A - Case summariesec.europa.eu/competition/publications/annual_report/1997/97part2_e… ·...

ANTITRUST

COMPETITION REPORT 1997 103

I - Antitrust: Articles 85 and 86 of the EC Treaty - Articles 65 and 66 of theECSC Treaty

A - Case summaries

1. Prohibitions

1.1. Horizontal agreements

a) Information exchange

Wirtschaftsvereinigung Stahl

On 26 November the Commission adopted a decision under Article 65 of the ECSC Treaty prohibitingan information exchange system notified by Wirtschaftsvereinigung Stahl, the German steel industryassociation. The system, which had not been implemented, provided for the exchange betweenassociation members of sensitive, recent and individualised data on supplies of more than 40 steelproducts in the various Member States, broken down by steel quality. The exchange would also haveconcerned the breakdown by consumer sector and the market shares of member companies on theGerman market. The leading German steel producers were to have participated in the system.

After analysing these homogeneous product markets in detail, the Commission drew a distinctionbetween two types of market. It raised no objection to the exchange of sensitive information ondispersed markets. On the other hand, it did prohibit the exchange of data on all markets for flatproducts and on the markets for beams, sheet piling, permanent way material and wire rod of stainlesssteel. These are concentrated markets characterised by low import penetration, stable trade flowsbetween Member States and chronic overcapacity.

The notified information exchange agreement would have restricted competition between the parties byincreasing market transparency to such a degree that any independent competitive action on the part ofone company would have been noticed immediately by its competitors, which would have been able totake suitable retaliatory measures such as systematically canvassing customers or offering temporary orlocal selective discounts. This increased transparency would thus have been liable to deter companiesfrom trying to increase their market shares, a fundamental competitive activity. In addition, thefrequency of the exchange, i.e. monthly, and the freshness of the data exchanged (one month old) wouldhave reduced considerably the time during which a company could have derived any benefit frombehaving competitively.

The decision is consistent with the Commission’s practice,1 which has been upheld by the Court of FirstInstance,2 of viewing as anti-competitive any systems involving the exchange of sensitive, recent andindividualised data on a concentrated market in homogeneous products.

1 1997 Competition Report; Commission Decision 92/157/EEC of 17 February 1992 relating to a proceeding

pursuant to Article 85 of the EEC Treaty - UK Agricultural Tractor Registration Exchange, OJ L 68, 13.3.1992.2 Judgments in Cases T-34/92 Fiatagri UK Ltd and New Holland Ford Ltd v Commission [1994] ECR II-905 and

T-35/92 John Deere Ltd v Commission [1994] ECR II-957.

APPLICATION OF THE COMPETITION RULES IN THE EUROPEAN UNION

104 COMPETITION REPORT 1997

2. Authorisations

2.1. Horizontal agreements

a) Strategic alliances

GEN (Global European Network)

Following substantial changes to the notified arrangements, the Commission gave negative clearance(by comfort letter) to the Global European Network (GEN) agreement aimed at improving the qualityof trans-European network telecommunications services.

The GEN agreement was originally signed by British Telecom, Deutsche Telekom, France Télécom,Telecom Italia and Telefónica de España, and now includes all the major European telecommunicationsoperators (TOs). It creates a high-quality, high-capacity (2Mbit/s) fibre optic telecommunicationsnetwork between the signatories’ nodes using plesiosynchronous digital hierarchy (PDH) technology.The network will improve the speed of circuit provision, repairs, network availability and the qualityand reliability of service.

As notified, the agreement posed a number of problems from the competition point of view and requiredamendment before the Commission could adopt a favourable attitude. The main changes were:

* the collective price-fixing arrangement which was planned between the TO signatories has beendropped and each signatory will therefore negotiate the conditions under which it will give access to itsGEN capacity on a bilateral basis;

* third parties were excluded from access to GEN capacity and could thus not benefit from thetechnical advantages it presents; each signatory has now undertaken to offer in its public tariff access toGEN capacity on a non-discriminatory basis to all third parties.

In view of these changes and the benefits which trans-European telecommunications can bring, theGEN agreement as such could be cleared.

The Commission must, however, at the same time continue to closely scrutinise agreements such asGEN which involve dominant operators in order to ensure the development of pro-competitivestructures. In particular, the conditions under which third parties can access European leased linesremain a strong concern. For that reason, the Commission has warned the parties that the negativeclearance of GEN does not mean that signatories may abuse their dominant positions with respect to theprovision of leased lines, notably by charging excessive and/or discriminatory prices, and thatindividual proceedings under Article 86 would be brought against TOs if such abuses were found to betaking place.

At the same time, the Commission is examining the application of the Open Network Provision (ONP)principles of cost orientation and transparency in Member States in the context of the ONP leased lineDirective.

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b) Joint ventures and other forms of cooperation

- Joint ventures

Carnival + Airtours3

A joint venture between Carnival Corporation (United States) and Airtours plc (United Kingdom),whereby they acquire joint control over Costa Crociere SpA, the leading Italian cruise company, wascleared by a comfort letter issued on 21 April. The joint venture, which was notified on 25 March, wasjudged by the Commission to be of a structural cooperative nature and was therefore dealt with underthe accelerated procedure.

Carnival Corporation is the leading cruise company in the world, its business being predominantly inNorth America. Airtours operates within the leisure travel industry in the United Kingdom, Scandinaviaand North America. Its current cruise operations in Europe are in the United Kingdom andScandinavia. Costa is the largest European cruise company, being active in Italy, France and Spain.

In line with its Decision of 9 July 1993 in Case No IV/M.334 - Costa Crociere/Chargeurs/Accor, therelevant market was considered to be the market for cruises offered in each Member State, taking intoaccount the importance to customers of this holiday concept, which cannot easily be offered via othertypes of organised holiday. The Mediterranean market, and especially Italy and France, were affectedby the operation.

In Europe an estimated 1 075 000 passengers chose a cruise holiday in 1996. The UK market is thelargest with 422 000 passengers in 1996, followed by Germany with 254 000 passengers and Italy with186 000. The other countries together accounted for the remaining 213 000 passengers. However, itshould be borne in mind that consumer preferences are not the same everywhere. Whereas in France,Italy, Germany and the United Kingdom between 139 000 and 422 000 passengers went on a cruiseholiday in 1995, in Scandinavia and Spain the corresponding figure was only 25 000 and 27 000respectively. The Commission concluded in its 1993 Decision that, whereas more than 65% of Italian,French or Spanish passengers preferred the Mediterranean, no more than 30% of German or Britishtourists opted for a Mediterranean cruise.

The Commission took the view that the agreements restricted competition, because Carnival andAirtours agreed to limit their future growth in the Italian and French markets in order to allow Costa tocontinue developing its presence there. However, it also took the following aspects into account: (1) thejoint acquisition by Airtours and Carnival of Costa improves the promotion and distribution of theCosta products offered to customers, while Italian and French customers will be able to benefit fromwider promotions of Airtours’ and Carnival’s cruises; and (2) the joint venture will also be able tobenefit from Airtours’ competitive strategy of introducing low-cost cruises, which has led it todemonstrate that it can make cruising more affordable and more widely available to holidaymakers.

3 IV/36.414.



Michelin + Continental4

Michelin and Continental notified their cooperation agreements in 1995. These agreements provided forthe setting-up of a joint venture and for additional cooperation in the following areas: recycling andretreading of tyres, creation of wheel/tyre assembly shops dedicated to car manufacturers' facilities,joint creation of a new franchising concept, cooperation in logistics, and joint purchasing of rawmaterials. Michelin has transferred to the joint venture the rights in the Uniroyal trade mark and thejoint venture has granted a licence of unlimited duration to Continental to use this trade mark. In return,Continental has transferred to the joint venture its low-cost-tyres production facility in Eastern Europe(SAVA). The tyres produced will be sold to Michelin and Continental, to be marketed separately byeach of them under their own brand name. Michelin and Continental have amended their agreements inorder to dispel any suspicion of cooperation in the distribution sector and have given up their jointfranchising project.

The Commission published a notice under Article 19(3) of Council Regulation No 17.5 The commentsreceived were not such as to alter the overall favourable assessment of the notified operation. On18 July the Commission authorised the cooperation between Michelin and Continental by comfortletter, the parties having satisfied it that the conditions of Article 85(3) were met.

Continental and Michelin have been advised that any sign of cooperation between them going beyondthe scope of the agreements as notified will be closely scrutinised and might even induce theDirectorate-General for Competition to reconsider the content of the comfort letter.

Sanofi+Bristol-Myers Squibb6

On 28 October the Commission approved the creation of a joint venture in the pharmaceutical sectorbetween the French company Sanofi and the US company Bristol-Myers Squibb. The purpose of thecooperation is to develop, manufacture and sell two new chemical entities in the cardiovascular area,Clopidogrel and Irbesartan, and the products derived therefrom.

One of the joint venture products (the anti-platelet drug Clopidogrel) is intended to prevent blood fromclotting in patients who have suffered a heart attack, stroke, etc., while the other product (theangiotensin II receptor antagonist Irbesartan) is intended for the treatment of high blood pressure.

The products have been jointly developed by the parties, each of them having devoted considerablefinancial and other resources. A jointly owned company, Sanofi Pharma Bristol-Myers Squibb SNC,will be responsible for putting the products on the market in the European Union. Distribution will be inthe form of co-marketing or co-promotion, depending on the regulatory and commercial conditions inthe relevant country.

The parties’ activities in these fields are complementary, with only marginal overlap, and theCommission found that the joint venture will not appreciably restrict competition between the parties.Moreover, considering the generally competitive market structures and the existence of importantgenerics, the joint venture is not likely to have any appreciable restrictive effect on third parties.

4 IV/35.522.5 OJ C 236, 14.8.1996.6 IV/36.610.

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The case was dealt with under the Commission’s accelerated procedure for structural joint ventures andthe parties received a comfort letter within two months of completing their notification.

Scandairy7

On 28 July the Commission approved the creation of Scandairy K/S, a joint venture in the dairy sectorbetween the Swedish dairy cooperative Arla ekonomisk förening and the Danish dairy cooperative MDFoods amba, but only after its scope had been severely reduced.

The joint venture is based in Denmark and its objects are to research, develop, produce and marketdairy products in the form of functional food products, i.e. products marketed as having componentsincorporated which entail a physiological function in addition to normal nutritional properties(e.g. lowering of cholesterol levels). The joint venture has also acquired the rights to MD's range offunctional food products sold under the Gaio trademark. Geographically, it will initially target northernEurope, with a view to eventually covering the whole of the European Union.

MD dominates the Danish dairy sector, while Arla occupies a similar position in Sweden. The partiesoriginally envisaged a joint venture extending also to dairy-based snacks and desserts, but followingserious doubts expressed by the Commission as to the joint venture's compatibility with the competitionrules they decided to exclude these products from the cooperation. The joint venture was thereby limitedto a new product area which is rapidly developing and where product development requiresconsiderable investment, to the exclusion of conventional dairy products.

The Commission accordingly considers that the agreements are, at least during a launch period,compatible with the competition rules. The parties have, however, been informed that the agreementswill be re-examined in the light of any new circumstances which might alter this assessment, and in anyevent after a period of seven years. To this end the parties have been invited to submit a report on theoperation of the agreements by the end of 2003, on the basis of which it can be determined whether thefavourable view of the arrangements should be maintained.

Hydro Texaco Holdings A/S - Preem (formerly OK Petroleum AB)

On 1 December 1995 Hydro Texaco Holdings A/S (Hydro Texaco) and Preem (formerly OKPetroleum) notified the Commission of the creation of a cooperative joint venture (Scanlube) for theproduction of lubricants.

Preem is a Swedish company which carries on a number of activities in the oil sector, from explorationto the distribution of refined products, fuels and lubricants. Hydro Texaco is a Danish company active,among other things, in the distribution of fuels and lubricants and in the operation of service stations. Itis a subsidiary of Norsk Hydro and Texaco and does business in Denmark, Norway and Iceland.

On 22 November 1995 Hydro Texaco and Preem entered into several agreements relating to theformation and operation of Scanlube, a joint venture in which each shareholder holds 50% of thecapital. In particular, Preem transferred to Scanlube the lubricants plant it used to operate on its ownin Gothenburg, Sweden. The aim of the joint venture is to purchase base oils, additives, packaging

7 IV/ 35.855.



materials and other supplies and to produce and package lubricants for sale to the shareholders.Several other agreements concerning the day-to-day running of the joint venture were concludedbetween Hydro Texaco or its subsidiaries, Preem or its subsidiaries and/or the joint venture. Under alubricating oil production technology agreement, Texaco Development Corporation grants to the jointventure a licence to use Texaco’s lubricating oil production technology.

In addition, a trade mark licence and distribution agreement has been concluded between TexacoInternational Trader and Preem. By this agreement, Texaco International Trader grants Preem anexclusive licence to distribute lubricants apart from marine lubricants under the Texaco trade marks inSweden. The Commission considered that this agreement was not ancillary to the formation of the jointventure and decided to examine it separately.

The Commission concluded that Scanlube was not a full-function joint venture and that its formationshould be examined pursuant to Council Regulation No 17. After an initial examination of the plannedoperation, the Commission informed the parties that it considered that it fell within Article 85(1) of theEC Treaty and that some clauses in the notified agreements contained non-indispensable restrictions ofcompetition that would bar the application of Article 85(3).

Following talks with the Commission, the parties made new proposals whereby the clauses containingthe restrictions of competition were withdrawn or modified. The parties thus remain free to producelubricants anywhere they wish and to obtain them from any source, including from other countries. TheCommission published a notice under Article 19(3) of Regulation No 17 inviting interested third partiesto submit their comments.8 No such comments were forthcoming.

The Commission’s departments sent the parties two comfort letters, one concerning the formation of thejoint venture and the other concerning the distribution agreement.

HFC Bank plc/British Gas Trading Ltd

On 14 February HFC Bank and British Gas Trading Ltd (BGT) notified an agreement establishing ajoint venture, Goldbrand Development Ltd (GDL), for the launch of the Goldfish Card in theUnited Kingdom. Under a scheme to be operated by GDL, cardholders are to be awarded points forusing their cards (including for the payment of BGT domestic gas bills) which will be redeemable in anumber of outlets. With the gradual liberalisation of the market for the supply of gas to domesticcustomers and the consequent emergence of new entrants, the main competition concern was whetherBGT’s role as a redemption partner of GDL could constitute an abuse of its dominant position on themarket under Article 86 of the EC Treaty by effectively tying in existing customers or at leastsubstantially reducing the probability that they would switch suppliers.

In April DG IV wrote to Ofgas, the UK gas regulator, asking for its views on the likely impact ofGoldfish on competition. In June Ofgas replied that it was also investigating the Goldfish Card and tothat end had already published a public consultation document. DG IV then decided to await Ofgas’sdecision on Goldfish before drawing any final conclusions.

In its October decision document Ofgas found that any tie-in to BGT caused by Goldfish would be verylimited in scope since any customer switching supplier could redeem points he had already accumulated

8 OJ C 47, 15.2.1997.

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against his closing BGT gas bill. In addition, if the number of points exceeded the amount due to BGT,the customer would receive a full refund of the net credit. At Ofgas’s request, BGT agreed to featurethis facility more prominently in its literature.

DG IV agreed with Ofgas’s findings, and after further analysis of market data gathered during thecourse of the investigation decided to close the case by way of a negative clearance type comfort letter.

Unisource and Uniworld

On 29 October the Commission approved the creation of the two telecommunications alliancesUnisource and Uniworld.9 Unisource is a joint venture between Telia of Sweden, PTT Telecom of theNetherlands and Swiss Telecom, while Uniworld is a joint venture between Unisource and the UScarrier AT&T. Following its investigation, the Commission found that the agreements fell within thescope of Article 85 of the EC Treaty. Subject to changes to the agreements and restrictions on theparties’ conduct, the creation of the two alliances was approved as the Commission found that theexisting dominant positions of the three Unisource shareholders on many of their home markets wouldnot be strengthened. This approval followed the clearance of the earlier alliances between BT and MCI(Concert) and France Télécom, Deutsche Telekom and Sprint (Atlas/GlobalOne). The decisions cametwo months before the full liberalisation of telecommunications across most of Europe on 1 January1998.

The inclusion of Telefónica in the Unisource alliance is not covered by the relevant decision asTelefónica has since announced its withdrawal from the alliance. The decision will be reviewed if theassumptions on which the Commission based it prove incorrect. Similarly, it does not cover any entryby STET of Italy into an alliance with the two joint ventures, a possible development which hasrecently been announced.

Unisource has activities in carrier services, mobile telephony and calling cards, satellite services andcorporate telecommunications (both data and voice). These are carried on through operatingsubsidiaries. Approval of the exclusive distribution arrangements of Unisource Business Networks,Unisource Voice Services and Unisource Satellite Services is also covered by the decision.

The exemption will last for five years from the date of the liberalisation of alternative networks on1 July 1996. It will therefore be valid until 30 June 2001.

The conditions attached to the Unisource agreements include undertakings to prevent discrimination bythe parent companies in respect of leased lines and interconnection and to prevent the misuse ofconfidential information, cross subsidies between Unisource and its parent companies and the tying orbundling of services. In addition, the Commission has confirmed with the Governments of Sweden andthe Netherlands the implementation of the EU’s telecommunications liberalisation programme, and inthe case of Switzerland the Swiss Government has confirmed inter alia the liberalisation oftelecommunications by 1 January 1998.

Similar undertakings were given by the parties to the Uniworld transaction in respect ofnon-discrimination, no misuse of confidential information and the prevention of cross subsidisation and

9 OJ L 318, 20.11.1997.



of tying of services. In addition, AT&T indicated to the Commission that, for traffic sent as part of thebilateral correspondent regime, it would offer European telecommunications operators cost-basedaccounting rates that would be no higher than the lowest accounting rate established between AT&Tand any Unisource shareholder. The Uniworld arrangements are also exempted for five years.

- Other forms of cooperation

British Dental Trade Association10

In its decision of 11 July 198811 the Commission exempted the rules and regulations laid down by theBritish Dental Trade Association (BDTA) in connection with dental product and equipment exhibitions,after the BDTA had removed all discrimination between members and non-members of the associationfor future exhibitions. The exemption expired on 15 December 1996. On 20 February the Commissionissued an exemption by comfort letter for BDTA’s current rules and regulations (very similar to thoseapplying in 1988) after having examined whether access to the BDTA’s exhibitions had been fair andopen since the 1988 exemption decision for undertakings from other Member States, especially thosenot represented in the United Kingdom by a BDTA member.

Joint Operational Service Agreement12 andWest Coast/Mediterranean Agreement13

On 5 March the Commission adopted decisions not to oppose exemption for the Joint OperationalService Agreement14 and the West Coast/Mediterranean Agreement15 and accordingly allowed bothagreements to benefit from the block exemption for liner shipping consortia contained in Regulation870/95.16

In accordance with Article 7 of Regulation 870/95, if the Commission does not wish a notifiedagreement to benefit from the block exemption, it has six months from the date of notification to informthe parties that it wishes to oppose exemption. In both cases, further information was requested fromthe parties and was received on 7 October 1996. As the Commission has decided not to opposeexemption, the two agreements will be exempt for the life of the Regulation, i.e. until 21 April 2000.The parties also obtained the benefit of Article 13 of the Regulation.

The parties to the Joint Operational Service Agreement (JOS) are Andrew Weir Shipping Ltd (tradingas Ellerman), Iscont Lines Ltd, KNSM Kroonburgh and Zim Israeli Navigation Ltd. The JOS is a jointliner shipping service between the ports of Felixstowe, Antwerp, Rotterdam and Hamburg and the portof Limassol in Cyprus and the ports of Ashdod and Haifa in Israel. The parties agree on the amount ofcapacity to be used in the joint service and currently operate four vessels offering a fixed-day, weekly 10 IV/31.593.11 OJ L 233, 23.8.1988; see also 1988 Competition Report, point 66.12 IV/35.770.13 IV/35.774.14 IV/35.770.15 IV/35.774.16 On 20 April 1995 the Commission adopted Regulation 870/95 (OJ L 89, 21.4.1995), which grants a block

exemption to liner shipping consortia offering international maritime liner services from one or more Communityports. Liner shipping consortia are agreements between shipping companies the object of which is to bring aboutcooperation for the joint operation of a maritime liner transport service by means of various arrangements. Theblock exemption expires on 21 April 2000 (See IP/95/409).

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service to each of the six ports of call. Two of the vessels are provided by Zim, one by Iscont and onejointly by Ellerman/KNSM. The relevant market in this case is scheduled maritime transport servicesbetween ports in northern Europe and ports in Cyprus and Israel.

The parties to the West Coast/Mediterranean Agreement (WC/Med) are Andrew Weir Shipping Ltd(trading as Ellerman), KNSM Kroonburgh BV and Zim Israeli Navigation Ltd. The WC/Med is a jointliner shipping service between the ports of Liverpool and Dublin and the ports of Lisbon, Leixoes,Malta, Palermo, Salerno, Piraeus, Limassol in Cyprus and Ashdod and Haifa in Israel. The partiesagree on the amount of capacity to be used in the joint service and currently operate three vesselsoffering a service every ten days to each of the eleven ports of call, except that Lisbon and Leixoes arecalled at on alternate sailings. One of the vessels is provided by Zim and two by Ellerman/KNSM.

These services cover two distinct markets: (i) services between northern European/Portuguese ports andcentral Mediterranean ports and (ii) services between northern European/Portuguese ports and ports inIsrael and Cyprus. In the case of the market for transport services between northernEuropean/Portuguese ports and central Mediterranean ports some road haulage services may besubstitutable for maritime transport services as a result of a very wide range of ferry services.

Since there is a significant overlap between the markets in which the two consortia operate, it wasnecessary to assess their combined market shares. For the reasons described below it was alsoappropriate to take into account not only containerised cargo but also non-containerised cargo.

Almost all cargo can be containerised and, over time, it is likely that the degree of containerisation inmost maritime markets involving Member States will be very high. In mature markets, such as thenorthern Europe/US or the northern Europe/Far East markets, the process of change towardscontainerisation is more or less complete and few, if any, non-containerised cargoes are left which arecapable of being containerised.

Furthermore, once a type of cargo regularly becomes containerised it is very unlikely ever to betransported again as non-containerised cargo. The reasons for this are that shippers become accustomedto shipping in smaller but more frequent quantities and become accustomed to the fact that once cargohas been loaded into a container, it is easier to ship onwards from the port of delivery to the ultimateconsignee using multimodal transport. Containerised cargo is also much more secure against pilferage.

Thus, as the degree of containerisation increases, shippers of non-containerised cargoes turn towardscontainerised services but once those shippers have become accustomed to shipping in containers theydo not revert to non-containerised shipping. Such examples of one-way substitutability are notuncommon.

Consortia arrangements between Sea-Land, P&O Nedlloyd, Maersk and OOCL17

(“Vessel-Sharing Agreements”)

On 3 September the Commission decided not to oppose exemption being granted pursuant toArticle 85(3) to consortia arrangements in the transatlantic trades between Sea-Land, P&O Nedlloyd,Maersk and OOCL.

17 IV/36.282.



The Vessel-Sharing Agreements (“VSA”) establish a liner shipping consortium between Sea-Land,P&O and Nedlloyd18 in the northern Europe/US and Mediterranean/US trades. The consortium wasfirst established in March 1988.

The VSA parties are collectively party to further agreements with OOCL and Maersk under whichOOCL obtains slots from the VSA parties and slots from Maersk and under which the VSA parties andMaersk obtain slots from each other. The arrangements have been authorised in the United States bythe Federal Maritime Commission. The VSA parties jointly operate nine vessels (which are owned andcrewed by Sea-Land).

The VSA arrangements involve trade shares within the meaning of Regulation 870/95 which are higherthan the 30% required by Article 6 of the Regulation for the application of the block exemption wherethe consortium operates within a conference. The VSA arrangements also fail to satisfy one or more ofthe conditions set out in Article 8 of Regulation 870/95, particularly those at Article 8(1) and 8(2)concerning service contracts and notice periods.

It follows that the VSA arrangements fall outside the scope of the block exemption provided byRegulation 870/95. The appropriate procedure was therefore the opposition procedure contained inArticle 12(1) of Regulation 4056/86 and Article 12(1) of Regulation 1017/68. In accordance with thisprocedure, the Commission published a notice19 on 18 June summarising the application for exemptionand inviting interested parties to submit comments within thirty days from the date of publication.

The Commission’s analysis of the VSA was premised on Regulation 870/95 as regards the restrictivenature of consortium agreements and the TAA Decision20 as regards the relevant market. On the basisof this analysis, the Commission concluded that the VSA brings about the same benefits as thosebrought about by consortia falling within the scope of the block exemption. The first three conditions ofArticle 85(3) were accordingly considered to be fulfilled in respect of those activities of the VSA whichfall within the scope of the list of exempted activities contained in Article 3(2) of Regulation 870/95.

Although Regulation 870/95 provides for a maximum period of notice of six months for blockexempted consortia, the parties argued that a 24 months’ notice period was reasonable andindispensable for the proper operation of the agreements considering the highly integrated nature of theVSA and related agreements. For the purposes of the VSA, Sea-Land had made considerableinvestments in the acquisition of vessels and P&O and Nedlloyd had contributed to financing thoseinvestments. Furthermore, P&O, Nedlloyd and OOCL had agreed to withdraw their existing vesselsand to use Sea-Land’s vessels. The Commission accepted that these facts demonstrated the highlyintegrated nature of the VSA and justified the long notice period.

The fourth condition of Article 85(3) was also considered to be fulfilled since the consortium has amaximum market share of less than 40% and was thus considered to remain exposed to effectivecompetition.

However, the VSA parties, Maersk and OOCL had been informed that a number of provisions whichwere not covered by the block exemption granted by Regulation No 870/95 could not be considered as

18 Nedlloyd and P&O merged their liner shipping activities in early 1997.19 OJ C 185, 18.6.1997, see annex.20 Trans-Atlantic Agreement, Commission Decision 94/980 of 19 October 1994, OJ L 376, 31.12.1994.

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restrictions indispensable for attaining the objectives of the consortium within the meaning ofArticle 85(3) and, in the Commission’s view, could not therefore be individually exempted.

The VSA parties, Maersk and OOCL accordingly gave undertakings to the Commission in fourside-letters not to exercise certain provisions contained in the agreements. In particular, the partiesagreed not to exercise in the geographic area covered by the EC Treaty the provisions relating to inlandand maritime rate-making, discussion and agreement on the terms relating to freight forwardercompensation and discussion and agreement on common essential terms in service contracts. In the lightof these undertakings, the Commission concluded that all of the remaining restrictions of competitionarising from the arrangements could qualify for individual exemption.

The overall arrangements (as modified by the undertakings) will be deemed exempt for a period of sixyears for those activities falling within Regulation 4056/86 and for a period of three years for thoseactivities falling within Regulation 1017/68. Those periods started to run as from 18 June.

New Carribean Service (NCS) and Eurosal III

On 6 October the Commission adopted decisions not to oppose exemption of two consortia agreements:New Caribbean Service (NCS)21 and Eurosal III.22 Both consortia were originally notified on 20October 1995. The originally notified Eurosal II agreement was replaced by the Eurosal III agreementnotified on 16 December 1996. Both notifications were completed by information received by theCommission on 7 April. As the Commission has decided not to oppose exemption, the two agreementswill be exempted for the life of the Regulation, i.e. until 21 April 2000.

The parties to the NCS agreement are the Charente Steamship Co. (whose liner services are handled byits subsidiary Harrison), CGM Sud, Flota Mercante Grancolombiana (FMG), Hapag-Lloyd, HanburgSüd, and P&O Nedlloyd Container Line. The NCS consortium provides a jointly operated linercontainer service between northern Europe and the Caribbean. The relevant market is liner servicesbetween northern Europe and the Caribbean.

The parties to the Eurosal II agreement are Hapag-Lloyd, Hanburg Süd, P&O Nedlloyd Container Lineand Compañía Sudamericana de Vapores (CSAV); Harrison, FMG and CGM have slotcharters on theservice. The Eurosal III consortium provides a jointly operated liner container service between northernEurope and the west coast of South America (WCSA) and regional connections in the Caribbean. Therelevant markets are liner shipping services between first northern Europe and WCSA and betweennorthern Europe and the Caribbean.

On the basis of the above analysis, the Commission concluded that the parties enjoyed market shares ofthe relevant markets of between forty and fifty per cent. In particular in view of the fact that there iscompetition from trans-shipment services offered by global carriers, it was considered that there iseffective competition and that the parties did not have the possibility of eliminating competition.

The parties are all members of the liner conferences existing in the trades. The agreements as originallynotified required that the parties be members of the conferences existing in the trades covered by the

21 IV/35.763.22 IV/36.319.



consortia services. Following discussions with the Commission, the parties amended the agreements soas to provide that the parties intend to be, but are not required to be, conference members. The partiesalso agreed to delete from the Eurosal III agreement a statement of the parties’ intent to conduct a jointpolicy in respect of participation in consortia and stabilisation agreements.

Following the changes to the agreements, the Commission concluded that the conditions of Article 85(3)were satisfied for the reasons elaborated in Regulation 870/95.

EUCAR23

EUCAR, the European Council for Automotive Research and Development, groups together Opel,BMW (including Rover), Mercedes, Fiat, Ford, PSA, Porsche, Renault, VW and Volvo.

The parties have concluded an agreement to step up their research work, especially as regards basicresearch in the economic, technical and ecological fields so as to improve the competitiveness of theEuropean motor car industry and promote long-term protection of the environment.

The research findings will therefore not be directly usable for commercial purposes.

A notice concerning the agreement was published in accordance with Article 19(3) of RegulationNo 17.

The Commission sent EUCAR a comfort letter authorising the agreement.

Swedish Match Sverige AB and Skandinavisk Tobakskompagni A/S

Swedish Match Sverige AB, the only manufacturer and physical distributor of cigarettes in Sweden,dominates the Swedish cigarette market. Skandinavisk Tobakskompagni is a Danish tobaccoconglomerate active primarily in Denmark. Skandinavisk Tobakskompagni’s Prince brand, whichenjoys a strong position in the Swedish cigarette market, has since 1961 been produced, distributed andsold in Sweden by Swedish Match under an exclusive licensing arrangement. This was notified to theCommission following Sweden’s accession to the EU. Under the agreement, prices were unilaterally setby Swedish Match, and the cigarettes sold by Swedish Match’s sales force. The Commission informedthe companies that, as a long-term exclusive manufacturing and sales licence between two majorcigarette manufacturers, dominant on neighbouring geographic markets, the agreement gave rise toserious concern regarding its compatibility with Articles 85 and 86.

The two companies accordingly agreed to radically alter the terms of their future relationshipconcerning the Prince brand. Their continued cooperation takes the form of two separate agreements forcontract manufacture and physical distribution by Swedish Match until the end of 2001: SwedishMatch will continue to manufacture Skandinavisk Tobakskompagni's requirements for the currentlylicensed variants of the Prince cigarette for sale in the Swedish market, and will handle the physicaldistribution of Prince cigarettes on a non-exclusive basis. Skandinavisk Tobakskompagni has, however,become solely responsible for all sales, marketing and pricing of Prince in Sweden. These newarrangements should avoid any negative impact which might have resulted for either company from amore abrupt change. In particular, Swedish Match had made substantial investments in the production

23 IV/35.742.

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and distribution of the Prince brand prior to Sweden’s accession to the Community and the applicabilityof its competition rules. After 2001 the contract manufacture and distribution agreements will beterminable on one year's notice.

The amended agreements have had the effect of placing essential control of Prince in the hands of thebrand owner, Skandinavisk Tobakskompagni, while at the same time allowing it to continue benefitingfrom Swedish Match’s manufacturing and distribution infrastructure. This has meant the effectiveintroduction of a new, important competitor onto the Swedish cigarette market, thereby contributing toa real and immediate increase in competition.

Britannia Gas Condensate Field24

The Commission cleared an agreement notified by the companies participating in the development ofthe Britannia gas field in the United Kingdom. The notified oral agreement concerned the decision bythe participating companies to appoint one of their number as the single sales negotiator on behalf ofthem all. It was considered that this agreement was restrictive of competition as amongst the companiesparticipating in the field, and was not ancillary to the agreements to jointly develop the field. However,the Commission concluded that this agreement did not affect trade between Member States and wastherefore outside the scope of the European Community's competition rules. This was a factualdetermination relating solely to the notified oral agreement which was in force between February 1992and the end of 1994.

An Article 19(3) notice was published on the Official Journal on 4 October 1996. 25

The Britannia gas condensate field is a relatively large gas field in the central area of the UKContinental Shelf. Reserves are estimated at 2.3 trillion cubic feet. The field ownership was, atnotification, divided between the following companies: Conoco (UK) Ltd, Conoco Petroleum Ltd,Chevron UK Ltd, Union Texas Britannia Ltd, Santa Fe Exploration (UK) Ltd, Texaco North Sea UKCompany, Phillips Petroleum Co. UK Ltd, and Amerada Hess Ltd. In addition, there have been anumber of previous owners, who sold out, but whose share was minor, including British Gas and Oryx.Amerada Hess left the consortium in January 1996.

c) Other horizontal agreements

The GSM MoU standard international roaming agreement

The Commission’s Directorate-General for Competition has given partial approval to the GSM MoUstandard international roaming agreement. GSM is the digital mobile system now in use in Europe, withmore than 37 million subscribers in the fifteen Member States. The Commission’s approval followedconsideration of a notification of the agreement under the competition rules of the EC Treaty(Articles 85 and 86). The standard international roaming agreement is designed to enable GSM mobilephone users in one country to use the GSM network in another country. Upon examination, theCommission found that the agreement presents a number of clear benefits and it also secured changeswhich ensure that the standard agreement will not have anticompetitive effects.

24 IV/35.354.25 OJ C 291, 4.10.1996.



Roaming agreements

Within the EU, operators of GSM mobile telephone networks are bound by national licensingprocedures which allow them to build and operate networks only within the borders of a givenMember State. In order to ensure that consumers can benefit from the European (and evenfurther-reaching) GSM standard, GSM operators in different Member States must make arrangementsso that when a GSM subscriber leaves the boundaries of the country in which he has a subscription, hewill be recognised by the operator(s) in the country he is visiting and thus be able to make and receivecalls there, as if he were still at home. These arrangements are called “roaming agreements”. In order tofacilitate the conclusion of such agreements, the GSM MoU Association, a world-wide grouping ofmore than 200 mobile operators, including all those in the EU, developed a non-compulsorystandard-form GSM International Roaming Agreement, in order to facilitate the conclusion of bilateralagreements between the operators.

Compatibility with the competition rules

In examining the compatibility of the standard agreement with the EU competition rules, theCommission found that the use of a standard agreement presented a number of clear benefits, notablythat the costs of negotiating individual bilateral agreements would be substantially reduced, thatroaming services would be made available more quickly and that the standard form would enable morecontractual fairness between parties and help to prevent discrimination. Consumers will thus benefitmore quickly from the widest possible area in which to use their GSM subscriptions.

At the same time, a number of competition concerns were identified which could have been detrimentalfor consumers. These potential problems were resolved to the Commission’s satisfaction throughamendments to the notified agreement. In the first place, it is now clear that nothing in the agreementprevents a consumer in one country from taking out a subscription with a network operating in anothercountry if the tariffs are financially more attractive. Secondly, the parties undertake to ensure thatcommercially sensitive information provided to other operators in the context of this agreement willonly be made available in the interest of roaming and not for anticompetitive purposes.

Inter-operator tariffs

One issue which has not yet been resolved is the basis on which operators charge each other forroaming services, which does not appear to be cost-oriented. However, discussions are under waywithin the GSM MoU whereby the present system in which charges are based on the domestic tariff ofthe operator would be replaced by an inter-operator tariff relating to the operator’s costs in providingthe service, which should result in lower prices for consumers. This move is expected to take placewithin a reasonable time-frame. In the context of the full liberalisation of the EU telecommunicationsmarket on 1 January 1998, the Commission will continue to monitor this development towardscost-oriented tariffs.

Microsoft/Santa Cruz Operation

On 31 January The Santa Cruz Operation Inc. (Santa Cruz), a US software company with extensiveoperations in the EEA, complained to the Commission accusing Microsoft of breaches of ECcompetition laws in a contract between it and Santa Cruz. The contract at issue was a 1987 contractbetween Microsoft and AT&T which provided that Microsoft would produce a version of UNIX for

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microcomputers by merging the versions of UNIX for microcomputers then offered by Microsoft andAT&T. Santa Cruz had succeeded to AT&T’s side of this contract by acquiring the UNIX business ofAT&T. The main restrictions identified in the contract at issue, and their effects, were as follows:

(1) The contract required that if either party produced a version of the UNIX operating system for amicrocomputer it be derived from the first version of UNIX produced by Microsoft as a result of the1987 agreement.

(2) As any version of UNIX produced by the parties to the contract had to be based on Microsoft’sinitial merged product, the contract required that AT&T, and by extension Santa Cruz, pay Microsoft aset royalty per copy for any UNIX product for microcomputers that it produced and sold.

(3) The contract also had the specific requirement that any version of UNIX produced by either partysupport a list of application programs which were supported by the UNIX versions offered byMicrosoft and AT&T prior to the agreement, which list was attached to the agreement.

In addition the contract was drafted in such a way that unless both parties agreed to end it, it couldeasily continue indefinitely.

On 26 May the Commission sent a statement of objections to Microsoft arguing that the above featuresof the contract complained of were restrictions of competition affecting trade between Member States,of the type prohibited by Article 85(1) of the EC Treaty, and did not qualify for an exemption from theCommission under Article 85(3) of the EC Treaty and so were void. Microsoft was given theopportunity to make written and oral comments on the statement of objections. Written comments werereceived and a date for an oral hearing was set for 13 November.

On 4 November Microsoft wrote to Santa Cruz unilaterally and irrevocably waiving the “rights” underthe clauses at issue to which the Commission had objected. On 5 November Microsoft provided a copyof this letter to DG IV. Microsoft has waived all of the obligations on Santa Cruz as to the type ofUNIX product that it can produce, including the requirement that versions of UNIX be backwardcompatible with the applications programs specified in the contract. Santa Cruz’s royalty obligationhas been changed, so that it now has to pay the set royalty only if it actually does use Microsoftintellectual property in a version of UNIX. The effect of the remaining parts of the contract for SantaCruz will be that Santa Cruz will have the right but not the obligation to use Microsoft intellectualproperty to produce versions of UNIX, and if it does so will pay the set royalty per copy of its product.On 18 November Santa Cruz wrote to the Commission withdrawing its complaint.

The antitrust division of the US Department of Justice provided assistance in this matter.

The restrictions at issue harmed Santa Cruz’s ability to compete with Microsoft in the provision ofoperating systems, and in particular harmed its ability to compete in the field of operating systems forworkstations and servers where there is vigorous competition between Microsoft’s Windows NTproduct and a variety of versions of UNIX. Microsoft’s waiver means that Santa Cruz can design itsfuture UNIX products as it wishes, is not obliged to use any Microsoft intellectual property in futureUNIX products and has the option, under the remaining parts of the contract, to use the Microsoftintellectual property involved at a set royalty.



Relais & Châteaux

The Commission applied for the first time its new de minimis notice in Case IV/36.180Relais et Châteaux.

The Relais & Châteaux association (R&C), which was created in 1954, is a “voluntary” chain of 364hotels and 49 restaurants (three-and four-star and luxury) having a common trade mark and logo. Theassociation notified its articles and regulations setting out all the rules on the admission of applicants.According to these rules, membership of R&C is incompatible with membership of a competing hotelchain. For departmental and regional reservations, however, R&C members remain free to approachbodies which offer a specific service (hotel clubs, reservation centres, marketing companies) or tourismoffices. Members may withdraw each year when their membership is due for renewal.

The Commission considered the position of R&C and the impact of the agreements not only on the hotelmarket as such but also on the intermediate market for the collective marketing of the services providedby luxury country hotels and restaurants. It concluded that the notified agreements affected tradebetween Member States to an insignificant extent since they were agreements between SMEs (asdefined by Community law). There were, moreover, no similar agreements in the relevant market suchas might have given rise to the risk of a cumulative effect of parallel networks.

This position is consistent with the new notice on agreements of minor importance adopted by theCommission on 15 October. In that notice, the Commission states that it will take action underArticle 85(1) against agreements between small and medium-sized enterprises only in exceptionalcircumstances.

d) Agreements on payment systems

TARGET

TARGET is a payment system set up by the European Monetary Institute (EMI) and the NationalCentral Banks (NCBs). It is to become operative at the beginning of stage three of economic andmonetary union (EMU), i.e. on 1 January 1999. It will be operated by the European System of CentralBanks (ESCB). TARGET will be a real-time gross settlement (RTGS) system. It will handle threecategories of payments. The first category are payments directly related to monetary policy, where theESCB is either the beneficiary or the originator of the payment. The second category are interbankpayments through which money market operations are settled (arbitrage transactions). The thirdcategory covers payment operations involving the banks’ customers, be they private individuals orcorporations (third party payments).26

After a number of meetings between the EMI and the Commission’s departments on the applicability ofthe competition rules of the Treaty to TARGET, Commissioner Van Miert indicated those departments’preliminary view by letter of 23 June.

26 For more detailed information on TARGET, see the Report on the TARGET system published by the EMI in

May 1995 and the Blue Book on Payment Systems in the European Union published by the EMI in May 1996,pp. 688 et seq.

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Applicability of Article 85(1)

The letter expresses the view that TARGET can be considered an instrument of monetary policy towhich Article 85(1) does not apply in so far as it handles payments of the first category. Partiesinvolved in these payment transactions do not undertake economic activities. These activities thereforefall outside the scope of Article 85(1).

In contrast, Article 85(1) does apply to TARGET when it handles the second and third categories ofpayment. Parties involved in these transactions do indeed undertake economic activities. This is obviousin the case of customer payments. But it also holds true in the case of arbitrage transactions becausebanks traditionally have been actively involved in this type of transaction as a normal part of theirbusiness. It is, of course, true that the integration of the euro money market, and hence the conduct of asingle monetary policy as required by Article 3a(2) of the Treaty, can be achieved only if interbankfunds can be rapidly and reliably transferred throughout the euro area, and that TARGET providesspeed and reliability. But this does not deprive these euro transfers of their economic nature.

It should be noted that the use of TARGET will not be compulsory for these payments. Commercialbanks may find it convenient to use TARGET, but they remain entirely free to avail themselves of otherchannels. In any event, even if an obligation to set up and operate TARGET could be derived from theTreaty or the ESCB Statute, such an obligation cannot alter the economic nature of the underlyingtransactions.

Grounds for a favourable view under Article 85(3)

No formal notification has been submitted to the Commission. As a matter of fact, no final decisionshave been reached by the Council of the EMI and NCBs with regard to all of TARGET’s operationalarrangements. Two issues have nevertheless been examined in detail.

The first issue is the envisaged uniform end-to-end price for payments handled through TARGET. Thisgoes beyond what the Commission has been willing to accept so far in relation to payment systems.However, while questioning whether in practice some price differentials would be a real impediment tothe achievement of these objectives, the Commission’s departments acknowledge that TARGET (andthe uniform end-to-end price figuring therein) contributes to the fulfilment of at least two legitimateobjectives.

The first is the smooth conduct of monetary policy and the singleness of the money market. The letterfully recognises the merit of TARGET as an instrument for cross-border arbitrage transactions whichare crucial in securing a single money market within the euro area.

The second objective is contributing to risk-reduction policies. Use of TARGET, which is an RTGSsystem, for large-value payments indeed contributes to reducing systemic risk within the euro area.

The second issue concerns the so-called full cost recovery principle according to which the end-to-endprice must cover full handling costs. The Commission of course fully supports the idea that full costrecovery is necessary to avoid unfair competition between TARGET and other payment arrangements.The issue was, rather, how the EMI and the NCBs, and later the ECB, would guarantee the properimplementation of this principle.



The Commission’s departments understand that observance of the full cost recovery principle can onlybe demonstrated ex post, i.e. some time after the launching of TARGET, since fully reliable figures onthe volume of payments handled through TARGET will initially be unavailable. For that reason, thedepartments have asked to be kept informed of further developments. In their view, it would be possibleto evaluate within a period of two to three years whether full costs are indeed being recovered. Theyhave invited the EMI forthwith to adjust, if necessary, prices according to the results of the evaluation,noting that it is clearly in no-one’s interest that TARGET’s pricing policy should become the object ofcomplaints in the years ahead.

SWIFT

The Commission received a complaint from the French Post Office (La Poste) in July 1996 against theSociety for Worldwide International Financial Telecommunications sc (SWIFT) and GUF (the Frenchgroup of SWIFT users, i.e. French banks).

SWIFT is a cooperative owned by over 2 000 banks. It operates a specific internationaltelecommunications network which offers reliable and secure data communication and processing tofinancial institutions located all over the world. The basic activity of SWIFT is the internationaltransfer of payment messages. For a number of years now, SWIFT has also offered message serviceslinked to specific financial transactions such as financial instrument purchases. Members have accessto all the services offered by SWIFT, whereas “participants” have access only to a specific service.Participants do not have access to SWIFT’s basic activity, the transfer of payment messages.SWIFT’s rules provide that its members are to assist it in determining whether applicant members orparticipants fulfil the membership criteria. This is one of the roles played by GUF.

In addition to its postal activities, La Poste operates in the retail banking market in France. With theexception of the granting of loans, it offers all the basic banking services: the holding of currentaccounts, payment operations, savings instruments, etc. Its overall share of the French bankingmarkets comes to approximately 10%.

La Poste had informal contacts with GUF between 1990 and 1994 to establish the terms on which itmight become a member of SWIFT. It formalised these contacts by applying to GUF in 1994 tobecome a member. GUF replied on 29 March 1994 that La Poste did not fulfil the membership criteriabecause it did not carry on an activity identical to that of credit institutions in a similar competitiveenvironment and under equivalent regulatory conditions. La Poste subsequently wrote direct toSWIFT. On 20 April 1995 SWIFT confirmed that it did not fulfil the membership conditions, statingthat:

La Poste does not currently qualify as an “établissement de crédit” as defined and regulated bythe French banking laws of January 24, 1984 and July 16, 1992; nor is it established that LaPoste carries out its financial activities under conditions equivalent to other SWIFT members.Namely, it is not supervised by the Banque de France and, therefore, is not subject to the sameprudential rules.

La Poste alleged in its complaint that, by denying it admission, the two bodies had infringed Articles 85and 86 of the Treaty.

On 24 March the Commission initiated formal proceedings against SWIFT for infringement ofArticle 86 of the Treaty and sent it a statement of objections. GUF was left out of the proceedings

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because its role was simply that of advising SWIFT on applications. The statement of objections notedthat SWIFT was an essential facility for transmitting electronic payment messages. The Commissionbased this finding on two considerations. First, SWIFT occupies a monopoly position on the market ininternational payment message transfer networks. Second, to deny membership to an entity would ineffect be to exclude it from the international transfer market, SWIFT being the only network providingconnections to banks located anywhere in the world. The Commission took the view that SWIFT hadabused its dominant position in two ways. First of all, its current membership criteria were unjustifiedas they related to the overall conditions under which applicants pursued their financial activities and notto their involvement in payment systems. Secondly, SWIFT applied its membership criteria to La Postein a discriminatory manner.

SWIFT answered the statement of objections on 23 June. It denied being an essential facility. Therewas growing competition from telecommunications operators and from private networks set up by thebanks. La Poste did not need to become a member of SWIFT to gain access to its network. It couldlink up with a bank already belonging to SWIFT and thus send messages on the SWIFT network. Ofthe 400 banks active in France, only 200 were connected directly to SWIFT. Granting access toLa Poste would have virtually no impact on competition in the downstream market for cross-bordertransfers, several hundred French banks being already present there. The addition of one player, evenas big as La Poste, would not have an appreciable impact on competition.

These arguments were not discussed between the Commission and SWIFT.

Following the reaching of an amicable agreement between La Poste on the one hand and SWIFT andGUF on the other, the Commission decided to accept an undertaking proposed by SWIFT. In theundertaking, which was signed on 26 September, SWIFT promises to grant full access to anyinstitution in the European Union which provides cross-border payment services to the public andfulfils the criteria laid down by the European Monetary Institute (or any successor organisation) foradmission to domestic payment systems. The current EMI criteria are: (i) the entity is authorised tohold accounts for customers; (ii) its direct participation in one or more EU fund transfer systemsprocessing third-party payments has the approval of the central bank; and (iii) either its public natureensures little risk of failure, or its financial service activities are supervised by a recognised competentauthority.

Access for this category will give access, on an equivalent and non-discriminatory basis, to thenetworks, products, services, working groups and documentation that are made available to SWIFTmembers. Future BIC Directories (the directory of banks connected to SWIFT and, from anadvertising point of view, comparable to the yellow pages of a telephone directory) will make nodistinction between “non-shareholding financial institutions” and members.

Before the new category of participants is created, SWIFT will sign cooperation agreements with anyapplicant fulfilling the EMI criteria. The Commission will monitor SWIFT’s compliance with theterms of the undertaking.

The Commission has accordingly suspended the proceedings until SWIFT’s general meeting creates thenew category of participants in June 1998. The text of the undertaking was published in the



Official Journal of the European Communities.27 The Commission decided to publish the undertakingbecause the case sets a precedent and because a large number of entities are potentially interested inaccess to the SWIFT network.

2.2. Vertical agreements

a) Exclusive dealing

Sport 7/KNVB

An agreement between Sport 7, a new broadcasting channel in Holland, and the KNVB, the Dutchfootball clubs’ association, was notified to the Commission under Article 85 in May 1996. Under theagreement, the KNVB granted the exclusive broadcasting rights to Dutch football club matches toSport 7 for a period of seven years. Sport 7 was authorised to issue sublicences to the broadcastingrights to a number of Dutch broadcasters.

The Commission’s main concerns with the arrangements under Article 85 were the seven-year durationof the exclusive broadcasting rights in the agreement, which seemed too long, and a renewal clause infavour of Sport 7, which seemed to be unjustified. The Commission did not conclude a full assessmentof the agreement because the Ministry for Economic Affairs in the Netherlands began to examine undernational competition law the issue of the collective selling of the television rights to Dutch footballmatches by the KNVB, and the question of ownership of those rights was challenged before the Dutchcourts. As the final outcome of the national cases was likely to have an impact on the arrangementsnotified to the Commission, it did not seem useful for the Commission to comment further on theapplication of Article 85 until the national action had been concluded. In fact, Sport 7 ceasedbroadcasting in December 1997.

1998 Football World Cup28

Ticket distribution systems employed during major sporting events have been scrutinised under the ECcompetition rules by the Commission in the past. These events included European and World Cupfootball and the Olympic Games. In these cases, the ticket distribution systems were based on theprinciple of exclusive distribution of tickets in each Member State, together with the tying of ticketsales to other services such as accommodation and travel.

The general line taken by the Commission in these cases has been to ensure that consumers are able topurchase entry tickets or package tours on advantageous terms as a result of competition betweenseveral distributors, taking account of the need to guarantee safety at matches. The Commission’sinvestigations in this sector have thus concentrated on the possible foreclosure of national markets andthe abuse of a dominant position by exclusive ticket distributors.

On 11 June the Comité Français d’Organisation de la Coupe du Monde de Football 1998 (CFO)notified the system for selecting tour operators to sell within the EEA tickets for the 1998 FootballWorld Cup tournament. In order to facilitate the selection procedure and subsequent stages, theCommission exempted the system on 30 June.

27 OJ C 335, 6.11.1997.28 IV/36.538.

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FIFA has chosen France to host the 1998 World Cup and entrusted the task of organising the event tothe Fédération Française de Football (FFF). To this end, the FFF set up the CFO as the localorganising committee. The CFO’s work consists in the logistics of the World Cup, including ticketsales. The overall system for selling tickets (prices, distribution and sale) must be approved by FIFA.

Tickets on sale outside France are marketed by two types of intermediary: national federations and touroperators. FIFA’s rules stipulate that 20% of all World Cup tickets are to be reserved for nationalfederations. The other tickets sold outside France are to be sold by tour operators in the EEA andelsewhere. To enable tour operators to sell their tickets to any end-user throughout the EuropeanUnion, and for reasons of safety and commercial good sense based on the existence of a critical mass oftickets per tour operator, the CFO has decided to select a limited number of tour operators on the basisof stringent specifications. The European tour operators have been selected regardless of nationalityaccording to selection criteria relating to their reliability, reputation, marketing methods, geographicalcoverage and experience. The number of tour operators in the EEA thus selected comes to five.

The selection system proposed by the CFO, being in the nature of a selective distribution network, islikely to have restrictive effects caught by the prohibition in Article 85(1) of the EC Treaty, namely alimitation on the number of tour operators responsible for selling tickets giving access to the 1998World Cup. Notwithstanding this, the selection system as a whole is considered by the Commission tobe proportionate to the objective pursued by the CFO, namely that of making the World Cup accessibleto the largest possible number of people by setting up a vast ticket reservation network while takingcare, for safety reasons, not to mix supporters from different countries. The selection system makes itpossible to ensure that tickets are distributed by competent professionals with extensive experience oftourism while allowing increased competition between the selected tour operators, to the benefit ofend-users. Restricting the number of tour operators is justified by the very nature of the event and ofthe resulting product. Ticket availability is limited by the event’s duration of only a month and bystadium capacity. The limited number of tour operators has made it possible, moreover, to resolve theconstraints linked to the safety issue by using a data-processing system which enables the CFO togather the necessary information from a manageable number of tour operators. The ticket distributionsystem envisaged is a considerable improvement on the one employed in Italy during the 1990 WorldCup. Spectators from the European Union can approach different, competing tour operators and travelagencies. Travel agents can themselves approach different tour operators to obtain tickets. Lastly, theCommission has taken care to ensure that the selection criteria are non-discriminatory and transparent.In the light of the case-law of the Court of First Instance on membership rules,29 the Commission takesthe view that selection criteria must be objective and sufficiently determinate so as to enable them to beapplied uniformly and in a non-discriminatory manner vis-à-vis all tour operators putting themselvesforward for selection. The indispensability of the restrictions of competition resulting from these rulescan be assessed only if this precondition is met.

29 Joined Cases T-528/93, T-542/93, T-543/93 and T-546/93 European Broaadcasting Union [1996] ECR II-649.



Monitoring of the block exemption Regulation on motor vehicle distribution30

- The Smart case - MC Micro Compact31

MC Micro Compact Car AG (MCC), a joint venture between Mercedes-Benz AG and Société Suissede Microélectronique et d’Horlogerie SA, notified in May 1996 its standard distribution agreementcovering the sale and servicing of the two-seater “Smart” city car. After several amendments, MCCsubmitted to the Commission in April 1997 an altered standard distribution contract which is inconformity with Regulation (EC) No 1475/95. The Commission would particularly like to point outthat the latest version of the notified contract complies with Regulation 1475/95 in the followingrespects:

- “Smart” dealers are allowed to market different makes (Article 3(3) of Regulation 1475/95);- “Smart” dealers may sell spare parts which compete with contract goods if they are of matching

quality (Article 3(5) of Regulation 1475/95);- “Smart” dealers are free to seek customers outside their contract territory by advertising, except by

personalised advertising (Article 3(8) of Regulation 1475/95);- recourse to an expert third party is provided for where there is disagreement over sales targets, stock

requirements and the keeping of demonstration vehicles (Article 4(1)(3) to (5)) and in case of earlytermination of the agreement (Article 5(3) of Regulation 1475/95).

The Commission has closed the case by way of a comfort letter informing MCC that the latest versionof the agreement is in conformity with the Regulation.

- Ford Service Outlet Agreement32

In June 1996 Ford notified a standard service outlet agreement (“the Agreement”). The Agreement,which will be implemented in all Member States except the United Kingdom, forms part of Ford’sreorganisation of its European dealer network.

The Agreement provides that the smallest Ford dealers, who mainly do servicing and sell very few cars(30 to 50 vehicles a year), will cease to be Ford dealers and instead become service outlets. The serviceoutlets will concentrate on maintenance, repair and warranty service to Ford customers. They are underno legal obligation to sell cars. The Agreement does not fall within the scope of CommissionRegulation 1475/95, 33 since there is no link between sales and servicing of cars, which is one of theconditions for its application.

The Commission is of the opinion that the Agreement presents advantages for consumers, who willretain the possibility of a service near home, as well as for small dealers, who would not be able tosurvive economically otherwise. The Commission has therefore closed this case by way of a comfortletter.

30 Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article 85 of the Treaty to certain

categories of motor vehicle distribution and servicing agreements, OJ L 145, 29.6.1995.31 IV/35.906.32 IV/26.101.33 OJ L 145, 29.6.1995.

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b) Other vertical agreements

BWI34

Best Western International (BWI), a US hotel organisation, obtained an exemption in respect of itsfranchise agreement, the Best Western Affiliation Agreement, the aim of which is to establish BestWestern as a single international marketing identity in different countries in the European Union bygranting licences to so-called Affiliated Organisations (“AO”) to use certain identifying symbols, suchas trade names and trade marks, which they can sublicense to hotels. The hotels involved arepredominantly in the segment of three to four star hotels. Best Western hotels in a given country formthe AO which they own, control and operate. There is an AO for every Member State within the EU,with the exception of Luxembourg. The AO may not own, manage, lease or control any hotel or otherlodging facility. The system also provides hotels with access to BWI's global reservation network. TheCommission took the view that the agreement fell within the scope of Regulation 4087/88 onfranchising. A comfort letter was issued to Best Western on 20 January.

Video games: Sega and Nintendo

In the follow-up to cases opened on its own initiative in June 1995 and the notification by Sega inMarch 1996 of its licensing agreements for the development of games compatible with its “Saturn”console, the Commission investigated the standard licensing agreements of both Sega and Nintendo.These two firms, which are leading suppliers of video game consoles and compatible games, have setup licensing schemes enabling independent software companies to develop and publish gamescompatible with their consoles.

In statements of objections sent to Nintendo and Sega in 1996, the Commission stated that the licensingagreements for the development of games compatible with the Nintendo “Game Boy”, “NintendoEntertainment System” and “Super Nintendo Entertainment System” consoles and the Sega “GameGear”, “Master System”, “Mega Drive”, “Mega CD” and “Saturn” consoles were restrictive ofcompetition and affected trade between Member States to an appreciable extent. Under the agreements,the two firms enjoyed in particular the right to approve any game developed by a licensee prior to itsbeing marketed, and licensees were under the contractual obligation to subcontract games production tothe licensors or to a limited number of approved manufacturers. In addition, most of the agreementsprohibited licensees from releasing more than a certain number of games each year.

The agreements thus enabled Sega and Nintendo to control the state of competition in the markets forgames compatible with their console systems, and in particular (i) the type and number of games released bytheir licensees, (ii) the time of their release and (iii) their manufacturing costs. Though primarily aimed atlimiting the ability of independent software companies to compete with Sega and Nintendo in the markets forcompatible games, these restrictions also had a direct impact on the European consumers for whom thegames were intended.

Following consultations with the Commission’s departments and the UK Department of Trade andIndustry, Sega and Nintendo decided to redraft their licensing agreements to bring them into line withEU competition law. Under the new agreements, there are no longer any limits on the number of games

34 IV/35.824 and IV/36.238.



a licensee may release on the market, and prior approval by the licensors is no longer required unlessand until a licensee elects to use one of their trade marks for a given game. In addition, the agreementsno longer contractually require that licensees’ games be exclusively manufactured by the licensors orauthorised manufacturers. Nintendo informed the Commission that the proposed amendments wouldalso apply to its licensing agreements aimed at the development of games compatible with its new“N64” console.

The Commission’s departments, which cooperated closely with the United Kingdom authorities ininvestigating the cases, considered that the new licensing agreements did not fall within the scope ofArticle 85(1) of the EC Treaty and would make for greater competition in the supply of gamescompatible with Sega and Nintendo consoles, to the immediate benefit of European consumers. Thecases involving the two firms were accordingly closed by comfort letter.

Banksys/Belgacom

On 2 December 1996 the Commission received notification of two memoranda of understandingbetween Banksys (which manages the Belgian debit card system), Belgacom (a Belgiantelecommunications operator) and three Belgian banks: Banque Bruxelles Lambert, Kredietbank andCrédit Communal de Belgique. These agreements seek to extend the functions available on the Protoncard, the electronic purse currently being launched in Belgium. Under the agreements, carriers ofProton cards will be able to reload them with the help of telephones specially equipped for that purposeand use them as calling cards.35

The investigation revealed no grounds for action under Articles 85(1) and 86. First, the parties haddeleted from the agreements the non-competition clauses concerning smart cards. Second, anymanufacturer or operator will be authorised on request to develop or have developed payment terminalsfor telephone calls or loading terminals based on specifications obtainable from the Interbank ElectronicSecurity Committee, a body set up by Belgian credit institutions. Third, any operator may obtainmemory space on the smart card on the same terms as Belgacom.

3. Rejection of complaints

Guérin Automobiles/Volvo France36

Guérin Automobiles/Nissan France37

These cases arose following two complaints about the standard-form distribution agreements of VolvoFrance and Nissan France. The complainant alleged that the agreements went far beyond what waspermitted under the exemptions in Regulation (EEC) No 123/85.

Following the adoption of the new Regulation (EC) No 1475/95, the interest of this type of case to theCommunity is greatly reduced and complainants can turn to national courts. The Commissionaccordingly took two decisions on 24 April rejecting the complaints.

35 OJ C 378, 13.12.1996.36 IV/34.423.37 IV/35.095.

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4. Settlement

Electrabel/Mixed intercommunal electricity distribution companies in Belgium

On 25 April the Commission announced its intention of suspending its investigation into the renewal ofthe articles of association of mixed intercommunal electricity distribution companies in Belgium (pressrelease IP/97/351).

In the spring of 1996 the Commission began to look into the matter and sent Electrabel, a privateproducer accounting for over 90% of electricity generation in Belgium, and Intermixt, the bodyrepresenting the communes associated in the distribution companies, a letter setting out its observationson several points:

- the duration of the new articles, which would prolong for several years the duration of thepartnership between Electrabel and the communes to between 20 and 30 years depending on thedistribution company concerned;

- a clause in the articles granting Electrabel the exclusive right to supply distribution companies withelectricity for resale to final consumers. This clause was to operate for the lifetime of the newarticles, i.e. for 20 to 30 years;

- certain aspects of the arrangements to permit communes to hold Electrabel shares.

The Commission invited Electrabel and Intermixt to make proposals to modify the new articles, failingwhich it proposed to initiate proceedings in order to prohibit them. Following consultations between theCommission and the parties, a satisfactory solution was found in the spring of 1997.

The proposals accepted by the Commission will be brought into force as and when the mixedintercommunal companies hold general meetings. The process may take several months. The file willbe formally closed by the Commission once all the amendments have been put into place.The new articles will be modified in the country’s three Regions so as to incorporate the followingchanges:

- exclusive supply of electricity by Electrabel will cease completely in 2011. Thereafter, alldistribution companies will be free to obtain supplies from the supplier of their choice;

- from 2006 the exclusivity will be lifted for 25% of the distribution companies’ requirements. Eachof them will be entitled, on four years’ notice, to obtain from third parties a quantity of electricityequivalent to 25% of its total requirements for supply after 2006. The electricity will be constantsupply (“base load”), while Electrabel will continue to supply the balance, including peak loadsupplies. The security of supply for the 25% which the distribution company may source from athird party will be guaranteed by the supplier or another producer prepared to provide such aguarantee;

- subject to its receiving fair compensation, Electrabel will not oppose the dissolution of a distributioncompany after 2011 if the communes associated in the distribution company so decide;



- the financial arrangements for the Electrabel shares to be held by the communes will includeprovision to afford the communes protection from any fall in the shares’ value. These financialarrangements will come to an end at the same time as Electrabel’s remaining supply rights, i.e. in2011.

In its handling of the case the Commission sought to safeguard the opportunities provided by theDirective liberalising the single market in electricity by preventing the foreclosure for a long period of asignificant part of the electricity market in Belgium.

At the same time, it was anxious not to call into question the principles of security and continuity ofsupply which guide the communes’ action and which are closely monitored by the supervisoryauthorities.

Irish Sugar

On 14 May, in a decision which found that the company had infringed Article 86 of the Treaty, theCommission imposed a fine of ECU 8.8 million on Irish Sugar plc, a subsidiary of the GreencoreGroup.

The decision against Irish Sugar concerns a series of infringements since 1985. Irish Sugar is the soleprocessor of sugar in the island of Ireland and has a share of over 90% of the sugar market withinIreland. The decision states that Irish Sugar has abused its dominant position on the Irish sugar marketby seeking to restrict competition both from imports of sugar from other Member States and from smallsugar packers within Ireland.

In the late 1980s Irish Sugar and its subsidiary Sugar Distributors Limited sought to restrictcompetition from imports of sugar from France and Northern Ireland by offering selectively low pricesto customers of an importer of French sugar, swapping Irish Sugar’s own Siucra brand of packagedsugar for an imported brand and offering selective “border” rebates to customers for packaged sugarwho were located close to the border with Northern Ireland. These practices formed part of a policy ofdividing markets and excluding competitors. Moreover, wholesale and retail customers who did notreceive selective low prices and rebates were placed at a competitive disadvantage in the retail sugarmarket.

Since at least 1985 Irish Sugar has offered rebates on purchases of bulk sugar to industrial customerswho export part of their final product to other Member States. These “sugar export rebates” varybetween customers for the same tonnage of sugar and vary over time without any consistentrelationship to sales volumes or currency changes. Both the practice of offering sugar export rebatesand the ad hoc manner in which the scheme is administered discriminates against customers who supplyonly the Irish market and places them at a competitive disadvantage in their trading relations with thirdparties - one Irish food processor is given a rebate to compete with a French processor in Francewhereas another Irish food processor receives no rebate to compete with that same French company onthe Irish market. The system of rebates on exports to other Member States also distorts the commonsugar regime.

Since 1993 Irish Sugar has sought to restrict competition from small sugar packers within Ireland bydiscriminating against them in the prices that it has charged for bulk sugar, thereby placing them at acompetitive disadvantage, notably vis-à-vis Irish Sugar itself. Irish Sugar has also offered rebates to

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certain wholesalers and food retailers who have been dependent on increases in their purchases of IrishSugar’s own Siucra brand, thereby making it difficult for small competitors to gain a foothold in themarket.

Through its infringements Irish Sugar has been able to maintain a significantly higher price level forpackaged retail sugar in Ireland compared with that in other Member States, notably in NorthernIreland, and has been able to keep its ex-factory prices, particularly for bulk sugar for “domestic” Irishconsumption, amongst the highest in the Community, to the detriment of both industrial and finalconsumers in Ireland.

In setting the level of the fine the Commission took into account the fact that the infringementsrepresent a serious breach of Community law, that several have been recognised as abuses of adominant position by the European Court of Justice and that they have taken place over a long period oftime.

ITT/Belgacom

During the course of 1997, the Commission reached a settlement with ITT Promedia NV andBelgacom, the Belgian telecommunications operator, on the conditions under which publishers oftelephone directories in Belgium have access to data regarding subscribers to Belgacom’s voicetelephony services.

The settlement terminated proceedings which had been initiated in response to a complaint lodged withthe Commission by ITT Promedia NV, the Belgian directory-publishing subsidiary of the US ITTWorld Directories company. In order to publish telephone directories - an activity which in Belgiumwas opened up to competition in 1994 - directory publishers require access to basic data whichtelecommunications operators (TOs) such as Belgacom have as a result of their provision of voicetelephony services. To the extent publishers are thus dependent on the TOs for access to such data,access must be granted on terms which are inter alia cost-oriented and non-discriminatory.

In its complaint, ITT alleged that the conditions which Belgacom was applying for access to its datawere excessive and discriminatory and thus caught by Article 86 of the EC Treaty. The initial priceequal to 34% of the publisher’s turnover and BEF 200 per line of data had already in 1995, as a resultof intervention at the national level, been brought down to 16% of turnover and BEF 67 per line ofdata. The Commission found that these latter conditions were still abusive and issued a formalstatement of objections against Belgacom at the end of 1995.

Following the statement of objections and hearing, Belgacom endeavoured to meet the Commission’sconcerns by submitting a business proposal on the basis of which the conditions for access to its datawould result in a price allowing Belgacom to recover the costs it actually incurs in the collection,treatment and provision of the subscriber data required for publishing purposes, plus a reasonableprofit margin. The variable component (16%) related to the turnover or profit of directory publisherswas not compatible with this cost-oriented approach, as Belgacom’s revenues would have increaseddepending on the commercial success of publishers, without any direct relation to the costs it wasincurring in this respect, and Belgacom agreed to drop this variable fee.



For the years 1995 and 1996, the cost allocation method applied in the particular circumstances of thiscase produced total annual costs for Belgacom of BEF 372 million; these costs must be dividedamongst the total number of directory publishers, which for the years in question were two, ITT andBelgacom’s directory-publishing subsidiary Belgacom Directory Services. This translated into a priceper line of data of BEF 37 for basic data, i.e. data and updates which are essential for publishingtelephone directories, and BEF 10 for supplemental data, i.e. data which can be acquired fromBelgacom or other sources. The distinction between access to basic and supplemental data has beenintroduced as of 1997, supplemental data already having been imbedded in the data provided and thuspayable over the previous years. As of 1997, the price charged for supplemental data ismarket-oriented, as Belgacom is in competition with other sources for the provision of such data.

The proposals made by Belgacom were sufficient to meet the Commission’s concerns that access tosubscriber data would be provided on a cost-oriented basis; in its assessment, the Commission wasassisted by an expert consulting firm. As a result of the new conditions proposed by Belgacom, ITTwithdrew its complaint and the file could be closed without the need for a formal decision.

With respect to the future trend of prices for access to basic data, Belgacom has furthermoreundertaken to continue applying the cost-oriented method agreed as part of the settlement. Severalfactors could lead to a change in prices for basic data, for example, a downward trend if costs go downas a result of technological improvements, possibly limited by an upward trend if Belgacom’ssubscriber base increases. Furthermore, the price per publisher will go down as the number ofpublishers of telephone directories, amongst which the total costs are allocated, goes up.

The principle of cost-orientation which is at the heart of this case is not only relevant from the point ofview of the application of the competition rules, but is also in line with the EU policy approach ondirectories reflected in the ONP voice telephony Directive38 and the Commission’s communication ondirectories.

Digital

In 1995 the Commission received two complaints against Digital Equipment Corporation (Digital), oneof the world’s leading suppliers of computer hardware and software, from independent serviceproviders (third party maintenance companies), who alleged that Digital’s practices prevented effectivecompetition in the supply of hardware maintenance services for Digital systems.

After investigations had been carried out at Digital’s premises in Germany, the Netherlands and theUnited Kingdom in November 1995, the Commission found, in a formal statement of objectionsaddressed to Digital in March 1997, that Digital had abused its dominant position on the EU marketsfor Digital software services and hardware services for Digital systems (1) by engaging indiscriminatory practices, in particular by offering, in the supply of software support services, highlydifferent transactions at the same price and similar transactions at very different prices, and (2) by tyingthe supply of hardware services and software services, inter alia due to the prices of software servicesbeing considerably more attractive when included in a hardware and software service package thanwhen sold on a stand-alone basis. The latter type of practice was deemed by the Commission to reflecta deliberate policy on the part of Digital to restrict its competitors’ scope in the market for hardwaremaintenance services for Digital computer systems; this policy also took the form, in the case of some

38 Directive 95/62/EC, currently being amended.

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contracts, of fidelity discounts conditional on the users concerned not obtaining supplies from otherservice providers during the lifetime of their agreement with Digital.

The Commission also considered that Digital’s agreements for the distribution of hardware andsoftware maintenance services infringed Article 85(1) of the EC Treaty:(1) by limiting the customer base of Digital’s distributors, forbidden as these were to supply softwareupdates and the corresponding services to users to whom they had not previously supplied the softwarein question or the system on which it was used, and(2) by excluding without justification certain companies, including independent service providers, fromDigital’s distribution network.

While disputing the interpretation of the facts and the provisional findings as set out by the Commissionin its statement of objections, Digital modified its service portfolio and pricing practices in the area ofhardware and software maintenance services and gave the Commission a number of formalundertakings.

These undertakings provide for the separate marketing of hardware maintenance services, theintroduction of a new software service package, a suitable amendment of Digital’s pricing policy for itssoftware support services and the software and hardware service package (the “DSS” package),publication of the price list and the inclusion, in all customer quotations for Digital’s DSS package, ofseparate quotations for each of the individual component services. Digital also undertakes to pursue atransparent and non-discriminatory discount policy and, when offering a discount for its DSS package,to offer the same discount on the component services of the package if taken separately. AlthoughDigital reserves the right to grant non-standard price reductions to meet competition, the reductions willnot be granted on the DSS package but only on the individual component services, which will remainseparately available, and Digital undertakes to verify that they are proportionate and do not prevent ordistort competition.

Digital further undertakes not to prevent its distributors from distributing software updates and servicesto any person properly licensed to use the relevant software and to select its service distributors throughthe non-discriminatory application of objectively verifiable criteria.

The Commission considers that Digital’s undertakings, which will expire on 1 January 2003, meet theconcerns of independent service providers while giving Digital system users a wider and moretransparent choice and Digital’s competitors more scope than hitherto.

Agreement on the joint control of BBL

The agreement on the joint control of Banque Bruxelles Lambert (BBL) was signed on 30 August 1995by the industrial and financial holding company Groupe Bruxelles Lambert (GBL), the Belgianinsurance group Royale Belge (RB) and the Belgo-Luxembourg banking group Crédit Communal deBelgique (CCB). Between them, these three groups hold 37.5% of BBL’s capital. The agreement wasnotified to the Commission on 20 December 1995 with a view to obtaining negative clearance (noapplication for exemption having been made). It limits the future conduct of the parties as BBLshareholders. First, they may not buy or sell BBL shares freely. Second, a strategy committee is set upcomposed of seven members: two representatives each of GBL and RB and two representatives of CCBplus one representative of its Luxembourg banking subsidiary BIL (giving three representatives in all



for the CCB group). The committee, acting unanimously, decides all matters within the competence ofBBL’s general meetings and board of directors (such as company strategy and the appointment ofmanaging board members) and any other question to do with the present or future participation of theparties in BBL. Its decisions are binding on the parties as regards their votes at BBL general meetingsand board of directors meetings. The agreement, which was concluded for a renewable period offive years, formed the subject-matter of a Carlsberg notice.39

After a detailed examination the Commission informed the notifying parties that the agreement involvedrestrictions of competition incompatible with Article 85(1) of the Treaty. Owing to the presence ofCCB among the signatories and on BBL’s board of directors, it was liable to have three anticompetitiveeffects. The first two were of a “structural” nature. First of all, CCB might be able to exert influenceover BBL. Secondly, the two banks’ behaviour might change without the need for any concerted actionon their part, each making allowance in its decisions for the financial interests of the other. And thirdly,CCB might gain access to confidential information on BBL’s policy and results and modify its ownbehaviour accordingly. It did not appear from the scrutiny of the documents discovered in the course ofthe investigation that the first two effects had as yet materialised, although they could do so at anymoment. It was clear from those documents, however, that the information which passed through thehands of BBL’s board of directors could be of use to CCB.

The parties challenged all the points raised by the Commission. The investigation was in any casewound up after BBL’s takeover by ING, which rendered the agreement inoperative.

B - New legislative provisions and notices adopted or proposed by theCommission

Title Date PublicationProposal for a Council Regulation (EC)amending Regulation (EEC) No 3975/87laying down the procedure for theapplication of the rules on competition toundertakings in the air transport sector: -COM (97) 218

OJ C 165, 31.5.1997, p.13

Recommendations on the application of thecompetition rules to transport infrastructureprojects

OJ C 298, 30.9.1997, p.5

Commission notice on agreements of minorimportance

15.10.1997 OJ C 372, 9.12.1997, p. 13

Notice on cooperation between nationalcompetition authorities and theCommission in handling cases fallingwithin the scope of Articles 85 or 86 of theEC Treaty

10.10.1997 OJ C 313, 15.10.1997, p. 3

Commission notice on the definition ofrelevant market for the purposes ofCommunity competition law

15.10.1997 OJ C 372, 9.12.1997, p. 5

39 OJ C 41, 13.2.1996.

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C - Formal decisions pursuant to Articles 85, 86 and 90 of the EC Treaty

1. Published decisions

Published decisions Date of decision PublicationIV/F3/34621-35059 Irish Sugar plc 14. 5.1997 OJ L 258, 22.9.1997, p. 1Commission Decision relating to a proceedingunder Article 65 of the ECSC Treaty(IV/36.069 - Wirtschaftvereinigung Stahl)

26.11.1997 OJ L 1, 3.1.1998, p. 10

Article 90(3) Decision requesting the Italianauthorities to end the system of discounts onpilotage in the port of Genoa

OJ L 301, 5.11.1997, p. 27

IV/35.830 - Unisource 29.10.1997 OJ L 318, 20.11.1997, p. 1IV/35.738 - Uniworld 29.10.1997 OJ L 318, 20.11.1997, p. 24

2. Other formal decisions40

2.1. Non-opposition decisions under Regulation (EC) No 870/95 (liner shipping consortia)

Case No IV/ Name Date of decisionIV/D2/35.770 Joint Operational Service Agreement on 5 March 1997 not publishedIV/D2/35.774 West Coast/Mediterranean Agreement on 5 March 1997 not publishedIV/D2/35.763 New Carribean Service on 6 October 1997 not publishedIV/D2/36.319 Eurosal III on 6 October 1997 not published

2.2. Individual exemption decisions adopted by the Commission under the opposition procedure(Article 12 of Regulation (EEC) No 4056/86 on maritime transport)

Case No IV/ Name Date of decisionIV/D2/35.681 Finncarriers, Poseidon and United Baltic Corporation on

9 January 1997(not published)

IV/D2/36.282 Consortia arrangements between Sea-Land, P&O Nedlloyd,Maersk and OOCL (“Vessel Sharing Agreements”)

(not published)

2.3. Rejections of complaints by decision

Case No IV/ Name Date of decisionIV/F2/35.095 Guérin/Nissan 22.4.1997IV/F2/34.423 Guérin/Volvo 22.4.1997IV/F3/35.591 +IV/F3/35.624

Hogeslag+Groninger/PVV+SSR+12 23.4.1997

IV/F1/33.302 Stork/Serac 20.6.1997 40 Not published in the Official Journal.



IV/F2/36.398 Bönig/Mazda 30.7.1997IV/F2/35.963 Bombardier-Rotax+HOAC/Austria 15.10.199736.075 CDK/Belgian State + EGC 12.11.1997IV/F1/35.169 TEM/Iberdrola 27.11.1997

D - Cases closed by comfort letter in 1997

Case No Title Date of closure Type ofcomfortletter41

35605 Bramac (ex EFTA 0061) 10-Jan-97 136186 Verrerie Cristallerie d’Arques JG Durand 10-Jan-97 135939 Automotive Products+Kongsberg+3 15-Jan-97 136265 Ford + Hessing De Bilt 21-Jan-97 134513 Eurogiro-network+14 17-Feb-97 135422 Nordic Oil & Energy Market Association (NOMA) (ex

EFTA 0047)17-Feb-97 1

36061 ECU Banking Association 17-Feb-97 135341 Hickson+Laporte+Rentokil 18-Feb-97 136124 Lange Uhren 18-Feb-97 134197 Marwal Systems + 3 19-Feb-97 135208 BASF + Gist-Brocades 25-Feb-97 136344 Suomen Optiopörssi 04-Mar-97 136192 ABB + BRB 05-Mar-97 136199 BRB + Railcare 05-Mar-97 136198 Railcare + Angel Train Contracts + 5 05-Mar-97 136280 Hallmark+Susy Card 05-Mar-97 136244 MD Foods+Arla+2 10-Mar-97 136242 Edward Dillon+5 13-Mar-97 135447 Control Data+Volkswagen+5 14-Mar-97 135058 Cultor + Degussa 17-Mar-97 136269 KME Schmoele+Talum 19-Mar-97 136351 Papierholz Austria+4 19-Mar-97 136258 SmithKline Beecham + Albemarle 21-Mar-97 136367 Goldschmidt+Grünau 21-Mar-97 136226 European Rail Catering+British Railways+13 26-Mar-97 135932 IRI+Oracle 07-Apr-97 135608 Wasabröd+Chips Oy (ex EFTA 0011) 08-Apr-97 136338 Arcus+Dethleffsen 08-Apr-97 134217 Hewlett-Packard 10-Apr-97 134694 Hewlett-Packard 10-Apr-97 135155 Hewlett-Packard 10-Apr-97 1

41 1 = Negative clearance 85(1) or 86

2 = Individual exemption 85(3)3 = Conformity with notice/block exemption.

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35868 Hewlett-Packard+14 10-Apr-97 135996 Vobis + Escom +SNI 11-Apr-97 136365 NEC+PB+Bull+8 11-Apr-97 135310 Wardle + Rover 25-Apr-97 136352 Zeneca+Sugen 25-Apr-97 136284 Royal Appliance+Harvard+2 05-May-97 136350 Johnson Wax+Caramba 05-May-97 136377 VKG 06-May-97 136254 P&WC + SNECMA 07-May-97 136422 Certa + Conforma 13-May-97 136416 Delfzijl Resin + Akzo Nobel Chemicals 20-May-97 136426 Philips FPD+Hosiden 20-May-97 136357 Perrier+Hero 22-May-97 135205 Lupack + Stork 29-May-97 136479 Evergreen+Chindwell 29-May-97 136026 Lindex+PTA 30-May-97 136071 Burberrys 30-May-97 133038 NVVA(Aansprakelijkheidsverzekeraar) 03-Jun-97 135378 Danish Bankers Association (cross-border payments) 03-Jun-97 136339 Becker+IS 04-Jun-97 136465 Friesland+Westmilch+4 09-Jun-97 136499 Burtonwood Brewery 09-Jun-97 136462 ABR+Crespel 16-Jun-97 136405 HIMPP+6 19-Jun-97 135130 Volvo Aero + UTC 30-Jun-97 136087 Europartners+2 03-Jul-97 136548 AIT+Continuum 04-Jul-97 136549 AIT+Fiserv CIR 04-Jul-97 135719 Gasell Metform+Gyproc (ex EFTA 0044) 14-Jul-97 136394 Avia 30-Jul-97 135705 PO / Sega (licences) 22-Aug-97 135707 PO / Nintendo (licences) 22-Aug-97 136553 Photronics+Plessey+1 28-Aug-97 136525 Fresh Fruit Services 03-Sep-97 136489 Danka+Kodak+2 11-Sep-97 136435 Metsä-Botnia+Metsä-Rauma+4 12-Sep-97 136514 Dave & Buster’s+Milton Keynes+1 17-Sep-97 135867 Technical Support Alliance+1 22-Sep-97 134942 WRG 23-Sep-97 135920 Meridian+DKV+1 30-Sep-97 136384 Dunlop+Firsteel 30-Sep-97 132696 Vereningde Assurantiebedrijven Nederland 02-Oct-97 132995 NVAA+Centrale Egalisatie Pool 02-Oct-97 135672 Europay + etcI + TCG 02-Oct-97 1



36584 Sika+HT Troplast+1 03-Oct-97 135961 Sega Saturn 06-Oct-97 134841 Pool Reinsurance 09-Oct-97 136633 National Westminster Bank + John Deere Group 09-Oct-97 136532 EME+PSEL+PSE+2 10-Oct-97 136299 Banksys+Belgacom+3 15-Oct-97 135465 Bundesländer+Wiener Allianz+13; CMR-Pool (ex EFTA

0028)16-Oct-97 1

36343 SGB+Rentenanstalt-Swiss Life+1 16-Oct-97 136469 Eureko+6 16-Oct-97 136317 Portland+Cementa 20-Oct-97 135498 Chevron+Amerada+5 23-Oct-97 136612 DLG+SLR+1 23-Oct-97 136637 Gibbs Mew + Centric Pub Company 04-Nov-97 136419 EGFI 06-Nov-97 136678 Walker Electronic+Keba 06-Nov-97 136386 Belgacom 13-Nov-97 135880 Leica 17-Nov-97 135597 Ascot Estates 18-Nov-97 136355 Mayfair 18-Nov-97 136603 Hilti+Leica 24-Nov-97 136639 Fercher + Schreier 25-Nov-97 136671 BICC+NKF+2 25-Nov-97 136193 Ishikawajima-Shibaura Machinery Co Ltd.+Perkins Group

Limited28-Nov-97 1

36404 HFC Bank+BGT+4 02-Dec-97 136446 SweFerry+DFO+DSB 03-Dec-97 136485 Lonza 03-Dec-97 136496 Home and Life Magazine 05-Dec-97 135293 IBOS Association 17-Feb-97 136203 Cygnus + Becton Dickinson 06-Mar-97 134820 GEN 24-Mar-97 133842 UIP+British Sky+4 13-May-97 135715 UIP Pay TV+Pro Net 13-May-97 134196 UIP + BSB + 10 13-May-97 133843 UIP Pay TV+3 13-May-97 135179 Bowater Packaging + Corrugated Europe 10-Jan-97 235194 Esscor Packaging 10-Jan-97 235583 Rosen+ENEL 18-Jan-97 235905 Sarlux+ENEL 18-Jan-97 235903 Rosen Rosignano Energia+SNAM 18-Jan-97 235853 Api Energia+ENEL+1 18-Jan-97 235123 Volvo Finland + Renault 21-Jan-97 236096 Cummins+Iveco+New Holland 21-Jan-97 235124 Volvo Personbilar Sverige + Renault 21-Jan-97 2

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35125 Volvo Personbiler Norge + Renault 21-Jan-97 236176 Thomson+Philips+Siemens 22-Jan-97 235494 Transgas+Turbogas 03-Feb-97 232727 Invaliditeitsverzekeringscentrale 17-Feb-97 234910 OCIMF + 35 20-Feb-97 235313 Ciba + Kodak 20-Feb-97 230130 Kawasaki UK 24-Feb-97 235365 Nobel+Justesa 24-Mar-97 236248 Schweppes/Appletise 08-Apr-97 236177 Centro Energia Comunanza+ENEL 09-Apr-97 236170 Exxon Chemical France + ICI Chemicals & Polymers 15-Apr-97 235921 GTM+12 22-Apr-97 235577 Skandinavisk Tobaks+1+Svenska Tobaks+1 24-Apr-97 236142 BPB+Isover+3 (ex IV/M.735) 13-May-97 236217 Texas Instruments+Power Innovations +1 20-May-97 236151 London & Scandinavian+Treibacher+1 23-May-97 235926 Strabag+Bank Austria+Stuag (ex IV/M.661) 29-May-97 235541 Byk Gulden+Nycomed 02-Jun-97 235590 Orlik Tobacco+Borkum Riff+2 02-Jun-97 232996 NVAA 03-Jun-97 236414 Carnival+Airtours+1 05-Jun-97 236239 Usinor Sacilor/LME/SAM+1 09-Jun-97 235486 La Poste+Royale Belge 16-Jun-97 235756 JBF + 7 (ECSC No 1167) 16-Jun-97 234966 Courage + Morland 30-Jun-97 236538 CFO 18-Jul-97 236376 Warner-Lambert+Pfizer 25-Jul-97 235426 Scandinavian Market Association (SMA) (ex EFTA 0065) 28-Jul-97 236318 DSM+Schenectady+2 07-Aug-97 236101 Ford (Service Outlet)+13 13-Aug-97 236208 Belgacom+Scitor+Scitor Internat.Telecommunication

Services22-Sep-97 2

36391 Siemens + Elscint 22-Sep-97 234338 UNESPA (CIDE) 26-Sep-97 234354 Associacao Portuguesa Seguradores 26-Sep-97 234339 UNESPA (ASCIDE) 26-Sep-97 235855 Scandairy+2 01-Oct-97 232210 FIAT Trattori 02-Oct-97 234457 Brandassuradeuren 02-Oct-97 233042 NVVA (Aansprakelijkheidsverzekeraar) 02-Oct-97 233043 NVVA (Aansprakelijkheidsverzekeraar) 02-Oct-97 236599 Serene+7 10-Oct-97 236183 Schweppes+Coca-Cola+6 23-Oct-97 236478 DryckesDistibutören i Sverige AB 23-Oct-97 235258 Audio/Video-Leverandorforeningen + Radiobranchen 24-Oct-97 2



36153 GSM MoU- International Roaming Agreement 11-Nov-97 235877 Omnigraph+5 13-Nov-97 236453 Polish Coal Export to Ireland 20-Nov-97 236526 Riverwood+FCP+5 25-Nov-97 234536 Autodesk 26-Nov-97 232689 BAVAM 02-Dec-97 236620 DSM + VEBA 03-Dec-97 236205 Elekta Instrument AB+Leica AG 04-Dec-97 236616 IVPC + ENEL 08-Dec-97 236694 Teverola+ENEL+1 08-Dec-97 236695 Comunanza+SNAM 08-Dec-97 235453 Kabel-Evidenzbureau+6 (ex EFTA 0036) 19-Dec-97 236487 Vaillant+Fagor+1 19-Dec-97 236713 Siemens & Floware 19-Dec-97 235507 Omnitel Pronto Italia (2nd GSM operator) re-opened case 19-Dec-97 235467 Timber+2 (ex EFTA 0006) 10-Jan-97 235468 MTK+2 (ex EFTA 0105) 10-Jan-97 235510 Enso-Gutzeit+Koskitukki+Luvian Tukki+4 others 10-Jan-97 235527 Etelä-Savon + Etelä-Karjalan + 10 10-Jan-97 235529 Etelä + Keski + 5 10-Jan-97 236094 Maa-ja Metsataloustuottajain Keskusliittp mtk

Ry+Metsateolli10-Jan-97 2

35530 Kainuun+Pohjois+5 10-Jan-97 235528 Nylands+Lounais-Suomen+11 10-Jan-97 235512 Alavuden Puunjalostustehdas+Haapajarven

Hasa+Tehdaspuu+Yhtyn10-Jan-97 2

35511 Enso-Gutzeit+Keiteleen Teollisuussaha+Myllykoski+3others

10-Jan-97 2

35509 Kuhmo+Tehdaspuu+Veitsiluoto+Yhtyneet Paperitehtaat 10-Jan-97 235485 Ren + Turbogas 03-Feb-97 235698 ISAB Energy + 5 03-Feb-97 235841 OK Petroleum+Hydro Texaco+1 07-Oct-97 235522 Michelin+Continental+1 04-Nov-97 236128 FWL+Esser 14-Jan-97 335803 AWS+CMA+DSR-Senator 20-Jan-97 336184 Monroe Europe+Airax 21-Jan-97 335495 Ugland international+20 03-Feb-97 331210 Honda Benelux 04-Feb-97 336238 Best Western (modified AA) 18-Feb-97 336268 Accountancy Firms’ Memorandum 18-Feb-97 336279 Goodyear 03-Mar-97 335878 Golv-Gripen+Välinge 19-Mar-97 336115 TeleCenter+Tele Danmark 25-Mar-97 336484 CAMR + Speywood 15-May-97 334995 Pool Italiano Previdenza Assicurativa degli Handicappati 16-Jun-97 3

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34997 CIRT 16-Jun-97 335906 MC Micro Compact 05-Aug-97 332698 Verenigde Assurantiebedrijven Nederland 02-Oct-97 336482 OBI 20-Oct-97 335104 Concordato Cauzione e Credito 1994 06-Nov-97 336180 Relais & Châteaux 20-Nov-97 3

E - Notices pursuant to Articles 85 and 86 of the EC Treaty

1. Publication pursuant to Article 19(3) of Council Regulation No 17

Case No IV/ Name Publication35.841 OK Petroleum/Hydro Texaco OJ C 47, 15.2.1997, p. 334.415 IFCO OJ C 48, 18.2.1997, p. 435.742 EUCAR OJ C185, 18.6.97IV/E2/36.461 Shell Nederland/BASF Nederland OJ C 269, 5.9.1997, p. 2IV/F3/35.079 Whitbread OJ C 294, 27.9.1997IV/F3/34.796 Canon+Kodak+others OJ C 330, 1.11.1997IV/E3/36.204 Genusa OJ C 381, 16.12.1997

2. Publication pursuant to Article 12(2) of Council Regulation (EEC) No 4056/86 andArticle 12(2) of Council Regulation (EEC) No 1017/68

Case No IV/ Name PublicationIV/D2/36.282 Consortia arrangements between Sea-Land,

P&O Nedlloyd, Maersk and OOCLOJ C 185, 18.6.1997, p.4

IV/D2/35.681 Finncarriers, Poseidon and United BalticCorporation

OJ C 310, 19.10.1996, p. 7

3. Notices inviting interested third parties to submit observations on proposedtransactions

Case No IV/ Name Publication36.365 NEC + Packard Bell + Bull OJ C 44, 12.2.199736.426 Philips FPD Hosiden OJ C 110, 9.4.1997, p. 5IV/F3/36.478 DryckesDistributören I Sverige AB OJ C 152, 21.5.1997IV/F3/36.533 Yves St.Laurent OJ C 196, 26.6.1997IV/F3/36.497 Rhône Poulenc/Novo Nordisk OJ C 218, 18.7.1997IV/F3/36.589 Givenchy OJ C 235, 2.8.1997IV/F3/36.610 Sanofi Pharma/Bristol-Myers Squibb OJ C 242, 8.8.1997IV/F2/36.213 GE Pratt&Whitney OJ C 25, 24.1.1998, p. 17



4. “Carlsberg” notices concerning structural cooperative joint ventures

Case No IV/ Name Publication36.351 Papierholz Austria OJ C 21, 21.1.1997, p. 1836.254 Pratt & Whitney/SNECMA OJ C 27, 28.1.199736.308 Springboard OJ C 65, 1.3.199736.461 Shell/BASF OJ C 121, 19.4.1997, p. 536.556 Harcros Chemicals UK/Nippon Denko Ltd OJ C 233, 1.8.1997, p. 236.584 Sika AG/HT Troplast AG OJ C 235, 2.8.1997, p. 536.612 Dansk Landbrugs Grovvareselskab amba

(DLG)/Svenska Lantmännens Riksförbund ekför (SLR)

OJ C 260, 27.8.1997, p. 3

36.539 British Interactive Broadcasting - BiB OJ C 259, 26.08.1997, p. 336.650 BASF AG/Shell Petroleum NV OJ C 289, 24.9.1997, p. 436.586 British Digital Broadcasting (BDB) OJ C 291, 25.09.1997, p. 1136.581 TD OJ C 298, 30.9.1997, p. 436.592 Cégetel OJ C 298, 30.9.1997, p. 436.658 Mitteldeutsche Erdöl Raffinerie GmbH

(Mider)/Helm AG (Helm)OJ C 305, 7.10.1997, p. 6

36.618 Sweden Post/Post Denmark OJ C 314, 16.10.1997, p. 436.645 STET/Bouygues OJ C 324, 25.10.1997, p. 436.303 Enex OJ C 354, 21.11.1997, p. 1336.638 FIA/FOA OJ C 361, 27.11.1997, p. 736.732 Solvay/Sisecam OJ C 369, 6.12.1997, p. 636.785 BASF AG/Shell Petroleum NV OJ C 369, 6.12.1997, p. 736.204 Genusa OJ C 381, 16.12.1997, p. 7

F - Press releases

Reference Date SubjectIP/97/420 15.01.1997 Maritime transport: the Commission gives green light to the

North Sea Liner Conference AgreementIP/97/50 23.01.1997 Competition and transparency: the Commission adopts a notice on

access to the fileIP/97/80 31.01.1997 Commission approves a revised cooperation arrangement

between Swedish Match Sverige AB and SkandinaviskTobakskompagni A/S concerning the Prince brand of cigarettesin Sweden

IP/97/147 21.02.1997 Commission adopts a statement of objections against Unileverconcerning freezer cabinet exclusivity in the Irish ice creammarket

IP/97/148 24.02.1997 Karel Van Miert gives green light to licensing arrangementsconcluded between Cadbury Schweppes plc. and Coca ColaEnterprises Inc.

IP/97/292 11.4.1997 Settlement reached with Belgacom on the publication of telephonedirectories

ANTITRUST


IP/97/640 01.05.1997 Car prices in the European UnionIP/97/12 20.05.1997 Commission proposes full implementation of competition rules

also to air transport between Union and third countriesIP/97/676 22.07.1997 The Commission clears Nintendo’s new licensing agreementsIP/97/740 4.8.1997 Monitoring of the block exemption Regulation on motor vehicle

distributionIP/97/742 05.08.1997 Commission approves the creation of Scandairy K/S, a joint

venture between Arla ekonomisk förening and MD Foods ambaIP/97/757 14.08.1997 The Commision clears Sega’s new licensing agreementsIP/97/787 11.09.1997 Commission approves bottling joint venture between The Coca-

Cola Company and Carlsberg A/SIP/97/821 29.09.1997 The European Commission intends to clear Whitbread’s

standard pub leasesIP/97/868 10.10.1997 The European Commission accepts an undertaking from Digital

concerning its supply and pricing practices in the field ofcomputer maintenance services

IP/97/876 15.10.1997 Ground-handling services at Athens airportIP/97/907 22.10.1997 Dock labour in the port of GenoaIP/97/907 22.10.1997 Pilotage fees in the port of GenoaIP/97/932 30.10.1997 Commission conditionally approves the creation of two

telecommunications alliances, Unisource and UniworldIP/97/1027 24.11.1997 Microsoft responds to Commission objections by releasing The

Santa Cruz Operation from restrictions in a contractIP/97/1042 26.11.1997 Wirtschaftsvereinigung Stahl : the Commission prohibits an

information exchange system in the steel industryIP/97/1075 3.12.1997 Karel Van Miert submits to the Commission clear guidelines on

the method for the setting of fines in the context of European"anti-trust" legislation

IP/97/1139 17.12.1997 Cable reviewIP/97/1180 19.12.1997 Commission opens investigation into international telephone prices

G - Judgments and orders of the Community courts

1. Court of First Instance

Case Parties Date Publication

T-229/94 Deutsche Bahn v Commission 21.10.1997T-195/95 Guérin Automobiles 6.5.1997 ECR I-679T-38/96 Société Guérin Automobiles 10.7.1997 ECR II-1223T-213/95and T-18/96

SCK and FNK v Commission 22.10.1997 ECR II-1739



2. Court of Justice

Case Parties Date PublicationC-264/95 P Commission v Union

internationale des chemins de fer(UIC)

11.3.1997

C-282/95 P Guérin Automobiles 18.3.1997 ECR I-1503C-147C-148

Request for preliminary ruling,Citibank + GZS/Deutsche PostAG (remail)

17.4.1997

C-157/94 Commission v Netherlands 23.10.1997 OJ C 387, 20.12.1997, p. 1C-158/94 Commission v Italy 23.10.1997 OJ C 387, 20.12.1997, p. 1C-159/94 Commission v France 23.10.1997 OJ C 387, 20.12.1997, p. 2C-160/94 Commission v Spain 23.10.1997 OJ C 7, 10.1.1998, p. 1

STATE MONOPOLIES AND MONOPOLY RIGHTS


II - State monopolies and monopoly rights: Articles 37 and 90 of the ECTreaty

A - Case summaries

1. Telecommunications

1.1. Application of the Commission Decision concerning discrimination in connection with GSMlicences granted in Spain

On 18 December 1996 the Commission adopted a Decision calling on Spain to put an end to thedistortion of competition resulting from the initial payment of ESP 85 billion imposed on the secondGSM operator, Airtel Móvil, which had not been imposed on the first operator, the public undertakingTelefónica, as a condition for obtaining its licence. On 30 April 1997 the Commission agreed to theimplementation of a package of corrective measures envisaged by the Spanish Government to eliminatethis distortion. The package’s main measures are the right for the second operator to be interconnectedto Telefónica’s fixed network without charge, up to an amount of ESP 15 billion, the extension ofAirtel Móvil’s licence from 15 to 25 years, early release of frequencies and granting to Airtel Móvil ofan additional 4.5 MHz in the 900 MHz band, and the extension of Airtel Móvil’s licence, without anadditional fee, enabling it to operate its mobile service in the DCS-1800 frequency band as well.

1.2. Termination of infringement proceedings initiated against Italy in connection with thegranting of the second GSM licence

On 10 December the Commission decided to terminate the infringement proceedings initiated againstItaly in 1994 regarding the conditions under which the second GSM licence was granted. The secondoperator was obliged to pay a licence fee of ITL 750 billion, whereas the public operator, SIP (nowTelecom Italia Mobile), was granted its licence free of charge. The amount in question representsabout one third of the initial investment required to set up a GSM network in Italy. The competitivedisadvantage imposed on the second operator clearly helped the public operator to extend its dominantposition on the new digital cellular mobile communications market. Accordingly, the Commissionadopted a decision on 4 October 1995 calling on the Italian Government to take steps to end thedistortion. In January 1996 the Italian Government undertook to adopt a package of correctivemeasures consisting of rapid liberalisation of the use of alternative infrastructure (enabling the secondoperator to create its own infrastructure), a temporary ITL 60 billion reduction in interconnection costs,non-discriminatory access to the newly available GSM frequencies and the option of providingDCS-1800 services too. Progress in implementing those measures made it possible to terminate theinfringement proceedings initiated in 1994. However, on determining that certain of the remedialmeasures agreed with the Italian Government had not been implemented, the Commission decided toinitiate new infringement proceedings at the end of 1997.



2. Media

VTM Decision of 26 June 1997

In June the Commission adopted a Decision establishing that the advertising monopoly awarded to aprivate television station was incompatible with Community law. The monopoly had been awarded toVlaamse Televisie Maatschappij NV (VTM) by the Flemish Executive in November 1987 andDecember 1991 pursuant to Flemish media legislation, which recognised the right of a single privatetelevision station to target the entire Flemish Community and to broadcast advertisements. TheCommission procedure was triggered by a complaint lodged by the British commercial broadcastingorganisation VT4 Ltd which, by decree issued by the Flemish Minister for Culture, had been deniedaccess to the Flemish cable network on the basis that VTM had a monopoly.

The Decision established that this monopoly constituted an infringement of Article 90, read inconjunction with Article 52 of the Treaty, because it was tantamount to excluding all operators fromother Member States which wished to set up in Belgium for the purpose of broadcasting advertisementsdirected at the Flemish public on the Belgian cable network.

The fact that the provisions in question apply both to organisations other than VTM which are based inBelgium and to organisations from other Member States does not constitute grounds for exempting thepreferential arrangements for VTM from the scope of Article 52 of the Treaty. In the case in point, byreserving television advertising for a single organisation, which also happens to be a public body, the lion’sshare of the market, if not all of it, is kept within the domestic economy. The effect of this is undeniablyprotectionist. The Decision states that, in this case, there are no compelling reasons of general interest, withinthe meaning of the case-law of the Court of Justice, which could justify the monopoly held by VTM.Although the Commission concedes that cultural policy and the maintenance of pluralism may constitutecompelling reasons of general interest, in the present case there is no necessary relationship between thepurported cultural policy objective of preserving pluralism in the Flemish press and the grant in Flanders of aprivate commercial television monopoly to VTM.

The Commission Decision makes it possible for VT4 and other Community operators to set up apermanent or secondary establishment in Flanders with a view to broadcasting advertisements directedat the Flemish public via the Belgian cable network.

3. Transport

3.1. Airports

3.1.1. Groundhandling services

Athens airport

The Commission has terminated proceedings pursuant to Articles 90 and 8642 which it initiated afterreceiving complaints from several airlines regarding the groundhandling services operated as amonopoly by Olympic Airways at Athens airport. The poor quality of those services (check-in,

42 Council Directive 96/67/EC of 15 October 1996, OJ L 272, 25.10.1996.



baggage handling, cleaning, catering etc.) and the lack of transparency on tariffs were deemed toconstitute abuse of a dominant position.

Following this decision, the Greek authorities carried out improvements to the eastern terminal atAthens airport, which houses foreign airlines. Major work has also been, or shortly will be, undertakenat other Greek airports handling large numbers of tourists. In addition, a law on temporary work whichmade it difficult for Olympic Airways to recruit staff to cope with rushes during the tourist season hasbeen amended. Olympic Airways’ monopoly on groundhandling services is to be abolished as from1 January 1998, when a new operator chosen by tender will start to compete with the airline. As from1 January 1999 (the date indicated by the Council Directive on access to the groundhandling market atCommunity airports) a second operator will begin ramp handling services.

Olympic Airways has also set up a system of quality control and minimum standards which itundertakes to observe at Athens, Heraklion, Chania, Rhodes, Corfu and Thessaloniki airports.Statistics showing compliance with those standards will be sent to airlines at the end of each season.Lastly, Olympic Airways has established a new tariff structure which is more closely related to theactual cost of services. The tariffs are to be published and any amendments will be announced andsubstantiated.

3.2. Ports

3.2.1. Piloting tariffs

Port of Genoa

The Commission has adopted a decision pursuant to Article 90(3)43 with regard to the system ofreductions in piloting tariffs established at the Port of Genoa by the Ministry of Transport andNavigation’s circular 5203359 dated 4 September 1996.44 Tourship (formerly Corsica Ferries)complained about this system, which enables shipping companies operating passenger vessels whichcarry out regular scheduled services according to a fixed route and make at least four port calls a weekto benefit from 65% reductions on the basic piloting tariff. Tourship felt that there was no justificationfor granting reductions of that type because the piloting service was identical irrespective of the vessel’sowner.

After examining the complaint, the Commission concluded that neither the existence of economies ofscale of that dimension nor the protection of the sea bed, which had also been invoked, could objectivelyjustified the scale of the reduction. Although the Commission recognised that planning of pilotingservices for shipping companies’ scheduled services might give rise to some economies of scale incomparison with tramp services, the current system is not based on that criterion.

The Commission took the view that the system of reductions was incompatible with Article 90(1) of theTreaty, read in conjunction with Article 86, because it had the effect of applying dissimilar conditions

43 OJ L 301, 5.11.1997.44 These tariffs were prompted by the judgment of 17 May 1994 in Case C-18/93 Corsica Ferries Italia Srli v Corpo

dei Piloti del Porto di Genova [1994] ECR I-1783 and were twice amended following the lodging of a complaint,on 5 October 1994 and 4 September 1996.



to equivalent services provided by different shipping companies and thus generating distortions ofcompetition. The Commission called on the Italian Government to bring this infringement to an end.

3.2.2. Ports legislation

Italian dock labour legislation

On 21 October the Commission adopted a formal decision pursuant to Article 90 (3) of the Treaty on Italiandock labour legislation.45 The decision calls on Italy to bring to an end the port companies’ monopoly oftemporary labour. It follows on from a Court judgment46 which ruled that certain provisions of Italian docklabour regulations were incompatible with Community law. This concerns, inter alia, the following articlesof the "Codice della navigazione":– Article 110, which stipulates that port work in Italy is reserved for port companies;– Article 111, which states that port authorities may grant concessions for the performance of port work;

however, the parties holding such concessions must, in any event, rely exclusively on labour provided bythe port companies for the performance of such work;

– Article 152, which stipulates that members of port companies must possess Italian nationality. At the time, a twofold monopoly existed for port work in all Italian ports; the port management bodyhad an indirect monopoly on the organisation of port work and the dockers corporations had amonopoly on the labour force performing that work. When the Commission first served the Italian authorities with formal notice, they carried out a reviewof their ports legislation. This review was partly implemented by Law No 84 of 28 January 1994 andLaw No 647 of 23 December 1996. It resulted in partial liberalisation of the industry, the mainelements of which were as follows:– The market for the organisation of port work was opened up to competition;– Port companies were allowed to recruit labour themselves, which put a de facto end to the dockers

corporations’ monopoly on the labour market for port work;– Port Authorities were set up and port managers were obliged to withdraw from the port work sector;– Discrimination based on nationality was ended.

However, the port reform laws created significant new distortions of competition which worked infavour of the former dockers corporations.

Under Law No 84/94 and Law No 647/96, the former port companies were converted into companiesperforming port work. Those laws also gave those same companies a monopoly on two markets whichare extremely important in economic terms: the temporary labour market and the market forsubcontracting labour-intensive services.

The Commission took the view that the latter measure was incompatible with Article 90(1) of theTreaty, read in conjunction with Article 86.

This is firstly because it results in the former port companies abusing their dominant position. Theyhave effectively been given the role of exclusive suppliers to their competitors (supply of temporary

45 Decision C(97)3108, OJ L 301, 5.11.1997.46 Case C-179/90 Merci Convenzionali Porto di Genova [1991] ECR I-5889.



labour or of labour-intensive services on a subcontracted basis to their competitors on the market forport work), thus creating a conflict of interests for them.

The second reason is that the new Italian ports legislation confers the monopoly in question oncompanies which have been found by the Court of Justice to have abused their dominant position.


Title Date PublicationNotice concerning telephony on the Internet 2.5.1997Draft Directive on the legal separation oftelecommunications network and cable networkoperations

16.12.1997

Notice on the application of the competition rulesto the postal sector

17.12.1997 OJ L 15, 21.1.1998

C - Formal decisions under Articles 37 and 90 of the EC Treaty

1. Published decisions

Published decisions Date of decision PublicationArticle 90(3) decision regarding pilotingtariffs in the port of Genoa

21.10.1997 OJ L 301, 5.11.1997

Article 90(3) decision on Italian docklabour legislation

21.10.1997 OJ L 301, 5.11.1997

Decision concerning the granting ofadditional implementation periods fortelecommunications liberalisation inPortugal

12.2.1997 OJ L 133, 24.5.1997

ditto in Luxembourg 7.5.1997 OJ L 234, 26.8.1997ditto in Spain 10.6.1997 OJ L 243, 5.9.1997ditto in Greece 18.6.1997 OJ L 245, 9.9.1997VTM 26.6.1997

D - Press releases

Reference Date SubjectIP/97/876 15.10.1997 Groundhandling services at Athens airportIP/97/907 22.10.1997 Dock labour in the port of GenoaIP/97/907 22.10.1997 Piloting tariffs in the port of Genoa



E - Judgments of the Community courts

1. Court of Justice (Article 90)

Case Parties Date PublicationC-157/94 Commission v Netherlands 23.10.1997C-158/94 Commission v Italy 23.10.1997C-159/94 Commission v France 23.10.1997C-160/94 Commission v Spain 23.10.1997C-189/95 Franzèn judgment 23.10.1997

MERGER CONTROL


III - Merger control: Council Regulation (EEC) No 4064/89 and Article 66of the ECSC Treaty

A - Introduction

Several cases provided an opportunity to reassess certain aspects of a “merger with a Communitydimension”, in particular the definition of the term “merger” itself and the calculation of the turnoverthat determines the Community dimension.

On the first point, the Commission concluded that the change from joint control to sole control by oneof the previous shareholders constitutes a new merger. In the Worms/Saint-Louis case,47 Saint-Louis,which was jointly controlled by the Worms and IFIL groups, came under the sole control of Worms.The Commission considered that, even if before joint control (examined in the IFIL/Worms/Saint-Louiscase) Worms already controlled Saint-Louis, this was not simply a return to an earlier situation, sincethe limits of Saint-Louis’s activities and its assets had been changed. Moreover,Mannesmann/Vallourec48 showed that a company can obtain control of another by acquiring only 21%of its capital. Several aspects were taken into consideration in reaching such a conclusion in the case inpoint: in particular, the shareholding pattern, the behaviour of the other shareholders at the generalmeetings of the last three years and Vallourec’s memorandum and articles of association were examinedin detail. The same analysis was conducted in Anglo American Corporation/Lonrho, where it wasconcluded that Anglo American Corporation, by acquiring 27.5% of Lonrho’s shares, was in a positionto exert a decisive influence over the company.

On the second point, the UBS/Mister Minit case49 showed that the activities of a franchising networkcannot always be taken into account when calculating the turnover of a franchising group, especially ifthe latter does not hold half the working capital and does not have the right to manage the affairs of thefranchisees. In the case in point, therefore, the situation was different from that observed inAccor/Wagon--Lits,50 where franchisee turnover had been included. British Airways/Air Liberté51

confirmed an earlier decision (Swissair/Sabena). To calculate turnover in air transport, particularlyturnover generated in the Community, the Commission bases the geographical allocation of turnover onthe 50-50 method (the turnover generated on each route is allocated on a 50-50 basis to the country oforigin and the country of final destination) or on the point-of-sale method (the turnover resulting fromthe air transport service is allocated to the country where the ticket was sold). In addition, even if anairline has ceased operations definitively or for a long period on a particular route, the turnoverattributable to the route will be preserved if the airline has kept the corresponding slots in order topursue operations elsewhere.

47 4.6.1997.48 3.6.1997.49 9.7.1997.50 28.4.1992.51 28.2.1997.



B - Summary of decisions taken under Article 6(1)(a) and (b)

1. Merger proposals where undertakings have been given by the firms involved

Bank Austria/Creditanstalt52

Bank Austria and Creditanstalt are two banking groups operating mainly in Austria in all banking andfinancial services. Both also have many holdings in companies operating in various sectors, inparticular in construction and civil engineering, property and insurance. The merger, which was part ofthe privatisation of Creditanstalt by the Austrian Federal Republic, gave rise to a detailed competitionanalysis of its implications for banking and construction. The acquisition of exclusive control ofCreditanstalt-Bankverein by Bank Austria would create an entity which, although ranked thirtieth inEurope, would have a balance-sheet roughly five times larger than that of its nearest rival in Austria.This clear lead in Austrian banking services was evident in particular from the significant marketshares in all segments of the sector, whether they concerned services to consumers or to firms. Inaddition, the existence of barriers to entry on Austrian banking markets and the addition of holdings inpublic-sector financial establishments, such as export credit insurance and the granting of subsidisedloans, further enhanced the parties’ strong market position and sparked the fear that a dominantposition might be created or strengthened.

Bank Austria, however, gave undertakings during the first stage of the investigation, which made itpossible to eliminate the risk of a restriction of competition in the financial and banking sector. Thusthe firm undertook to sell off its holding in the GiroCredit bank and to reduce that which the new entitywould have in Österreichische Kontrollbank, which specialises in the financing of public holdings. Italso undertook not to extend its influence in a third firm, Investkredit, beyond that obtained by BankAustria and GiroCredit before the operation.

Competitive problems in the construction industry were also likely to result from the merger, sinceBank Austria, which already had close links with several large construction and civil engineering firms,would have indirectly acquired, through the acquisition of Creditanstalt, a majority share in thepowerful Austrian company Universale. In this respect, Bank Austria promised the Commission to selleither its stake in Universale or that in Stuag, another large building and construction firm. The twopossibilities were considered by the Commission as equivalent from the competition standpoint, bothbeing capable of eliminating the risks to competition inherent in the merger.

Lyonnaise des Eaux/Suez53

In May the two French groups Lyonnaise des Eaux and Compagnie de Suez decided to merge all theiractivities to form a new company called Lyonnaise Suez. The new group thus created is among thelargest in France in terms of turnover and covers a wide variety of different activities, includingservices to local authorities.

Having examined all the markets concerned, the Commission concluded that with regard to the majorityof the firms’ activities, the merger raised no competition problems: either only one of the firms waspresent in certain sectors (industry, mining and finance for Suez; the media for Lyonnaise), or the

52 11.3.1997.53 5.6.1997.

MERGER CONTROL


parties’ market shares remained limited or raised no serious doubts (building and public works,industrial and electrical works, management of technical installations, property, engineering, and wastemanagement outside Belgium).However, the Commission found that, in the waste management sector in Belgium, the merger waslikely to raise serious doubts despite the minor role of the sector in the merger as a whole. Thesedoubts, which related to the detoxication of special industrial wastes, the collection of ordinary wasteand industrial cleaning, would have justified starting a more detailed examination. However, right fromthe start of the examination, the firms gave undertakings which dispelled the Commission’s doubts.These were accepted by the Commission, since they represented clear, structural solutions to clearlyidentified competition problems of minimal scope compared with the rest of the merger. The remediesconsisted of (a) the sale by Lyonnaise des Eaux of the majority of its holdings in household wastecollection and industrial cleaning in Belgium and (b) the sale, by Suez or Lyonnaise des Eaux, of theirstake in the detoxication of special industrial wastes in Belgium. Arrangements were made for thesedivestments to take place rapidly, under the Commission’s supervision and through an agent appointedfor the purpose. For these reasons, the Commission cleared the merger at the end of the first stage ofthe investigation.

2. Merger proposals in telecommunications

PTA/STET/Mobilkom54

Cegetel/Vodafone/SFR55

The Commission handled two cases involving operators of analog and digital mobile telephonenetworks. It authorised STET Mobile Holding, of the Italian group STET, to acquire a stake in theAustrian mobile telephone company Mobilkom Austria. Post und Telekom Austria had hitherto beenthe only shareholder in Mobilkom, which, after the merger, became a joint venture under the combinedcontrol of the national company and STET. The Commission also approved the merger whereby theSociété Française du Radiotéléphone (SFR), controlled by Cégétel of the French group CompagnieGénérale des Eaux, became a joint venture between Cégétel and the UK firm Vodafone.

Both these two merger proposals gave the Commission the opportunity to examine the market situationfor the operation of mobile telephony networks and associated services in Europe and in certainMember States such as Austria and France. Since neither of these cases raised serious doubts,irrespective of the market definition employed, the Commission did not have to consider the need todistinguish on the products market between analog and digital mobile telephony or to define thegeographic market at European or national level. Nevertheless, it drew attention, in its decision on SFR,to the view it had held in 1995 in Omnitel,56 namely that there was a growing tendency towards theestablishment of a European market for the supply of GSM digital telephony services on account of thedegree of substitutability existing to some extent throughout Europe between the various subscriptionsthat can be taken out in different countries and on account of the development prospects in the mediumterm.

The Commission’s investigations showed that mobile telephony networks were markets in a phase ofstrong expansion throughout Europe in general, and in particular in the two Member States more

54 11.6.1997.55 19.12.1997.56 IV/M.538 - decision of 27.3.1995.



directly concerned by these two cases. This growth, particularly in digital technology telephony, isreflected in the considerable increase in the number of network operators, the corresponding expansionof the networks and the considerable rise in the number of subscribers. In this context, the market isdriven by intense competition between operators resulting, as the Commission found for instance in thecase of France, in the supply of varied services, promotions and falls in the cost of subscriptions. TheCommission noted, for each of the proposed mergers, that the operation involved aggregating zero ormarginal market shares in the Member State concerned and that, at European level, the parties hadcomparable numbers of competitors without their market shares giving rise to doubts about the creationof a dominant position.

Bank of America/General Electric/Cableuropa57

STET/GET/Union Fenosa58

Albacom/BT/ENI/Mediaset59

These three cases should be mentioned together because they are typical of the growing spread ofcompetition in national telecommunications markets in the process of liberalisation or where thepresence of national operators was predominant. The first two mergers concerned the same MemberState, Spain, while the third concerned Italy.

The Commission authorised the acquisition by Bank of America and General Electric of joint control ofthe Spanish firm Cableuropa, a company which specialised in the supply of telecommunicationsservices using cable television networks ("CATV") or relating to such networks and which had appliedfor the necessary authorisations to introduce and operate CATV and telecommunications servicesnetworks in Spain. The Commission noted that in Spain the markets in question were distinguished byfirms with a very strong presence, in particular Telefónica in telecommunications and Sogecable on thepay-TV market. It concluded that the arrival of Cableuropa on the Spanish market will bring a newcompetitor into play, one which will have the necessary technical capacity to supply a complete rangeof telecommunications and television services and will have considerable financial resources that willenable it to remain competitive beyond the short term.

The Commission also authorised the merger whereby the Italian telecommunications group STET andthe Spanish electricity groups Endesa and Union Fenosa acquired joint control of Retevision as part ofthe privatisation of that company by public tender, decided on by the Spanish Government. Before itwas privatised, it was wholly owned by the Ente Público de la Red Técnica Española de Televisión.Retevision will operate on the Spanish fixed telephony market, where Telefónica de España hitherto hada virtually monopoly. The phased liberalisation of this market will be completed in 1998. TheCommission therefore concluded that the merger would bring onto the market an independent operatorwith the technical capacity and financial resources to compete with Telefónica.

As far as the Italian market was concerned, the Commission authorised the acquisition by the Italiancompany Ente Nazionale Idrocarburi (ENI) of a 35% holding in the Italian telecommunicationsoperator Albacom, a firm set up in 1995 by the UK group British Telecom (BT) and the Italian bankBanca Nazionale del Lavoro. ENI’s holding will enable it to exercise joint control of Albacom with BTand the Italian television group Mediaset, which has been a shareholder since 1996.

57 19.6.1997.58 20.8.1997.59 13.11.1997.

MERGER CONTROL


The Commission examined the operation in the context of the liberalisation of the Italiantelecommunications sector. It found that Albacom was a new entrant in the voice telephony servicessector and intended to become a future public telecommunications operator. It therefore considered thatthe operation was pro-competitive.

Albacom’s entry into the Italian telecommunications market in 1995 had been based on the supply ofservices over a national data network to large firms carrying out substantial export operations andincurring considerable telecommunications expenses. Through this operation, Albacom would alsoincorporate the telecommunications activities of ENI, which comprised transmission equipment, voiceand data transmission networks, microwave telecommunications and the use of the telecommunicationsinfrastructure of SNAM. The latter, which is a subsidiary of ENI, distributes natural gas through anetwork of pipelines along which optic fibre telecommunications cables were laid. The Commissiontook into account that the granting by SNAM of the right to use its telecommunications infrastructurewill not prevent third parties from laying their own telecommunications cables in places next to thepipelines. The Commission also noted that other operators had entered the liberalisedtelecommunications market in Italy and that the leading competitor on the liberalised market wasTelecom Italia, a national firm with a monopoly of public voice telephony; since this monopoly was dueto end on 1 January 1998, the operation should take place against the background of opening up themarket to competition.

3. Merger proposals in electronic data transmission

Bertelsmann / Burda / Springer - HOS-MM60

Bertelsmann / Burda - HOS Lifeline61

The restructuring of the electronic data transmission services supplied by the firms Bertelsmann, Burdaand Springer Verlag led to the separate notification of two mergers. Bertelsmann and Springer used tooperate an on-line medical information service, while Burda owned its own on-line service in the samefield. By combining their activities, the three firms created the joint venture Health Online ServiceMultimedica (HOS-MM), of which they have joint control. HOS-MM supplies a medical informationservice to paying subscribers, which is intended for professional users such as doctors, hospitals,pharmacists and medical students. Since the market is not very developed as yet, and given the presenceof competitors and potential entrants, the merger was not likely to lead to the creation of a dominantposition.

Bertelsmann and Burda also set up a second joint venture, HOS Lifeline, to which the first firmcontributed its on-line medical information services activity, which is intended for the general public.The service, which is free of charge, is financed by the income from letting advertising space on itspages. Given HOS Lifeline’s small share of the market for advertising space on the Internet, which isgrowing rapidly, and given the improbability that the merger will make it possible to coordinate theother service activities on Internet operated by the parties, the Commission also authorised this secondjoint venture. However, it intends to keep a close eye on the rapid development of on-line servicesmarkets, so as to prevent anticompetitive situations from arising which could slow down the expansionof computerised telecommunications.

60 15.9.1997.61 15.9.1997.



4. Merger proposals in retailing

Promodès/Casino62

In its summary of the Rewe/Billa case in the 1996 report, the Commission had said that it would followmerger developments in the distribution sector closely, in particular by monitoring firms’ purchasingpower. The takeover bid launched by the large-scale retailing group Promodès for the Casino group,which operates in the same sector in France, gave the Commission the opportunity to do this, since theincrease in the purchasing power of the firms involved vis-à-vis their suppliers was particularly large inthis case: if it came about, the merger would result in the combining of two of the top ten distributors inFrance.

The French authorities requested a partial referral of the case so that they could examine it themselves,on the grounds that the merger was likely to create or strengthen a dominant position on Frenchterritory in fifty or so local retailing markets supplied by hypermarkets, supermarkets or smallneighbourhood stores. The Commission referred the case as far as the identified local markets wereconcerned, but retained scrutiny of the non-referred part. This included the sector supplying thelarge-scale distributors, i.e. the pre-retailing level comprising the links between the large-scaledistributors and the suppliers/manufacturers of everyday consumer goods.

The Commission used various analytical criteria to assess, as far as France was concerned, the degreeof purchasing power resulting from the combination of the two groups. It considered that, in thisparticular case, given the present state of the market, the analysis should be conducted in a nationalcontext on account of the purchasing policies established, the value and volume of the productsconcerned by those policies and the limited nature of the negotiations and/or purchases at Europeanand, conversely, local level. It also felt that, in order to assess the purchasing power of the large-scaledistributors, their market share should also be taken into account downstream of the retailing level,since the volumes they buy from their suppliers are linked to their downstream market shares and sincetheir positions play a decisive role in their dealings with the suppliers/manufacturers. The Commissionalso felt that since the commerce conducted only by the large and medium-sized stores in France(hypermarkets and supermarkets) was highly developed, and given the size of the turnover generated bymany manufacturers from these types of store, which were an essential outlet for them, special attentionshould be paid to the market shares attained by the large-scale distributors in these retailing segments.The Commission considered that account should be taken of the weight of the large-scale distributors’joint purchasing agencies and cooperation agencies, which are the suppliers’/manufacturers’indispensable partners when it comes to negotiating terms of sale. Such agencies can have a largermarket share than that of the distributors at retail level suggests, since they accept as affiliatesindependent firms or small-scale distribution groups. Thus Promodès and Casino, taken together, wouldhave held about 20% of the large-scale distribution market in France, but their purchasing agencieswould have had a share of 25% on account of their affiliated partners. At all events, these ratios werenot enough to establish the creation of a dominant position regarding the supplies procured by theselarge-scale distributors, and the Commission therefore authorised this part of the operation. Itsconclusion was supported by the finding that many of the large groups’ suppliers were firms ofsignificant national or international size; the latter supplied products under known and reputablebrands, which it was in the distributors’ interest to offer on the shelves, and had other distributors orpurchasing agencies as important customers.

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Intermarché/Spar63

This case was remarkable in particular for being a combination of two distribution groups of differentnationality, each established in its country of origin without being present in the country of the other.The ITM Entreprises group basically operates in France and carries on no business in Germany,whereas SPAR, control of which was acquired by ITM Entreprises, operates only in that country. TheCommission noted as a result that the merger did not give rise to any overlap of activities in each Stateas a whole (France and Germany respectively). However, it examined the competitive situation in theregions along the Franco-German border, since some of these might possibly form relevant geographicmarkets, given the opportunities for consumers and the existing supply base to move. That there was nosignificant combination of the parties’ activities in these cross-border areas was one of the reasons forauthorising the proposed merger.

5. Merger proposals in basic consumer goods

Swedish Match / KAV64

Apart from the cases dealing with mergers in branded food products which were the subject ofproceedings and were commented on under that heading, the Commission had the opportunity toexamine a consumer goods market never discussed before, namely matches. The merger here consistedof the creation of a joint venture between Swedish Match and the match manufacturer KAV, asubsidiary of the leading Turkish industrial group Koç and an exporter to the EEA. As a result of theestablishment of the joint venture, Swedish Match, which is the European leader in this industry and isalso active globally, was able slightly to increase its strong position in the EEA.

One of the interesting aspects of this decision is the fine distinction drawn by the Commission betweenmatches for resale and two other categories of product: disposable lighters, and publicity matches anddisposable lighters. Basing itself on an analysis of available studies and on the examination of theprices of matches and disposable lighters, the Commission managed to show that the former are mainlyused for household purposes whereas the latter are basically used by smokers, and that there isrelatively little correlation between their price or their sales trends. As it had already underlined inNestlé/Perrier and, more recently, Coca-Cola/Amalgated Beverages GB, the Commission pointed outon this occasion that mere functional substitutability is not sufficient in itself to prompt the conclusionthat two products belong to the same market. Publicity matches and disposable lighters also haveseveral characteristics which distinguish them from matches for resale. For instance, they have thespecific function of promoting brands, they are not available for purchase by consumers and they differin their production and marketing and the distribution channels used.

As regards the relevant geographic market, the Commission did not extend this beyond the EuropeanEconomic Area, given the differences in competition conditions in the EEA and the main productionareas from which such products are imported (one of which is Turkey).

In its analysis, however, the Commission considered that these imports exert significant competitivepressure on the main producers situated in the EEA - often manufacturers who have long held anational monopoly. Moreover, the considerable production capacity in the Czech Republic, Poland and

63 30.6.1997.64 18.12.1997.



Croatia, countries which now export to the EEA, means potential supplementary competition whichcould easily translate into further alternative sources of supply. One of the concerns triggered by thejoint venture was that wholesalers importing products manufactured by KAV into the EEA marketmight be deprived of this important source of supply following revision of the new entity’s commercialstrategy. However, given Swedish Match’s declarations that it will continue to supply these wholesalerson fair terms for at least a sufficient duration, there was no fear of harmful consequences forcompetition in this respect. At the end of its investigations the Commission therefore concluded that thelimited increase in Swedish Match’s market share as a result of the establishment of the joint venturewould not significantly alter the already strong position of this leader on the market for matches forresale. Nevertheless, the Commission emphasised that it would closely monitor any new moves thatmight be made by Swedish Match in the sector, given the power of this operator (whose market share isclose to 60%) and the structure of the market.

6. Merger proposals in automobile equipment

TRW/Magna65

Siemens/HUF66

Lear/Keiper67

The interesting aspect shared by these three cases is that they all concerned motor vehicle equipment,such as airbags, locking and anti-theft systems or car seats, and that the Commission based its analysison a relevant geographic market covering at least the European Economic Area (EEA). In each case,the Commission’s inquiry showed that the merger entailed no risk of a restriction of competition in anyof the sectors involved.

Thus the Commission decided to approve the acquisition by the American firm TRW Inc. of all theshares in the German firm Magna Automotive Holding GmbH, which manufactures and sells vehiclesteering wheels, airbags and airbag inflation systems. TRW is active worldwide in the manufacture andsale of parts and systems for the automobile, aerospace and defence industries. While the Commissionfound that, as regards vehicle steering wheels, the proposed merger would not result in an aggregationof market shares, since TRW does not market vehicle steering wheels in Europe, it noted that on theEEA market for airbags TRW would significantly increase its market shares. However, the combinedshares ought not to exceed approximately 35% of the market, and TRW would be faced withcompetition from other suppliers such as Autoliv, Petri, Morton and Allied Signal. As for airbaginflation systems, the Commission noted that TRW held few market shares in the EEA in recent yearsand that, after the merger, it would have a similar position to that of Autoliv, the previous leader on themarket. Both would be faced with competition from Morton and from smaller suppliers.

The Commission also authorised an equity investment by Siemens Aktiengesellschaft (Siemens) inHülsbeck & Fürst (HUF). Through this operation, Siemens acquired control of HUF jointly with itsinitial partners. HUF manufactures, in particular, mechanical components for motor vehicle lockingand anti-theft systems; Siemens produces electronic components for such systems. The Commissionestablished that Siemens’s equity investment in HUF would not give rise to the creation orstrengthening of a dominant position. There would be no aggregation of market shares in Europe in the

65 28.1.1997.66 29.4.1997.67 22.7.1997.

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locking systems sector, since the two firms manufacture different components. On the market for thedevelopment of locking systems for motor vehicles, the creation of a dominant position was not to befeared, in particular in view of the strength of demand from motor vehicle manufacturers vis-à-vis theirsuppliers.

Lastly, the Commission authorised the acquisition of Keiper Car Seating from the Keiper Recaro groupby Lear Corporation Southfield. Lear is a producer of vehicle components which manufactures andsupplies complete standard vehicle seats on a just-in-time basis and other components for vehicleinteriors. Keiper Car Seating also produces and supplies complete vehicle seats.

The Commission drew a distinction between the standard car seats affected by the merger and specialcar seats, for the following reasons: standard car seats are sold exclusively to vehicle fitters and aredesigned for specific vehicle models, whereas special car seats are sold to vehicle manufacturers andprivate customers and are designed to be installed on most vehicles; unlike special car seats, which aredelivered to warehouses, standard car seats are supplied by the manufacturers on a just-in-time basis tomeet the fitters’ demand for rapid delivery of large volumes for immediate fitting in the vehicles; thisobligation on a standard seat manufacturer to ensure a constant, large and rapid flow requires both ahigh level of investment and particularly elaborate logistics; in price terms, the differentials aresubstantial, since special car seats are 100-150% more expensive, and vehicle fitters have stated that ifthe price of standard car seats were to rise significantly, they would not resort to buying special seatssince the price differentials would be too great.

As its analysis related to the market for standard car seats in the EEA, the Commission found that afterthe acquisition of Keiper Car Seating by Lear, there would be three large suppliers left on the market,each holding more than 20% and less than 40% of the market in value terms, namely Johnson Control,Bertrand Faure and Lear, and seven small competitors. Coupled with this concentration in supply is theconcentration on the demand side. The Commission noted that motor vehicle manufacturers had anexcellent knowledge of prices and costs worldwide and that they approached several suppliers beforeordering car seats. Some manufacturers even have in-house car seat production, which allows them toswitch sourcing between internal resources and external suppliers. The Commission concluded thatcompetitive pressures are strong on the standard seats market in the EEA and that, consequently, themerger would not lead to the creation or strengthening of a dominant position.

The Commission based its assessment of the EEA on the following considerations: the geographicproximity which may exist between a manufacturer or a fitter and a motor vehicle manufacturer, inparticular in view of the need to supply equipment just-in-time, the fact that deliveries may be made atregional or local level, or the fact that the market shares of the different suppliers vary from oneMember State to the next are not in this instance conclusive evidence that markets are national or evensubnational. Generally speaking, competition between manufacturers to obtain supply contracts takesplace on at least a Community scale; equipment models are most often designed by car builders at thislevel at least, and for their orders makers can call on offers from all European manufacturers,especially since transport costs are not an obstacle to transfrontier cross-supplies.



7. Merger proposals in the steel industry

Mannesmann/Vallourec68

The Commission approved the operation whereby Mannesmannröhren-Werke AG (MRW), a 79%subsidiary of the German group Mannesmann, planned to acquire 21% of the shares of Vallourec SA(Vallourec). As part of the transaction it was planned that MRW and Vallourec would set up a jointventure combining their seamless tubes manufacturing activities. The Commission considered that,given that the remaining shareholdings were very widely dispersed and poorly represented at the generalmeetings, MRW would have de facto control of Vallourec by owning 21% of its capital.

MRW is active in the manufacture, finishing and marketing of steel tubes and steel tube products, themanufacture of basic materials for the production of tubes and manufacturing operations for varioussteel and other materials. Vallourec is a French firm, whose activities consist in the manufacture oftubes and pipes and associated products and the manufacture of other steel materials.

MRW’s and Vallourec’s activities overlapped in the production of carbon and alloy steel tubes,precision tubes, bearing tubes, gas cylinders, tubular components for automobiles, the production ofsteel and semi-finished steel products and the retail distribution of steel tubes.

The diversity of the categories of tubes concerned led the Commission to examine the dividing linesbetween the markets for the products in question. It considered that the carbon and alloy steel tubes canbe divided into commodity grade tubes (which can be further subdivided into commercial tubes,mechanical tubes and structural tubes), powergen tubes, steel line pipe, OCTG tubing and casing, andOCTG drill pipe. The Commission also drew the conclusion, after a survey of the trade, that for thesevarious categories of tubes there were separate markets for seamless and welded products. Eventhough, in the long term, there is a continuous tendency to substitute welded tubes for seamless ones,there are still important applications for which only seamless tubes are appropriate. In addition,although there were indications that the relevant geographic markets were larger than the EuropeanEconomic Area, the Commission examined the situation that would result from the operation on thebasis of markets limited to the EEA.

The combination of MRW’s and Vallourec’s activities would lead to market shares of 30% or more ofEEA consumption in a number of products (several categories of seamless tubes for various uses, gascylinders, bearing tubes, seamless precision tubes). However, it emerged from the Commission’sinvestigation that there was significant competition from other producers, well established in westernEurope and with technical and commercial experience, and considerable production capacity, inparticular: Dalmine (Italy), Benteler (Germany), Chesterfield Tubes (for gas cylinders), Ovako andDesford Tubes (United Kingdom). In general, the examination of the competitive situation also tookinto account the presence of major competing producers of tubes of other types, such as British Steel,Rautaruukki (Finland), Voest-Alpine (Austria) and Tubeurop (France), in a market contextcharacterised by considerable overcapacity and growing imports. For all these reasons, the Commissionauthorised the linking of these two large producers of tubes.

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Krupp Hoesch / Thyssen69

The creation of a joint venture between Thyssen and Krupp in the flat steel products sector was thesubject of two Commission authorising decisions. The first, adopted on 28 July under Article 66 of theECSC Treaty, applied to the products falling within the scope of this provision, while the secondcovered all the other products and activities of the joint venture, in particular certain products for themotor industry. Although Thyssen will have a majority holding in the new firm, several factors indicatethat joint control will be exercised by the two shareholders over the joint subsidiary, in particular thesetting-up of a joint shareholders’ committee charged with facilitating the taking of unanimousdecisions by the board of directors and with introducing arbitration and conciliation procedures in theevent of disagreement in the committee. In addition, as regards the assessment of the joint venture’seffects on competition, the Commission concluded that a dominant position would not be created, giventhe positions of the parties and the presence of strong competitors such as Arbed, Ilva, Usinor Sacilor,Cockerill Sambre and British Steel.

8. Merger proposals in the chemical industry

Hoechst/BASF70

Shell/Montell71

BASF/Shell72

Restructuring of the polyolefin sector in Europe went ahead, with three new merger operations. In thefirst, BASF and Hoechst combined their polypropylene production activities in the new firm of Targor.Despite the fact that each parent company holds 50% of the company’s capital, various clauses in theagreement between the two founding companies led the Commission to consider that BASF wouldnevertheless be able to exercise sole control over Targor.

Targor will be the second-largest producer of polypropylene in western Europe, immediately afterMontell. The three main producers Montell, Targor and Borealis will henceforth account for more thanhalf the supply of polypropylene. However, the Commission did not feel serious doubts could be raisedabout the compatibility of the joint venture with the common market, since there are still manycompetitors on the market. Similarly, as regards research and development, Hoechst’s leading positionin the field of metallocene technology and the creation of a strong combined R&D potential will notlead to the creation or strengthening of a dominant position.

There were two other cases concerning the polyethylene sector. One operation, which had no significanteffect on competition, consisted in the change from joint control over the joint venture Montell, set upby Shell and Montedison in 1994 (the Shell/Montecatini case) to sole control by Shell. The otheroperation, which was more complex, gave rise to two parallel notifications, one under the MergerRegulation and the other under Article 85 of the EC Treaty. The proposed transactions were based onthe grouping of BASF’s and Shell’s polyethylene activities in a new joint venture. In view in particularof the strong positions on the polypropylene market held by the two leaders, BASF and Shell, throughTargor and Montell respectively, the Commission examined very closely the implications of the

69 11.8.1997.70 17.6.1997.71 23.10.1997.72 23.12.1997.



operation for the ability of the joint venture to exercise all the functions of an autonomous economicentity and for possible risks of coordination between the parent companies. The joint venture, whichoperates several installations, including some on the industrial sites of the parent companies, isintegrated downstream and has its own cracking towers for the production of olefins, just like BASFand Shell. However, its basic activity, measured in terms of turnover, is still the production andmarketing of polyethylene. As a result of the investigations carried out, and in view of certain changesmade by the parties to the notified agreements, the Commission was therefore able to conclude that thejoint venture was a full-function one and that there was no serious risk of coordination.

Hoechst/Clariant73

Hitachi/Dupont74

In these two cases, the Commission examined certain original aspects of the notified operations. In thefirst, which concluded with the authorisation of the acquisition by Clariant of Hoechst’s specialtychemicals business, Hoechst obtained in exchange a 45% holding in the purchaser, Clariant, whosecapital was increased. However, the Commission considered that the transaction did not enable Hoechstto exercise control over Clariant’s business and that it was neither economically nor legally linkedinseparably to the acquisition of the subsidiary, Virteon, which was the subject of the notification.Consequently, this second transaction does not fall within the scope of the Merger Regulation and wasnot covered by the authorising decision. Among the many markets affected by the acquisition ofVirteon, only a few overlaps resulted from the operation, and the presence of major competitors, suchas BASF and Bayer, and certain characteristics of the markets, such as the heterogeneous nature of theproducts, led the Commission to consider that there was no risk of creating or strengthening a dominantoligopoly.

In the second case, which did not present any significant competition problem, one of the Commission’sconcerns was that the staff employed in the joint venture set up by Dupont de Nemours and HitachiChemical in the liquid polyamide sector would initially be seconded and not transferred, under thecontracts governing their employment. Nevertheless, from the start of the business, the joint venturewas to have an independent management, with the power to recruit and responsibility for the secondedemployees. Similarly, for economic and logistical reasons, in particular the difficulty of separatingintegrated equipment on an industrial site, it was proposed that the parent companies should, for atransition period, retain legal ownership of the facilities used by the joint venture. In the light of theinformation supplied by the parties to justify the application of these transitional provisions, theCommission considered that the joint venture had sufficient resources and funds to enable it to operateautonomously on its market and make it a full-function enterprise.

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9. Merger proposals in airport services

Birmingham International Airport75

Hochtief/Aer Rianta/Düsseldorf Airport76

These two cases provided the Commission with the opportunity to examine an air transport sectorwhere there have been relatively few mergers, namely the operation of airport infrastructures and themanagement of ground activities associated with passenger and cargo traffic. In both cases - oneconcerning Birmingham Airport in the United Kingdom, and the other the German airport ofDüsseldorf - the operation involved some withdrawal by the public authorities (districts ormunicipalities), which had decided to bring in an experienced airport services company and a companyspecialising in financial matters to help them in the management of their airports. In both cases, too, theservice company selected was the same: the Irish group Aer Rianta, which operates among other placesat Dublin, Cork and Shannon airports.

The Commission considered that the operation and management of the airport ground activitiesassociated with the movement of passenger flights and cargo aircraft, and the supply of associatedservices, could be regarded as a separate product market. The market comprises several largecategories of services which are associated with runway operations (e.g. guiding of aircraft, runwaymaintenance) or with groundhandling (passenger assistance, fuelling, maintenance) and which aresupplied, as the case may be, to airlines, aircraft or persons departing or arriving by air. They alsoinvolve various commercial services, supplied to anybody on the ground (restaurants, car parking, carhire services, shops). Airport management also includes the coordination and supervision of third-partyactivities, since it often happens that at an airport the operation of certain services is delegated by themanagement through partnership, leasing or concession contracts. Since the operations did not raiseserious doubts whatever the distinction used, the Commission did not have to consider whether or not tosubdivide all the services into as many separate markets, depending on the nature of the servicessupplied. For the same reason, it did not need to define the relevant geographic market and was able tolimit itself to mentioning the possible limits: the confines of each airport, its catchment area, or theaddition of the airports situated in the same region offering similar services or which customers couldopt for on the basis of charges, air fares (especially for charter passengers) offered by the companieslocated at them, and the airlines operating inward- or outward-bound services.

The Commission authorised these transactions, which did not raise any serious doubts as regardsdominance, in particular because, in the field in question, Air Rianta did not previously operate in theUnited Kingdom or on the Continent.

75 25.3.1997.76 22.12.1997.



10. Merger proposals in financial services

Fortis/Meerspierson77

Fortis/ASLK-CGER78

Crédit Suisse/Winterthur79

Merita/Nordbanken80

Mergers involving operators active in both banking services and insurance are indicative of the growing linksbetween these two sectors, prompting the Commission to look more closely at their conglomerate aspects.The Belgian-Dutch group Fortis, which occupies an important position in insurance, acquired fromABN-AMRO the merchant bank MeesPierson, without the transaction raising any problems either from theconglomerate standpoint or in terms of overlapping horizontal activity, given its limited impact and thepresence of powerful competitors. Moreover, the transaction puts an end to the overlap of activities betweenthe acquired bank and ABN-AMRO, one of the leading banking operators on the markets in question in theNetherlands.

The Commission also approved the acquisition by the same group, Fortis, of exclusive control of the Belgianbank ASLK-CGER. In a previous decision, in 1993, the Commission had authorised an initial acquisition ofa holding by Fortis in the former public undertaking ASLK-CGER Bank and Insurance. That decision hadconcluded that Fortis would obtain sole control of the insurance business and joint control of the bankingdivision. Through the new acquisition, Fortis obtains sole control of the whole of ASLK-CGER. In thebanking sector, however, it still has several powerful competitors. Furthermore, the acquisition does notsubstantially alter the situation applying in insurance at the time of the previous case.

The merger between the banking group Crédit Suisse Group and the Winterthur insurance company createdthe foremost Swiss financial group, with a leading position both in commercial banking services forindividual clients and in insurance. As a result of the merger, the new entity becomes a global financialoperator, present on the majority of product markets in these two sectors; it will be one of the largest financialgroups in Europe and one of the world leaders in financial asset management. According to the Commission’sfindings, however, this merger between two complementary companies produces no significant aggregation ofmarket share in any of the relevant product markets within the Community. Nor do the market shares of thetwo parties to the merger lead to any problems from the point of view of competition.

From the conglomerate angle, the Commission examined the possible effects of pooling the parties’ financialresources, developing their respective techniques and know-how and sharing their distribution channels. Aninstance would be the potential competitive advantage to be gained from the introduction by a conglomerategroup of the supply of individualised global financial schemes. However, the Commission noted that thegrowing competition between big banks and the insurance companies (e.g. Allianz/Dresdner Bank, BancaRoma/Toro Assicurazioni or AXA/UAP/Banco Bilbao Vizcaya) is now enabling other competitors to benefitfrom comparable synergies. It concluded that the advantages of the merger, particularly in terms of financialpower, were therefore not likely to raise serious doubts as to the compatibility of the merger with the commonmarket, given the positions of the parties and the presence of other groups able to provide effectivecompetition.

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Finally, the Commission approved the proposed merger between the Finnish group Merita and the thirdSwedish bank, Nordbanken. The two groups operate on many banking and financial markets and in theinsurance sector. However, the businesses concerned are mainly national in character, and the activities ofeach firm on the markets of the other are insignificant. In addition, the merger does not significantlystrengthen Merita’s strong position in Finland and does not reduce potential competition, since, before themerger, Nordbanken was not a potential entrant to the Finnish market anyway. On the contrary,monetary union and the continued internationalisation and deregulation of financial activities shouldincrease such competition and could result in the future erosion of Merita’s current position.

C - Summaries of decisions taken under Article 8 of Council Regulation(EEC) No 4064/89

Coca-Cola Enterprises/Amalgamated Beverages81

The Commission decided to authorise the acquisition by Coca-Cola Enterprises (CCE) of the whole of theshare capital of Amalgamated Beverages Great Britain (ABGB), the parent company of the British bottlerCoca-Cola & Schweppes Beverages Ltd (CCSB).

The merger would transfer control of CCSB to CCE and thus to the American group The Coca-ColaCompany (TCCC), which, in the Commission’s view, controlled CCE within the meaning of the MergerRegulation. Taking as the relevant market that in cola-flavoured carbonated soft drinks in Great Britain, theCommission considered that CCSB held a pre-existing dominant position on the market in colas inGreat Britain. This position would be taken over by CCE, which would be fully vertically integrated andown CCSB’s large portfolio of brands of soft drinks. However, it concluded that the merger would not leadto a strengthening of a dominant position as a result of which effective competition would be significantlyimpeded in the common market or a substantial part of it.

Three aspects at least of this decision are significant.

The first aspect concerns the meaning of “control”, which the Commission had to determine regardingrelations between CCE (the enterprise acquiring control of CCSB) and TCCC. The parties argued that CCEwas an independent bottling company since TCCC was merely a minority shareholder. The Commissionconsidered that there were, however, many factors which, taken together, indicated that TCCC exercisedeffective control over CCE. For example, TCCC, with 45% of the shares, had the biggest singleshareholding in CCE, five times more than the second-biggest shareholder. With that shareholding, TCCChad held almost a majority of votes in the annual general meetings held in recent years. It had never beenoutvoted and probably never would be since the remaining shareholdings were widely dispersed. Moreover,CCE’s business was linked to TCCC, on which it was economically dependent since almost all of CCE’sturnover was accounted for by the sale of TCCC’s products. Lastly, TCCC could convert its near-majorityof votes into a clear majority since it could buy more shares on the market any time it wished.

The second aspect is the Commission’s definition of a product market limited to cola-flavoured soft drinks inGreat Britain. Accepting that in principle the factors defining the product market were price, intrinsiccharacteristics and intended application, it focused on the following points:

81 22.1.1997.



- product characteristics and consumer preferences: an evaluation was made of the differences between typesof consumption, demand for beverages and the different reasons why consumers choose particular beverages.It found that, while brand and product image were key factors influencing cola consumption, price and tastewere more important in the consumption of other carbonated soft drinks;

- most of the actors on the market (competitors and customers) were also of the view that a relevant marketfor colas could be defined. In response to the question whether consumers would switch to drinks other thancolas following a price increase of between 5% and 10%, most distributors and competitors considered thatthere would be little or no substitution away from colas;

- on the basis of the parties’ market studies and internal documents, the Commission noted that, whereas therelevant market was wider than the market in colas when consumption habits, behaviour, purchases andbrand perception were assessed, when it was price studies and studies of the scale of reactions to pricechanges that were being carried out, the competitive environment taken into account was that of colas;

- examination of sales statistics, particularly data on the impact of the introduction of distributors’ own-brandcolas, also provided significant evidence that there was a market in colas. Sales of distributors’ own brandsincreased mainly at the expense of other colas, and not at the expense of other carbonated soft drinks; thepenetration of distributors’ own-brand colas resulted in a substantial increase in TCCC’s cola advertising. Itemerged clearly from the investigations that cola demand was relatively inelastic, with distributors’own-brand colas needing more support in the form of reductions in price and allocation of retailing space.

The third aspect is that the analysis criteria indicate that CCSB’s dominant position is not strengthened.CCSB’s existing dominant position on the market in colas was established through the very high marketshares in the overall cola market (almost 60%) held by Coca-Cola and in each of the various distributionchannels and through its status as a “must-stock” item in multiple grocers, wholesalers and cash-and-carries.A further element is CCBS’s wide portfolio, which enables customers to obtain all or a very large part oftheir requirements from a single source and also allows considerable economies of scale in purchasing,production and distribution. These economies of scale are in addition to those arising from the very largevolume of Coca-Cola sales. The Commission also found that a competitor such as Britvic, which bottlesPepsi, was unable to increase its market share significantly despite the application of considerable advertisingand promotion resources; moreover, the structural change undergone by the cola market (principally themultiple-retailer channel) with the introduction of premium own-brands of cola and the entry of Virgin Colaappeared to have stabilised and in fact Coca-Cola was regaining market shares; lastly, distributors’own-brand colas accounted for only 10% of the overall market in cola in Great Britain and did not seem ableto exert countervailing pressure.

Regarding the impact of the operation, the Commission concluded that, through CCE’s acquisition of CCSB,TCCC would become completely vertically integrated and obtain a direct “route to market”, i.e. access tocustomers in all distribution channels. Regarding vertical aspects, the acquisition of a direct route to marketwould give TCCC advantages such as marketing by the bottler and advertising carried out by the owner ofthe brand, and the ability to increase marketing expenditure and to target that expenditure. However, theCommission recognised that TCCC already exercised substantial influence, if not joint control, over themarketing of its own products and over CCSB’s overall commercial strategy.

Regarding horizontal and conglomerate aspects, the Commission recognised that TCCC’s acquisition ofcontrol of CCSB’s complete portfolio would not form a significant change on the market since it had alreadyhad a good deal of access to the advantages deriving from CCSB’s large portfolio.

MERGER CONTROL


Third parties, including competitors, raised concerns regarding the impact of the operation, some of whichrelated to practices coming under Articles 85 and/or 86. However, in all of those cases the Commission tookaccount of undertakings given by CCE, which met some of the concerns expressed by third parties.

Thus, although the proposed operation would lead to a structural change which might also lead to a change inCCSB’s market behaviour, the Commission considered that, given the very specific facts of the case, therewas not enough evidence to conclude with sufficient certainty that the proposed operation would result in anappreciable strengthening of CCSB’s dominant position in the cola market in Great Britain.

Licensing arrangements, forming part of the overall transaction, were scrutinised in parallel underArticle 85. In order to ensure, on the one hand, that CCSB would have the ongoing right to produce,distribute, market and sell Cadbury Schweppes’ branded soft drinks and, on the other, that CCE wouldbe committed to the future of Cadbury Schweppes’ brands, the parties entered into long-term exclusivelicensing arrangements. The agreements are for an initial period of 15 years, extendable by a furtherten years unless either party gives notice of termination.

The agreements were approved, since the parties, following discussions with the Commission’sDirectorate-General for Competition, agreed to alter some of the terms in the agreements and, inparticular, CCE agreed to give an undertaking relating to the future behaviour of CCSB. The partieshave, nevertheless, been informed that the agreements will be re-examined in the light of any newcircumstances and, in any event, after a period of seven years.

As part of the undertaking (the full version of which is available upon request from the Commission),CCE agreed not to include the following types of restrictive provision relating to the purchase ofcola-flavoured beverages in agreements concluded or renewed with customers in Great Britain, and toabstain from unilateral practices having equivalent effect:

(a) exclusivity provisions: provisions that oblige a customer not to purchase other cola-flavouredbeverages or provisions that grant the customer a rebate or other advantage on condition that thecustomer does not purchase such beverages;

(b) target rebates: provisions making the availability or size of rebates granted to a customerconditional on reaching purchase targets for products individually set for the customer for periodsexceeding three consecutive months;

(c) combined target rebates: provisions under which a target rebate (to the extent permitted under (b)above) is paid if the customer reaches specific total aggregate purchases of both products and any otherbeverages;

(d) tying provisions: provisions making the supply of products or the availability or size of rebates orother advantages conditional on a customer purchasing one or more additional beverages andpurchasing one or more products.



Kesko/Tuko82

On 20 November 1996 the Commission decided that Kesko’s acquisition of Tuko, both Finnishcompanies operating in the daily consumer goods sector in Finland, was incompatible with the commonmarket. It concluded that the operation would create a dominant position in Finland in the market indaily consumer goods at retail and wholesale levels. The operation, which has no Communitydimension, was examined at the request of the Finnish Competition Office pursuant to Article 22 of theMerger Regulation.

In so far as the merger had already been implemented, the Commission indicated in the final paragraphof the statement of reasons on which its decision was based that it would take appropriate steps in aseparate decision under Article 85(4) of the Regulation, which empowers it to order the taking of anyaction that may be appropriate in order to restore conditions of effective competition.

Consequently, at the beginning of 1997 the Commission decided to order Kesko to divest itself of theTuko daily consumer goods business in favour of a viable competitor independent of the Kesko groupin accordance with a specific procedure and timetable. The order was based on Tesko’s proposal totransfer Tuko’s business in this area to a purchaser with in-depth experience of the daily consumergoods business in Finland. An independent administrator was also to be appointed to supervise theoperation and management of the business to be transferred.

The Commission considered that Kesko’s proposal was sufficient to overcome the competitiondifficulties identified in the 1996 decision and proportionate to the objective sought, i.e. to re-establisheffective competition on the Finnish markets in daily consumer goods at retail level and at the level ofcash-and-carry sales to business customers.

Anglo American Corporation/Lonrho83

The Commission decided to approve the acquisition by Anglo American Corporation (AAC), aSouth African mining group, of shares in Lonrho, a trading and mining company established in theUnited Kingdom, on condition that the holding was reduced to less than 10%.

The transaction concerns the world market in platinum and rhodium. In 1996 Lonrho and theSouth African enterprise Gencor put forward a first proposal for a Community-scale merger concerningthose two products. The Commission considered that it would lead to the creation of a duopolydominating the world market for the products and declared it incompatible with the common market bydecision of 24 April 1996.84

The present case also gives rise to competition problems. By a series of transactions, AAC and itsassociated companies were to acquire at least 27.5% of the shares in Lonrho, sufficient in itself to giveit decisive influence. After examining the matter in depth, the Commission concluded that theamalgamation of the two groups, both very significant operators of platinum mines, would create adominant position on the world markets in platinum and rhodium seriously impairing effectivecompetition in the common market. In particular, it was guided by the following factors: the current

82 19.2.1997.83 23.4.1997.84 1996 Competition Report.

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market shares held by the two groups; the groups’ holdings of significant and easily exploitablereserves; and the foreseeable development of the market, which would shortly enable the groups tocontrol production and prices in that market. Its enquiries indicated that Lonrho and AAC were theonly operators to have good growth prospects in the near future and would together hold over 60% ofthe market in platinum, while the market share of their nearest competitor, a Russian producer, wasexpected to decrease by half in the next few years and that total demand for the products wouldcontinue to increase.

For those reasons the Commission considered it appropriate that AAC should reduce its proposedholding in Lonrho to below 10% so that the South African group would be prevented from exercisingdecisive influence over Lonrho. AAC was allowed time to negotiate the disposal of its shares; however,pending disposal the shares would be held by a trustee who would only be able to exercise voting rightscarried by these shares subject to the prior authorisation of the Commission.

On 24 November, in accordance with the terms of the decision, AAC applied to the Commission forapproval of the planned sale of its Lonrho shares to a South African business, JohannesburgConsolidated Investment Limited. The Commission did not object to the proposed transfer providedcertain undertakings were given to ensure that AAC and Johannesburg Consolidated InvestmentLimited would be completely independent.

The Commission’s decision is of special importance for at least two principal reasons. First, itconfirms the Commission’s view that a person with only a minority shareholding can have exclusivecontrol of an enterprise. In this case AAC, with 27.5% of Lonrho’s shares, was far and away thebiggest shareholder, able to control the majority of the votes in shareholders’ general meetings.Furthermore, it was the only significant mining enterprise holding shares in Lonrho. The Commissionalso took account of the past behaviour of other Lonrho shareholders, particularly that they had alwaysfollowed the recommendations of the principal shareholder. Second, the decision is of considerableimportance in the Commission’s implementation of its merger control policy. This is the first time ithas made authorisation of a merger conditional on the transfer of shares in a quoted company in orderto remedy competition problems.

British Telecom/MCI85

The Commission authorised the planned merger between British Telecommunications plc (BT) andMCI Communications Corporation (MCI) in the telecommunications field subject to compliance by theparties with proposed commitments.

BT’s main services and products concern local and long-distance telephone lines for individuals andbusinesses, international telephone calls to and from the United Kingdom and the supply oftelecommunications equipment. MCI is a US-based company with diversified interests incommunications, offering its customers a portfolio of integrated services, including long-distance calls,radiotelephony, local calls, paging, messaging, the Internet and advanced global communications.

After investigation, the Commission concluded that the proposed merger was liable to create orstrengthen a dominant position on the market in international voice-telephony services between the UKand the US and in audioconferencing services in the UK.

85 14.5.1997.



Regarding the UK-US market, that risk followed from the relative shortage of transmission facilities onthe UK-US link, then experiencing a sharp rise in demand, and the danger of a bottleneck forming. Atpresent the two countries’ networks are interconnected via the existing international transmissioninfrastructures between these countries, particularly the transatlantic cables. For technical reasonscable and satellite cannot be treated as substitutable for the supply of international voice-telephonyservices. BT and MCI hold high-usage capacities on the transatlantic cables in service, particularly atthe western end, and their power would be increased since the merger would enable them to operate asreciprocal correspondents.

The merger as notified would allow BT and MCI, by combining their capacities, to route theirtransatlantic traffic by end-to-end routes wholly owned by them. They would therefore be able tointernalise payments previously made through settlement of international accounts for all traffic andwould also be able to benefit from more effective exploitation of their transmission capacity because ofthe time difference between the United States and the United Kingdom. At least in the short-to-mediumterm these cost advantages would not be available to any other competitor on the UK-US route.Furthermore, given the combination of BT’s and MCI’s cable capacities and BT’s position in theinitiation of traffic from the United Kingdom, the enterprise created by the merger would allow thecompanies to impede competition by other enterprises holding facilities-operation rights in theUnited Kingdom.

On the audioconferencing services market, BT and MCI, formerly competitors in the United Kingdom,would be able to obtain a combined market share exceeding 80%. The Commission’s enquiryconfirmed that the limited level of investments necessary to set up an audioconferencing business andthe rapid development of the market did not make penetration of the market easier; in fact thedevelopment of the market primarily benefited established operators, to whom the increased demandwent rather than to new, unproven suppliers. Since this made it more difficult for a new entrant tochallenge service-providers already operating, with well-established reputations and experience, and tocapture a part of the increase in customers, there was a substantial barrier to entry to a sector led moreby software and service than by hardware and technology. The merger as notified was therefore liableto create or strengthen a dominant position on the market in the provision of audioconferencing servicesin the United Kingdom.

The parties offered to enter into commitments to meet the objections raised by the Commissionconcerning the merger’s impact on competition. First, they offered to make available to newinternational operators, on a non-discriminatory cost basis, all of their in-service and future capacity ontransatlantic cables (TAT 12/13 cable capacity) overlapping on implementation of the merger. Second,they undertook to convert the international leased lines between the United Kingdom and theUnited States into irrevocable rights of users, available on request to international simple resaleoperators. Lastly, they offered to sell other operators, at their request and without delay, the easternend matched half-circuits currently owned by BT and used for the joint provision of internationaldirect-dial and international private leased circuits services. Moreover, in order to meet theCommission’s concerns regarding the UK audioconferencing market, they undertook to transfer, subjectto the Commission’s verification, MCI’s UK audioconferencing business, without interrupting itsoperations.

The Commission considered that the parties’ undertakings, subject to their full compliance, weresufficient to overcome its doubts concerning the compatibility of the proposed merger with the commonmarket.

MERGER CONTROL


Blokker/Toys “R” Us86

The Commission decided that Blokker’s acquisition in February of the Toys “R” Us stores in theNetherlands led to the strengthening of its dominant position on the Dutch market in specialised toyoutlets and was therefore incompatible with the common market. It ordered Blokker to divest theToys “R” Us stores to an independent third party unconnected to the Blokker group. It began itsexamination of this case, which has no Community dimension, at the request of theNetherlands Government under Article 22 of the Merger Regulation. Since the merger had beenimplemented, it acted under Article 8(4) of that Regulation, which empowers it to require the separationof undertakings or assets brought together or any other action appropriate in order to restore conditionsof effective competition.

The Blokker group is a major retail operator in the Netherlands, where it is the market leader in theretail sale of toys. It has two chains of specialised toy outlets and also retails a large range of toysthrough its household-articles shops. The United States enterprise Toys “R” Us is one of the biggesttoy retailers in the world. Its Dutch subsidiary operated in the Netherlands through nine megastores,six of which were to be taken over permanently by Blokker, while the remaining three shops would berun as a temporary operation pending their closure.

The Commission considered that the relevant market in this case was the market in toy shops,specialised shops and shops with specialised departments offering a wide range of products throughoutthe year in the Netherlands. Blokker held a dominant position on the Dutch market in the specifiedproduct. Its finding that these was a dominant position was based on Blokker’s holding a significantmarket share, the fragmentation of its competitors and the significance of non-brand and distributor’sbrand products. In addition it considered that Blokker’s operation of different retail formulae gave it asubstantial advantage over its competitors and enabled it to influence suppliers’ access to the market.

The Commission concluded that the merger strengthened Blokker’s dominant position. The acquisitionof Toys “R” Us gave Blokker only a relatively small additional market share but the integration of thebusiness into the Blokker group gave it a considerable market potential; by adding the Toys “R” Usformula to its own sales formula, Blokker would be able to secure access to the important segmentconsisting of large-scale suburban retailing in which only Toys “R” Us was active. Moreover, themerger created barriers to access to the Dutch market in the retail sale of toys.

For these reasons the Commission declared the merger incompatible with the common market andprescribed measures to restore conditions of effective competition. On the basis of undertakings offeredby Blokker and additional supplementary measures, it ordered Blokker to divest most of its shares inthe Dutch subsidiary of Toys “R” Us to an independent enterprise which was not linked to the Blokkergroup and would be capable of operating and developing the Dutch Toys “R” Us shops. Blokker wasallowed to retain a minority holding in Toys “R” Us but would have to withdraw after a certain periodand offer an option to the party to buy the whole of the Toys “R” Us business immediately.

The Commission thus restored effective competition on the market in toy outlets in the Netherlands andoptimised the possibilities for the continued presence of the Toys “R” Us stores on the Dutch market.

86 26.6.1997.



Boeing/McDonnel Douglas87

The Commission decided to declare the acquisition of the McDonnell Douglas Corporation (MDC) bythe Boeing Company (Boeing) compatible with the common market subject to full compliance byBoeing with undertakings given to the Commission.

The Commission determined that the proposed merger led to a significant strengthening of the dominantposition already held by Boeing on the world market in large commercial jet aircraft. It considered thatthe strengthening of the position resulted from MDC’s own competitive potential on that market,Boeing’s enhanced capacity to enter into exclusive supply agreements with airlines and the acquisitionof MDC’s defence and space business, which give advantages in the commercial aviation sectorthrough spin-off in the form of R&D and technology-transfer benefits. Boeing offered commitments toovercome the competition concerns identified by the Commission. Those commitments included fromenforcing its exclusivity rights under existing agreements and from entering into any exclusiveagreements in future, isolating MDC’s commercial aircraft business, providing access for other aircraftmanufacturers to patents, refraining from abusing its relations with purchasers and suppliers andsubmitting an annual report to the Commission on publicly funded military and civil aircraft R&Dprojects. Those commitments are considered sufficient to overcome the Commission’s competitionconcerns and it has decided to declare the merger compatible with the common market subject to thoseconditions and obligations.

The market in large commercial jet aircraft is a worldwide one and the European Union forms anintegral and important part of that market, the Union’s competitive structure being comparable. It hasbeen calculated that European airlines will account for about one third of demand over the nextten years and that the average market shares of Boeing and MDC will amount to about one third of theEU market.

After five months of intensive investigation, the Commission established that Boeing, a fully integratedcompany operating in the civil and military aerospace business, already held a dominant position on theworld market in large commercial jet aircraft. Its existing dominant position on that market followsfrom its very large market share (64% of the world market), the size of its fleet in service (60% of theglobal market) and the fact that it is the only manufacturer offering a complete family of aircraft. Thisposition cannot be challenged by potential new entrants in view of the extremely high barriers to entryto the market, which is very capital-intensive. Boeing’s domination was further shown by its recentconclusion of exclusive supply agreements with three of the major airlines, American, Delta andContinental Airlines, which would probably not have concluded those contracts, extending as they doover 20 years, unless the supplier already dominated the market in large commercial aircraft and wascapable of continuing its domination.

The immediate strengthening of Boeing’s domination arose from the increase in its share of the globalmarket in large commercial aircraft from 64% to 70% (in terms of its current order book). Moreover,in addition to its existing monopoly in the wide-body aircraft segment (the Boeing 747 segment) it holdsanother monopoly in the smaller, narrow-body aircraft segment.

Douglas Aircraft Company (DAC, MDC’s commercial aircraft division) has gone downhillcommercially in recent years (although the potential of the MD95 has not yet been tested). This decline

87 30.7.1997.

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was caused by a relatively low level of investment compared with Boeing and Airbus and seemed tohave been aggravated by a loss of confidence on the part of customers and investors following MDC’scancellation of the MDXX programme, undoubtedly confirmed by the announcement that Boeing wastaking over the programme. Nevertheless, Boeing itself declared, after making that announcement, thatit would benefit from DAC’s competitive potential. The acquisition of this advantage constitutes astrengthening of a dominant position for the purposes of Community law.

Another crucial element in strengthening Boeing’s dominant position is the broadening of its customerbase from 60% to 84% of the existing fleet in service. By securing closer contact to its customer base,Boeing could increase its opportunities for future sales through the significant additional leverage overexisting MDC aircraft users (for example, through maintenance business). Closer contact with airlinesusing MDC aircraft would give it a better chance of identifying and influencing customer needs and ofpersuading them to change from MDC aircraft to Boeing. In particular it could use its leverage effectto persuade airlines to enter into long-term exclusive supply agreements. It has already concluded suchagreements with airlines ranked first, third and fourth which use MDC aircraft. Prior to thoseagreements, exclusivity deals like those have never before been concluded in the sector. The proposedmerger would lead to a further increase in future in Boeing’s ability to enter into similar exclusivesupply agreements and was liable to have a knock-on effect on other major airlines, inducing them toconclude such agreements as well.

Although the Commission’s enquiry did not lead it to conclude that the proposed merger would lead tothe creation or strengthening of a dominant position in the defence and space sectors, it considered thatBoeing’s dominant position on the market in commercial aircraft would be significantly strengthenedthrough the addition of MDC’s defence and space business. The acquisition of the defence constructorranking second in the world by the first-ranking manufacturer of military aircraft would considerablyincrease Boeing’s access to its patents and intellectual property and publicly funded R&D. Thesignificant strengthening of Boeing’s position in defence R&D would increase its know-how and conferother advantages and enhance the benefits obtained from the transfer of military technology tocommercial aircraft. If Boeing and MDC combine their portfolios of patents and know-how, this wouldfurther strengthen Boeing’s dominant position. Moreover, the global combination of the twocompanies’ civil, military and space businesses would strengthen Boeing’s negotiating position with itssuppliers, enabling it to secure benefits in this area at the expense of its competitors.

Boeing made proposals to remedy the strengthening of its dominant position caused by combiningDAC’s competitive potential with Boeing’s dominant position, increased opportunities to concludeexclusive supply agreements which would virtually close off the market, and spin-off from militaryactivities, particularly R&D for the large commercial jet aircraft business. Regarding the first point,the Commission’s enquiry showed that no other aircraft manufacturer was interested in acquiring DACbesides Boeing and it was impossible to find any potential entrant to the commercial jet aircraft market.Since it was impossible for Boeing to divest DAC, it undertook to maintain DAC as a separate legalentity for a period of ten years and to submit to the Commission a report describing DAC’sperformance accessible to the public and certified by an independent auditor. It also proposed torestrict the leverage effect created by the acquisition of the MDC fleet, undertaking not to establish anylink between the sale of Boeing aircraft and access to the MDC fleet. Regarding exclusive supplyagreements, it undertook to refrain from entering into any additional agreements until 2007 and not toenforce its exclusivity rights under existing agreements. Regarding the global effect, it offered to grantcompetitors non-exclusive licences for patents and related know-how concerning applications ofgovernment-funded R&D. It also undertook to submit over a ten-year period an annual report to the



Commission on non-classified aeronautics R&D projects in which it is involved. Those undertakingswill increase the transparency of the links between military and civil business. Lastly, it undertook notto exploit its relations with suppliers to secure preferential treatment. This package of remedies as awhole is sufficient to overcome the competition problems identified by the Commission, which thereforedecided to declare the merger compatible with the common market.

The Coca-Cola Company/Carlsberg A/S88

The Commission authorised The Coca-Cola Company (TCCC) and Carlsberg A/S (Carlsberg) toestablish a joint venture, Coca-Cola Nordic Beverages, an enterprise bottling soft drinks. Theauthorisation was granted subject to the parties’ compliance with a number of undertakings, whichwere given in order to solve the competition problems identified by the Commission.

The economic objective of Coca-Cola Nordic Beverages was to further the interests of bottlingcompanies in Denmark and Sweden producing, distributing and selling carbonated soft drinks underbrands including those of TCCC. With this in view, a bottling company, Dadeko A/S, a Carlsbergsubsidiary in Denmark, and TCCC’s bottling plant in Sweden, Coca-Cola Drycker Sverige (CCDS),were to be transferred to Coca-Cola Nordic Beverages.

The Commission examined the effects of establishing the joint venture on the carbonated soft drinksmarket regarding both brands and bottling in Denmark and Sweden. After carrying out a detailedexamination, it concluded that, on the Danish market, the establishment ofCoca-Cola Nordic Beverages would strengthen the dominant positions of TCCC at brand level and ofDadeko A/S, the Carlsberg subsidiary, at bottling level.

When the merger was planned TCCC held over 40% of the Danish market in terms of brands andCarlsberg held more than 8%, while Carlsberg’s share of the bottling market was more than 60%. Theparties’ principal competitor for brands was PepsiCo, with less than 10% of the market. Regardingbottling, the Commission determined that Carlsberg’s main competitor was Bryggerigruppen, with amarket share of less than 20%, and that Carlsberg controlled the enterprise Jyske Bryg, which was ableto exercise determining influence on Bryggerigruppen.

The Commission considered that the strengthening of the dominant position in Denmark of TCCC interms of brands and of Dadeko A/S in terms of bottling arose from combining the four principal effectsof the merger: TCCC’s vertical integration of pre-bottling activities, the licensing to TCCC of certainof Carlsberg’s brands of carbonated soft drinks, the elimination of Carlsberg as an actual and potentialcompetitor of TCCC in brands and the termination of Carlsberg’s distribution arrangements for marksin competition with TCCC.

Regarding Sweden, the Commission obtained evidence to the effect that TCCC was already dominanton the market in carbonated soft drinks. Nevertheless, it took into consideration the fact that TCCChad terminated its licensing agreements with the principal Swedish brewer, Pripps, and had set up itsown bottling company. This enabled it to bring into play significant production and distributionfacilities hitherto reserved to Pripps. For that reason the Commission concluded that the establishmentof Coca-Cola Nordic Beverages did not strengthen TCCC’s dominant position in Sweden.

88 11.9.1997.

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To overcome the competition problems on the Danish market identified by the Commission, TCCC andCarlsberg gave a number of undertakings, some of which were considered sufficient in themselves toremedy the anti-competitive impact of the proposed merger. The undertakings considered appropriateby the Commission concerned, on the one hand, the sale of Carlsberg’s holding in Jyske Bryg, whichwas able to exercise decisive influence on Bryggerigruppen, the second manufacturer of carbonated softdrinks in Denmark and, on the other, the transfer by Carlsberg of Jolly Cola, the third cola brand inDenmark. The Commission considered that those transfers made it possible for a realistic and viablealternative competitor to develop on the Danish market, capable of providing a countervailing force inrelation to the arrangements envisaged by the parties and to offset the vertical effects of thosearrangements.

In addition the Commission considered certain aspects of the merger in relation to Article 85. Inrestructuring their bottling business in the Nordic countries, TCCC, CCDS (the Swedish branch of thejoint enterprise set up by TCCC and Carlsberg) and the Swedish brewer and bottler Falcon BryggerierAB also concluded agreements relating solely to the Swedish market. The agreements covered theestablishment of a joint distribution system between CCDS and Falcon, the transfer by Falcon ofcertain soft-drink brands to TCCC and an exclusive dealing agreement between CCDS and Falcon onthe sale of CCDS products in certain hotels and restaurants, etc. In response to the objections raised bythe Commission that certain aspects of the agreements were contrary to the competition rules, theparties proposed amendments.

The Commission’s principal concern was that Falcon, through restrictions in the agreement setting upthe distribution joint venture and in another agreement on the transfer of certain brands from Falcon toTCCC, might be precluded from bottling its own drinks and those of other businesses in Sweden.However, the parties gave an undertaking that Falcon would be allowed to continue as a competitor inthe soft-drinks business both as an owner of brands and as a bottler. In view of those undertakings, theCommission concluded that the agreements could be considered compatible with the competition rules.

Guinness/Grand Metropolitan89

The Commission approved the merger of two British groups, Guinness and Grand Metropolitan(GrandMet). The approval was subject to compliance by the groups with undertakings given to theCommission to meet the numerous competition problems it had identified during its in-depthexamination. The Commission had in fact decided to initiate proceedings because the planned merger,which was intended to create the biggest alcoholic beverages group in the world, would lead to thecombination of substantial market shares in this area in many European countries and to the holding ofa wide range of leading brands.

Guinness and GrandMet both have spheres of activity (spirituous beverages, beers, food products,catering, hotels, publications, etc.) but the impact of their merger would have related essentially to theproduction and distribution of spirituous beverages, where the parties operate on a global scale andeach owns a significant number of major international or national beverage brands.

In identifying competition problems, the Commission applied certain essential criteria. Regarding therelevant geographic market, it considered that the geographic markets in question in the EuropeanEconomic Area were still national, as was shown by consumption patterns differing between

89 15.10.1997.



Member States, the continuation of distribution mainly along national lines, continuing differencesbetween Member States regarding tax and legal aspects and the limited impact of parallel trade as aprice constraint. The definition of the relevant product market was considered in particular detail inview of the different definitions initially appearing possible. The Commission concluded that therelevant product markets were no wider than each of the main categories of internationally knownspirituous beverages (whisky, gin, vodka, rum, etc.) or than each liqueur. It also considered that, apartfrom the general distinction between different types of spirituous beverages, more specific definitionswere also appropriate for certain products or for certain geographic areas because of their particularcharacteristics. Thus, in Belgium and Luxembourg, it concluded that genever should not be included inthe definition of the market in gin; again, in the case of Ireland and Spain, the view was taken that Irishwhiskey and whisky produced in Spain formed markets distinct from the market in Scotch whisky ineach of those States.

Applying the criteria of the relevant geographic and product markets, as adopted, to assess the effectsof the merger, the Commission took into consideration many factors such as the prevalence of verticalintegration between production and distribution, the impact of the brands owned, the level of barriers toentry, the degree of buyer power or the portfolio effect, i.e. the impact of the concentration in the newentity of various categories of spirituous beverages or dominant brands.

The Commission’s enquiry showed that the merger would result in the creation or strengthening of adominant position in certain Member States: on the markets in whisky, gin and vodka in Belgium andLuxembourg; on the markets in Scotch whisky and brandy/cognac in Ireland; on the market in Scotchwhisky in Spain; and, lastly, on the markets in whisky, gin, rum and brandy in Greece.

Nevertheless, the parties gave undertakings in response to those problems. The undertakings involvedthe divestment of two brands of whisky, Dewar and Ainslie, at European level. Dewar is a majorinternational brand and its divestment will remedy doubts concerning the parties’ strength on the whiskymarkets in Greece and Spain. This will also enable the new owner to develop the brands in otherEuropean markets. Ainslie is a major brand in the Benelux and its transfer will also remove doubtsconcerning that market. Regarding Belgium and Luxembourg, the parties also undertook to leave thedistribution of Gilbey gin to a third party and to terminate their distribution agreement for Wyborowavodka. Those undertakings were considered sufficient to overcome the Commission’s competitionconcerns regarding the markets in gin and vodka in Luxembourg and Belgium. The parties alsoundertook to terminate their distribution agreement for Bacardi in Greece in order to resolve theproblems created by their “portfolio power” there in view of their strong initial market shares in variouscategories of spirituous beverages. Regarding Ireland, the parties undertook to divest some interests soas to ensure continued competition in the distribution of spirituous beverages.

The Commission considered that as a whole the divestments sufficed to overcome the problems, inparticular because the transfers will lead to a reduction in the strong presence of the business created bythe merger on the geographic markets and in the categories of spirituous beverages in question. Ittherefore authorised the proposed merger subject to those conditions.

MERGER CONTROL


Siemens/Elektrowatt90

The Commission approved subject to conditions the proposed merger between the German companySiemens AG and the Swiss company Elektrowatt AG. The merger as notified would have reinforcedthe parties’ businesses on a number of different markets, including those for commercial buildingcontrol and security systems, energy supply equipment and payphones. The competition problemconcerned the market in public payphones in Germany.

On terminating its enquiry, the Commission concluded that the merger would lead to the creation of adominant position on the German market in public payphones. Germany, which accounts for 20% ofthe public payphones installed in the European Union, is the second-largest potential market in theEuropean Economic Area. Deutsche Telekom, the only buyer of public payphones in Germany, decidedto replace existing card-operated telephones by a new card-operated system. The introduction of thenew card-operated telephones was to begin at the end of 1997. The new system was developed by aconsortium consisting of Siemens and Landis & Gyr (an Elektrowatt subsidiary), in collaboration withDeutsche Telekom.

Up to 1995, there were three manufacturers of German public payphones, Siemens, Elektrowatt/Landis& Gyr and Bosch Telecom. Bosch Telecom stopped developing new payphones in 1995 and suppliedonly those required to discharge its existing contractual obligations. Even after Bosch dropped out,Deutsche Telekom nevertheless remained able to negotiate its contracts with at least two suppliers byputting them up for tender. Following the merger, Siemens would be the sole supplier of a newgeneration of card-operated telephones.

The Commission was very doubtful whether true competition could be restored by the entry of a newsupplier in the medium term. Even if a competitor could use licensing agreements to gain access to thetechnology developed by Siemens, entry to the market would not be profitable. The competitor wouldhave to develop a new product specifically for the German market. However, the volume of that marketwas limited. Moreover, Siemens/Landis & Gyr, Deutsche Telekom’s traditional suppliers, werealready on the market with binding supply contracts for substantial quantities of new-generationpayphones. In view of Siemens’s dominant position it was unlikely that a potential competitor would beable to secure a profitable order. The Commission therefore considered that the merger led to thecreation of a dominant position on the public payphone market in Germany.

In order to meet the Commission’s concerns, the parties gave an undertaking that Siemens would sell byan agreed deadline Elektrowatt’s entire payphone business to an independent third party who would bean effective actual or potential competitor. Siemens also undertook to offer the purchaser the sameaccess to card-operated telephone technology as that enjoyed by Elektrowatt/Landis & Gyr. Lastly, anindependent administrator would be made responsible for verifying that Siemens carried out itscommitments and for selling Elektrowatt’s payphone business in the event of failure to divest before thedeadline.

The Commission considered that the proposed sale of the business was sufficient to remove the doubtconcerning the creation of the dominant position on the market in public payphones in Germany since itensured that in future there would be a second independent supplier on the market in addition toSiemens.

90 18.11.1997.



Veba/Degussa91

The Commission conditionally authorised the proposed acquisition by Veba AG of 36.4% of the sharecapital of Degussa AG, thereby securing a majority of the votes in general meetings, giving it effectivecontrol of Degussa.

The acquisition mainly concerns the chemical industry, particularly products such as adjuvants, plasticsand acids. The Commission’s in-depth investigation showed that it would create a competitivedifficulty in the European market in fumed silica. On this market supply in Europe is highlyconcentrated, with only three competitors there including Degussa, which had a share exceeding 50% atthe time of the acquisition. The second and main competitor was Cabot, which, together with a Vebasubsidiary, owned Cabot/Hüls GmbH for the production of fumed silica.

The Commission concluded that in this particular situation the acquisition would result in the creationof a dominant position on the market in fumed silica in Europe. Veba and Cabot’s joint venture formeda structural link weakening Cabot’s position as an independent competitor. The agreements drawn upon the joint venture showed that the new entity formed by Veba and Degussa would be kept informed ofdevelopments in Cabot’s prices and would be able to adjust its own pricing policy accordingly. Themarket position of the last remaining competitor, Wacker, did not allow it to provide effectivecompetition or prevent Veba/Degussa from operating on the market without regard for pressure fromcustomers or competitors. Moreover, most purchasers of fumed silica had criticised the acquisition onthe ground that the market leader, Degussa, would thereafter be bound to its most important competitorthrough Veba and a joint venture.

In order to overcome the Commission’s objections, Veba undertook to transfer its holding inCabot/Hüls GmbH to an independent buyer unconnected with the Veba or Degussa groups and withoutthe companies being linked by holdings or officers. The Commission considered that the legalseparation of Veba from the joint venture would thus prevent the creation of a dominant position on thepart of Veba/Degussa, particularly since Cabot could remain a competitor independent of the newenterprise.

D - Commission decisions

1. Decisions under Articles 6 and 8 of Council Regulation (EEC) No 4064/89

1.1. Decisions under Article 6(1) of Council Regulation (EEC) No 4064/89

Case No Name Date ofdecision

Published in OJ

IV/M.0872 TRW/Magna 28.1.97 OJ C 110, 9.4.97IV/M.0856 British Telecom/MCI 30.1.97IV/M.0874 Amec/Financière Spie Batignolles/Spie

Batignolles6.2.97 OJ C 118, 16.4.97

IV/M.0850 Fortis/Meespierson 6.2.97IV/M.0880 Schweizer RE/Uniorias 7.2.97 OJ C 120, 18.4.97

91 3.12.1997.

MERGER CONTROL


IV/M.0883 Prudential/HSBC/Finnish Chemicals 13.2.97 OJ C 121, 19.4.97IV/M.0878 RTL 7 14.2.97 OJ C 201, 1.7.97IV/M.0884 KNP BT/Bunzl/Wilhelm Seiler 14.2.97 OJ C 110, 9.4.97IV/M.0846 Philips/Hewlett-Packard 17.2.97 OJ C 110, 9.4.97IV/M.0875 DBV/Gothaer/GPM 17.2.97 OJ C 198, 28.6.97IV/M.0882 ADM/Grace 20.2.97 OJ C 120, 18.4.97IV/M.0879 Vendex (Vedior)/BIS 20.2.97 OJ C 162, 29.5.97IV/M.0876 Telia/Ericsson 20.2.97 OJ C 156, 24.5.97IV/M.0871 UPM-Kymmene/Finnpap 21.2.97 OJ C 110, 9.4.97IV/M.0890 Blokker/Toys “R” Us 21.2.97 OJ C 71, 7.3.97IV/M.0869 BGT/EHG - AIM 26.2.97 OJ C 125, 22.4.97IV/M.0887 Castle Tower/TDF/Candover/Berkshire -

HSCo27.2.97 OJ C 120, 18.4.97

IV/M.0857 British Airways/Air Liberté 28.2.97 OJ C 149, 17.5.97IV/M.0867 Wagon-Lits/Carlson 7.3.97 OJ C 202, 2.7.97IV/M.0873 Bank Austria/Creditanstalt 11.3.97 OJ C 160, 27.5.97IV/M.0877 Boeing/McDonnell Douglas 19.3.97 OJ C 136, 1.5.97IV/M.0835 Recticel/Greiner 19.3.97 OJ C 205, 5.7.97IV/M.0786 Birmingham International Airport 25.3.97 OJ C 137, 3.5.97IV/M.0904 RSB/Tenex/Fuel Logistic 2.4.97 OJ C 168, 3.6.97IV/M.0866 Cereol/Ösat - Ölmühle 2.4.97 OJ C 146, 14.5.97IV/M.0900 BT/TELE DK/SBB/Migros/UBS 16.4.97 OJ C 160, 27.5.97IV/M.0886 MRW/MHP 22.4.97 OJ C 160, 27.5.97IV/M.0891 Deutsche Bank/Commerzbank/J.M. Voith 23.4.97 OJ C 247, 13.8.97IV/M.0901 Go-Ahead/VIA/Thameslink 24.4.97 OJ C 253, 19.8.97IV/M.0894 Rheinmetall/British Aerospace/STN Atlas 24.4.97 OJ C 213, 15.7.97IV/M.0912 Siemens/HUF 29.4.97 OJ C 214, 16.7.97IV/M.0896 Tenneco/KNP BT 30.4.97 OJ C 207, 8.7.97IV.M.0833 The Coca-Cola Company/Carlsberg A/S 2.5.97 OJ C 148, 16.5.97IV/M.0914 Tesco/ABF 5.5.97 OJ C 162, 29.5.97IV/M.0907 Agos Itafinco 12.5.97 OJ C 204, 4.7.97IV/M.0902 Warner Bros./Lusomundo/Sogecable 12.5.97 OJ C 202, 2.7.97IV/M.0920 Samsung/AST 26.5.97 OJ C 203, 3.7.97IV/M.0915 Tyco/ADT 2.6.97 OJ C 227, 26.7.97IV/M.0906 Mannesmann/Vallourec 3.6.97 OJ C 238, 5.8.97IV/M.0909 Worms/Saint-Louis 4.6.97 OJ C 203, 3.7.97IV/M.0916 Lyonnaise des Eaux/Suez 5.6.97 OJ C 207, 8.7.97IV/M.0911 Clariant/Hoechst 10.6.97 OJ C 238, 5.8.97IV/M.0908 PTA/Stet/Mobilkom 11.6.97 OJ C 214, 16.7.97IV/M.0919 Abeille Vie/Viagère/Sinafer 12.6.97 OJ C 233, 1.8.97IV/M.0917 Valinox/Timet 12.6.97 OJ C 10, 15.1.98IV/M.0934 Auchan/Leroy Merlin/Ifil/La Rinascente 16.6.97 OJ C 274, 10.9.97IV/M.0936 Siebe/APV 16.6.97 OJ C 274, 10.9.97IV/M.0845 BASF/Hoechst 17.6.97 OJ C 232, 31.7.97IV/M.0939 Bankamerica/General Electric/ Cableuropa 19.6.97 OJ C 235, 2.8.97



IV/M.0938 Guinness/Grand Metropolitan 20.6.97 OJ C 198, 28.6.97IV/M.0933 ICI/Unilever 23.6.97 OJ C 213, 15.7.97IV/M.0923 Deutsche Bank/Dresdner Bank/ESG 23.6.97 OJ C 303, 4.10.97IV/M.0929 Dia/Veba Immobilien/Deutschbau 23.6.97 OJ C 226, 25.7.97IV/M.0922 Viag/Goldschmidt 26.6.97 OJ C 245, 12.8.97IV/M.0930 Ferrostaal DSD 26.6.97 OJ C 213, 15.7.97IV/M.0910 CLF CCB (DEXIA)/San Paolo/ Crediop 27.6.97 OJ C 274, 10.9.97IV/M.0946 Intermarché/Spar 30.6.97 OJ C 227, 26.7.97IV/M.0949 Mederic/Urrpimmec/CRI/Munich RE 2.7.97 OJ C 329, 31.10.97IV/M.0885 Merck/Rhône-Poulenc-Merial 2.7.97 OJ C 312, 14.10.97IV/M.0943 CGEA/EVS/DEGV 2.7.97 OJ C 232, 31.7.97IV/M.0940 UBS/Mister Minit 9.7.97 OJ C 232, 31.7.97IV/M.0951 Cable and Wireless/Mærsk Data - Nautec 10.7.97 OJ C 235, 2.8.97IV/M.0953 Thomson/Siemens/ATM 18.7.97 OJ C 255, 20.8.97IV/M.0937 Lear/Keiper 22.7.97 OJ C 275, 11.9.97IV/M.0913 Siemens/Elektrowatt 28.7.97IV/M.0962 Daimler Benz/Deutsche Telekom - Telematik 31.7.97 OJ C 253, 19.8.97IV/M.0918 Klockner/ODS 5.8.97 OJ C 10, 15.1.98IV/M.0723 Norsk Alcoa/Elkem 6.8.97 OJ C 309, 9.10.97IV/M.0925 Krupp-Hoesch/Thyssen 11.8.97 OJ C 285, 20.9.97IV/M.0941 ADM/Acatos & Hutcheson - Soya Mainz 11.8.97 OJ C 275, 11.9.97IV/M.0897 Stinnes/Haniel Reederei 11.8.97 OJ C 289, 24.9.97IV/M.0963 Compaq/Tandem 11.8.97 OJ C 283, 19.9.97IV/M.0966 Philips/Lucent Technologies 20.8.97 OJ C 274, 10.9.97IV/M.0927 Stet/GET/Unión Fenosa 20.8.97 OJ C 288, 23.9.97IV/M.0968 Lufthansa Cityline/Bombardier/EBJS 26.8.97 OJ C 285, 20.9.97IV/M.0971 Klöckner/Comercial de Laminados 26.8.97 OJ C 10, 15.1.98IV/M.0954 Bain/Hoechst - Dade Behring 2.9.97 OJ C 22, 23.1.98IV/M.0942 Veba/Degussa (Art. 6(1)(c)) 2.9.97IV/M.0977 Fujitsu/Amdahl 8.9.97 OJ C 305, 7.10.97IV/M.0976 Banco Santander/San Paolo/ Finconsumo 15.9.97 OJ C 306, 8.10.97IV/M.0973 Bertelsmann/Burda - HOS Lifeline 15.9.97 OJ C 360, 26.11.97IV/M.0972 Bertelsmann/Burda/Springer-HOS MM 15.9.97 OJ C 360, 26.11.97IV/M.0957 L’Oréal/Procasa/Cosmétique Iberica/ Albesa 19.9.97 OJ C 374, 10.12.97IV/M.0967 KLM/Air UK 22.9.97 OJ C 372, 9.12.97IV/M.0983 Bacob Banque/Banque Paribas Belgique 22.9.97 OJ C 342, 12.11.97IV/M.0961 Frantschach/Bischof + Klein/F+B

Verpackungen26.9.97 OJ C 359, 25.11.97

IV/M.0960 Frantschach/MMP/Celulozy Swiecie 26.9.97 OJ C 356, 22.11.97IV/M.0979 Preussag/Voest Alpine 1.10.97 OJ C 314, 16.10.97IV/M.0981 Fortis/ASLK-CGER 2.10.97 OJ C 323, 24.10.97IV/M.0984 Dupont/ICI 2.10.97 OJ C 4, 8.1.98IV/M.0950 Hoffmann - La Roche/Boehringer Mannheim 2.10.97 OJ C 306, 8.10.97IV/M.0990 Hagemeyer/ABB Asea Skandia 7.10.97 OJ C 376, 11.12.97IV/M.0986 Agfa-Gevaert/Du Pont (Art. 6(1)(c)) 9.10.97

MERGER CONTROL


IV/M.0985 Crédit Suisse/Winterthur 15.10.97 OJ C 341, 11.11.97IV/M.0926 Messer Griesheim/Hydrogas 23.10.97 OJ C 376, 11.12.97IV/M.1007 Shell/Montell 23.10.97 OJ C 6, 10.1.98IV/M.0994 Dupont/Hitachi 24.10.97 OJ C 6, 10.1.98IV/M.1011 Ingersoll-Rand/Thermo King 24.10.97 OJ C 378, 13.12.97IV/M.1003 Alcoa/Inespal 24.10.97IV/M.0991 Promodes/Casino 30.10.97 OJ C 376,11.12.97IV/M.1017 Hannover RE/Skandia 03.11.97IV/M.0988 Mærsk DFDS Travel 4.11.97 OJ C 10, 15.1.98IV/M.1026 Nordic Capital/Apax Industri 6.11.97 OJ C 10, 15.1.98IV/M.1018 GE Capital/Woodchester 7.11.97IV/M.0998 OBS! Danmark 10.11.97IV/M.1019 Preussag/Tui 10.11.97 OJ C 368, 5.12.97IV/M.1001 Preussag/Hapag-Lloyd 10.11.97 OJ C 368, 5.12.97IV/M.0975 Albacom/BT/ENI/Mediaset 13.11.97 OJ C 369, 6.12.97IV/M.1037 Nomura/Blueslate 17.11.97IV/M.1015 Cummins/Wärtsilä 17.11.97 OJ C 366, 4.12.97IV/M.0980 Arbed/Aceralia 18.11.97IV/M.1031 Jardine/Appleyard 20.11.97IV/M.1023 Ifil/Worms & Cie 27.11.97 OJ C 20, 22.1.98IV/M.1013 Shell UK/Gulf Oil 28.11.97 OJ C 29, 27.1.98IV/M.1021 Compagnie Nationale de Navigation/ Sogelfa

- CIM1.12.97 OJ C 29, 27.1.98

IV/M.0958 Watt AG (II) 4.12.97IV/M.1049 Akzo/PLV-EPL 4.12.97IV/M.1046 Ameritech/Tele Danmark 5.12.97 OJ C 25, 24.1.98IV/M.1029 Merita/Nordbanken 10.12.97IV/M.1054 LGV/BTR 11.12.97IV/M.1040 Wolters Kluwer/Reed Elsevier 11.12.97 OJ C 24, 17.1.98IV/M.1030 Lafarge/Redland 16.12.97IV/M.0997 Swedish Match/KAV 18.12.97IV/M.1057 Terra/ICI 19.12.97IV/M.1055 Cegetel/Vodafone - SFR 19.12.97 OJ C 16, 20.1.98IV/M.1068 Crédit Suisse First Boston/Barclays 19.12.97IV/M.1059 Suez Lyonnaise des Eaux/BFI 19.12.97IV/M.1067 Merrill Lynch/Mercury 22.12.97IV/M.1036 Chrysler/Distributors in Benelux and in

Germany22.12.97

IV/M.1063 Metro/Makro 22.12.97IV/M.1035 Hochtief/Aer Rianta/Düsseldorf Airport 22.12.97IV/M.1058 Unichem/Alliance Santé 22.12.97 OJ C 29, 27.1.98IV/M.0970 TKS/ITW Signode/Titan 22.12.97 OJ C 9, 14.1.98IV/M.1041 BASF/SHELL (II) 23.12.97IV/M.1033 AXA-UAP/AXA Aurora 23.12.97



1.2. Decisions under Article 8 of Council Regulation (EEC) No 4064/89

Case No Name Date ofdecision

Published in OJ

IV/M.794 Coca-Cola Enterprises/AlmagamatedBeverages Great Britain

22.1.97 OJ L 218, 9.8.97

IV/M.784 Kesko/Tuko 19.2.97 OJ L 174, 2.7.97IV/M.754 Anglo American Corporation/Lonrho 23.4.97 OJ LIV/M.856 British Telecom/MCI 14.5.97 OJ L 336, 8.12.97IV/M.890 Blokker/Toys “R” Us 26.6.97 OJ LIV/M.877 Boeing/McDonnell Douglas 30.7.97 OJ L 336, 8.12.97IV/M.833 The Coca-Cola Company/Carlsberg 11.9.97 OJ LIV/M.938 Guinness/Grand Metropolitan 15.10.97 OJ LIV/M.913 Siemens/Elektrowatt 18.11.97 OJ LIV/M.942 Veba/Degussa 03.12.97 OJ L

2. Decisions pursuant to Article 66 of the ECSC Treaty

Case No Name Date of decisionECSC. 1218 Sidmar/Ferrometalli 14.2.97ECSC. 1223 RBB/Agenzia Carboni 3.4.97ECSC. 1228 Arbed/Champion 24.4.97ECSC. 1227 Hoogovens/Boel 28.4.97ECSC. 1236 SHV/RTE 14.5.97ECSC. 1243 Krupp Hoesch/Thyssen 28.7.97ECSC. 1250 Thyssen Sonnenberg/Alfa 30.9.97ECSC. 1237 Arbed/Aceralia 10.11.97ECSC. 1258 European Metal Recycling 16.12.97ECSC. 1261 Riva ILP/Hellenic Steel 16.12.97

E - Press releases

1. Decisions under Articles 6 and 8 of Council Regulation (EEC) No 4064/89

1.1. Decisions under Article 6(1) of Council Regulation (EEC) No 4064/89

Reference Date SubjectIP/97/69 29.01.97 COMMISSION APPROVES THE ACQUISITION BY TRW OF

MAGNA AUTOMOTIVE HOLDING (GERMANY) GMBHIP/97/76 30.01.97 THE COMMISSION INITIATES SECOND PHASE PROCEEDINGS

ON BT-MCI MERGERIP/97/100 07.02.97 THE COMMISSION APPROVES JOINT VENTURE IN THE

CONSTRUCTION INDUSTRY (AMEC/SPIE BATIGNOLLES)IP/97/101 07.02.97 THE COMMISSION CLEARS THE ACQUISITION OF

MEESPIERSON BY FORTIS

MERGER CONTROL


IP/97/104 10.02.97 COMMISSION AUTHORIZES THE ACQUISITION OF THE ITALIANUNIONE ITALIANA DI RIASSICURIAZIONE S.P.A. BYSCHWEIZERISCHE RÜCKVERSICHERUNGS-GESELLSCHAFT

IP/97/121 14.02.97 THE COMMISSION APPROVES MANAGEMENT BUY-IN OFFINNISH CHEMICALS OY

IP/97/123 17.02.97 THE COMMISSION APPROVES THE ACQUISITION BY KNPGROUP OF TWO PAPER MERCHANTS IN GERMANY AND ITALY

IP/97/126 18.02.97 THE COMMISSION GIVES THE GO-AHEAD TO THE JOINTVENTURE BETWEEN HEWLETT-PACKARD AND PHILIPS

IP/97/127 18.02.97 THE COMMISSION AUTHORIZES JOINT VENTURE OF DBV-WINTERTHUR AND GOTHAER VERSICHERUNGEN

IP/97/128 18.02.97 THE COMMISSION CLEARS TV JOINT VENTURE OF CLT-UFAAND UNIVERSAL IN POLAND

IP/97/144 21.02.97 COMMISSION CLEARS ACQUISITION BY ARCHER-DANIELS-MIDLAND COMPANY OF GRACE COCOA ASSOCIATES

IP/97/145 21.02.97 COMMISSION APPROVES JOINT-VENTURE BETWEEN TELIAAND ERICSSON

IP/97/146 21.02.97 THE COMMISSION APPROVES MERGER IN THE TEMPORARYEMPLOYMENT SERVICES SECTOR (VENDEX / BIS S.A.)

IP/97/149 25.02.97 THE COMMISSION INITIATES SECOND PHASE PROCEEDINGSON THE TAKE-OVER OF THE DUTCH OPERATIONS OF TOYS "R"US BY BLOKKER

IP/97/150 25.02.97 THE COMMISSION APPROVES THE ACQUISITION BY UPM-KYMMENE OF FINNPAP IN THE FINNISH PAPER INDUSTRY

IP/97/168 27.02.97 COMMISSION CLEARS JOINT VENTURE OF BODENSEEWERKGERÄTETECHNIK GMBH AND EHG ELEKTROHOLDING GMBH &CO

IP/97/169 28.02.97 THE COMMISSION AUTHORISES THE ACQUISITION OF JOINTCONTROL OF THE BBC'S HOME SERVICE TRANSMISSION BY ANINTERNATIONAL CONSORTIUM

IP/97/170 28.02.97 THE COMMISSION AUTHORISES THE ACQUISITION OF AIRLIBERTÉ BY BRITISH AIRWAYS

IP/97/204 11.03.97 THE COMMISSION APPROVES MERGER IN BUSINESS TRAVELSERVICES

IP/97/210 11.03.97 THE COMMISSION APPROVES THE ACQUISITION OFCREDITANSTALT BY BANK AUSTRIA AFTER UNDERTAKINGS

IP/97/236 19.03.97 COMMISSION BEGINS AN IN-DEPTH INVESTIGATION OF THEBOEING / MCDONNELL DOUGLAS MERGER

IP/97/243 20.03.97 THE EUROPEAN COMMISSION APPROVES A JOINT VENTURE INTHE SECTOR OF POLYURETHANE FOAMS

IP/97/250 25.03.97 THE COMMISSION CLEARS A MERGER CONCERNINGBIRMINGHAM INTERNATIONAL AIRPORT

IP/97/267 03.04.97 COMMISSION DECLARES RSB PSG/TENEX NUCLEARFORWARDING JOINT VENTURE NOT TO BE A CONCENTRATIONUNDER THE EC MERGER REGULATION

IP/97/268 03.04.97 COMMISSION APPROVES JOINT-VENTURE BETWEEN CEREOLAND ÖSAT



IP/97/318 17.04.97 COMMISSION APPROVES JOINT VENTURE CREATING SECONDNATIONAL TELECOMMUNICATIONS OPERATOR INSWITZERLAND

IP/97/329 22.04.97 COMMISSION APPROVES THE ACQUISITION OF SOLE CONTROLOF MANNESMANN HOESCH PRÄZISROHR GMBH BYMANNESMANNRÖHREN-WERKE

IP/97/345 24.04.97 THE COMMISSION APPROVES THE ACQUISITION OF JOINTCONTROL OF J.M. VOITH GMBH BY DEUTSCHE BANK ANDCOMMERZBANK

IP/97/352 25.04.97 COMMISSION CLEARS FRANCHISE OF UK PRIVATISEDTHAMESLINK RAILWAY NETWORK

IP/97/353 25.04.97 THE COMMISSION REFERS THE CASE RHEINMETALL/BRITISHAEROSPACE/STN ATLAS TO THE BUNDESKARTELLAMT AS FARAS THE AFFECTED MARKETS FOR SYSTEMS LEADERSHIP FORARMOURED VEHICLES ARE CONCERNED AND OTHERWISECLEARS THE PLANNED CONCENTRATION

IP/97/376 30.04.97 COMMISSION AUTHORIZES SIEMENS' ACQUISITION OFHOLDING IN HUF

IP/97/381 02.05.97 THE COMMISSION APPROVES THE ACQUISITION BY TENNECOOF THE PROTECTIVE PACKAGING AND FLEXIBLE PACKAGINGDIVISIONS OF KNP BT

IP/97/386 02.05.97 EUROPEAN COMMISSION INITIATES DETAILED INVESTIGATIONINTO THE CREATION OF A JOINT VENTURE BETWEEN THECOCA-COLA COMPANY AND CARLSBERG

IP/97/392 06.05.97 COMMISSION CLEARS THE ACQUISITION BY TESCO OF ABF'SBUSINESSES IN THE IRISH RETAIL SECTOR

IP/97/398 13.05.97 COMMISSION CLEARS THE CREATION OF A JOINT VENTURE INTHE CONSUMER CREDIT SECTOR

IP/97/417 16.05.97 THE COMMISSION AUTHORISES THE JOINT VENTUREBETWEEN WARNER BROS., LUSOMUNDO AND SOGECABLE TODEVELOP MULTIPLEX CINEMAS IN SPAIN

IP/97/488 04.06.97 THE COMMISSION CLEARS THE ACQUISITION OF 21% OFVALLOUREC BY MANNESMANNRÖHREN-WERKE AND THEESTABLISHMENT OF A JOINT VENTURE COMBINING THEIRSEAMLESS TUBE ACTIVITIES

IP/97/494 05.06.97 THE COMMISSION APPROVES THE ACQUISITIONOF SOLE CONTROL BY WORMS & CIE OF THE GROUP SAINT-LOUIS

IP/97/496 05.06.97 COMMISSION GIVES GREEN LIGHT TO MERGER BETWEENCOMPAGNIE DE SUEZ AND LYONNAISE DES EAUX

IP/97/498 06.06.97 COMMISSION CLEARS ACQUISITION BY TYCO OF ADT IN THEFIRE AND SECURITY ALARM SECTOR

IP/97/505 10.06.97 THE EUROPEAN COMMISSION AUTHORISES THE ACQUISITIONOF AST BY SAMSUNG BUT CONSIDERS IMPOSING A FINE FORLATE FILING

IP/97/516 12.06.97 THE COMMISSION CLEARS ACQUISITION OF HOECHST AG'SSPECIALTY CHEMICALS BUSINESS BY CLARIANT AG

MERGER CONTROL


IP/97/517 12.06.97 COMMISSION APPROVES STET HOLDING IN MOBILKOMAUSTRIA

IP/97/518 13.06.97 THE COMMISSION CLEARS THE CREATION OF A JOINTVENTURE BETWEEN VALLOUREC AND TIMET

IP/97/519 13.06.97 COMMISSION CLEARS THE ACQUISITION BY ABEILLE VIE OFSOLE CONTROL OF SOCIÉTÉ D'EPARGNE VIAGÈRE ANDSINAFER

IP/97/525 17.06.97 THE COMMISSION APPROVES A CONCENTRATION IN THESECTORS OF RETAIL GROCERY AND "DO IT YOURSELF" INITALY

IP/97/541 19.06.97 COMMISSION APPROVES THE CREATION OF TARGOR, A JOINTVENTURE BETWEEN HOECHST AND BASF FORPOLYPROPYLENE

IP/97/542 19.06.97 COMMISSION CLEARS ACQUISITION OF APV BY SIEBEIP/97/547 20.06.97 THE COMMISSION AUTHORISES THE ACQUISITION OF JOINT

CONTROL BY BANK OF AMERICA AND GENERAL ELECTRIC ONTHE SPANISH COMPANY CABLEUROPA

IP/97/548 20.06.97 COMMISSION OPENS IN DEPTH ENQUIRY ON GUINNESS/GRANDMETROPOLITAN MERGER

IP/97/556 24.06.97 COMMISSION AUTHORISES THE ACQUISITION BY DEUTSCHEBANK AND DRESDNER BANK OF JOINT CONTROL OF ESG EDV-SERVICE-GESELLSCHAFT FÜR HYPOTHEKENBANKEN

IP/97/557 24.06.97 COMMISSION CLEARS THE ACQUISITION BY ICI OF THESPECIALTY CHEMICALS DIVISION OF UNILEVER

IP/97/574 27.06.97 COMMISSION APPROVAL FOR THE ACQUISITION OF TH.GOLDSCHMIDT AG BY VIAG

IP/97/575 27.06.97 COMMISSION AUTHORISES THE ACQUISITION BY FERROSTAALAG OF SOLE CONTROL OF DSD DILLINGER STAHLBAU GMBH

IP/97/591 01.07.97 COMMISSION APPROVES THE ACQUISITION OF JOINTCONTROL OF CREDIOP BY THE BANKING GROUPS DEXIA ANDSAN PAOLO

IP/97/592 01.07.97 COMMISSION CLEARS ACQUISITION OF THE GERMANCOMPANY SPAR HANDELS AG BY THE FRENCH GROUP ITM

IP/97/599 03.07.97 COMMISSION APPROVES JOINT VENTURE BETWEEN MÜNICHRE AND THREE FRENCH INSURANCE COMPANIES

IP/97/606 03.07.97 THE COMMISSION AUTHORISES THE CREATION OF A JOINT-VENTURE BY RHÔNE-POULENC AND MERCK

IP/97/630 09.07.97 UNION BANK - MINIT INTERNATIONAL SA MERGER : NOTWITHIN THE SCOPE OF THE MERGER REGULATION SAYS THEEUROPEAN COMMISSION

IP/97/644 14.07.97 COMMISSION AUTHORISES A JOINT VENTURE BETWEENCABLE & WIRELESS AND MAERSK DATA

IP/97/705 28.07.97 COMMISSION APPROVES A JOINT VENTURE BETWEENTHOMSON AND SIEMENS IN THE AIR TRAFFIC MANAGEMENTBUSINESS

IP/97/706 28.07.97 COMMISSION CLEARS ACQUISITION OF KEIPER CAR SEATINGBY LEAR CORPORATION FROM THE KEIPER RECARO GROUP



IP/97/715 29.07.97 THE COMMISSION INITIATES SECOND PHASE PROCEEDINGSON SIEMENS/ ELEKTROWATT MERGER

IP/97/737 01.08.97 COMMISSION AUTHORISES THE CREATION OF TELEMATIKGMBH BY DAIMLER BENZ AND DEUTSCHE TELEKOM

IP/97/743 06.08.97 THE COMMISSION CLEARS THE ACQUISITION OF SOLECONTROL OF ODS HOOGOVENS BY KLÖCKNER STAHL- UNDMETALLHANDEL

IP/97/745 07.08.97 THE COMMISSION AUTHORISES THE ACQUISITION BY NORSKALCOA AND ELKEM OF JOINT CONTROL OVER ELKEMALUMINIUM IN THE PRIMARY ALUMINIUM MARKET

IP/97/751 12.08.97 THE COMMISSION AUTHORISES THE FORMATION OF A JOINTVENTURE BETWEEN THYSSEN STAHL AG AND KRUPP HOESCHSTAHL AG IN THE FLAT STEEL PRODUCTS SECTOR PURSUANTTO THE EC MERGER REGULATION

IP/97/752 12.08.97 THE COMMISSION APPROVES THE ACQUISITION OF TANDEMCOMPUTERS BY COMPAQ

IP/97/755 13.08.97 COMMISSION AUTHORIZES THE ACQUISITION OF JOINTCONTROL BY ADM INTERNATIONAL AND ACATOS &HUTCHESON PLC OVER THE GERMAN SOYBEAN CRUSHINGCOMPANY SOJA MAINZ

IP/97/756 13.08.97 COMMISSION DECIDES THAT THE CREATION OF A JOINTVENTURE FOR WATERWAY TRANSPORTS IN BELGIUM BYSTINNES AND HANIEL IS NOT A CONCENTRATION UNDER THEEC MERGER REGULATION

IP/97/760 21.08.97 COMMISSION AUTHORISES THE CREATION OF PHILIPSCONSUMER COMMUNICATIONS - A JOINT VENTURE BETWEENPHILIPS AND LUCENT TECHNOLOGIES

IP/97/761 21.08.97 THE COMMISSION AUTHORISES THE JOINT CONTROL OFRETEVISION, THE SECOND TELECOM OPERATOR IN SPAIN

IP/97/765 27.08.97 COMMISSION APPROVES THE ACQUISITION OF JOINTCONTROL OF EBJS EUROPEAN BUSINESS JET SERVICES BYLUFTHANSA CITYLINE AND BOMBARDIER

IP/97/766 27.08.97 THE COMMISSION CLEARS THE ACQUISITION OF SOLECONTROL OF COMERCIAL DE LAMINADOS BY KLÖCKNERSTAHL- UND METALLHANDEL

IP/97/771 02.09.97 THE COMMISSION INITIATES SECOND PHASE PROCEEDINGSON VEBA/DEGUSSA MERGER

IP/97/772 04.09.97 COMMISSION CLEARS THE CREATION OF A JOINT VENTUREBETWEEN HOECHST AND BAIN CAPITAL IN THE FIELD OF INVITRO DIAGNOSTICS

IP/97/798 18.09.97 COMMISSION CLEARS THE CREATION OF A JOINT VENTURE INCONSUMER CREDIT SECTOR

IP/97/799 18.09.97 COMMISSION AUTHORISES THE CREATION OF THE JOINTVENTURE HOS LIFELINE BY BERTELSMANN AND BURDA

IP/97/801 22.09.97 THE COMMISSION APPROVES THE ACQUISITION BY L'OREALOF SOLE CONTROL OF SPANISH COMPANIES ACTIVE IN THECOSMETICS SECTOR

MERGER CONTROL


IP/97/805 23.09.97 THE COMMISSION APPROVES THE ACQUISITION OF SOLECONTROL OVER BANQUE PARIBAS BELGIQUE BY BACOBBANQUE

IP/97/806 23.09.97 THE COMMISSION APPROVES THE ACQUISITION OF AIR UK BYKLM

IP/97/815 26.09.97 COMMISSION CLEARS SACK JOINT VENTURE BETWEENFRANTSCHACH AND BISCHOF+KLEIN

IP/97/820 29.09.97 COMMISSION CLEARS ACQUISITION OF POLISH PACKAGINGCOMPANY BY FRANTSCHACH AND MMP

IP/97/845 02.10.97 JOINT VENTURE BY PREUSSAG STAHL AG AND VOEST-ALPINESTAHL LINZ GMBH IS NOT A CONCENTRATION UNDER THE ECMERGER REGULATION

IP/97/847 03.10.97 COMMISSION OPENS DETAILED INVESTIGATION INTOHOFFMANN-LA ROCHE/BOEHRINGER MANNHEIM MERGER

IP/97/848 03.10.97 THE COMMISSION CLEARS THE ACQUISITION BY THE GROUPFORTIS OF SOLE CONTROL OVER A.S.L.K.-C.G.E.R. BANK

IP/97/852 06.10.97 COMMISSION APPROVES THE ACQUISITION BY DUPONT OF ICIPOLYESTER AND TITANIUM DIOXIDE BUSINESSES

IP/97/867 10.10.97 COMMISSION OPENS DETAILED INVESTIGATION INTO THEAGFA-GEVAERT / DUPONT MERGER

IP/97/869 09.10.97 COMMISSION AUTHORISES THE ACQUISITION BY HAGEMEYERNV OF THE SCANDINAVIAN WHOLESALE ACTIVITIES OF ABB

IP/97/894 16.10.97 COMMISSION AUTHORISES MERGER BETWEEN CREDIT SUISSEAND WINTERTHUR

IP/97/916 24.10.97 THE COMMISSION APPROVES THE ACQUISITION OF MONTELLBY SHELL

IP/97/918 27.10.97 COMMISSION CLEARS THE ACQUISITION OF INESPAL BYALCOA

IP/97/919 27.10.97 COMMISSION CLEARS THE CREATION OF A JOINT VENTUREBETWEEN HITACHI AND DUPONT

IP/97/920 27.10.97 COMMISSION APPROVES THE ACQUISITION OF THERMO-KINGCORPORATION BY INGERSOLL-RAND COMPANY

IP/97/933 30.10.97 COMMISSION APPROVES THE CREATION OF A JOINT VENTURE"HYDROGAS- MESSER"

IP/97/937 31.10.97 THE COMMISSION HAS DECIDED TO PARTIALLY REFER THEPUBLIC BID BY PROMODES FOR THE ACQUISITION OFCONTROL OF CASINO

IP/97/955 05.11.97 THE COMMISSION CLEARS THE ACQUISITION OFREINSURANCE PORTFOLIO OF SKANDIA BY HANNOVER RE

IP/97/964 07.11.97 THE COMMISSION APPROVES MERGER IN TRAVEL AGENCYSERVICES IN DENMARK (MAERSK AIR/DFDS)

IP/97/966 07.11.97 THE COMMISSION AUTHORISES THE ACQUISITION OF JOINTCONTROL OF THE SWEDISH FURNITURE FIRM APAX INDUSTRI

IP/97/971 11.11.97 THE COMMISSION CLEARS THE ACQUISITION OFWOODCHESTER INVESTMENT BY GE CAPITAL

IP/97/972 11.11.97 THE COMMISSION CLEARS THE JOINT VENTURE OBS!DANMARK BETWEEN FDB, NKL AND KF



IP/97/982 12.11.97 COMMISSION REFERS THE CASE PREUSSAG/HAPAG-LLOYD/TUITO THE BUNDESKARTELLAMT

IP/97/991 14.11.97 COMMISSION CLEARS THE ACQUISITION BY ENI OF ACONTROLLING STAKE IN THE ITALIANTELECOMMUNICATIONS OPERATOR ALBACOM

IP/97/1002 18.11.97 COMMISSION CLEARS NOMURA'S ACQUISITION OF THEBLUESLATE BUSINESS

IP/97/1020 20.11.97 THE COMMISSION AUTHORISES THE ACQUISITION BY ARBEDOF CONTROL OF ACERALIA

IP/97/1023 21.11.97 COMMISSION CLEARS THE ACQUISITION OF APPLEYARD PLCBY JARDINE INTERNATIONAL

IP/97/1055 28.11.97 THE COMMISSION APPROVES THE ACQUISITION OF SOLECONTROL BY IFIL OF THE WORMS & CIE GROUP

IP/97/1061 01.12.97 COMMISSION CLEARS SHELL ACQUISITION OF CERTAIN GULFOIL INTERESTS

IP/97/1083 04.12.97 THE COMMISSION DECIDES TO PARTIALLY REFER THEACQUISITION OF JOINT CONTROL OF COMPAGNIEINDUSTRIELLE MARITIME BY SOGELFA AND COMPAGNIENATIONALE DE NAVIGATION

IP/97/1088 05.12.97 COMMISSION AUTHORISES THE ACQUISITION OF A MAJORITYIN WATT AG BY BAYERNWERK AG, ENERGIE BADEN-WÜRTTEMBERG AG AND NORDOSTSCHWEIZERISCHEKRAFTWERKE AG

IP/97/1093 08.12.97 COMMISSION APPROVES STRATEGIC INVESTMENT IN TELEDANMARK BY AMERITECH

IP/97/1112 11.12.97 THE COMMISSION APPROVES THE MERGER BETWEEN MERITAAND NORDBANKEN

IP/97/1116 12.12.97 COMMISSION DECIDES TO OPEN IN-DEPTH INVESTIGATIONSREGARDING THE WOLTERS KLUWER/REED ELSEVIER MERGER

IP/97/1129 16.12.97 THE COMMISSION DECIDES TO PARTIALLY REFER THEACQUISITION OF REDLAND BY LAFARGE TO THE UNITEDKINGDOM AND FRENCH NATIONAL AUTHORITIES

IP/97/1182 22.12.97 COMMISSION APPROVES ACQUISITION BY CHRYSLER OF CARDISTRIBUTORSHIPS IN GERMANY AND THE BENELUXCOUNTRIES

IP/97/1183 22.12.97 THE COMMISSION APPROVES THE ACQUISITION BY TERRAINDUSTRIES OF ICI'S NITROGEN FERTILIZER BUSINESS

IP/97/1184 22.12.97 COMMISSION AUTHORISES THE ACQUISITION OF CONTROL BYSITA, A SUBSIDIARY OF THE SUEZ LYONNAISE DES EAUXGROUP, OF CERTAIN SUBSIDIARIES OF THE AMERICAN GROUPBROWNING FERRIS INDUSTRIES

IP/97/1185 22.12.97 COMMISSION CLEARS A MERGER CONCERNING DÜSSELDORFAIRPORT

IP/97/1186 22.12.97 COMMISSION CLEARS THE ACQUISITION OF BARCLAYS DEZOETE WEDD BY CRÉDIT SUISSE FIRST BOSTON

IP/97/1187 22.12.97 COMMISSION APPROVES THE MERGER BETWEEN UNICHEMAND ALLIANCE SANTÉ

MERGER CONTROL


IP/97/1188 22.12.97 COMMISSION CLEARS ACQUISITION OF SOCIÉTÉ FRANÇAISEDE RADIOTÉLÉPHONIE

IP/97/1189 23.12.97 COMMISSION OPENS IN DEPTH ENQUIRY INTO THE JOINTVENTURE BETWEEN THYSSEN KRUPP STAHL AND ITWSIGNODE TO TAKE OVER THE ACTIVITIES OF TITANUMREIFUNGSTECHNIK

IP/97/1190 23.12.97 COMMISSION APPROVES A JOINT VENTURE IN THE MATCHSECTOR (SWEDISH MATCH AB/KOC HOLDING AS/KAV)

IP/97/1192 23.12.97 COMMISSION CLEARS THE ACQUISITION OF MERCURY BYMERRILL LYNCH

IP/97/1193 23.12.97 COMMISSION APPROVES THE ACQUISITION OF SOLE CONTROLBY METRO GROUP OF THE MAKRO GROUP

IP/97/1194 23.12.97 THE COMMISSION APPROVES ACQUISITION BY AXA-UAP OFEXCLUSIVE CONTROL OF THE AXA-AURORA INSURANCECOMPANY

IP/97/1195 23.12.97 COMMISSION CLEARS THE POLYETHYLENE JOINT VENTUREBETWEEN SHELL AND BASF

1.2. Decisions under Article 8 of Council Regulation (EEC) No 4064/89

Reference Date SubjectIP/97/41 22.01.97 THE COMMISSION CLEARS THE ACQUISITION OF THE

BRITISH BOTTLER COCA-COLA & SCHWEPPESBEVERAGES BY COCA-COLA ENTERPRISES, INC.

IP/97/135 19.02.97 THE COMMISSION ORDERS KESKO OY TO DIVEST THEDAILY CONSUMER GOODS BUSINESS OF TUKO OY

IP/97/325 18.04.97 KESKO OY FULFILS COMMISSION ORDER TO DIVESTTHE DAILY CONSUMER GOODS BUSINESS OF TUKO OY

IP/97/338 23.04.97 EUROPEAN COMMISSION CLEARS ANGLOAMERICAN'S PURCHASE OF LONRHO SHARESSUBJECT TO THE STAKES BEING REDUCED TO LESSTHAN 10%

IP/97/406 14.05.97 THE COMMISSION CLEARS THE BT-MCI MERGERSUBJECT TO FULL COMPLIANCE WITH SPECIFICUNDERTAKINGS SUBMITTED BY THE PARTIES

IP/97/570 26.06.97 COMMISSION ORDERS BLOKKER TO DIVEST DUTCHTOYS "R" US OPERATIONS

IP/97/729 30.07.97 THE COMMISSION CLEARS THE MERGER BETWEENBOEING AND McDONNELL DOUGLAS UNDERCONDITIONS AND OBLIGATIONS

IP/97/787 11.09.97 THE COMMISSION APPROVES BOTTLING JOINTVENTURE BETWEEN THE COCA-COLA COMPANY ANDCARLSBERG A/S

IP/97/878 15.10.97 COMMISSION CLEARS THE MERGER BETWEENGUINNESS PLC AND GRAND METROPOLITAN PLCSUBJECT TO SEVERAL FIRM DIVESTMENTCOMMITMENTS



IP/97/1013 18.11.97 THE COMMISSION CLEARS SIEMENS - ELEKTROWATTMERGER

IP/97/1076 03.12.97 THE COMMISSION CLEARS VEBA/DEGUSSA MERGERIP/97/1102 10.12.97 THE COMMISSION APPROVES JCI AS A POTENTIAL

PURCHASER OF ANGLO AMERICAN'S SHAREHOLDINGIN LONRHO SUBJECT TO CERTAIN CONDITIONS

F - Judgments of the Community courts


Case Parties Date PublicationT-290/94 Kaysersberg v

Commission27.11.1997 [1997] ECR II

STATE AID


IV - State aid

A - Overview of cases

1. Regional aid

Germany

a) Amendment to § 52(8) of the German Income Tax Act

On 26 February the Commission decided to initiate Article 93(2) proceedings in respect of anamendment to § 52(8) of the German Income Tax Act (Einkommensteuergesetz). The new clause was atax-relief measure applicable from 1996 to 1998 which was intended to increase the equity capital baseof firms employing a maximum of 250 persons and having their registered office and centraladministration in one of the new Länder or West Berlin. The Commission had serious doubts regardingthe compatibility with the common market of the measure, which constituted state aid within themeaning of Article 92(1). The aid had to be ranked as operating aid, which was admissible onlyexceptionally in regions eligible under subparagraph (a) of Article 92(3). This aid did not satisfy thetests for the admissibility of operating aid, and was to be available to firms with their registered officesin West Berlin, which was an area assisted under subparagraph (c) rather than subparagraph (a) ofArticle 92(3). Some of the arrangements for its application also appeared to be contrary to the freedomof establishment provided for in Article 52 of the EC Treaty.

b) Two aid schemes extended to firms in West Berlin

On 12 February the Commission decided to authorise the extension to West Berlin of two schemesalready authorised in the new German Länder. They consisted of special depreciation and investmentallowance arrangements. The decision imposed certain conditions and excluded the processing andmarketing of agricultural products. The main conditions were that replacement investment was to beexcluded from both schemes and that, where an investment was outside an assisted area, the investmentallowance was to be confined to SMEs. In taking this decision, the Commission took account of theparticularly difficult economic situation in Berlin, this being the reason why the whole of the Land ofBerlin had been accepted, from 1997, as being eligible for regional aid under Article 92(3)(c).

c) Extension of the investment premium scheme in the new German Länder

On 1 October the Commission adopted a negative decision terminating Article 93(2) proceedings inrespect of a two-year extension of the 8% investment premium granted to large enterprises located inthe new German Länder. The German Parliament had approved an Act which put back from 1996 to1998 the date by which qualifying investment projects had to be completed; the Act did not affect thedate for the start of the investment. The Commission considered that this extension constitutedadditional aid to the same projects, and would not encourage new projects. It was therefore operatingaid, and the Commission, citing the judgment in Philip Morris,92 refused to authorise the extension,which did not satisfy the tests laid down in Article 93.

92 Case 730/79 [1980] ECR 2671.



d) Improvement of regional economic structures: aid for teleworking

On 30 July the Commission decided to initiate Article 93(2) proceedings in respect of rules onteleworking laid down in the German regional aid scheme, specifically the twenty-sixth outline planunder the Joint Federal Government/Länder scheme for improving regional economic structures. Thescheme notified allowed aid to be given towards the creation of teleworking jobs. The intensity of theaid available varied according to the location of the firm rather than the place of work of the teleworker.The Commission questioned the compatibility of this provision with the rules on state aid.

Belgium

a) Investment aid scheme for social market economy firms

On 16 September the Commission decided not to raise any objection to the application of an aid schemefor initial tangible investment in the setting up or extension of social market economy firms. Thescheme was to operate until 31 December 1999 and would have a budget of BEF 160 million(ECU 3.96 million), with 50% of its financing provided by the ERDF and 50% by the Walloon Region.The aid, which was in the form of outright grants, was calculated as a percentage of job-creatinginvestment; at least one job had to be created. The aid complied with the regional ceiling for theObjective 2 area in Belgium and was subject to an absolute value limit of BEF 3 million (ECU 74 300)for each tranche of investment creating one job.

b) Investment aid scheme for firms in the Ittre-Tubize area

On 16 September the Commission decided not to raise any objection to the application of an investmentaid scheme for firms located or wishing to locate in the Ittre-Tubize area. The scheme was to operateuntil 31 December 1999 and would have a budget of BEF 500 million (ECU 12.4 million). The aid,which was in the form of outright grants, was subject to a minimum investment requirement ofBEF 5 million (ECU 123 824) and was provided on condition that at least five jobs were created. Itwas calculated as a percentage of job-creating investment, with a ceiling of BEF 3 million(ECU 74 300) for each tranche of investment creating one job.

Denmark

a) New regional map of development areas for the period 1997-99

On 22 January the Commission decided to approve the new development areas map notified by theDanish Government; the new map was the same as the one the Commission had approved for the period1992-96. The intensity ceilings remained at 17% net and 25% net, and the scheme covered about 20%of the Danish population. The Commission also took account of the relatively small budget for the aid,which amounted to ECU 13.4 million for 1997 and ECU 4 million for 1998 and for 1999.

Spain

a) Regional aid schemes in Andalusia and Galicia

On 30 April the Commission decided not to object to regional investment aid schemes to be operated byAndalusia and Galicia. In Andalusia, the aid was to be granted for environmental protection, utilisation

STATE AID


of renewable energy sources and energy savings, and rural electrification; in Galicia, it would be usedto improve the quality of the industrial environment, to support research and development projects forthat purpose, and to introduce industrial waste management systems.

In both cases the Commission concluded that the aid complied with the Community rules on regionalaid, environmental protection aid, and research and development aid. The measures to assist ruralelectrification were are not caught by Article 92.

b) Tax arrangements for the Canary Islands

On 16 December the Commission decided to approve aid under the economic and tax arrangementsscheme (“REF”) for regional development in the Canary Islands. The aid took the form of reductions intaxes, as an incentive to the creation of new businesses or the expansion of existing ones and, to a lesserextent, the safeguarding of existing firms. The annual budget would not exceed ESP 45 000 million(ECU 269.4 million). The Commission concluded that the investment aid complied with the ceilingscurrently in force and that the operating aid, which was to be available on a declining scale for a limitedtime, was justified in view of the disadvantages experienced by the firms owing to their location in aremote region of the Community.

Finland

a) New Finnish regional aid map

On 16 December the Commission approved the new map of regions eligible for regional aid in Finland,which was to apply until 31 December 1999. The rate of aid varied from 20 to 37%, depending on theregion and size of the firm. Population cover was identical to the previous map, at 41.6%. Seventeen ofthe regions, or 13.8% of the Finnish population, were eligible under Article 92(3)(a) of the EC Treaty.

Italy

a) New Italian map

On 21 May the Commission decided to authorise the extension of the Italian regional aid schemes until31 December 1999, in accordance with a new map and amendments notified to it; the Commission wassatisfied that the rates and procedures laid down in the principles of coordination of regional aidsystems were being complied with.

b) The Tremonti Act

On 16 April the Commission decided to raise no objection to one aspect of Act No 549/95, known asthe Tremonti Act, which provided for investment aid for SMEs and firms in areas eligible for regionalaid. The aid consisted in income tax exemption for profits intended for the financing of investment thatexceeded the average amount of investment carried out in the previous five years. Having concludedthat the aid scheme complied with the guidelines on aid for SMEs and the Community rules on regionalaid, the Commission decided not to object to the application of the scheme to firms other than those inindustries subject to specific Community rules.



In the case of the shipbuilding and synthetic fibres sectors, the Commission reminded the Italianauthorities that the Community rules required individual notification.

Lastly, the Commission decided to initiate proceedings under Article 93(2) of the EC Treaty andArticle 6(4) of the Steel Aid Code in respect of the application of the scheme to the motor industry andthe steel industry, as the scheme did not appear to be compatible with the guidelines for aid to thoseindustries.

Ireland

a) Tax arrangements for Irish enterprise areas

On 16 December the Commission approved a series of measures concerning the enterprise areasdefined in the 1995 and 1997 Finance Acts. The tax relief granted to these areas consisted in capitalallowances (accelerated and free depreciation), double rent allowance, and relief from local propertytax. Only investments relating to new business start-ups were eligible. Operating aid was excluded, andthe combined intensity of aid under these arrangements and regional aid ws not to exceed the regionalaid ceilings established by the Commission. The enterprise areas designated in 1995 would be validuntil the end of July 1998, and those defined in 1997 would be extended until the end of 1999.

Portugal

a) Aid scheme for young entrepreneurs

On 18 June the Commission decided not to raise any objection to the implementation of an investmentaid scheme for young entrepreneurs which was to operate until 31 December 1999 and have a budget ofECU 30 million. The aid, in the form of outright grants which took account of the number of jobscreated, was to help the creation, extension and modernisation of small and medium-sized enterprises inwhich a majority stake was held by young entrepreneurs. The scheme satisfied the detailed rules andceilings prescribed for the grant of aid to SMEs in areas such as Portugal, which was eligible for aidunder the exemption in Article 92(3)(a).

Sweden

a) Aid scheme for transport in the northern regions of Sweden

On 5 February the Commission decided to approve a Swedish aid scheme for transport in the northernregions of the country, aimed at partially compensating for the handicaps suffered by firms owing totheir location in what were very remote regions of the European Union. The scheme consisted in areimbursement, calculated on a rising scale according to distance (from 251 km to over 701 km), ofpart of the extra costs of road or rail transport incurred by such firms owing to their remote location.The aid wold cover businesses in the northern regions of Norrbotten, Jämtland, Västerbotten,Kopparberg, Västernorrland and parts of the counties of Gävleborg and Värmland. The Commissiontook its decision after satisfying itself that the scheme complied with the requirements of theCommission’s method for the application of Article 92(3)(c) to regional aid, which referred to thespecial nature of the regions in question and their specific handicaps in terms of distance and transportcosts.

STATE AID


b) Aid for businesses situated in the northern regions of Sweden

On 30 July the Commission proposed “appropriate measures” concerning a scheme to assist businessesin the north of Sweden. In February the Commission had authorised the grant of certain forms of aidfor transport in the northern regions of Sweden, aimed at partially compensating for the handicapsowing to their location and to the costs of transport. But these firms also received aid in the form ofreductions in their social security contributions, and in order to prevent different forms of aid beingcombined in a way incompatible with the common market the Commission decided to propose measuresfixing ceilings for the aid authorised, and excluding from aid most of the mining and quarryingindustry.

United Kingdom

a) Aid scheme for capital investment in Scotland

On 1 October the Commission decided to raise no objection to the introduction of an aid scheme forfirms carrying out capital investments in Scotland. In areas eligible for regional aid, amounts of up to20 or 30% could be granted, depending on the area. Elsewhere, the aid was to be restricted to small andmedium-sized enterprises and to the intensity laid down in the relevant guidelines. In certain sensitiveindustries it would be either prohibited or subject to very tight restrictions. The scheme had a totalbudget of GBP 425 million (ECU 646 million) for the period from 1996/97 to 1999/2000.

2. Aid to specific industries

2.1. Steel

Germany

a) Stahlwerke Bremen

On 18 June the Commission decided that an injection of capital into Stahlwerke Bremen GmbH wasoutside the scope of Article 1 of the Steel Aid Code. The shareholders in Stahlwerke Bremen, namelyHanseatische Industriebeteiligungen GmbH (“Hibeg”), which is a publicly owned regional investmentcorporation controlled by the City of Bremen, and a private company, Sidmar, decided to increaseStahlwerke Bremen's capital by DEM 150 million (ECU 77 million), apportioned between themaccording to their shareholdings in the company, i.e. 32.3% for Hibeg and 67.7% for Sidmar. In thecircumstances Hibeg's capital injection could be considered the normal behaviour of a private investor,and the Commission concluded that it did not constitute state aid.

b) Georgsmarienhütte

On 15 July the Commission initiated formal inquiry proceedings in respect of aid toGeorgsmarienhütte GmbH, a steelworks located in Lower Saxony. Georgsmarienhütte had beenexempted from its environmental obligations with regard to the recycling and disposal of industrialdust. In the light of the polluter pays principle, this exemption appeared to constitute state aidincompatible with the ECSC Treaty and the Steel Aid Code. The Commission therefore decided to



initiate proceedings under Article 6(5) of the Code in order to verify whether the exemption wascompatible with the common market.

c) Gröditzer Stahlwerke

On 15 July the Commission decided to initiate proceedings under Article 6(5) of the Steel Aid Code inrespect of aid of at least DEM 106 million (ECU 53.8 million) granted for the privatisation andrestructuring of Gröditzer Stahlwerke GmbH, a steel firm located in Saxony. The Commission hadserious doubts as to the compatibility of this aid with the ECSC Treaty and the Steel Aid Code,especially given the adverse effects on intra-Community trade of maintaining this firm on the market.

d) Eisen- und Stahlwalwalzwerke Rötzel

On 30 July the Commission decided to initiate proceedings under Article 6(5) of the Steel Aid Code inrespect of aid for Eisen- und Stahlwalzwerke Rötzel GmbH, a steel firm which had been in liquidationsince 1 May 1997. The aid was in the form of a guarantee on 80% of an investment loan amounting toDEM 15 million (ECU 7.6 million) for restructuring the company, and the Commission had seriousdoubts as to its compatibility with the Steel Aid Code.

e) SHB Stahl- und Hartgußwerke Bösdorf

On 15 July the Commission adopted a decision requiring the German Government to supplyinformation. In proceedings initiated on 5 February 1997, the Commission had unsuccessfully tried toobtain the information it required to verify the compatibility of aid granted to Stahl- und HartgußwerkeBösdorf AG, a foundry located in Saxony. It therefore adopted a decision formally ordering the GermanGovernment to provide this information.

f) ESF Elbestahlwerk Feralpi

On 18 November the Commission decided to initiate proceedings under Article 6(5) of the Steel AidCode in respect of aid to the steel firm ESF Elbestahlwerk Feralpi GmbH. The aid consisted of grantstotalling DEM 10.58 million (ECU 5.37 million), which had already been paid, a DEM 12 million(ECU 6 million) guarantee for operating loans, also already granted, and a DEM 18.2 million (ECU 9.2million) guarantee which was about to be granted for investment loans. The Commission formallyasked the German authorities to suspend the granting of the latter guarantee. The Commission alsoinitiated proceedings in respect of aid in the form of a DEM 12 million (ECU 6 million) investmentguarantee which was authorised in 1994 but was unlawfully used to cover operating costs; operatingaid is prohibited by the ECSC Treaty.

Belgium

a) Duferco Clabecq

On 5 November the Commission authorised the Duferco Clabecq company plan. Following thebankruptcy of the old Forges de Clabecq, its plant was taken over by Duferco Clabecq, a companyformed for this specific purpose by the Duferco group. Duferco Clabecq's capital was to beBEF 1 400 million, of which 75% was to be put up by Duferco and 25% by the State. The latter wasalso to grant Duferco Clabecq a ten-year loan of BEF 550 million with an annual interest rate of 5.5%;

STATE AID


75% of the loan would be guaranteed by Duferco. Having examined the arrangements, the Commissiontook the view that the State's holding was consistent with the normal practice of an investor operating ina market economy, and that the loan was being granted on normal market terms. It therefore concludedthat the public measures did not involve any element of aid falling within the scope of Article 1(2) ofthe Steel Aid Code.

Spain

a) Tax aid scheme for ECSC industries

On 30 July the Commission decided to initiate proceedings under Article 6(5) of the Steel Aid Code inrespect of a scheme established by the Spanish authorities providing for tax reductions for firmsexporting or operating abroad, including firms in the steel industry. The scheme existed before Spain'saccession to the European Communities, but the ECSC Treaty made no provision for existing aid, and,on the basis of the information available to the Commission, the aid appeared to be incompatible withthe Steel Aid Code and the ECSC Treaty.

With regard to industries coming under the EC Treaty, the Commission would be proposingappropriate measures under Article 93(1) to the Spanish Government at a later date.

Greece

a) Halyvourgia Thessalias

On 16 September the Commission decided not to raise any objection to the provision of investment aidfor the steel company Halyvourgia Thessalias, amounting to GRD 96 million (ECU 310 000) in theform of a grant and GRD 114 million (ECU 368 000) in the form of an interest subsidy, since itconsidered that the aid complied with the conditions in Article 5 of the Steel Aid Code.

Italy

a) Mini Acciaierie Odolose

On 26 February the Commission decided to terminate the proceedings initiated under Article 6(4) of theSteel Aid Code, and to authorize aid totalling ITL 5 400 million (ECU 2.8 million) for the closure ofthe steel company Mini Acciaierie Odolese as part of the planned closure of a series of private steelplants in Italy. The Commission found that all the requirements of the Steel Aid Code, in particularArticle 4, had been fulfilled.

b) ISP Cremona

On 2 April the Commission decided not to object to aid of ITL 25 900 million (ECU 13.3 million) tothe ISP Cremona steelworks for an R&D programme aimed at studying and developing a new processfor manufacturing flat-rolled steel. It concluded that the aid satisfied the limits and conditions ofArticle 2 of the Steel Aid Code and the Community framework for state aid for R&D.



c) Ferdofin Siderurgica

On 30 April the Commission adopted a negative final decision terminating the proceedings initiatedunder Article 6(4) of the Steel Aid Code in respect of a state guarantee granted to the steel groupFerdofin Siderurgica SpA to cover bank loans amounting to ITL 45 000 million (ECU 22 million). TheCommission concluded that the aid in question was not eligible for any of the exemptions laid down bythe Steel Aid Code and was therefore incompatible with the common market. It ordered that Ferdofinshould repay the aid.

Luxembourg

a) R&D aid to Arbed and Ares

On 21 May the Commission decided to initiate proceedings under Article 6(5) of the Steel Aid Code inrespect of aid totalling LUF 65 million (ECU 1.6 million) for the 1995 and 1996 R&D programmes ofcompanies of the Arbed, ProfilArbed and Ares groups. It had serious doubts about the aid'scompatibility with the R&D aid framework, notably as regards the proximity of certain projects to themarket, the additionality in relation to normal R&D activities, and the incentive nature of the aid.

2.2. Non-ECSC metals

Austria

a) Aid scheme to promote the economy in Styria

On 2 April the Commission decided not object to the introduction by the Land of Styria of a package ofmeasures to promote its economy. This comprised investment, guidance, R&D and environmental aid,as well as aid for the rescue and restructuring of small and medium-sized enterprises in difficulty. Atotal budget of ATS 500 million (ECU 36 million) had been earmarked for the aid programme, whichwere to remain in force until the end of 2000.

The Commission also decided to authorise the introduction of a programme aimed at the renewal offinished products and raw materials industrial structures in the manufacturing and processing ofearthenware and stone products, the manufacture and processing of (non-ECSC) metals, themanufacture of metal products, mechanical engineering, and the production of pig iron, steel andferro-alloys. The aid, reserved for firms located in areas eligible for regional aid and for SMEs outsidesuch areas, was to be allocated a budget of ATS 64.62 million (ECU 5 million), and would remain inforce until the end of 1999. All cases of aid in sectors covered by the ECSC Treaty would be notifiedindividually.

The Commission based its decision on the fact that the aid was compatible with the provisions on stateaid in the EC and ECSC Treaties and with the Community guidelines on the various types of aidinvolved.

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2.3. Shipbuilding

Germany

a) Peene Werft

On 22 January the Commission decided to approve the last tranche of aid of DEM 30.6 million(ECU 15.7 million) intended for the completion of the restructuring of the Peene Werft shipyard inWolgast in Mecklenburg-Western Pomerania. It found that the aid complied with the SeventhShipbuilding Aid Directive and with the Council Directive authorising additional aid for therestructuring of yards in the new Länder.

b) Neptun Industrie Rostock and Dieselmotorenwerk Vulkan

On 22 January the Commission decided to initiate Article 93(2) proceedings in respect of aid granted toNeptun Industrie Rostock GmbH (“NIR”) and Dieselmotorenwerk Vulkan GmbH in order to enablethem to survive an acute liquidity crisis. It had doubts as to the compatibility of the aid with thecommon market, in particular with the Community guidelines on state aid for firms in difficulty.

NIR, which had been owned since 1994 by Bremer Vulkan Verbund, operated in the mechanical andstructural engineering sector. In 1996 it received a BvS loan of DEM 15 million (ECU 7.5 million).Dieselmotorenwerk Vulkan, which made marine diesel engines, was bought by Bremer Vulkan Verbundas part of the privatisation of east German shipbuilding companies. In 1996 it received a subsidisedloan of DEM 20 million (ECU 10 million). NIR had also received a guarantee from the Land ofMecklenburg-Western Pomerania covering 100% of a loan of DEM 63 million (ECU 31.5 million).

c) Volkswerft Stralsund

On 12 March the Commission decided to initiate proceedings under Article 93(2) of the EC Treaty inrespect of development aid for Indonesia approved by it in 1994, which was intended to finance thepurchase of three dredgers from the German yard Volkswerft Stralsund. At that time the Commissionauthorised the aid under Article 4(7) of the Seventh Directive, subject to the condition that the dredgerswould be used exclusively on domestic shipping routes in Indonesia. In the light of information itreceived subsequently the Commission concluded that this condition was not being met, and that theprovisions of Article 4(7) were being infringed.

d) Bremer Vulkan

On 21 May the Commission decided to terminate the Article 93(2) proceedings it had initiated inrespect of aid granted to the shipyard Bremer Vulkan Werft GmbH, Bremen, which had gone intoliquidation in the meantime. It authorised the aid for building the cruise liner Costa 1 and two containerships as production aid under Article 4 of the Seventh Directive, and concluded that the balance of theaid could be considered compatible with the common market as closure aid under Article 7 of theDirective.



e) Lloyd Werft Bremerhaven

On 30 April the Commission decided, pursuant to Article 5 of the Seventh Directive, not to object toaid in the form of a state guarantee for a loan of DEM 9.6 million (ECU 4.8 million) granted to LloydWerft Bremerhaven, Bremen, which specialises in ship repair and conversion.

f) MTW-Schiffswerft and Volkswerft

On 30 July the Commission decided to terminate proceedings it had initiated under Article 93(2) and toauthorise the grant of investment aid in the form of loans for the restructuring of the shipyardsMTW-Schiffswerft GmbH and Volkswerft GmbH, amounting to DEM 195.3 million (ECU 99 million)and DEM 283 million (ECU 143.6 million) respectively, part of which was unlawfully paid out in1996. The Commission decided that the aid was compatible with the Seventh Directive.

Acting under Council Regulation No 1013/97, which allowed an exception to be made here to the ruleslaid down by the Seventh Directive, the Commission also authorised the grant to MTW and Volkswerftof a first instalment of operating aid in conjunction with the restructuring of the yards. The firstinstalment amounted to DEM 180.5 million (ECU 91.6 million) for MTW and DEM 210.8 million(ECU 107 million) for Volkswerft. It covered the period from the time when the parent company,Bremer Vulkan, went into liquidation until the end of 1997, and was also to be used to finance welfareplans to cushion the effects of massive redundancies at the two shipyards.

Denmark

a) Shipbuilding aid granted to Danish yards in the period 1987-93

On 5 February the Commission decided to terminate the proceedings initiated under Article 93(2) inrespect of aid granted for shipbuilding in Denmark from 1987 to 1993. It concluded that in 53 cases theaid granted was within the ceiling authorised in the Seventh Directive and did not give rise to anyobjections.

However, in the case of five shipbuilding contracts signed in 1992 by Odense Stålskibsværft A/S itfound that the aid granted exceeded the 9% ceiling in force at the time. It therefore decided that theamount of aid exceeding the authorised ceiling, namely DKK 1.018 million (ECU 137 000), wasincompatible with the common market, and ordered that it be recovered from the recipient yard.

Spain

a) Publicly owned shipyards

On 8 January the Commission decided to extend the Article 93(2) proceedings it initiated in 1995 inrespect of aid notified by the Spanish Government which was to take the form of tax credits forpublicly owned shipyards. The extension of the proceedings was concerned with a plan to grantadditional aid of at least ESP 160 000 million (ECU 972.5 million). The Commission had seriousdoubts as to the compatibility of the new aid with the Seventh Directive.

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b) Development assistance for Morocco

On 16 September the Commission, acting under Article 4(7) of the Seventh Directive, which concernsaid granted as development assistance, authorised the granting of aid for the building by the Spanishshipyard Unión Naval de Levante SA of two container ships for Comanav (Compagnie marocaine denavigation); the two new vessels were to replace four obsolete ships, and to carry cargo betweenMorocco and Europe in accordance with the same timetables and on the same routes as the old ships.The aid was to be granted in the form of a credit facility covering 50% of the value of the contract over14 years, with a five-year period of grace and a rate of interest of 1.5% per annum. The Commissiontook the view that the various conditions for authorising such aid were met, in particular thoseconcerning the recipient country and the level of the OECD grant element (25.09%).

c) Publicly owned shipyards

On 15 July the Commission decided to terminate the proceedings initiated under Article 93(2) and toauthorise various items of aid for publicly owned shipyards in Spain. These comprised investment aidand social aid totalling ESP 93 980 million (ECU 564.3 million), approved under Articles 6 and 7 ofthe Seventh Directive, and tax credits and capital injections totalling ESP 135 028 million(ECU 810.8 million), approved under Council Regulation No 1013/97, which allowed an exception tobe made here to the rules laid down by the Seventh Directive. Nevertheless, the authorisation of the aidwas subject to stringent conditions concerning the full implementation of the restructuring plan, whichentailed significant reductions in capacity, and a prohibition on reopening the Astano yard and on theconversion of ships by the Astander yard while it remained in public ownership. No further operatingaid could be given to the yards, even if it was linked to restructuring and privatisation.

d) Astilleros Zamacona

On 30 July the Commission adopted a negative decision bringing to an end the Article 93(2)proceedings in respect of aid amounting to 9% per contract, instead of the maximum rate of 4.5%normally applicable, which the Spanish authorities planned to grant to Astilleros Zamacona, a shipyardin the Basque Country, for the construction of five tugs. Under the Seventh Directive authorisation toexceed the ceiling may be given in certain exceptional circumstances, but the Commission concludedthat these circumstances did not exist in the present case.

France

a) Aid scheme for shipbuilding

On 12 March the Commission decided not to raise objections to the extension until 31 December 1997of the shipbuilding aid scheme in force in France since 1991; the Commission was satisfied that thescheme complied with the Seventh Directive.



Greece

a) Hellenic Shipyards

On 8 January the Commission decided to extend the Article 93(2) proceedings initiated in 1994 inrespect of aid to be granted in connection with the 49% privatisation of Hellenic Shipyards plc. Theextension of the proceedings was concerned with additional aid for the yard over and above the GRD44 billion aid towards privatisation already authorised in 1992. The Commission considered that theextra aid, which constituted operating aid, would exceed the aid ceiling authorised by the SeventhDirective and would therefore be incompatible with the common market.

On 15 July the Commission decided to terminate the Article 93(2) proceedings, and to authorise aidtowards the privatisation of Hellenic Shipyards in the form of the cancellation of debts ofGRD 54 525 million (ECU 176 million) owed by the yard. This authorisation was granted underCouncil Regulation No 1013/97, which allowed an exception to be made in such cases to the rules laiddown by the Seventh Directive, and was subject to stringent conditions concerning the completeimplementation of the restructuring plan and the prohibition of all new operating aid, even if linked torestructuring.

The Commission also decided, pursuant to Article 6(1) of the Seventh Directive, to authoriseinvestment aid amounting to GRD 7 812.5 million (ECU 25.2 million) for the restructuring of theshipyards, which entailed a reduction in production capacity and the introduction of new technology.

Italy

a) Aid scheme for shipbuilding

On 4 June the Commission decided not to raise any objections to a new aid scheme for shipbuildingwhich was to remain in force until 31 December 1997. It formed a continuation of the existing scheme,whose introduction in 1990 and whose most recent extension in 1996 the Commission had alreadyapproved.

Portugal

a) Lisnave

In June 1995 the Commission authorised aid to Lisnave, a shipbuilding and ship-repair company, toenable it to carry out a restructuring plan. Under the plan all the company’s business was to beconcentrated at one yard by the end of 1996. For various reasons the operation was delayed, and in1996 Lisnave received new aid, which was not notified, in the form of a state guarantee on a loan ofPTE 6 000 million (ECU 30 million) and an overdraft facility of PTE 3 500 million(ECU 17.9 million). On 5 February 1997 the Commission decided to initiate Article 93(2) proceedings,as it seriously doubted whether the new aid was compatible with the Seventh Directive and whether thetimetable and implementation of the restructuring plan for which it had authorised the previous aid hadin fact been complied with.

On 21 October the Commission decided to terminate the Article 93(2) proceedings, and to authorise anew restructuring plan involving aid amounting to PTE 6 800 million (ECU 34 million). It reached this

STATE AID


decision after conducting a detailed analysis of the restructuring plan, and concluding that the aid,which was intended to cover the resulting social costs, was compatible with the relevant conditions ofthe Seventh Directive.

United Kingdom

a) Privatisation of the Devonport Royal Dockyard

On 12 March the Commission authorised the privatisation of the Devonport Royal Dockyard, operatedunder licence since 1987 by Devonport Management Ltd. Having examined the privatisation procedurethe Commission concluded that the operation was being carried out on the basis of economic andcommercial criteria, and decided that the financial measures taken in connection with it did notconstitute state aid within the meaning of Article 92(1).

b) Shipbuilding aid schemes extended for 1997

On 16 September the Commission decided to authorise the extension of the 1997 aid schemes forshipbuilding, which it had approved in July 1996 on the basis of Articles 3, 4 and 6 of the SeventhDirective. The schemes provided for operating aid and investment aid, and complied with the conditionsand ceilings specified by the Commission.

2.4. Motor industry

Germany

a) Abgaszentrum der Automobilindustrie

On 2 April the Commission decided not raise any objections to aid to the economic interest groupingAbgaszentrum des Automobilindustrie (“ADA”) to allow it to conduct a programme of research anddevelopment on reducing pollution caused by diesel and petrol engine exhaust emissions. It found thatthe aid, in the form of grants totalling DEM 7.3 million (ECU 3.6 million), was consistent with theframeworks on aid to the motor vehicle industry and to research and development. ADA, with 14employees, was set up jointly by the German vehicle manufacturers Audi, BMW, Mercedes Benz,Porsche and Volkswagen.

b) Volkswagen

On 18 November the Commission decided not to raise any objection to the payment ofDEM 98.3 million (ECU 49.87 million) in aid to Volkswagen's Kassel/Baunatal plant, for theinstallation of two new production lines for automatic transmission units. It concluded that the aid metthe conditions for the granting of regional aid in respect of motor-vehicle components which were laiddown by the Community framework on aid to the motor vehicle industry. Aid amounting toDEM 90.7 million had previously been granted to Volkswagen’s Mosel II and Chemnitz II plants inSaxony in breach of a Commission decision, and as a precondition to any decision in the new case theCommission obtained an undertaking that the earlier aid would be repaid. The Commission thereforedecided to withdraw the Court of Justice action it had brought against Germany in the earlier case.



Austria

a) BMW Motoren

On 18 June the Commission decided not to raise any objections to the grant of aid totallingATS 345.7 million (ECU 25 million) over the period to the year 2000 for BMW Motoren AG, a motorvehicle engine producer based in Steyr, which is in an area assisted under Article 92(3)(c). A sum ofATS 228.8 million was to be granted by way of regional aid, while the balance was for investments forresearch and development, environmental protection, training and innovation. The Commissionconcluded that the framework on state aid to the motor vehicle industry and the specific guidelines forthe types of aid in question had all been complied with. It also took account of the fact that the projectwould safeguard 250 jobs.

Spain

a) Opel España

On 21 May the Commission decided not to object to investment aid in the form of a grant ofESP 574.93 million (ECU 3.47 million) to Opel España, a motor manufacturer located in Figueruelas,Saragossa, in Aragon, towards the cost of changing the car body painting process to a new, moreproductive and less polluting one. The Commission took the view that the project complied with point 3of the framework on state aid to the motor vehicle industry and with point 1.5.1 of the guidelines onstate aid for environmental protection. Since the aid was to be a one-off payment, the Commissionchecked that the amount of the investment eligible for aid took account of the financial advantageaccruing to the company as a result of the energy savings generated by the investment in environmentalprotection measures.

Finland

a) Valmet Automotive

On 15 July the Commission decided to approve the grant of investment aid amounting toFIM 34.4 million (ECU 5.8 million) to the motor vehicle manufacturer Valmet Automotive for its plantin Uusikaupunki, Vakka-Suomi, which is in an assisted region. The aim of the investment planned byValmet, which was currently assembling vehicles for Saab and Opel and the Russian make Samara,was to begin construction of a new Porsche model. The aid was to be granted under regional aidschemes already authorised by the Commission, and complied with the criteria laid down for regionalaid in the Community framework on state aid to the motor vehicle industry.

France

a) Saab Scania

In July the Commission decided to terminate the Article 93(2) proceedings it had initiated inFebruary 1996 concerning investment aid of FRF 24.7 million given to Scania Production Angers.After examining the documentation sent by the French authorities the Commission concluded that themoney, which was an advance on a regional planning grant (“PAT”), had been properly recovered.

STATE AID


The Commission also established that aid planned for two other projects undertaken by the firm was tobe granted under schemes already approved, and complied with the requirements of those schemes, sothat it did not need to be notified in advance under the Community framework on state aid to the motorvehicle industry.

b) Renault: MCA and Sovab

On 3 December the Commission decided not to object to regional investment aid granted to two Renaultsubsidiaries. Maubeuge Construction Automobile (“MCA”) was to receive a total ofFRF 10.785 million in aid (ECU 1.77 million), consisting of FRF 7.385 million in the form of a PATregional planning grant and FRF 3 million from the ERDF for the production of a new model, theKangoo. The other company, Sovab, was to receive a regional planning grant of FRF 48 million(ECU 7.26 million) to produce a new utility vehicle, the X70. In both cases the Commission concludedthat the regional aid criteria of the motor vehicle guidelines had been complied with.

Italy

a) Fiat

On 18 November the Commission decided not to raise any objection to the payment of ITL 587 billion(ECU 307 million) in aid to Fiat for two new investments at its Pomigliano di Arco plant in Campania,which manufactures Alfa Romeo cars. The aid met the conditions of the Community framework onstate aid to the motor vehicle industry, particularly in view of the fact that the increase in capacitywhich would occur in Campania was to be more than offset by production capacity reductions at otherFiat plants.

Netherlands

a) Mitsubishi Motor Sales Europe: NedCar

On 21 October, on the basis of the Community framework on aid to the motor vehicle industry, theCommission decided to raise no objection to the granting of proposed aid to Mitsubishi Motor SalesEurope for its NedCar factory at Born. The aid in question consisted of regional investment aidamounting to NLG 6.54 million (ECU 2.9 million), i.e. 1.5 % of the investment in net grant equivalent,and training aid amounting to NLG 7.66 million (ECU 3.45 million).

b) NedCar cost allocation rules

On 2 July the Commission decided raise no objection to the notified cost allocation rules of NedCar, inwhich the Dutch state was a shareholder. An investigation had revealed that the notified rules did notcontain state aid. The case followed on from a conditional decision taken by the Commission in 1994regarding a possible state aid component in agreements between the Dutch State, Volvo CarCorporation and Mitsubishi Motors Corporation.93 Those agreements concerned the future ownership,plans and financial arrangements of Netherlands Car BV. The new decision found that the allocationrules to be applied under the agreements would prevent large losses being recorded on the old Volvo400 series, which would have meant an adverse overall result for the State. 93 State aid measure No C 3/92, ex N 645/91: OJ L 384, 31.12.1994, p. 1.



United Kingdom

a) Vauxhall Motor

On 12 March the Commission decided not to raise any objections to the granting of aid for aninvestment project undertaken by Vauxhall Motor Ltd at its Ellesmere Port factory, with a view tolaunching a new model of car. This investment, carried out in a region eligible for regional aid underArticle 92(3)(c), was expected to lead to the creation of 805 jobs. The aid authorised comprisedregional investment aid of GBP 11 million (ECU 14.6 million) and training aid of GBP 950 000(ECU 1.3 million). The Commission concluded that the aid complied with the criteria for regional aidset out in the framework on aid to the motorvehicle industry.

b) Rover

On 16 December the Commission decided to authorise aid totalling GBP 33.5 million(ECU 48.7 million), comprising GBP 22.5 million (ECU 32.7 million) in the form of regionalinvestment aid and GBP 11 million (ECU 16 million) in the form of training aid, for a new plant to bebuilt by the Rover group at Hams Hall in the West Midlands for the manufacture of new petrol enginesfor BMW and Rover. The project was expected to safeguard 1 500 jobs in the Midlands, with a further500 highly skilled jobs being safeguarded in engine design and development. The Commissionconcluded that the project complied with the criteria for regional and training aid set out in theframework on state aid to the motor vehicle industry. The UK authorities will also be investingGBP 4.25 million (ECU 6.2 million) in site development, under a general measure not covered byArticle 92.

Sweden

a) Transport aid to Saab Automobil, Volvo Personvagnar Komponenter and Scania CV

On 2 April the Commission decided not to object to the aid granted to Saab Automobil AB, VolvoPersonvagnar Komponenter AB and Scania CV AB under the Swedish aid scheme for transport in thenorthern regions. The aid totalled some SEK 296 000 a year (ECU 35 000) for Saab, SEK 96 000(ECU 11 500) for Volvo, and SEK 8 million (ECU 960 000) for Scania. The Commission concludedthat the aid, which had to be notified individually pursuant to the framework on aid to the motor vehicleindustry, complied with the limits and conditions laid down in that framework.

b) New motor vehicle framework in “appropriate measure” form

In August the Commission sent the Member States a new Community framework for state aid to themotor vehicle industry, in the form of a proposal for an “appropriate measure” under Article 93(1), andasked them to indicate their agreement to it. Sweden did not accept it, and on 8 October, in order toguarantee equal treatment throughout the Community, the Commission decided to initiate proceedingsunder Article 93(2) with respect to all approved state aid schemes currently in force in Sweden whichmight potentially benefit the motor vehicle industry.

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c) Volvo Trucks

On 10 September the Commission decided to initiate the inquiry provided for in Article 93(2) in respectof transport aid already granted or still to be granted to the Volvo Trucks cabin plant in Umeå. The aidwas available under a regional transport aid scheme which was approved by the Commission on 5February. Since the company was a truck producer, the aid was notifiable under the Communityframework for state aid to the motor vehicle industry, and was scrutinised individually. The frameworkviewed this type of operating aid very critically, holding that it should not be authorised even indisadvantaged regions, since it relieved the company of part of its normal operational costs and gave itan unfair and ongoing advantage. Accordingly, the Commission took the view that the aid did notappear to be compatible with the motor vehicle framework.

2.5. Synthetic fibres

Germany

a) Ernst Michalke

On 21 May the Commission decided not to object to the grant of DEM 6.64 million (ECU 3.4 million)in investment aid to Ernst Michalke GmbH & Co, a wholly owned subsidiary of Hoechst AG located inGuben, Brandenburg, which is a region qualifying for assistance under Article 92(3)(a). The investmentproject, which involves setting up a new polyester fibre production plant, forms part of an overall planto restructure and rationalise the Hoechst group, the ultimate aim being to reduce fibre productioncapacity by about 30% overall. After scrutinising the plan as a whole, the Commission has come to theconclusion that the aid, which corresponds to 50% of the authorised regional ceiling, is in keeping withthe new code on aid to the synthetic fibres industry.

Spain

a) Sniace

On 21 October the Commission decided to initiate Article 93(2) proceedings with respect to aidincompatible with the common market which was alleged to have been granted to the Spanish syntheticfibres producer Sniace SA, located in Torrelavega, Cantabria, in order to stave off liquidation. The aidwas said to consist of several operations rescheduling tax and social security debts totallingESP 3 600 million (ECU 21.79 million) and of a guarantee on a loan of ESP 1 000 million(ECU 6.05 million).

Portugal

a) Cordex

On 12 March the Commission decided to initiate proceedings under Article 93(2) in respect of thePortuguese Government's proposal to grant investment aid of ECU 3.47 million to CompanhiaIndustrial Textil SA (“Cordex”), a rope and cord manufacturer located in Esmoriz, Ovar The aidedinvestment would be used for the installation of new capacity for the production of polypropylene



filament yarn, and the Commission had serious doubts as to its compatibility with the code on aid to thesynthetic fibres industry.

2.6. The financial sector

Germany

a) Westdeutsche Landesbank

On 1 October the Commission decided to initiate Article 93(2) proceedings in respect of the transfer toWestdeutsche Landesbank (“WestLB”) of the entire capital of the publicly owned housing agencyWohnungsbauförderungsanstalt. The resulting increase in the capital of WestLB had been valued atDEM 5 900 million (ECU 3 100 million), and while part of these funds had to be used for theirprevious purpose, namely housing promotion, at least DEM 2 500 million could be used by WestLBfor its business activities. The Commission took this decision after examining the transfer in the light ofthe principle of the private investor operating under normal market economy conditions, and concludingthat it involved state aid.

France

a) GAN insurance group

On 12 March the Commission decided to reconsider an aid measure it had authorised in 1996, andinitiated Article 93(2) proceedings in respect of that measure and further aid planned by the Frenchauthorities. In September 1996 the Commission had cleared aid granted by the French State to theGAN insurance group in the form of a capital injection of FRF 2 860 million (ECU 438.8 million)towards a restructuring plan which included the sale of the CIC banking group. As GAN continued tobe in difficulty, and the transfer of CIC had not taken place, the French Government proposed at thebeginning of 1997 that a further FRF 20 billion (ECU 3 068.5 million) should be provided in aid,comprising a further capital injection of FRF 11 billion and a state guarantee to cover losses ofFRF 9 billion which it was estimated GAN would incur in implementing the guarantees it would haveto provide, as part of the restructuring operation, for loans granted to the hived-off property companyBâticrédit Finance et Cie, set up in 1994.

On 30 July the Commission decided to terminate the Article 93(2) proceedings and to authorise amaximum of FRF 23.76 million (ECU 3.81 million) in aid to GAN, subject to a 10% fluctuationmargin. It concluded that the aid would meet the requirements of the guidelines on state aid for rescuingand restructuring firms in difficulty provided a number of conditions were met: for example, thegroup’s international insurance activities had to be reduced by 50 % (a figure of FRF 7 000 million(ECU 1 055 million)); and other financial holdings of the group valued at FRF 2 400 million(ECU 361.7 million) had to be disposed of. CIC and GAN would have to be sold, either together orseparately, in order to ensure a return to viability.

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b) SDBO

On 2 April the Commission decided to extend the proceedings initiated on 18 September 1996 withregard to aid of FRF 101.5 million (ECU 15.6 million) granted to Société de Banque Occidentale(“SDBO”); the Commission had now ascertained that the aid received by SDBO was in fact greater,amounting to FRF 190.5 million (ECU 28.9 million). On the basis of fresh information provided by theFrench authorities, the Commission considered that the capital injection and the transfer of assets fromSDBO to Crédit Lyonnais no longer appeared to involve state aid to Crédit Lyonnais. But theCommission did not have sufficient information to determine whether the aid to SDBO was compatiblewith the common market.

c) Crédit Mutuel and Crédit Agricole

On 16 December the Commission decided to initiate Article 93(2) proceedings in respect of two statesavings schemes: Crédit Mutuel, on account of the financial conditions under which it exercised theexclusive right granted it by the French authorities to collect Livret bleu savings, and Crédit Agricole,which enjoyed an exclusive right to take deposits from notaries in rural areas.

The Livret bleu was a partially tax-exempt savings account aimed at the general public, which CréditMutuel had the exclusive right to operate. The Commission considered that this savings mechanism,which was supposed to meet public-interest objectives defined by the public authorities, also benefitedCrédit Mutuel, which might therefore be receiving state aid. The funds collected through Livret bleuaccounts, which currently amounted to some FRF 90 billion, were only partially reinvested forpublic-interest purposes, and a growing proportion of the savings was reinvested, with Crédit Mutuelreceiving a financial intermediation commission.

Since 1973 Crédit Agricole had been the only credit institution authorised by the French authorities toreceive deposits from notaries in rural areas. The deposits earned a 1 % commission paid to the notariesby Crédit Agricole, which thus had access to virtually free financial resources averaging almostFRF 20 billion.

United Kingdom

a) Sale of claims of the Student Loans Company Ltd

On 21 October the Commission decided that a public sale of claims held by a public loans corporationdid not constitute state aid. With a view to transferring management costs to the private sector, theUnited Kingdom Government was planning to sell the claims, amounting to GBP 1 600 million(ECU 2 432 million), held by the Student Loans Company Ltd, which gave loans to students wishing togo on to higher education. The Commission decided that this transaction did not constitute state aidafter establishing that it was being carried out according to market rules, involving an open procedurewith the sale going to the highest bidder.



2.7. Guarantee schemes

Germany

a) Guarantee scheme set up by the Land of Saxony-Anhalt for the acquisition of shareholdingsabroad

On 16 December, taking the view that the measure was compatible with the guidelines on aid for smalland medium-sized enterprises, the Commission decided not to object to the introduction by the Land ofSaxony-Anhalt of a guarantee scheme with a budget of DEM 100 million (ECU 50 million) intended tocover the financial risks incurred by SMEs acquiring shareholdings in firms located in the countries ofcentral and eastern Europe, the former Soviet Union, and certain countries of eastern Asia. No coverwas to be provided for political risks. The 10-year guarantees would cover a maximum of 80% of anyacquisition, with a ceiling of DEM 5 million per project, DEM 10 million per SME, or DEM 30 millionper group of SMEs.

Netherlands

a) Special financing scheme

On 26 February the Commission decided to raise no further objection to the Regeling bijzonderefinanciering or special financing scheme. The Commission had earlier initiated Article 93(2)proceedings, and the scheme was then amended. It now consisted in loans granted at market rates andcovered by a guarantee scheme whose arrangements, in particular the amount of the premiums, wouldallow it to be self-financing. After examining the functioning of the measure the Commission concludedthat it no longer contained any element of state aid within the meaning of Article 92.

b) Investment reinsurance scheme.

On 16 September the Commission decided, under the exemption in Article 92(3)(c), not to raise anyobjection to a self-financing scheme for reinsuring non-marketable political risks (e.g. civil war,expropriation or nationalisation) relating to investments by Dutch companies. The ceiling forguaranteed investments was set at NLG 1 billion (ECU 455 million), the sum insured was to be amaximum of 90% of the investment, and the maximum reimbursable amount of transfer losses was200% of the sum invested. The maximum term for insurance of an investment was 15 years after it wascompleted and 20 years altogether. The State would charge risk premiums for the reinsurance whichwere to be calculated as a percentage of the amount of the investment and in terms of the political risksinvolved in each particular country.

2.8 Transport

a) Air transport

On 16 April the Commission decided to raise no objection to a FRF 1 billion capital injection into AirFrance, being the residue of the third instalment of a total FRF 20 million. The Commission haddecided on 24 July 1996 that this final sum should be held in a blocked account until all the conditionslaid down in the earlier decision of 27 July 1994 had been met; the Commission now considered that themoney could be unfrozen, in view of the way in which the conditions had been complied with and the

STATE AID


undertakings given by the French authorities, especially regarding fares policy inside the EEA,measures to be taken in agreement with the Commission in respect of the Orly south and westterminals, and the mechanisms for the merger between Air France and Air France Europe.

The same day the Commission authorised the payment to the Portuguese airline TAP of the fourth andfinal instalment of a capital increase of PTE 180 000 million which the Commission had authorised in adecision of 6 July 1994. The Commission was satisfied that the conditions laid down in the originaldecision had now been fulfilled, and that taken overall the company’s restructuring programme wasproceeding according to plan. The Commission nevertheless drew attention to the need to continue theefforts undertaken in order to achieve long-term viability, particularly by reaching agreement with thesocial partners and increasing the volume of revenues.

On 15 July the Commission authorised, subject to a number of conditions, the payment to Alitalia of acapital injection of ITL 2 750 billion, to be paid out in three instalments, beginning immediately with aninstalment of ITL 2 000 billion. The aid accompanied a restructuring plan intended to restore thecompany to long-term competitiveness and viability in the new context of a liberalised Communitymarket. In the light of the restructuring plan, and of the undertakings given by the Italian authorities,the Commission took the view that the aid was likely to facilitate the development of the air transportindustry without affecting trade to an extent contrary to the common interest. The authorisation givenwas subject to compliance with a number of conditions, aimed in particular at ensuring that therestructuring plan was fully implemented, that the company was run on commercial principles, thatthere was no discrimination in favour of Alitalia, that the capacity offered was held to certain limits,that Alitalia did not act as price leader, that Alitalia gave up certain shareholdings in other companies,and that the aid was transparent and verifiable.

b) Sea transport

On 21 October the Commission adopted a final negative decision in respect of a scheme of assistanceprovided by the region of Sardinia between 1988 and 1996 for the acquisition, conversion, and repair ofpassenger and merchant ships, and ordered Italy to recover the aid unlawfully granted. TheCommission also initiated proceedings in respect of the more recent amendment and extension of thescheme.

On 18 November the Commission sent all Member States a proposal for “appropriate measures” underArticle 93(1) aimed at bringing existing aid schemes into line with the new Community guidelines onstate aid to maritime transport by 5 January 1999.94

On 17 December the Commission initiated proceedings in respect of an Irish aid scheme under which areduction in salary costs was to be available which was not restricted to vessels which flew the flag of aMember State.

c) Rail transport

On 19 November the Commission gave its authorisation under Article 92(3)(c) for aid paid by the UKauthorities in connection with the sale and restructuring of Railfreight Distribution. The Commission

94 OJ C 205, 5.7.1997, p. 5.



took the view that the restructuring plan would enable the firm to return to long-term viability, and tookaccount of the fact that the aid was in large measure intended to offset charges due to Eurotunnel forthe use of infrastuctures.

d) Road transport

On 30 July the Commission adopted a negative decision in respect of certain aspects of an unnotifiedaid scheme operated by the region of Friuli-Venezia Giulia, and required Italy to recover the aidunlawfully granted. The decision is currently the subject of an action for annulment brought by theItalian government, the regional authorities and 117 road hauliers.

e) Combined transport

On 20 January the Commission decided to initiate Article 93(2) proceedings in respect of a Dutch aidscheme intended to cover costs incurred in the start-up period of intermodal shuttle links to and fromthe Netherlands; the Commission had doubts as to the admissibility of the measures under theexemption in Article 92(3)(c).

On 22 October the Commission authorised the extension of the Dutch scheme of assistance forcombined transport facilities to cover the years 1997 to 2001; the Commission took the view that themeasures provided for would make a significant contribution to transferring some road traffic to otherless polluting modes of transport.

f) Inland waterways

On 1 October and 16 December the Commission authorised measures to be taken by France andGermany to assist non-industrial inland waterway transport; these extended existing aid schemes untilthe end of 1999. The measures accompany the structural reorganisation of the industry which isproceeding in accordance with Council Regulation No 1101/89 as amended by Regulation No 2254/96.

On 1 October the Commission authorised aid granted to Luxport by the Luxembourg authorities for theacquisition of equipment for the maintenance of containers for waterway transport. The is the first casein which the Commission has applied Council Regulation No 2255/96, which allows aid to investmentin waterway terminal infrastructure or in fixed and mobile infrastructures necessary for transhipment toand from waterways.

2.9 Agriculture and fisheries

a) Agriculture

The Commission took a negative final decision in a Portuguese case in which aid had been granted tothe publicly owned cereal trading company EPAC.95 The aid consisted of a state guarantee and specialfinancing conditions on a debt consolidation loan. The Commission took the view that it was not inconformity with the Community guidelines on state aid for rescuing and restructuring firms indifficulty.

95 Case C 15/97.

STATE AID


The aid had not been notified in advance, and was particularly distortive of competition; and for thefirst time in the agricultural sector the Commission made use of the possibilities allowed by thejudgment in Boussac: in the course of the proceedings it made an interim order requiring the PortugueseGovernment to suspend the aid until a final decision had been reached.

The Portuguese authorities did not abolish the aid, and the Commission was obliged to refer the matterto Court of Justice in order to enforce Community law.

As regards aid for the advertising of agricultural products, the Commission had noted in 1996 thatassurances given by Member States might not by themselves suffice to guarantee compliance withmandatory Commission rules in this field. In fact, some publicly funded advertising material has in factbeen found to contain breaches of EC provisions, Article 30 of the Treaty in particular.

In a case of this kind, the Commission adopted a final negative decision on a French state aid measureto encourage sheepmeat consumption.96 It took the view that the publicity logos “Agneau des bergersde France” and “Agneau français, qualité bouchère” were incompatible with Article 30 of the Treaty.

In another such case the Commission had to consider aid towards the start-up of a “regulatory councilfor the quality mark ‘Rioja calidad’”.97 Public aid was being given not to a private quality label, but toa regional quality mark. As this quality mark label was not covered by Regulation (EEC) No 2081/92,and was in practice restricted to agricultural products of the Rioja region, the Commission considered itcontrary to Community rules.

The Commission also initiated Article 93(2) proceedings in respect of an Italian measure to assistpromotion and publicity for Sicilian citrus fruits, a measure financed entirely out of public funds.98

According to the Community guidelines for aid of this kind,99 the level of aid usually allowable was50%. The guidelines did permit this rate to be increased in some circumstances, but the Commissionhad never set a ceiling for the maximum rate allowable. It had accepted rates up to 75% (and,exceptionally, 80%). It would not accept a 100% aid rate, as it took the view that the contribution madeby the beneficiaries had to be “significant”.

Following the negative final decision it took in late 1996 in the French biofuels case,100 the Commissionin 1997 adopted two negative final decisions in biofuels cases in Italy101 and Belgium.102 It held bothmeasures incompatible with common agricultural policy rules. But it did not consider that thesemeasures were incompatible with Article 95, as the French measure had been.

Despite the Commission’s strict policy on the recovery of unlawful aid, it did not require recovery ofthe aid in the French biodiesel case, because the breach of Community rules did not lead to an increasein output of the product assisted, and attempting to restore the status quo would in fact have left the

96 Case C 18/95.97 Case N 541/96.98 Case C 41/97.99 JO L 302 of 12.11.1987, p. 6.100 Case C 51/94.101 Case C 43/94.102 Case C 5/95.



recipients far worse off than they would have been without the aid. For the same reasons theCommission did not insist on recovery of the Italian biofuel aid. No aid had been paid out under theBelgian scheme.

Both France and Italy asked for extra time to implement these decisions. The Commission took anegative approach towards both requests, on the grounds that there was no evidence thatimplementation was objectively impossible.

At the end of 1995 the Commission initiated Article 93(2) proceedings in respect of an Italian lawproviding for the State to take over guarantees subscribed by cooperative members in favour ofagricultural cooperatives declared insolvent. The Commission considered this to be retroactiveoperating aid to cooperatives, without any possibility of restructuring, since all the cooperativesconcerned had closed or were about to close.

In 1997 Italy applied to the Council to have this aid considered compatible under the thirdsubparagraph of Article 93(2), alleging exceptional circumstances. The Council accepted theapplication and decided that in derogation from Article 92 the aid was to be considered compatible withthe common market.

The Commission proceedings had been suspended pending the outcome of Italy’s application to theCouncil; the Council’s decision meant that they no longer served any purpose. The Commissionannounced that it would not be applying to the Court of Justice to have the decision annulled.

While maintaining its established policy of opposing operating aid in the agricultural sector, theCommission decided to raise no objection to in three cases concerning the Community’s most remoteregions: transport aid was to be given in the French Overseas Departments and the Azores, to financepart of the cost of shipping local products; and a special economic and taxation system in the CanaryIslands, which was to apply in agriculture and other industries (the “REF” scheme), included severaltypes of operating aid.

The Commission considered that these measures were justified in order to offset the strongly negativeeconomic impact of the combination of insularity and remote location of the regions involved, andwould not have an adverse effect on the internal market.

Turning to aid linked to BSE, the Commission initiated Article 93(2) proceedings in respect of aid to begranted in the region of Friuli-Venezia Giulia in Italy in order to compensate operators engaged in theprocessing and marketing of beef products for loss of value and decrease in slaughterings between18 March and 16 August 1996.103

Hitherto the Commission’s policy had been to allow compensation for the indirect effects of the BSEcrisis only in the UK, which was the sole Member State where a total ban on exports had been imposed.In other Member States it allowed compensation for direct effects only. Proceedings were initiated inthis particular case on the ground that the evidence was not sufficient to show that there was noovercompensation. These proceedings are not concerned with the fact that aid is being given tocompensate indirect effects in a Member State other than the UK.

103 Case C 51/97.

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In 1995 the Commission initiated Article 93(2) proceedings regarding restructuring aid given by theregional authorities of Navarre to a company called Cárnicas del Sadar;104 in 1997, following additionalinformation supplied by the Spanish authorities, the Commission decided to terminate the proceedings.

Cárnicas del Sadar is a company formed by staff of a company which became insolvent,Pamplonica SA. When Pamplonica was declared insolvent Cárnicas del Sadar obtained Pamplonica’sfacilities, equipment and the brand from the court, with a view to carrying on the same business. Thecapital needed to restart production came out of the unemployment allowances of the workers andregional government aid. Although formally the recipient of the aid was a new company, theCommission considered that it remained the same firm, and that the Community guidelines for rescuingand restructuring firms in difficulty could be applied.

Four aid measures related to agri-monetary problems were notified in 1997. Three concerned Ireland,and were based on Council Regulation (EC) No 724/97, which allowed compensation to be granted forloss of income as a result of a reduction in the agricultural conversion rates for certain currencies. Theother case concerned Sweden, and was based on Regulation (EC) No 2990/95, which made similarprovision for Finland and Sweden.

The first Irish case related to the revaluation of the Irish pound in November 1996 and January 1997;105

the Swedish case related to the revaluation of the Swedish krona of July 1996; and the second Irish aidrelated to the revaluation of the Irish pound in March 1997.106 Both Member States envisaged grantingthe maximum aid allowed under the Regulations. Only Community financial support was to beprovided. The amounts payable under these schemes were consequently limited to half the total possibleunder the Regulations.

In the third Irish case107 national moneys unused in the framework of aid measure No N 256/97 were tobe utilised for a new agri-monetary scheme. Although the new scheme was different from the schemesapproved earlier (concentrating aid to the beef sector on a restricted class of animals), the Commissionconsidered that it would not distort competition, since the aid level did not offset the income lossessuffered by these producers.

The Commission initiated Article 93(2) proceedings in a Dutch case of advertising aid for ornamentalplants, in which the scheme was to be financed in part from a parafiscal tax on imports from otherMember States.108 The Commission considered that this tax differed from the parafiscal taxes normallyapplied. Imports were to be taxed only if a partner representative organisation in the foreign MemberState agreed. The proceeds of the tax levied on imports were to be returned to the organisation in theMember State concerned. This money was to be spent on the promotion of ornamental plants ingeneral, decided in consultation between the Dutch product board for ornamental plants and the partnerorganisation, and always with the partner organisation’s agreement. The Commission took the view thatthis rechanneling of the tax revenue to representative organisations should ensure that the products of

104 Case C 33/95.105 Case N 256/97.106 Case N 408/97.107 Case N 397/97.108 Case C 34/97.



the Member States concerned derived the same benefit from the scheme as Dutch products taxed in theNetherlands.

However, the Commission initiated proceedings because it did not possess sufficient information toconclude that the partner organisations with which contracts were concluded represented all producersand traders in the Member State concerned, or at least an overwhelming majority, and that therechannelled moneys would really be used in all cases in a way that producers and traders in the otherMember States benefited from the scheme to a comparable extent.

The Commission also felt that other Member States and interested parties should be consulted, as theywould be in proceedings of this kind , because the taxation and rechanneling system directly affectedthe interests of all other Member States, and of organisations and enterprises in the ornamental plantssector in those Member States, so that their agreement to such a system needed to be verified.

Under the Act of Accession special rules apply to the new Member States, Austria, Sweden andFinland; the Commission had to establish what the contracting parties meant by the word “flexibility”used in Declaration 31. This Declaration promises that in the processing industry in Austria andFinland there will be “flexibility on transitional national aid schemes designed to facilitaterestructuring”. In Cases 445/B/95 and 14/96 the Commission decided that this could mean disregardingthe normal exclusions (the “selection criteria” in Decision 94/173/EC). At the end of 1996, in Case517/B/96, the Commission allowed a measure that disregarded the selection criteria without evenrequiring a quid pro quo from the beneficiary in the form of closure of part of its production capacity.

The Commission initiated Article 93(2) proceedings in respect of a proposal which would have broughtabout an increase in production capacity in an excluded sector, starch. The Commission expressedconcern that the term “flexibility” in Declaration 31 might be taken too far, and might conflict with thecommon interest of the Community; an increase in production capacity might well be beyond its properscope.

A second aspect of the transitional provisions applying to the new Member States is the transitional anddegressive product support which applies to virtually all agricultural products under Articles 138 and140 of the Act of Accession. Although this type of aid had been greatly reduced by 1997, theamendment of the relevant Commission decision to take account of successive reviews of the supportlevel before and after accession was a constant concern of the responsible departments during the year.

b) Fisheries

On 18 August the Commission initiated Article 93(2) proceedings in respect of aid granted by theItalian authorities towards the temporary stoppage of fishing. The Commission took the view that thestoppages involved were foreseeable and regular, and that the aid was therefore contrary to the generalrules on state aid, because it was designed to free the recipient from costs which it would have to bearin the ordinary way as part of its normal business.

On 22 December the Commission initiated Article 93(2) proceedings in respect of an Italian measure toassist the recapitalisation of fishing cooperatives; the Commission was not satisfied that the provisionfor public participation in a capital increase was intended to finance an investment project and not tocover an operating deficit in the cooperatives.

STATE AID


On 11 July the Commission initiated Article 93(2) proceedings in respect of Dutch aid to theScheveningen fish auctions. The case was opened following a complaint to the Commission by other,privately-owned auction markets in the Netherlands. The Commission wanted to clarify whether a sumof money given to the Scheveningen auctions by the municipality of The Hague was provided onnormal market terms or whether there was a state aid component.

The Commission took positive final decisions on two Italian aid measures, one German measureconcerning a scheme of assistance towards the modernisation and construction of fishing boats, and aFrench measure to assist the renewal of the fishing fleet in Lower Normandy.

On 4 June the Commission proposed “appropriate measures” under Article 93(1) in respect of a schemeto promote herring in the Netherlands which was to be financed out of parafiscal charges on productsimported from other Member States or non-Community countries. Under the measures proposed by tehCommission the Dutch authorities would change the system of financing the aid so that there would beno compulsory levy towards the promotion of herring in the Netherlands imposed on goods importedfrom other Member States or countries which were party to the EEA Agreement (in so far as thosecountries were among the non-Community countries whose products were to be taxed).

On 16 September the Commission proposed “appropriate measures” under Article 93(1) in respect of aSwedish aid scheme. The Commission suggested that the rates of aid towards the temporary laying upof vessels specified in the Swedish legislation, which were intended partially to offset the loss ofrevenue as a result of a temporary stoppage of fishing due to unforeseeable and irregular events, shouldbe brought into line with those provided for in Table 2 in Annex IV of Council Regulation (EC)No 3699/93 of 21 December 1993 laying down the criteria and arrangements regarding Communitystructural assistance in the fisheries and aquaculture sector and the processing and marketing of itsproducts.

2.10 Other industries

Machine tools

Germany

a) SKET Schwermaschinenbau Magdeburg

On 29 May the Commission adopted a negative final decision terminating the Article 93(2) proceedingsit had initiated in respect of aid totalling DEM 781.2 million (ECU 390.6 million) granted to SKETSchwermaschinenbau Magdeburg GmbH with a view to its privatisation. SKET, which had becomeinsolvent, was located in Saxony-Anhalt, and was the largest manufacturer of heavy machinery andequipment in the new Länder. The Commission concluded that the aid was incompatible with thecommon market because it did not comply with the guidelines on aid for firms in difficulty. Inasmuchas it was granted before a final decision had been taken, the aid was also unlawful. The Commissionaccordingly ordered the German authorities to recover it as part of the liquidation proceedings.



b) Dörries Scharmann

On 16 April the Commission decided to initiate proceedings under Article 93(2) in respect of aidgranted to the special machine tool manufacturer Dörries Scharmann GmbH for restructuring purposes,in the form of a state guarantee of 80% on a loan of DEM 46 million (ECU 23 million). TheCommission had serious doubts as to the compatibility of the aid with the common market, as norestructuring plan had been submitted to it, and required precise details of the ties between the presentcompany and the insolvent Dörries Scharmann AG, a subsidiary of the Bremer Vulkan group, whichwas the subject of proceedings concerning the repercussions of the misuse of aid granted to the group.

Austria

a) Actual Maschinenbau

On 5 February the Commission decided not to object to the granting of rescue aid in the form of asix-month loan of ATS 15 million (ECU 1.09 million), at normal market rates, to ActualMaschinenbau AG, a manufacturer of machine tools for the plastics industry. The Commissionconcluded that the aid satisfied the requirements of the guidelines on state aid for firms in difficulty.

Tourism and leisure

Austria

a) Mölltaler Gletscherbahnen

On 26 February the Commission decided not to object to investment aid of ATS 50 million(ECU 3.7 million) granted to Mölltaler Gletscherbahnen GmbH, in Carinthia, for a tourism investmentconsisting essentially in the construction of a mechanical lift and the necessary ancillary facilities. TheCommission concluded that the aid complied with the Community rules on the compatibility of regionalaid.

b) Thermenzentrum Geinberg Errichtungs-GmbH

On 21 May the Commission decided not to object to the granting of regional aid totallingATS 115.8 million (ECU 8.8 million) for the construction of a health centre called ThermenzentrumGeinberg Errichtungs-GmbH in Geinberg, Upper Austria. The Commission found the aid to becompatible with the common market, especially because the new centre would not create anyovercapacity in the health tourism sector.

c) Therme Blumau AufschließungsgmbH

On 21 October the Commission decided to raise no objection to regional aid totallingATS 186.5 million (ECU 13.5 million), equal to 12.5% of the investment in net grant equivalent,towards the setting up of a health establishment, to be known as Therme BlumauAufschließungsgmbH & Co KG, at an important spa in Styria, a region qualifying for regional aid upto 20% net. The tests of exemptability under Article 92(3)(c) were satisfied.

STATE AID


France

a) Stardust Marine

On 5 November the Commission decided to initiate proceedings under Article 93(2) in order todetermine whether, as part of a recapitalisation operation, aid had been granted to Stardust Maritime, asubsidiary of Crédit Lyonnais. From 1994 to 1997, Stardust Maritime was given fresh capitalamounting to FRF 504.8 million (ECU 76 million) by Altus Finance, a former shareholder in CréditLyonnais, and Consortium de réalisations, a hive-off vehicle for Crédit Lyonnais. Stardust Marine wassubsequently sold to F.G. Marine, apparently without a call for bids, for FRF 2 million(ECU 0.3 million), and the Commission was also examining whether this price could be considered toreflect the market price.

Posts and express deliveries

France

a) SFMI-Chronopost

On 1 October the Commission decided to terminate the proceedings initiated in respect ofSFMI-Chronopost, a subsidiary of the French post office La Poste which was active in the expressdelivery sector; it found that the commercial and logistical assistance provided by La Poste and theother financial transactions between the two undertakings took place under normal market conditions,and that the tax and customs arrangements to which SFMI-Chronopost was subject were thoseapplicable under ordinary law. The Commission concluded, therefore, that these measures did notconstitute state aid.

Cinema and television

France

a) Société française de production

On 12 February the Commission decided not to object to the granting of rescue aid totallingFRF 350 million (ECU 53 million) to Société française de production (“SFP”), having concluded thatthe requirements of the Community guidelines on rescue and restructuring aid for firms in difficultywere satisfied.

However, it decided to initiate Article 93(2) proceedings in respect of aid totalling FRF 2 500 million(ECU 382 million) which the French authorities proposed to grant to SFP for industrial and financialrestructuring. The information in the Commission’s possession did not enable it to assess thecompatibility of the aid with the guidelines.



Ireland

a) Aid for film production

On 18 June the Commission decided not to raise any objection to the implementation of an aid schemefor the production of television documentaries and films. The scheme, forming part of the Irishoperational programme for industrial development, was to run until 1999. Its total budget wasIEP 11.4 million (ECU 15.3 million), of which IEP 8.5 million (ECU 11.4 million) was financed by theERDF. The aid was to be paid by the Irish Film Board in the form of interest-free loans which wouldbe repayable in the event of success. The Commission authorised the scheme after concluding that itcontributed to promoting culture and qualified for exemption under Article 92(3)(d).

Electronics

Spain

a) Daewoo Electronics Manufacturing España

On 18 November the Commission initiated Article 93(2) proceedings in respect of aid to DaewooElectronics Manufacturing España SA (“Demesa”). The firm, newly created in the Basque Country tomanufacture refrigerators, received an investment grant which the Spanish authorities claimed to beconsistent with the Ekmen aid scheme in force in the region. Since 1996 the firm had been occupyingfree of charge a site whose announced selling price appeared to be too low, and had been receiving taxincentives and aid for R&D and energy saving. The Commission decided• to ask the Spanish Government for all relevant information concerning the regional R&D and

energy-saving aid already granted;• to ask the Spanish Government for all relevant information regarding the aid granted under

authorised R&D and energy-saving schemes;• to ask the Spanish Government to notify any environmental aid in advance; and• to initiate Article 93(2) proceedings in respect of the fact that the authorised regional aid ceiling

might have been exceeded given the additional tax incentives which had been granted and the factthat the firm was currently occupying free of charge a site the announced selling price of whichappeared to be too low.

Netherlands

a) Technolease

On 23 April the Commission decided to initiate Article 93(2) proceedings in respect of a transactionbetween Philips, the electronics manufacturer, and Rabobank. Philips sold its know-how to Rabobank,which then leased the know-how back to Philips. The Commission did not possess sufficientinformation to be able to determine whether the transaction conferred tax advantages on the two partieswhich might constitute state aid.

STATE AID


United Kingdom

a) LG Electronics Wales and LG Semicon Wales

On 2 April the Commission decided not to object to investment aid granted to LG ElectronicsWales Ltd and LG Semicon Wales Ltd. The two firms, located in Imperial Park Newport, in SouthWales, an area eligible for regional aid, will receive aid totalling respectively GBP 126.7 million(ECU 159 million) and GBP 114 million. The Commission took this decision after ascertaining that theaid in question was compatible with the common market and, in particular, with the Community ruleson regional aid.

b) Hyundai Semiconductor Europe

On 21 October the Commission decided not to object to the granting of regional investment aid toHyundai Semiconductor Europe Ltd, which specialises in the manufacture of electronic products, forthe purpose of building a factory in Dunfermline, Scotland, and training its future employees. It foundthat the aid, amounting to GBP 98 million (ECU 144.6 million), or 3.4 % in net grant equivalent, couldbe exempted under Article 92(3)(c).

Gaming and betting

France

a)Pari Mutuel Urbain and Pari Mutuel Hippodrome

On 22 January the Commission decided to initiate Article 93(2) proceedings in respect of a measuretaken by the French authorities to assist two racecourse companies (sociétés de courses), Pari MutuelUrbain (“PMU”) and Pari Mutuel Hippodrome (“PMH”); the measure consisted in a temporaryreduction in the state betting levy. The Commission had doubts as to the absence of state aid, in view ofthe temporary nature of the measure and the fact that it was linked to the implementation of socialmeasures and the restructuring of the companies. Should it emerge that state aid was involved, theCommission would then have to determine its compatibility with Article 92.

Building and public works

Austria

a) Mayreder Bau

Following financial difficulties in 1995, Mayreder Bau GmbH, a construction company in Linz, drewup a restructuring plan, and on this basis obtained a reduction in its debts to the tax authorities and tobanks, some of which were State-controlled. The Commission concluded that the measures taken by thetax authorities and the banks did not contain any element of state aid within the meaning ofArticle 92(1). It took the decision after examining whether the conduct of the State and the publiclyowned banks was justified on economic grounds; it found their losses would have been considerablygreater if the company had been forced into insolvency.



Textiles

France

On 9 April the Commission adopted a negative final decision bringing to an end the Article 93(2)proceedings it had initiated in respect of aid planned by the French Government to create or maintainemployment in the textile, clothing and leather and footwear industries. The Commission did not callinto question the employment objectives pursued by the French authorities, but it found that the factthat the aid was specifically for industries which were sensitive or in crisis made it incompatible withthe common market. It therefore ordered the recovery of all the aid already paid in excess of the deminimis ceiling.

Metalworking

Germany

On 21 May the Commission decided not to object to the waiver by the German authorities of thereimbursement of a loan of DEM 7.876 million (ECU 4 million) as part of the restructuring of the steelfirm Growa Stahlbau Berlin GmbH, Berlin. It considered that the waiver constituted state aid whichcould be authorised under the guidelines on aid for firms in difficulty. It also considered that the waiverof a penalty of DEM 1.5 million (ECU 0.8 million) did not constitute state aid within the meaning ofArticle 92(1) inasmuch as the obligation out of which the penalty arose had been fulfilled.

3. Cross-industry schemes

3.1. Environmental protection

Germany

a) BAS Broerius Abfallwirtschaft Sachsen

On 21 May the Commission decided not to object to investment aid in the form of a DEM 6.93 million(ECU 3.5 million) guarantee granted to BAS Broerius Abfallwirtschaft Sachsen GmbH, awaste-processing company located in Böhlen, Saxony, with a view to the processing of hazardouswaste from local chemical plants. The Commission took the decision in view of the environmentalimportance of the project and the fact that the measure complied with the aid ceilings and awardconditions for aid under Article 92(3)(a), which was applicable in Saxony.

b) Gemeinnützige Abfallverwertung

On 16 September the Commission decided to terminate the proceedings initiated under Article 93(2)and to approve aid granted to Gemeinnützige Abfallverwertung GmbH, Aachen, an organisationcollecting and recycling industrial and commercial waste. The aid was provided in the form of aninvestment grant of DEM 2.7 million (ECU 1.4 million) and staff training subsidies totallingDEM 483 832 (ECU 0.24 million) between 1992 and 1995. The decision was subject to compliancewith strict conditions, including an undertaking given by the German authorities to take measures tocontrol the association's behaviour on the market, and especially its pricing policy.

STATE AID


c) Riedel-de Haën

On 16 September the Commission decided to initiate proceedings under Article 93(2) in respect ofinvestment aid of DEM 8 million (ECU 4 million) which appeared to have been granted unlawfully toRiedel-de Haën, a chemical company located in Seelze in Lower Saxony. On the basis of theinformation in its possession, the Commission doubted whether the aid granted was covered by schemesthat had already been approved, and whether it met the criteria in the guidelines on aid forenvironmental protection; the Commission was therefore unable to assess the compatibility of the aidwith the common market.

d) Zeitzer Standort Gesellschaft

On 16 December the Commission decided that a measure to assist Zeitzer Standort Gesellschaft GmbHdid not constitute aid within the meaning of Article 92. Zeitzer Standort Gesellschaft had the task ofimproving and redeveloping the industrial site at Zeitz into a modern industrial park, and of privatisingreclaimed land at market prices. The public authorities, which were financing the project jointly withthe private sector, were investing DEM 85.3 million (ECU 42 million). The Commission took the viewthat the measure was not state aid, as the State was acting like a private investor operating undernormal market conditions.

e) MCR Gesellschaft für metallurgisches Recycling

On 16 December the Commission decided to initiate proceedings under Article 6(5) of the Steel AidCode in respect of a plan to grant the steel firm MCR Gesellschaft für metallürgisches Recycling anadditional DEM 97 million in the form of two low-interest loans and a guarantee, under the heading ofenvironmental aid. The firm planned to invest DEM 130.1 million (ECU 65.82 million), includingDEM 97 million for environmental protection, in a new process for converting engine residues intonon-toxic steel-making additives. Investment aid in the form of a grant of DEM 24.1 million(ECU 12.19 million) was approved by the Commission in 1994. The Commission was unable todetermine from the information in its possession whether the planned additional aid complied with theCommunity guidelines on aid for environmental protection, as required by Article 3 of the Steel AidCode.

Belgium

a) Indaver

On 29 October the Commission decided to raise no objection to the grant of environmental aid to thewaste treatment company Indaver BNV; the aid amounted to BEF 129.8 million (ECU 3.2 million), onan overall investment of BEF 3 300 million (ECU 81.5 million). The Commission found that the aidamounted to 16% of the portion of the investment going beyond what legally required for environmentalprotection, and that the rates and conditions of the relevant guidelines had been complied with.



Denmark

a) Combined heat and power stations

On 3 December the Commission decided to authorise a programme of aid for combined heat and powerproduction. Electricity distribution companies were to be required to purchase electricity produced incombination with heat by centralised plants required to supply the heat, in cases where the plants wereunable to sell their electricity at market prices covering the cost of producing the combined heat andpower.

The Commission approved the measures because of their environmental value and their contribution toenergy saving, as well as their conformity with the environmental protection guidelines. TheCommission noted that the programme was to apply for a limited period (until 2006), that the level ofaid was to fall over time, and that the scheme would encourage centralised power plants to continueoperating in an electricity market that was in the process of being liberalised.

France

a)Biofuels production

On 9 April the Commission decided not to object to aid in the form of exemption from the domestic taxon petroleum products (“TIPP”) which France intended to grant for certain biofuels. This exemptionwas to apply irrespective of the method of cultivation or of the vegetable raw material used to producethe fuels. The exemption would be granted to biofuels production units approved by the Frenchauthorities, irrespective of their location in the Community, which would be authorised to place on theFrench market a pre-defined volume of biofuels. The Commission considered that the system wasconsistent with the Community strategy of reducing dependence on imported oil, developing alternativeenergy sources, improving the use made of agricultural resources and protecting the environment.

Sweden

a) Renewable energy sources

On 18 November the Commission decided not to raise any objection to an aid scheme designed topromote investment in installations using alternative energy sources: biomass, wind and water. The aidin question met the conditions set out in the guidelines on state aid for environmental protection. Thescheme was to apply for five years, and would have a total budget of SEK 900 million(ECU 105 million).

3.2. Research and development

On 22 January the Commission decided, as an appropriate measure under Article 93(1) of the ECTreaty, to amend the notification thresholds for aid relating to Eureka research projects, in accordancewith point 4.7 of the Community framework for state aid for research and development. In future, theCommission must receive prior notification of Eureka projects with a total cost of ECU 40 million ormore which are to benefit, under an approved scheme, from aid totalling at least ECU 10 million ingross grant equivalent. One-off aid measures must be notified if they exceed the de minimis ceiling.

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Germany

a) Microelectronics R&D

On 21 May the Commission decided not to object to a scheme to support microelectronics R&D whichwas to apply until 2000 and was to have a budget of DEM 115 million (ECU 59.4 million). TheCommission found the scheme to be in keeping with the R&D aid framework as regards, in particular,the innovative nature of the projects, the incentive effect of the aid, and compliance with the authorisedaid intensities.

b) Reduction of environmental production in ECSC industries

On 21 October the Commission decided to terminate the proceedings initiated under Article 6 of theSteel Aid Code in respect of a plan to extend to the steel industry the aid scheme aimed at reducingenvironmental pollution in ECSC industries. The German Government had informed the Commissionthat it was withdrawing its notification of the plan, which had been dropped, so that the proceedings nolonger served any purpose.

c) Fourth energy research programme

On 16 December the Commission decided not to object to the application of the fourth energy researchprogramme, which was aimed at supporting R&D in the field of energy technologies with a view tomitigating the climatic and environmental problems caused by the use of energy. The programme wasto run until the end of 2002, and had an overall budget of DEM 4 000 million (ECU 2 053 million).The Commission took the view that the programme complied with the requirements of the frameworkfor R&D aid.

d) Bavarian scheme to promote R&D in civil aviation

On 16 December, after finding that the scheme was compatible with the R&D framework, theCommission decided not to raise any objection to the implementation by the Land of Bavaria of ascheme to promote research and technology in the civil aviation sector in order to improve safety andperformance and to achieve more efficient use of energy. The scheme was to run until 1999, and wouldhave an overall budget of DEM 40 million (ECU 20.3 million).

e) Wacker Siltronic and associates and Siemens, Motorola and associates

On 16 December, after concluding that the proposal was compatible with the R&D framework, theCommission decided not to object to the granting of aid to two R&D projects relating to 300-mmsilicon wafer technology that were to run until 2000; one of these projects was concerned with theactual production of 300-mm wafers, and was to be conducted by Wacker Siltronic AG and associateswith a budget of ECU 32.2 million, while the other was concerned with the manufacture of integratedcircuits using this 300-mm technology, and was to be conducted by Siemens, Motorola and associateswith a budget of ECU 95.2 million.



Austria

a) Hoffmann-La Roche

On 21 May the Commission decided to terminate the Article 93(2) proceedings it had initiated inrespect of aid proposed for the pharmaceuticals manufacturer Hoffmann-La Roche. It took a negativefinal decision in respect of R&D aid and aid for accident prevention measures, having found itincompatible with the common market. The R&D aid, amounting to ATS 300 million (ECU 22 million)was not in keeping with the R&D aid framework, with special reference to the necessity of the aid, itsincentive effect and the nature of the research and development involved. As for the ATS 39.6 million(ECU 2.9 million) in aid for investment in accident prevention measures, the Commission found that theinvestment would have had to be carried out in any event.

But the Commission authorised ATS 42.8 million (ECU 3.1 million) in aid for investment in measuresto reduce air and water pollution, after finding it compatible with the environmental protection aidguidelines.

b) Siemens Bauelemente

On 16 December the Commission decided to initiate proceedings under Article 93(2) in respect of aplan to grant aid of ECU 27 million to Siemens Bauelemente OHG. The aid consisted ofECU 25.5 million for R&D into silicon wafers to produce power semiconductors and of environmentaland training aid amounting to ECU 1.5 million. The Commission had serious doubts concerning thecompatibility of the aid with the R&D and environmental aid guidelines, with special reference to thenature of the research and the incentive effect.

Denmark

a) Energy saving

On 16 September the Commission decided not to raise any objection to changes to the aid scheme topromote energy conservation, which was to have a budget of DKK 838 million (ECU 112.7 million) in1997, DKK 884 million (ECU 118.9 million) in 1998, DKK 1 004 million (ECU 135.1 million) in1999, and DKK 1 033 million (ECU 139 million) in 2000. The aid, which would be in the form ofreduced rates of tax and grants, was to fall over time, and was restricted to a period of four, five, six oreight years depending on the type of reduced rate granted and the type of recipient. The Commissionconsidered that the scheme was in accordance with the principles contained in the proposal for aCouncil directive on the taxation of energy products, and that the changes made were compatible withthe common market, in particular in the light of Article 92(3)(c), and it approved the changesaccordingly.

Spain

a) Construcciones Aeronáuticas

On 30 April the Commission terminated the Article 93(2) proceedings it had initiated in respect of aidamounting to ESP 7 210 million (ECU 45 million) received in the period 1991-93 by ConstruccionesAeronáuticas SA (“CASA”) in support of a research and development project for the construction of

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the new CASA-3000 aeroplane. After examining the rate and conditions for the aid in the light of therules of the Community framework for state aid for research and development, the Commission decidedthat ESP 1 917 million (ECU 12 million) of the aid was incompatible with the common market, andordered that it be recovered from CASA.

However, as regards the remainder, the Commission considered that ESP 3 589 million(ECU 22 million) of the aid was covered by the partial authorisation decision of 27 September 1994,and that the balance, amounting to ESP 1 704 million (ECU 11 million) fell within the limits andconditions of the framework already referred to. The Commission therefore decided to raise noobjections to these payments.

b) Renewable energy sources

On 2 April the Commission decided to terminate the Article 93(1) proceedings which it had initiatedagainst Act No 82/80 of 30 December 1980 in Spain, and to raise no further objections to its continuedapplication. The Act, which provided for aid in the form of grants and tax exemptions for thedevelopment of renewable energy sources, contained certain provisions which did not conform with theguidelines on state aid for environmental protection and the Community framework for state aid forresearch and development. The Commission found that the Spanish Government had complied with the“appropriate measures” which the Commission had proposed in order to remedy this situation, and hadamended the legislation to bring it into line with the Community rules.

c) R&D in the Basque Country

On 30 July the Commission decided not to raise any objection to the implementation of a regional aidscheme for research and development in the Basque Country, since it had concluded that the schemewas compatible with the common market and with the Community rules on regional aid and on aid forresearch and development. The scheme was to operate until the end of 2000 and would have an annualbudget of ESP 1 850 million (ECU 11.2 million).

France

a) Eurocopter France

On 30 July the Commission decided to authorise aid to Eurocopter France for the design andpre-competitive development of a helicopter prototype of a design which would represent a majortechnological advance in environmental protection, safety and fuel economy. The aid was to take theform of a loan of FRF 241 million (ECU 36 million) covering 40 % of the eligible project costs, withrepayment to start in 2000.

France and the Netherlands

a) Medea R&D programme (Eureka 1535)

On 30 July the Commission, acting under the framework for state aid for research and development,decided to authorise aid amounting to FRF 2 000 million (ECU 304 million) earmarked by the FrenchGovernment and NLG 245 million (ECU 112 million) earmarked by the Dutch Government to



implement the European Medea-1535 programme over the years 1997-2000. This programme, whichwould operate within the Eureka framework, was intended to form the basis for a European cooperationstrategy for microelectronics.

Italy

a) Olivetti

On 4 June the Commission decided to terminate the proceedings which it had initiated underArticle 93(2) concerning proposed R&D aid of ECU 7.7 million for Olivetti SpA for the developmentof portable multimedia personal computers, as the Italian authorities had withdrawn the notification andundertaken not to grant the aid in question.

b) Research and innovation

On 21 October the Commission decided not to object to the introduction of a new research andinnovation aid scheme with a budget of ITL 600 000 million (ECU 310 million) for the year 1997/98.The scheme involved research projects, research-related vocational training projects and the setting upof research centres. The aid complied with the rates and procedures laid down in the framework forresearch and development aid and, as far as the aid for research centres was concerned, with the overallscheme for Italian regional aid.

c) SGS-Thomson

On 16 December the Commission decided to terminate Article 93(2) proceedings in respect of a plan togrant R&D aid of ECU 18 million to SGS-Thomson. As the Italian Government had informed theCommission that the aid would not now be granted and that it was withdrawing the notification, theproceedings no longer served any purpose.

Netherlands

a) R&D in environmental protection

On 12 February the Commission decided not to object to a Dutch R&D scheme aimed at encouragingsmall and medium-sized enterprises, as defined in the Commission Recommendation, to developproducts which had less impact on the environment. The aid would not exceed NLG 500 000(ECU 228 560) per recipient firm, with a total budget over five years of NLG 14 million(ECU 6.4 million).

The Commission also decided to approve aid in the form of a grant of NLG 10 million(ECU 4.6 million) spread over five years and aimed at assisting Ecodesign, a long-term research projectinto methods of reducing the environmental impact of products through the stages of manufacture, useand waste-processing, which was to run for 20 years and would be conducted by the firm NederlandsePhilips Bedrijven.

In both cases, the Commission concluded that the projects complied with the criteria and terms of theCommunity framework for state aid for R&D.

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b) Tax reduction for R&D

On 25 March the Commission decided that a measure notified by the Dutch Government which loweredthe tax paid by employers on the salaries of employees working on R&D projects did not constitutestate aid. Following a detailed examination of the way in which the measure was being applied, theCommission decided that it was a general tax measure and did not constitute state aid caught byArticle 92(1). The Commission’s decision was based on the fact that the reduction was not specific toany industry, region or type of firm, and was granted solely on the basis of objective criteria, with nodiscretionary power. The application of the measure was not tied to a budget or limited to a statedperiod.

c) Nederlandse Philips Bedrijven

On 3 December, having concluded that the proposal complied with the framework for R&D aid, theCommission decided not to raise any objections to the aid to be granted to Nederlandse PhilipsBedrijven BV for two R&D projects. The Liquid-crystal Display (LCD) project will receiveECU 36.45 million in aid, while ECU 6.2 million will go to the Radiology 2001 project.

Sweden

a) Excise duties on energy in the steel industry

On 26 February the Commission decided not to object to the application to steel firms of a reduction inthe environmental tax on carbon dioxide emissions. The measure was to be in force for three years. TheCommission, which had already authorised the reduction in other sectors of the economy, concludedthat the proposal complied with the guidelines on aid for environmental protection and with Article 3 ofthe Steel Aid Code.

3.3. Internationalisation

Austria

a) Lift GmbH

On 3 December the Commission decided to initiate proceedings under Article 93(2) in respect of aidgranted to Lift GmbH in the form of a subsidised loan of ATS 25 million (ECU 1.8 million) as part ofan IDF investment in China worth ATS 54.1 million (ECU 4 million). The aid was being granted underthe ERP-Internationalisierungsprogramm, a scheme which the Commission had already approved oncondition that applications involving large firms were notified: Lift GmbH fell into this category. TheCommission had serious doubts as to the compatibility of the aid with the common market, andespecially whether the aid satisfied the test of necessity, since Lift GmbH was a major internationalfirm already well established on the Asian, US and Australian markets and the aid could affect trade toan extent contrary to the common interest by distorting competition with other firms not receivingsimilar aid.



3.4. Rescue and restructuring

Germany

1) SMEs in difficulty in the new Länder

On 26 February the Commission decided to raise no objections to the application of an aid scheme forsmall and medium-sized enterprises in difficulty in the new Länder, aid which was to be provided underthe terms of reference of the BvS and BMGB, which gave them the task of monitoring privatisationcontracts and bringing formerly state-owned companies to successful business operation under marketconditions (Vertragsmanagement). 109 The aid, which could take the form of extensions of existing loansand guarantees, loan write-offs, and, exceptionally, new loans or grants, would not exceedDEM 3 million (ECU 1.5 million) per recipient. The scheme was to apply until the end of 2000 andwould be financed annually from a maximum budget of DEM 600 million (ECU 300 million). TheCommission took its decision after checking that the scheme complied with the guidelines on rescue andrestructuring aid for firms in difficulty.

2) SHB Stahl- und Hartgußwerke Bösdorf

On 5 February the Commission decided to initiate Article 93(2) proceedings in respect of restructuringaid totalling DEM 6 million (ECU 3 million) granted to SHB Stahl- und Hartgußwerke Bösdorf AG,Saxony, which operated in the cast-steel sector. The Commission had already approved restructuringaid of DEM 5 million (ECU 2.5 million) for the firm in June 1996, but in October the firm filed forbankruptcy. The Commission has serious doubts as to the compatibility of the new aid with theguidelines on state aid for firms in difficulty.

3) Lautex GmbH Weberei und Veredelung

On 12 March the Commission decided to initiate proceedings under Article 93(2) in respect of aidwhich the German authorities planned to grant towards the restructuring of the textile company LautexGmbH Weberei und Veredelung. The proposed aid comprised loans amounting to DEM 13.9 million(ECU 7 million) and guarantees covering a total of DEM 10 million (ECU 5 million). The company,located in Saxony, had already received a large amount of restructuring aid from the Treuhandanstaltprivatisation agency, and the Commission had serious doubts as to whether the restructuring plan nowbeing proposed complied with the guidelines on state aid for rescuing and restructuring firms indifficulty.

4) Aircraft Services Lemwerder

On 12 March the Commission decided to terminate the proceedings it had initiated under Article 93(2)and to approve the aid of DEM 70 million (ECU 36.75 million), granted in the form of a capitalcontribution and guarantee, as part of the restructuring plan for the aircraft maintenance companyAircraft Services Lemwerder GmbH (“ASL”), located in Lower Saxony. The Commission decided thatthe aid was compatible with the guidelines on state aid for rescuing and restructuring firms in difficulty.

109

The Bundesanstalt für vereinigungsbedingte Sonderaufgaben (“BvS”) and the Beteiligungs- und ManagementGesellschaft Berlin (“BMGB”) are the main successor organisations to the Treuhandanstalt privatisation agency.

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The authorisation was, however, subject to the condition that the German authorities refrain until31 December 2001 from granting any aid which might contribute to an increase in ASL’s productioncapacity or help to cover any losses incurred by it.

5) Könitz Porzellan

On 2 April the Commission decided not to object to aid granted in the form of a cancellation of a debtamounting to DEM 4.35 million (ECU 2 million) and credit guarantees of DEM 2.5 million(ECU 1.2 million) granted to the recently privatised Könitz Porzellan GmbH, a tableware manufacturerin Thuringia. The aid complies with the requirements of the guidelines on aid for firms in difficulty.

6) Union Werkzeugmaschinen

On 16 April the Commission decided not to raise any objections to restructuring aid granted to UnionWerkzeugmaschinen GmbH, a machine-tool manufacturer located in Saxony. Privatised in 1991 andtaken over in 1993 by Dörries Scharman, a Bremer Vulkan subsidiary, it encountered seriousdifficulties owing to the insolvency of those two companies. The Commission found that the aid,totalling DEM 9.6 million (ECU 4.7 million), complied with the guidelines on aid for firms indifficulty.

7) Mansfeld Maschinenbau, Foron Haus- und Küchentechnik, Aweba Werkzeugbau andSpezialchemie Leuna

On 30 April the Commission decided to raise no objection to aid to be granted to MansfeldMaschinenbau, Foron Haus- und Küchentechnik, Aweba Werkzeugbau GmbH and SpezialchemieLeuna GmbH. Mansfeld, a manufacturer of special metal constructions located in Saxony-Anhalt, wasto receive aid totalling DEM 46.4 million (ECU 23 million). The other three recipients were located inSaxony. Foron, an electrical appliances manufacturer, was to receive aid of DEM 2.1 million(ECU 1 million). Aweba, a tool manufacturer, was to be granted DEM 3.7 million (ECU 1.85 million)and a state guarantee of DEM 8 million (ECU 4 million). Lastly, Spezialchemie Leuna was to receiveinvestment aid totalling DEM 14 million (ECU 7 million) and aid to cover losses of DEM 1 million(ECU 0.5 million).

In all four cases, the aid, which accompanied the privatisation and restructuring of the firms concerned,was authorised by the Commission once it had concluded that the aid satisfied the conditions of theguidelines on aid for firms in difficulty.

8) SKET Schwermaschinenbau Magdeburg

On 29 May the Commission took a negative final decision terminating the Article 93(2) proceedings ithad initiated in respect of aid totalling DEM 781.2 million (ECU 390.6 million) granted to SKETSchwermaschinenbau Magdeburg GmbH with a view to its privatisation. The company, which hadbecome insolvent, was located in Saxony-Anhalt, and was the largest manufacturer of heavy machineryand equipment in the new Länder. The Commission found that the aid was incompatible with thecommon market because it did not comply with the guidelines on aid for firms in difficulty. The aid wasalso unlawful in that it had been granted before a final decision was taken. The Commissionaccordingly required the German authorities to recover it as part of the liquidation proceedings.



On 5 November the Commission decided to initiate Article 93(2) proceedings in respect of state aid,some of which had already been paid, for the restructuring of SKET Verseilmachinenbau GmbH, whichwas producing tubular stranding machines in Saxony-Anhalt. The firm was one of six set up followingthe insolvency of SKET Schwermaschinenbau Magdeburg. The aid took the form of grants and loanstotalling DEM 18.1 million (ECU 8.5 million) and guarantees on a total of DEM 18.3 million(ECU 9 million). The Commission had serious doubts as to whether the guidelines for restructuring aidwere applicable, given the very vague character of the restructuring plan, the absence of any privatecontribution, and the fact that a new firm had been set up by the State following a bankruptcy.

On 21 October the Commission decided to initiate Article 93(2) proceedings in respect of aid to SKETMaschinen und Anlagenbau GmbH, a mechanical engineering firm, and SKETWalzwerkstechnik GmbH, which made rolling mills; these were two more of the six firms set upfollowing the insolvency of SKET Schwermaschinenbau Magdeburg. They had received aid in the formof grants and loans amounting to DEM 79.2 million (ECU 39 million) and DEM 128.9 million(ECU 63 million) respectively, and guarantees of DEM 2 million (ECU 1 million) andDEM 86.2 million (ECU 43 million) respectively. The Commission decided to initiate proceedingsbecause it had serious doubts as to whether the requirements of the guidelines on state aid for firms indifficulty had been met.

9) Chemieanlagenbau Staßfurt

On 2 April the Commission decided to initiate Article 93(2) proceedings in respect of aid to themechanical engineering and foundry firm Chemieanlagenbau Staßfurt, located in Saxony-Anhalt. Thefirm had received assistance in the form of a loan of DEM 27.3 million (ECU 13.6 million) to financeits liquidities, and guarantees totalling DEM 16.7 million (ECU 8.3 million) in order to ensure itssurvival and pursue its restructuring which, started in 1995, was aimed at eventual privatisation. Themeasures constituted aid to a firm in difficulty in an ailing industry, and there were serious doubts as tothe compatibility of the aid with the guidelines on state aid for firms in difficulty, in particular asregards the details of the restructuring plan and the prospects for the firm's return to viability.

10) Triptis Porzellan

On 30 April the Commission decided to initiate Article 93(2) proceedings in respect of aid to theporcelain manufacturer Triptis Porzellan GmbH. In order to assist its restructuring, started in 1993when it was privatised, the company had received aid in the form of a non-repayable advance ofDEM 10 million (ECU 5 million). Hessische Landesbank, a public-sector bank, also allowed it a partialcancellation of debt of DEM 10 million (ECU 5 million). It was not clear whether the debt reliefconstituted state aid. The Commission had doubts as to the compatibility of the measures with thecommon market, in view, in particular, of the considerable overcapacity in the industry at Communitylevel and uncertainty as to the exact amount of aid.

11) Growa Stahlbau Berlin

On 21 May the Commission decided not to object to the waiver by the German authorities of thereimbursement of a loan of DEM 7.876 million (ECU 4 million) as part of the restructuring of the steelfirm Growa Stahlbau Berlin GmbH, Berlin. It considered that the waiver constituted state aid whichcould be authorised under the guidelines on aid for firms in difficulty. It also considered that the waiver

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of a penalty of DEM 1.5 million (ECU 0.8 million) did not constitute state aid within the meaning ofArticle 92(1) inasmuch as the obligation out of which the penalty arose had been fulfilled.

12) Rackwitz Aluminium

On 18 June the Commission decided not to raise any objections to a grant of rescue aid amounting toDEM 6.5 million (ECU 3.25 million) for Rackwitz Aluminium GmbH i.GV, a firm producingaluminium pressing profiles in Saxony. Potential buyers for the firm had expressed interest, and aidwas being granted, in compliance with the conditions laid down in the relevant guidelines, in order tomaintain it as a going concern while the takeover and restructuring plan were organised.

13) Bell Flavors and Fragances Duft und Aroma

On 18 June the Commission decided not to raise any objections to a grant of aid of DEM 5.6 million(ECU 2.5 million) towards the restructuring plan for Bell Flavors and Fragances Duft undAroma GmbH, since it had concluded that the aid satisfied the conditions laid down in the guidelines onaid for firms in difficulty. The firm was located in Saxony; its business was flavourings and perfumes.

14) Altenburger Bau

On 18 June the Commission decided not to raise any objections to a grant of aid of DEM 1 million(ECU 0.5 million) for Altenburger Bau, a construction firm located in Thuringia. As a result ofcash-flow difficulties arising from bad debts and the insolvency of one of its debtors, the firm had toundergo restructuring. The aid granted for restructuring satisfied the conditions laid down in theguidelines on aid for restructuring firms in difficulty.

15) Walzengießerei Coswig, Schmiedeberger Gießerei and Funkwerk Darbendorf

On 18 June the Commission decided not to raise any objections to aid to be granted to WalzengießereiCoswig GmbH, Schmiedeberger Gießerei GmbH and Funkwerk Darbendorf GmbH for restructuringfollowing privatisation. The first two firms were foundries, located in Saxony, and were to receive aidamounting to DEM 30 million (ECU 15 million) and DEM 39 million (ECU 19.5 million). Funkwerk, amanufacturer of communications equipment located in Brandenburg, was to receive aid ofDEM 4.8 million (ECU 2.4 million).

In all three cases the Commission concluded that the aid satisfied the conditions laid down in theguidelines on aid for restructuring firms in difficulty.

16) Addinol Mineralölwerke

On 4 June the Commission decided not to raise any objections to rescue aid totalling DEM 28 million(ECU 14 million) for Addinol Mineralölwerke GmbH, located in Saxony-Anhalt, a firm in thelubricants, heating oil and bitumen sector. A buyer had been identified and was preparing arestructuring plan. The Commission found that the aid was in accordance with the relevant guidelines,since it was for a period ending on 30 July 1997 and was granted to deal with a severe cash-flow crisisjeopardising the plan to restructure the firm.



17) Berlin liquidity fund for firms in difficulty

On 4 June the Commission decided, under the guidelines on state aid for rescuing and restructuringfirms in difficulty, not to raise any objections to the establishment by the Land of Berlin of a liquidityfund for firms in difficulty. The fund was to operate until 2006, and would have a total budget ofDEM 100 million (ECU 52.5 million) for granting loans at market rates, for a maximum period of fiveyears, to small and medium-sized enterprises in financial difficulties, provided that they adopted arestructuring plan. Loans granted to large firms in difficulty would have to be notified individually.

18) Lausitzer Stahlbau Ruhland and Magdeburger Stahlbau

On 2 July the Commission decided, pursuant to the Community guidelines on state aid for rescuing andrestructuring firms in difficulty, not to raise any objection to the grant of restructuring aid for two firmsin the structural steel sector, Lausitzer Stahlbau Ruhland GmbH, in Brandenburg, and MagdeburgerStahlbau GmbH, based in Saxony-Anhalt. The aid for the first firm was DEM 19.7 million(ECU 9.7 million) and the aid for the second was DEM 8 million (ECU 4 million).

19) Weimar-Werk Baumaschinen

On 15 July, under the Community guidelines on state aid for firms in difficulty, the Commissiondecided not to raise any objection to the grant of aid amounting to DEM 37 million (ECU 17.5 million)for the privatisation and restructuring of Weimar-Werk Baumaschinen GmbH, a constructionequipment manufacturer making excavators in Thuringia.

20) Agrotechnik Handelsgesellschaft

Agrotechnik Handelsgesellschaft mbH's business consists in the sale and hire of agricultural andconstruction equipment. It operates from 19 locations throughout all the new Länder. In the course ofthe company's privatisation, the German authorities waived repayment of a loan of DEM 134 million(ECU 68 million) granted to the company through the Treuhandanstalt privatisation agency, which theCommission, in view of the company's difficulties at the time, treated as non-repayable aid in itsentirety and authorised as such. On 15 July the Commission accordingly decided that the fresh waiverwas merely a confirmation of aid already authorised and did not constitute new, additional state aid forthe company.

21) Belzig

On 15 July the Commission decided not to raise any objection to the grant of aid of DEM 16.5 million(ECU 8.8 million) for the privatisation of Belzig GmbH, a hotplate-producing company located inBrandenburg; the conditions required by the guidelines on state aid for firms in difficulty were met.

22) Möbelwerke Themar

On 15 July the Commission decided to authorise the grant of restructuring aid of DEM 7.5 million(ECU 3.6 million) for Möbelwerke Themar GmbH, a furniture-producing company located inThuringia. The Commission had determined that the conditions laid down by the guidelines on state aidfor firms in difficulty had been fulfilled; the Commission was impressed by the restructuring plan,which it felt was capable of making the company viable again. On the other hand, in the similar case of

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Zeuro Möbelwerk, a company in the same industry, the lack of clarity and cogency in the company'srestructuring plan led the Commission to initiate proceedings under Article 93(2).

23) Leuna 2000

On 23 July the Commission decided to initiate Article 92(3) proceedings in respect of aid given toMitteldeutsche Erdöl-Raffinerie GmbH (“Mider”), a subsidiary of Elf, to build the Leuna 2000refinery. The Commission had doubts about the application of its earlier decisions in the case, taken in1993 and 1994, and indeed suspected that the information on which those decisions were based mighthave been inaccurate, in which case the aid granted might have been incompatible with the commonmarket. In its earlier decisions the Commission approved aid which was to be granted to Mider for thebuilding of a new refinery on the Leuna site in Saxony-Anhalt. Mider was a company which had beenset up to build and manage the refinery.

Press reports subsequently revealed the existence of a study carried out for the Bundesanstalt fürvereinigungsbedingte Sonderaufgaben (“BvS”), the successor to the Treuhandanstalt privatisationagency, which concluded that Elf's estimate of the cost of building Leuna 2000 was a great deal toohigh. The study was carried out in with a view to determining the market price of shares in Mider,because Elf had an option to sell 33% of the shares in the new refinery to the BvS once the refinerywent into production. The findings of the study raised the following problem: if the price Mider waspaying for the refinery was indeed higher than necessary, why should this be so? Was the higher pricejustified by choices of specific features and high technology at the refinery, or was it overestimated? Ifit was, the amount of aid might have been excessive.

The Commission also wanted to examine the terms on which the BvS was to buy the 33% stake if Elfexercised the option, or the terms of any other compensation the BvS was offering Elf if it did notexercise its option. The Commission would have to be satisfied that the sum paid by the BvS was nottoo high. The Commission had been supplied with information and data, but felt that in view of theimportance of the case formal proceedings should be opened so that it could analyse it in detail.

24) Oddesse, ZM and Maco

On 30 July the Commission, acting under the guidelines on state aid for rescuing and restructuringfirms in difficulty, decided to authorise the grant of aid amounting to DEM 30.8 million(ECU 15.6 million) to the holding company Maco for the restructuring of its two mechanicalengineering subsidiaries, Oddesse and ZM, located in Saxony-Anhalt and Saxony.

25) Dresdner Kühlanlagenbau

On 30 July the Commission decided to authorise aid of DEM 12.13 million (ECU 6 million) granted forrestructuring Dresdner Kühlanlagenbau GmbH, a company located in Thuringia which assembled andserviced refrigeration equipment, having determined that it was in accordance with the relevant state aidguidelines.



26) CBW Chemie GmbH Bitterfeld-Wolfen

On 30 July the Commission decided to initiate Article 92(3) proceedings in respect of aid grantedtowards the privatisation of the chemicals firm CBW Chemie GmbH Bitterfeld-Wolfen. The firm wasto receive a total of DEM 67.6 million from the BvS in state aid for investment, site conversion andcoverage of losses. The Commission seriously doubted the compatibility of the aid with the commonmarket because of the uncertain long-term viability of the firm, the scale of the investor’s contribution,which it judged too small, and the possibility of adverse effects on competitors.

27) Investment aid to encourage the use of lignite

On 30 July the Commission decided to initiate Article 93(2) proceedings against investment aid to begranted by the Land of Brandenburg towards a power station fuelled by lignite, also called brown coal.The Commission took the view that the measures constituted state aid to the lignite industry in theregion. The choice of a power station fuelled by lignite, despite its evident economic disadvantages, andthe fact that both the investment cost and the operating cost were higher than for a gas-fuelled plant,would provide support for the regional industry. The industry could now count on long-term supplycontracts. The aid was to take the form of a grant of DEM 49.92 million (ECU 25 million) provided bythe Land of Brandenburg to in order partially to offset the additional cost of the more expensive lignitetechnology as compared with to a comparable gas-fuelled power station. The Commission accordinglydecided to initiate proceedings and to require the German authorities to send it all information relevantto the case.

28) System Microelectronics Innovation

On 30 July the Commission decided to initiate Article 93(2) proceedings in respect of aid to SystemMicroelectronics Innovation GmbH, located in Frankfurt an der Oder in Brandenburg. Despite a formalrequest, the Commission had received no information from the German authorities that would enable itto analyse and assess the aid. It would appear that the firm had received aid totalling DEM 130 million(ECU 65 million) from the Treuhandanstalt privatisation agency and the Land of Brandenburg,although efforts to restructure it had come to nothing. At the end of April 1997 the Brandenburgauthorities agreed to insolvency proceedings because they were no longer prepared to cover its chroniclosses. For lack of information the Commission was unable to assess the aid granted in the past. Itaccordingly initiated Article 93(2) proceedings, requiring the German authorities to provide theinformation requested.

29) Mitteldeutsche Stahlbau and Stahlbau Calbe

On 21 October the Commission decided that in compliance with the guidelines on aid for firms indifficulty it would raise no objection to the granting of aid for the restructuring of the privatised steelconstruction firms Mitteldeutsche Stahlbau GmbH and Stahlbau Calbe GmbH, both located inSaxony-Anhalt. The aid amounted to DEM 108.76 million (ECU 54 million) and DEM 36.77 million(ECU 18.5 million) respectively. The Commission took account of the location of the firms in a regioneligible for aid under Article 92(3)(a), the situation in the industry and the favourable prospects forrestoring viability to the firms concerned.

STATE AID


30) Elpro

On 16 September the Commission decided to initiate proceedings under Article 93(2) in respect of aidof DEM 73 million (ECU 37 million) granted by the German authorities for the restructuring ofElpro AG, Berlin. The aid was granted at a time when the Commission had not been given sufficientinformation and had not yet taken a final decision, and the Commission seriously doubted whether itwas compatible with the common market and complied with the guidelines on rescuing andrestructuring firms in difficulty, with particular reference to the existence of a coherent restructuringplan to secure the firm's long-term viability.

31) Privatisation of firms belonging to Schröder & Partner and of GMB Magnete Bitterfeld

On 1 October the Commission decided to raise no objection to restructuring aid of DEM 25.66 million(ECU 15 million) planned for the privatisation of five firms belonging to Schröder & Partner, havingestablished that the conditions relating to the restoration of viability had been met and that the adverseeffects on competitors were limited. The firms in question were the textile companiesColor-Textil GmbH, Ertex GmbH and Zwickauer Kammgarn GmbH, located in Saxony, and thefurniture maker EWM-Eisenberger Wohnmöbel GmbH and the carpet manufacturer ThüringerTeppichfabriken GmbH located in Thuringia.

For the same reasons it decided not to object to aid totalling DEM 5.8 million (ECU 2.9 million) whichwas to be granted to GMB Magnete Bitterfeld GmbH, a small chemicals business with 20 employeeslocated in Saxony-Anhalt.

32) Batropa Batterie

On 21 October the Commission decided to raise no objection to a state guarantee on 80% of a loan ofDEM 3.72 million (ECU 1.57 million) to be given to Batropa Batterie GmbH, an SME making alkalinebatteries in the eastern part of Berlin; the Commission was satisfied that the guidelines on aid to firmsin difficulty were being complied with.

33) Leinefelder Textilwerke

On 21 October the Commission decided to raise no objection to aid of DEM 6.7 million(ECU 3 million) to be granted towards the restructuring of the textile firm LeinefelderTextilwerke GmbH, in Thuringia, with a view to its privatisation. The Commission took account of thefirm’s location in an area eligible for aid under Article 92(3)(a), and of the existence of real prospectsfor a return to viability, especially given the reorientation of production towards special yarns and themodernisation of the plant.

34) Niemeyer & Söhne

On 21 October the Commission decided to raise no objection to the granting of rescue aid to Niemeyer& Söhne GmbH, in North Rhine-Westphalia, with a view to the drawing up of a restructuring plan; thefirm was active in the foundry industry and the production of agricultural and industrial machinery.The aid consisted in a six-month guarantee covering 80 % of a DEM 3.7 million loan(ECU 1.8 million) at a rate (6 %) higher than the German reference rate. The Commission took account



of the firm's relatively small share of the European market and the threat to 430 jobs that insolvencywould represent; it concluded that the guidelines on aid for rescuing firms in difficulty were beingrespected.

35) Infraleuna

On 12 March the Commission decided to initiate proceedings under Article 92(3) in respect of aid ofDEM 1 065 million (ECU 532.5 million) which the German authorities planned to grant toInfraleuna GmbH, on the Leuna site in Saxony-Anhalt, which is an area eligible for regional aid underArticle 92(3)(c). Infraleuna's role was to manage all the site infrastructures on behalf of the chemicalfirms operating there. The Commission considered that the real beneficiaries of the aid were probablythe chemical companies which used the infrastructures, and it had has serious doubts as to whether theaid was compatible with the common market.

36) Milizer Maschinenbau

On 16 September the Commission decided, under the exemption provided for in Article 92(3)(c), toauthorise the granting of investment aid in the form of an eight-year guarantee covering 65 % of a loanof DEM 25 million (ECU 12.5 million) to Dr. Ing. Milizer Maschinenbau GmbH & Co KG. Althoughthe German authorities had already provided the guarantee, in two instalments, before it was notified,the Commission considered that the aid met the conditions laid down by the Guarantees Act of the Landof Thuringia, which it had approved in December 1996.

37) Leuna Polymer

On 5 November the Commission decided not to raise any objection to aid totalling DEM 20.225 million(ECU 10.261 million) for restructuring Leuna Polymer GmbH, a manufacturer of industrial waxes,polymers and orthopaedic foams. The Commission was satisfied that the restructuring plan compliedwith the relevant guidelines, particularly as regards the restoration of the firm to industrial and financialviability, which was to be completed in 1999.

38) Kali und Salz

On 18 November the Commission decided to initiate Article 93(2) proceedings against aid ofDEM 128.87 million (ECU 64 million) which the German authorities had earmarked for Kali undSalz GmbH, a manufacturer of potash and industrial products made from potash and rock salt, for therestructuring of plants in the new Länder. In view of the restructuring aid authorised in 1993, and thefavourable economic development of the plants in question, the Commission had serious doubts as towhether this fresh aid was compatible with the common market and whether the guidelines forrestructuring aid were applicable in this case.

39) Gildemeister

On 11 November the Commission decided to terminate the Article 93(2) proceedings it had initiatedagainst Gildemeister AG, after concluding that the measures taken for the restructuring of the companywere compatible with the common market. It found that the DEM 47.3 million credit waiver byWestLB did not contain any aid element, since the bank was acting to safeguard its own major

STATE AID


investment in the firm; that the DEM 20 million guarantee had been granted in accordance with anauthorised scheme; and that the other aid granted complied with the guidelines for restructuring aid.

40) Guarantee scheme for firms in difficulty in Saxony-Anhalt

On 18 November the Commission decided to terminate the Article 93(2) proceedings it had initiatedand to adopt a negative final decision in respect of the guarantee scheme implemented in 1994 and 1995by the Land of Saxony-Anhalt in order to enable firms in difficulty to obtain liquidity; the scheme didnot require any restructuring plan. The Commission concluded that the guarantees granted constitutedstate aid, and that they were unlawful in that they had been granted in contravention of Article 93(3).They were also incompatible with the common market, because they failed to meet the conditions of theguidelines on aid to firms in difficulty, and were not covered by any of the exemptions provided for inArticle 92(2) and (3). The Commission therefore ordered that the aid granted be recovered.

41) Dieselmotorenwerk Rostock

On 3 December the Commission decided to extend the proceedings initiated on 22 January 1997 inorder to include an investigation of all aid paid since that date to Dieselmotorenwerk Rostock GmbH(formerly Dieselmotorenwerk Vulkan), a manufacturer of marine diesel engines. The new aid consistedof loans, to be converted into non-repayable grants, totalling DEM 74.5 million (ECU 37.7 million),guarantees totalling DEM 60 million (ECU 30.36 million) and other sureties amounting toDEM 20 million (ECU 10.12 million). Virtually all the aid was unlawful as it was granted withoutbeing notified and without awaiting the Commission's decision. In addition, the Commission had seriousdoubts whether the rescue and restructuring aid was compatible with the relevant guidelines.

42) Pittler/Tornos Werkzeugmaschinen

On 3 December the Commission decided to initiate proceedings under Article 93(2) in respect ofrestructuring aid totalling DEM 11.917 million (ECU 6.02 million) to Pittler/TornosWerkzeugmaschinen GmbH, Saxony, a metalworking firm making multi-spindle lathes. TheCommission had serious doubts whether the requirements of the guidelines on rescue and restructuringaid had been met, in particular as regards the prospects of a return to viability within a reasonable time.

43) Buna SOW Olefinverbund

In November 1995 the Commission approved investment and restructuring aid totallingDEM 9 500 million (ECU 4 800 million) to Buna SOW Olefinverbund GmbH, which was privatisedwhen acquired by the US firm, Dow Chemical Company; on 10 December 1997 the Commissiondecided to reopen proceedings under Article 93(2) in respect of the aid. The earlier approval wasaccompanied by certain conditions, in particular the removal from the restructuring plan of aid ofDEM 966 million intended to subsidise energy costs. The Commission took its decision because theinformation now in its possession indicated major changes to the restructuring plan that seemed to gobeyond what had been authorised as regards the amount of aid and capacity levels, as well the existenceof a new energy supply contract which seemed to provide for aid to cover energy costs, therebysidestepping the ban on such aid imposed by the decision of November 1995.



44) Chemische Werke Piesteritz

On 16 December the Commission decided not to object to aid totalling DEM 25.5 million(ECU 13 million) for the restructuring of Chemische Werke Piesteritz GmbH with a view to itsprivatisation. The company, located in Saxony-Anhalt, manufactures different types of phosphate. TheCommission concluded that the aid complied with the requirements of the guidelines for rescue andrestructuring aid.

45) Thüringer Motorenwerke

On 16 December the Commission decided to terminate the Article 93(2) proceedings initiated on18 December 1996 in respect of rescue aid to Thüringer Motorenwerke GmbH, a manufacturer ofdiesel engines for lorries and utility vehicles, in the form of loans totalling DEM 4.8 million(ECU 2.43 million). The Commission concluded that the rescue aid component in the first loan(DEM 2 million) could be regarded as compatible with the common market and could therefore beauthorised. However, it concluded that the subsequent rescue aid packages amounting toDEM 2.8 million (ECU 1.42 million) were not compatible, as they did not comply with therequirements of the guidelines for rescue and restructuring aid. The aid would therefore have to berecovered by the German authorities.

Austria

a) Actual Maschinenbau

On 16 December the Commission decided to initiate proceedings under Article 93(2) in respect of theextension until 31 October 1997 of rescue aid for Actual Maschinenbau AG, a company producingmachine tools for the plastics industry located in Upper Austria. The aid was in the form of a loan ofATS 15 million (ECU 1.1 million) granted for a period of three months at an interest rate of 6.87%. Onthe basis of the information in its possession the Commission doubted whether the extension of this aidwas compatible with the common market.

Spain

a) SMEs in difficulty in Cantabria

On 30 April the Commission decided to raise no objection to a scheme being introduced by theauthorities in Cantabria to assist SMEs in difficulty, the definition of “SMEs” applied being theCommunity one. The Commission found that the planned aid complied with the guidelines on aid tofirms in difficulty.

b) Almagrera

On 16 April the Commission decided not to object to the aid granted to the public mining enterpriseAlmagrera SA, Huelva, Andalusia, engaged in the extraction of copper, zinc and lead and theproduction of sulphuric acid. The aid, amounting to ESP 6 727 million (ECU 40.9 million), was aimedat restructuring the firm, restoring its profitability, and at its privatisation through its sale to an Irishcompany, Navan Resources. The Commission concluded that the aid complied with the conditions ofthe guidelines on restructuring aid for firms in difficulty.

STATE AID


c) Porcelanas del Norte (Ponsal)

On 30 April the Commission decided to initiate proceedings under Article 93(2) in respect of aidgranted to Porcelanas del Norte SAL (“Ponsal”), which became Manufacturas Navarras SAL in 1994;the aid consisted of investment aid of ESP 750 million (ECU 4.5 million), a grant of ESP 100 000(ECU 6 000) per job created, and a debt write-off of ESP 3 100 million (ECU 18 million). The firm,which was located in Pamplona, Navarre, manufactured and marketed porcelain tableware anddecorative objects. The Commission doubted whether the aid was compatible with the common market,with particular reference to compliance with the guidelines on state aid for firms in difficulty and theconsiderable overcapacity in the industry.

d) Grupo de Empresas Alvarez

On 15 July the Commission, acting in accordance with the guidelines on aid for firms in difficulty,decided to terminate the proceedings initiated under Article 93(2) and to approve aid granted to Grupode Empresas Alvarez, a company operating in the glass and chinaware industry, located in Vigo,Galicia. The aid took the form of loan guarantees, of which ESP 983 million (ECU 5.9 million) hadbeen released, and rescue aid amounting to ESP 1 050 million (ECU 6.1 million). The decision wassubject to compliance with stringent conditions, including the prohibition of any new state aid to thecompany; the Commission was satisfied that the restructuring plan, which included significantreductions in capacity, was capable of restoring the company's viability.

France

a) Nouvelles Filatures Lainière de Roubaix

On 30 July the Commission decided to initiate proceedings under Article 93(2) in respect of aid to thetextile company Nouvelles Filatures Lainière de Roubaix. The company, a yarn spinner establishedfollowing the winding up of the group SA Filatures Lainière de Roubaix, was granted aid in the form ofa loan of FRF 18 million, and was to be granted further aid of FRF 22.2 million. The Commissiondecided to initiate the Article 93(2) proceedings in order to assess the compatibility of this aid with thecommon market, with special reference to the soundness of the restructuring plan, the future viability ofthe enterprise, and the effect of the aid on intra-Community competition; despite repeated requests theCommission did not possess enough information to be able to determine whether or not the aid wascompatible. In making its assessment the Commission would be taking account of the fact that thecompany was an SME and of the regional development needs of the area where it was located.

b) Thomson and its subsidiary Thomson Multimedia

On 1 October the Commission decided to terminate the proceedings initiated under Article 93(2) inrespect of French Government aid for the Thomson electronics group and its subsidiary ThomsonMultimedia. It decided to approve a public capital injection of FRF 11 000 million(ECU 1 694.59 million) towards the recapitalisation of the group. Its approval was subject to theconditions that the funds be used exclusively for the recapitalisation of Thomson Multimedia, and thatThompson Multimedia limit its share of the European Union market for television sets to 10% until 31December 2000. The Commission took this decision after noting that the restructuring plan for the



group entailed a substantial industrial and commercial reorganisation and a gradual shift towardsfuture-oriented products, and concluding that the plan was capable of restoring the company's viability.

However, the Commission declared unlawful and incompatible with the common market the aidcomponent in an overvalued price of FRF 482 million (ECU 74.25 million) which the Government paidthe group for a 3.01% stake in Crédit Lyonnais. The Commission therefore decided to require that thegroup refund FRF 145.6 million (ECU 22.43 million).

Italy

a) Extraordinary administration of large firms in crisis

On 22 January the Commission decided to initiate Article 93(2) proceedings in respect of thearrangements for the extraordinary administration of large firms in a state of crisis, which had existedsince 1979 and allowed insolvent companies, under government control, to remain in business for amaximum of five years, their debts being frozen and a state guarantee given for the loans they neededfor day-to-day operations and the implementation of a restructuring plan. The Commission took thedecision after the Italian authorities refused to comply with the “appropriate measures” the Commissionhad proposed under Article 93 (1), which called for the notification of all cases under the scheme inorder to assess their compatibility with the Community rules on state aid for firms in difficulty.

b) Sicilian Regional Act No 25/93 establishing a scheme of assistance for public contracts

On 22 January the Commission decided to initiate Article 93 (2) proceedings in respect of the extensionof an aid scheme in Sicily in the form of subsidised loans granted to certain firms for public contractsalready awarded. As the scheme constituted operating aid, it had been authorized in 1994 for a limitedperiod, no extensions or refinancing being provided for. Since it ranked as operating aid, theCommission considered that, on the basis of the information in its possession, an extension did notappear to qualify for exemption from the incompatibility of state aid with the common market.

c) Keller SpA et Keller Meccanica SpA

On 12 February the Commission decided to initiate Article 93(2) proceedings in respect of restructuringaid granted to two subsidiaries of the Keller group, which manufactures railway rolling stock. Thesewere Keller SpA, in Sicily, and Keller Meccanica SpA, in Sardinia; both were insolvent and subject tothe Italian “extraordinary administration”' system. The aid comprised loans totallingITL 40 339 million (ECU 21.1 million) and state guarantees covering half the loans. The information inthe Commission's possession did not allow it to determine whether the aid complied with theCommunity guidelines on state aid for rescuing and restructuring firms in difficulty.

d) Enirisorse

On 16 April the Commission decided to terminate the Article 93(2) proceedings it had initiatedpreviously and to authorise aid granted by the Italian Government to the Enirisorse Group with a viewto its restructuring and subsequent privatisation, in the form of a capital injection totalling ITL 1819 000 million (ECU 936.3 million). Enirisorse is a subsidiary of the public holding company ENI,and its main business is in the copper, lead and zinc industries. The Commission considered that the aid

STATE AID


complied with the limits and conditions laid down by the Community guidelines on state aid forrescuing and restructuring firms in difficulty.

e) Morteo Industrie

On 30 April the Commission decided not to object to the rescue aid granted to Morteo Industrie SpA, ametalworking company. The Commission authorised the aid, which took the form of a state guaranteecovering 67% of a six-month loan of ITL 25 000 million (ECU 13 million), on the grounds that itcomplied with the guidelines on aid for firms in difficulty.

f) Condotte and Italstrade

On 4 June the Commission decided to initiate proceedings under Article 93(2) in respect of aid grantedbetween 1995 and 1997 to the civil engineering companies Condotte SpA and Italstrade SpA. Thecompanies were subsidiaries of the Iritecna/Fintecna group, whose restructuring plan was authorised bythe Commission in 1995 subject to the condition that there would be no aid measures in addition tothose provided for in the plan. The Commission subsequently ascertained that new items of aid had infact been granted to Condotte and Italstrade in connection with their privatisation, amounting to at leastITL 65 000 million (ECU 33 million) for the former and at least ITL 85 000 million(ECU 43.6 million) for the latter. It decided to initiate proceedings after determining that the aid wasintended mainly to cover losses incurred by the companies, and did not appear to be covered by the1995 Commission decision or to satisfy the conditions laid down in the guidelines on aid forrestructuring firms in difficulty.

g) IRA Costruzioni

On 18 June the Commission decided not to raise any objections to a grant of rescue aid for IRACostruzioni SpA, a construction firm located in Catania, Sicily. The aid was in the form of a guaranteeon 43% of loans totalling ITL 35 000 million (ECU 15 million), which were necessary for thebusiness's survival pending finalisation of the restructuring plan which should make the firm viableagain. The Commission concluded that the aid complied with the conditions laid down in the guidelineson state aid for restructuring and rescuing firms in difficulty.

h) Enirisorse

On 16 December the Commission decided to initiate Article 93(2) proceedings in respect of fresh aidgiven by the Italian authorities to the Enirisorse group, a subsidiary of the public holding company ENIwhose main business was in the copper, lead and zinc industries. The aid, which was not notified to theCommission, took the form of a capital injection of ITL 133 000 million (ECU 68.67 million); this wasnot provided for in the restructuring plan which the Commission authorised in April, and did not appearto reflect the behaviour of a private investor operating under normal market conditions.



3.5. Employment and training

Germany

a) Schott

On 18 June the Commission decided not to raise any objections to training aid amounting toDEM 1.1 million (ECU 0.56 million) for retraining employees of the glass manufacturer Schott, whichhad closed down its glass blowing operation, so that they had to take up other glass-producing jobs inthe company in order to avoid dismissal. The Commission determined that although the aid was ofindirect benefit to the company, which obtained the trained employees it required, the employees alsobenefited, because they acquired a new skill which allowed them to continue with Schott but could alsobe used in a job with a new firm.

b) Amendment of Employment Promotion Act

On 18 June the Commission concluded that one part of the new German Employment Promotion Actdid not constitute state aid caught by Article 92(1). The scheme permitted the department responsiblefor employment promotion to grant aid to firms that took on long-term unemployed workers underspecial contracts. The department was to check only that the worker qualified, irrespective of therecruiting firm. This part of the scheme applied in all industries and throughout the country, and theCommission accordingly concluded that it was a general measure.

The second part of the new Act, which applied only in the new Länder and Berlin, did constitute stateaid. The subsidies provided for were to be granted in accordance with the Community rules on aid toemployment. They were intended to improve the integration of unemployed workers over a period of nomore than 12 months, during which time the workers were to receive training. The Commissionaccordingly decided to raise no objection to this part of the scheme.

Belgium

a) Reduction of social security contributions: Maribel quater

On 25 March the Commission decided not to raise any objections to the introduction in Belgium of anew scheme for reducing social security contributions, known as “Maribel quater”, which was designedto reduce the social costs relating to the employment of manual workers. The Commission noted thatthe measure applied generally and automatically to firms employing manual workers, on the basis ofobjective criteria and with no distinction between different industries, regions or types of firm. In itsview, the scheme was a general measure which did not fall within the scope of Article 92(1).

Italy

a) The Marcora Act

On 16 April the Commission decided to raise no objection to aid to be paid out of a fund known as“Foncooper” towards additional investment aimed at the development, restructuring and conversion ofcooperatives which fall within the Community definition of SMEs. the Commission found that this aid

STATE AID


complied with the rates and conditions laid down for the compatibility of aid to SMEs and for regionalaid.

The Marcora Act, which provided for aid in the form of loans for cooperatives and for measures tosafeguard employment, established two funds for the purpose, Foncooper and the Special Fund.

The Commission decided to initiate proceedings under Article 93(2) in respect of operating aid grantedby Foncooper to reduce the liabilities incurred by cooperatives as a result of earlier investments. It alsodecided to initiate proceedings against aid from the Special Fund for cooperatives formed where firmswhich were insolvent or in the process of closure were bought out by redundant workers or workerscovered by the cassa integrazione income guarantee scheme as a result of temporary unemployment.The Commission had serious doubts as to the compatibility of this aid with the common market, as itdid not appear to comply with the guidelines on aid to employment or with those on restructuring aidfor firms in difficulty.

b) Reductions in social security contributions in Venice and Chioggia

On 3 December the Commission decided to initiate proceedings under Article 93(2) in respect of an aidscheme applied in Venice and Chioggia which was aimed at reducing the social security chargesrelating to new and existing jobs (Article 27 of Act No 30/97 and Article 5bis of Decree-lawNo 96/95). The Commission had serious doubts as to the compatibility of the aid with the commonmarket, as the reductions in respect of existing jobs constituted operating aid, which was in principleprohibited outside regions qualifying for exemption under Article 92(3)(a), while the reductions for newjobs did not seem to comply with the guidelines for employment aid.

Netherlands

a) Philips Semiconductor

On 18 June the Commission decided not to raise any objections to the grant of aid for a trainingprogramme developed by Philips Semiconductor BV in order to meet its need for trained employees; theaid amounted to NLG 8.6 million (ECU 3.9 million), of which NLG 6.6 million (ECU 3 million) wasprovided by the European Social Fund. The aid covered 61% of the cost of the project, which wasintended to train 1 285 persons, of whom 685 were employees of the company and 600 wereunemployed people who required training to fill vacancies. Part of these unemployed trainees would berecruited from among certain categories of workers experiencing particular difficulties in finding a job.

Sweden

a) Amendment of employment aid scheme

On 18 June the Commission decided to terminate its examination, begun under Article 93(1), of anexisting scheme in Sweden, the regional aid scheme for employment. The Swedish authorities hadamended the scheme in order to make it compatible with the common market, in accordance with theappropriate measures proposed by the Commission.



3.6. SMEs

Germany

a) Amendment of Sächsische Aufbaubank liquidity aid scheme

On 16 September the Commission decided not to raise any objection to changes to the programme ofliquidity aid provided by the Sächsische Aufbaubank for firms in the Land of Saxony. Under theprogramme, liquidity aid in the form of loans to SMEs which were healthy, being reorganised or indifficulty could be made available up to a ceiling of DEM 5 million (ECU 2.6 million) per firm for aperiod of 8 or 10 years, depending on whether operating loans or investment loans were being granted.In the case of firms in difficulty, aid could also be granted to refinance existing operating loans (debtrescheduling). Large firms and firms in sensitive industries could also qualify, subject to theCommission's approval. The programme's duration (five years) and budget (ECU 110-125 million peryear) remained unchanged.

b) Investment aid in the coalmining areas of the Saarland and North Rhine-Westphalia

On 18 November the Commission decided not to raise any objection to an aid scheme in the coalminingareas of the Saarland and North Rhine-Westphalia involving the granting of low-interest loans to SMEsundertaking investment and training projects. The aid complied with the conditions and interest rateslaid down for the regions in question and with the rules on the combination of aid granted underdifferent schemes, while firms in difficulty were excluded. The scheme was to apply for three years,and would have a total budget of DEM 300 million (ECU 150 million).

Finland

a) Risk capital guarantee scheme

On 10 June the Commission found that there was no state aid component in the guarantee schemeestablished by Finland to make it easier for SMEs to obtain investment capital. The guarantee coveredup to 50% of the investment, and the firm had to pay a premium of between 0.5 and 5% of the value.The scheme was self-financing. The Commission concluded that the scheme did not contain any elementof state aid caught by Article 92(1).

United Kingdom

a) Business advisory scheme administered by Welsh Development Agency

On 21 October the Commission decided to raise no objection to aid for business advisory services inWales, which was to be administered by the Welsh Development Agency. The budget for the schemewas to be determined annually; for the year 1997/98 it was GBP 4.6 million (ECU 6.9 million). Thescheme was open only to SMEs as defined in the Commission Recommendation, and the rates andmechanisms complied with the guidelines on state aid for SMEs.

STATE AID



Name of document PublicationCommission Regulation (EC) No 241/97 of 10 February 1997 amendingRegulation (EEC) No 1102/89 laying down certain measures forimplementing Council Regulation (EEC) No 1101/89 on structuralimprovements of inland waterways

OJ L 40, 11.02.97

Review of production aid ceiling for shipbuilding OJ C 51, 21.02.97Council Regulation (EC) No 543/97 of 17 March 1997 amending Regulation(EEC) No 1107/70 of the granting of aids for transport by rail, road andinland waterways

OJ L 84, 26.03.97

Guidelines for the examination of state aid to fisheries and aquaculture OJ C 100, 27.03.97Council Regulation (EC) No 1013/97 of 2 June 1997 on aid to certainshipyards under restructuring

OJ L 148, 06.06.97

Community guidelines on State aid to maritime transport OJ C 205, 05.07.97Proposal for a Council Regulation on the application of Articles 92 and 93 ofthe EC Treaty to certain categories of horizontal aid

OJ C 262, 28.08.97

Commission notice on the method for setting the reference and discount rate OJ C 273, 09.09.97Community framework for State aid in the motor vehicle industry OJ C 279, 15.09.97Communication of the Commission to the Member States pursuant to Article93 (1) of the EC Treaty applying Articles 92 and 93 of the EC Treaty toshort-term export credit insurance

OJ C 281, 17.09.97

Community guidelines on State aid for rescuing and restructuring firms anddifficulty (“agricultural safeguard aid”)

OJ C 283, 19.09.97

Council Regulation (EC) No 2600/97 of 19.12.1997 amending Regulation3094/95 on aid to shipbuilding

OJ L 351, 23.12.97

Commission communication amending the Community framework for Stateaid for research and development

OJ C 48, 13.02.98

Guidelines on national regional aid OJ C 74, 10.03.98Commission communication concerning extension of the guidelines on Stateaid for rescuing and restructuring firms in difficulty

OJ C 74, 10.03.98

Communication from the Commission to the Member States on the linksbetween regional and competition policy

OJ C 90, 26.03.98

Multisectoral framework on regional aid for large investment projects OJ C 107, 07.04.98



C - List of state aid cases in sectors other than agriculture, fisheries,transport and the coal industry

1. Measures which the Commission considered compatible with the common market withoutopening an investigation under Article 93(2) of the EC Treaty

Germany

N 840/96 08.01.97 ERP budgetary law 1997 OJ C 058, 25.02.97N 809/96 09.01.97 Guideline on the granting of aid for the promotion

of technology and innovation as part of theregional development programme in Mecklenburg-Western Pomerania

OJ C 189, 20.06.97

N 780/96 21.01.97 Technology promotion programme in the transportsector (Bavaria)

OJ C 110, 09.04.97

N 390/96 21.01.97 Programme to safeguard jobs (North Rhine-Westphalia)

OJ C 058, 25.02.97

N 802/95IP/97/39

22.01.97 Aid to shipbuilding: restructuring aid for PeeneWerft - final tranche of closure aid

OJ C 197, 27.06.97

NN 108/96 22.01.97 Rational energy utilisation and renewable energysources (Mecklenburg-Western Pomerania)

OJ C 051, 21.02.97

N 851/96 29.01.97 Modification of the consolidation fund of the Landof Berlin for enterprises in east Berlin

N 891/96 03.02.97 Aid scheme of the Land of Saxony-Anhalt toassist SMEs in connection with the UrbanCommunity initiative

OJ C 189, 20.06.97

N 938/96 03.02.97 Budget increase for the scheme covering projectsfor producing gas from waste purification

OJ C 189, 20.06.97

N 681/96 05.02.97 Investment aid in favour of Movimento GmbH(Berlin)

OJ C 302, 03.10.97

NN 134/96IP/97/87

05.02.97 Programme/modification of the SächsischeAufbaubank in favour of small businesses(Saxony)

NN 138/96 05.02.97 Extension and amendment of the guidelineconcerning Bavarian regional programmes in theindustrial sector

N 685/95 21.02.97 Future energy and ecology programme (Saarland) OJ C 110, 09.04.97N 889/96 21.02.97 Promotion of renewable energies OJ C 110, 09.04.97N 894/96 21.02.97 Programme for energy research and energy

technologiesOJ C 110, 09.04.97

NN 45/96IP/97/156

26.02.97 Contract management measures of BvS/BMGB infavour of SMEs

OJ C 201, 01.07.97

N 40/97 05.03.97 Promotion of environmental stations (Bavaria) OJ C 172, 06.06.97N 339/96 12.03.97 Restructuring aid in favour of KLH-Technik

GmbH (Mecklenburg-Western Pomerania)OJ C 302, 03.10.97

N 39/97 19.03.97 Modification of the programme of the Land of OJ C 189, 20.06.97

STATE AID


Thuringia for the promotion of innovativeinformation and communication technologies

N 85/97 25.03.97 Prolongation of aid schemes applicable toshipbuilding 1996/97

OJ C 051, 18.02.98

N 680/96 02.04.97 Aid for Abgaszentrum der Automobilindustrie OJ C 311, 11.10.97NN 141/96 02.04.97 Aid in favour of Konitz Porzellan GmbH

(Thuringia)OJ C 201, 01.07.97

N 84/97 04.04.97 Regional promotion programme (Rheinland-Pfalz) OJ C 172, 06.06.97N 926/96 04.04.97 Polar research programme (Rheinland-Pfalz) OJ C 172, 06.06.97N 875/96 08.04.97 Modification of the aid programme for

collaborative research by introducing a specific“Fuego” component

N 880/96 08.04.97 Extension and amendment of the aid scheme of theLand of Berlin (west) for environmental protectionprojects receiving Community assistance inrespect of Objective 2 (1997-99)

OJ C 197, 27.06.97

N 122/97 08.04.97 Amendment to the guidelines of the Bavarianprogramme to promote tourism

OJ C 197, 27.06.97

N 128/97 08.04.97 Programme for renewable energy OJ C 197, 27.06.97N 881/96 11.04.97 R&D aid: development and demonstration project

(Lower Saxony)OJ C 172, 06.06.97

N 629/96 16.04.97 Guideline on the granting of rescue andrestructuring aid to SMEs in the free state ofSaxony

OJ C 197, 27.06.97

N 853/96 16.04.97 Measures in favour of WerkzeugmaschinenfabrikVogtland GmbH

OJ C 302, 03.10.97

N 874/96NN 139/96IP/97/311

16.04.97 Aid for Union Werkzeugmachinen GmbH(Saxony)

OJ C 172, 06.06.97

N 734/96 30.04.97 Extension and amendment of the RWP regionalprogramme of the Land of North Rhine-Westphalia

OJ C 231, 30.07.97

N 839/96NN 44/97IP/97/383

30.04.97 Privatisation of Mansfeld Maschinen- undAnlagenbau GmbH

OJ C 207, 08.07.97

N 892/96IP/97/383

30.04.97 Restructuring of Foron Haus- und KuchentechnickGmbH (Saxony)

OJ C 208, 09.07.97

NN 142/96IP/97/383

30.04.97 Privatisation of Spezialchemie Leuna GmbH(Saxony-Anhalt)

OJ C 189, 20.06.97

N 34/97 30.04.97 Guidelines on economy and environment (LowerSaxony)

N 42/97NN 42/97IP/97/383

30.04.97 Measures in favour of Aweba Werzeugbau GmbH(Saxony)

OJ C 197, 27.06.97

N 92/97 30.04.97 Development aid to Vietnam under Art. 4(7) of the7th Directive on aid to shipbuilding

OJ C 302, 03.10.97

N 113/97 30.04.97 Aid for Lloyd Werft Bremerhaven GmbH OJ C 051, 18.02.98



N 134/97 30.04.97 Prolongation and modification of aid scheme forenvironmental protection in favour of SMEs inwest Berlin

OJ C 231, 30.07.97

N 155/97 30.04.97 Changes to aid schemes for SMEs; application ofthe new Community definition (Land of Berlin)

OJ C 242, 08.08.97

N 220/97 30.04.97 Guidelines of the Land of Thuringia onimplementing the Community Retex initiative

NN 14/97 21.05.97 Aid in favour of Growa Stahlbau Berlin GmbH(Berlin)

OJ C 239, 06.08.97some of themeasures do notconstitute aid withinthe meaning ofArticle 92(1) of theEC Treaty

N 215/97 21.05.97 Aid in favour of Apparate- undIndustrieanlagenbau Grüssing GmbH & Co. KG(Thuringia)

OJ C 207, 08.07.97followed by acorrigendum on10.06.97

NN 47/97 21.05.97 Aid in favour of BAS Broerius AbfallwirtschaftSaxony GmbH (Saxony)


N 913/96 21.05.97 Measures in favour of AddconProduktiongesellschaft GmbH (Saxony-Anhalt)

OJ C 208, 09.07.97

N 869/96 21.05.97 Measures in favour of microelectronics OJ C 245, 12.08.97N 74/97 21.05.97 Investment aid in favour of Art Performance

Musik Produktions GmbH (west Berlin)OJ C 302, 03.10.97

N 855/96NN 48/97

21.05.97 Privatisation of Aromatics Wolfen GmbH(Saxony-Anhalt)

OJ C 218, 18.07.97

N 417/96 21.05.97 Aid in synthetic fibres sector in favour of ErnstMichalke GmbH & Co. (Brandenburg)

OJ C 218, 18.07.97

NN 56/97N 101/97

21.05.97 Privatisation of Inducal Göllingen GmbH(Thuringia)

OJ C 218, 18.07.97

N 223/97 22.05.97 Measures to promote the sale of east Germanproducts abroad (new Länder)

OJ C 242, 08.08.97

N 225/97NN 70/97

04.06.97 Aid for Addinol Mineralölwerke GmbH (Saxony-Anhalt)

OJ C 239, 06.08.97

N 901/96IP/97/487

04.06.97 Liquidity fund of the Land of Berlin to assist firmsin difficulty

OJ C 291, 25.09.97

N 138/97NN 33/97

04.06.97 Aid for Industriearmaturen Polte GmbH (MAW)(Saxony-Anhalt)

OJ C 207, 08.07.97

N 67/97 12.06.97 Promotion of renewable energies (Lower Saxony) OJ C 346, 15.11.97NN 61/97 18.06.97 Aid for Bell Flavors & Fragrances Duft und

Aroma GmbH (Saxony)OJ C 245, 12.08.97

N 859/96NN 50/97

18.06.97 Privatisation of Walzengiesserei Coswig GmbH(Saxony)

NN 67/96 18.06.97 Measures in favour of Altenburger bau GmbH(Altenburg, Thuringia)

OJ C 245, 12.08.97

STATE AID


N 330/97 18.06.97 Privatisation of Funkwerk Dabendorf GmbH(Brandenburg)

OJ C 245, 12.08.97

N 37/97 18.06.97 Subsidy to a professional qualification measure(Bavaria)

OJ C 025, 24.01.98

NN 69/97 18.06.97 Measures in favour of Rackwitz AluminiumGmbH I. GV

OJ C 245, 12.08.97

N 872/96NN 32/97

18.06.97 Privatisation of Schmiedeberger Giesserei GmbH(Saxony)

OJ C 245, 12.08.97

N 179/97NN 43/97

02.07.97 Aid for Lausitzer Stahlbau Ruhland GmbH(Brandenburg)


N 329/97NN 79/97

02.07.97 Aid for Magdeburger Stahlbau GmbH (Saxony-Anhalt)

OJ C 288, 23.09.97

N 670/96 07.07.97 Promotion of projects for the use of biomass(Bavaria)

OJ C 346, 15.11.97

N 137/97 15.07.97 Privatisation of FEW Forschungs- undEntwicklungsgesellschaft Wolfen mbH

OJ C 288, 23.09.97

N 185/97 15.07.97 Aid for Weimar-Werk Baumaschinen GmbH(Thuringia)

OJ C 288, 23.09.97

N 221/97 15.07.97 Measures in favour of Ford-ForschungszentrumAachen (North Rhine-Westphalia)

N 341/97 15.07.97 Privatisation of Belzig GmbH (Brandenburg) OJ C 288, 23.09.97NN 110/96 15.07.97 Aid for Möbelwerke Themar GmbH (Thuringia) OJ C 288, 23.09.97N 867/96 17.07.97 Consultancy services for SMEs in technology

transfer through consultancy institutions(Saarland)

OJ C 346, 15.11.97

N 407/97 24.07.97 Continued promotion of measures to assist SMEsin the waste recovery and processing sector inSaxony

OJ C 291, 25.09.97

N 927/96 28.07.97 Programme stimulating SMEs in trade andindustry (Rheinland-Pfalz)

OJ C 033, 31.01.98

N 337/96 30.07.97 Modification of the guideline on the promotion ofconsolidation participations for SMEs in the Landof Saxony-Anhalt

OJ C 291, 25.09.97

N 31/97 30.07.97 Shipbuilding: first tranche of aid for therestructuring of MTW Schiffswerft GmbH

OJ C 344, 14.11.97

N 114/97 30.07.97 Shipbuilding: first tranche of aid for therestructuring of Volkswerft GmbH Stralsund

OJ C 344, 14.11.97

N 197/97NN 119/97

30.07.97 Measures in favour of Maco, Oddesse, ZM OJ C 288, 23.09.97

N 356/97NN 103/97

30.07.97 Restructuring of Dresdner Kühlanlagenbau GmbH OJ C 323, 24.10.97

N 415/97 30.07.97 Aid to shipbuilding: contract-related aid for theconversion of the MV “Windward” in the LloydWerft Bermerhaven yard

OJ C 051, 18.02.98

N 311/97 04.08.97 Amendments to the Saxony-Anhalt aid scheme for OJ C 291, 25.09.97



providing practical and technical equipment foradditional traineeships

N 773/96 19.08.97 R&D aid for Fost EV (Saxony-Anhalt) OJ C 288, 23.09.97N 121/97 19.08.97 Programme of the Land of Saxony for support of

SMEs in the framework of the Urban jointinitiative (Chemnitz, Brühl-Nordviertel)

OJ C 050, 17.02.98

N 135/97 19.08.97 Extension and modification of the aid scheme ofthe Land of Berlin (west) for initiatives inecological management

OJ C 065, 28.02.98

N 364/97 19.08.97 Changes to aid schemes for SMEs: introduction ofthe new Community definition

N 399/97 19.08.97 Aid measures of the Land of Saxony-Anhalt topromote wind-power installations

OJ C 050, 17.02.98

N 435/97 22.08.97 Aid programme of the Land of Saxony-Anhalt topromote apprenticeships

OJ C 050, 17.02.98

N 514/97 22.08.97 Temporary measures for flood damage, KFW(Frankfurt/Oder, flood regions at Oderbruch andNeisse)

OJ C 329, 31.10.97

N 53/97 28.08.97 Guidelines on new environmental technologies(Lower Saxony)

OJ C 363, 29.11.97

N 459/97 03.09.97 Changes to aid schemes for SMEs: introduction ofthe new Community definition (Hamburg)

N 437/97 09.09.97 Directive for implementing the Bavarian regionalaid programmes for industry: amendment of anexisting scheme

OJ C 050, 17.02.98

N 599/96IP/97/794

16.09.97 Amendment of the liquidity aid programme ofSächsische Aufbaubank

NN 31/97 16.09.97 Aid for Dr. Ing. Militzer Maschinenbau GmbH &Co KG (Eisenach, Thuringia)

OJ C 342, 12.11.97

N 495/97 19.09.97 Changes to aid schemes for SMEs: introduction ofthe new Community definition (Hessen)

N 320a/97 24.09.97 Investment loan scheme in favour of coal miningareas by Kreditanstalt für Wiederaufbau

OJ C 050, 17.02.98

N 480/97 24.09.97 Amendment and extension of the R&D aid schemefor SMEs in Berlin

OJ C 050, 17.02.98

NN 131/96 01.10.97 Privatisation of GMB Magnete Bitterfeld GmbH(Saxony-Anhalt)

OJ C 050, 17.02.98

N 289/97NN 74/97

01.10.97 Privatisation of businesses belonging to Schröder& Partner

OJ C 342, 12.11.97

N 210/97 13.10.97 Building R&D and technnology programme OJ C 363, 29.11.97N 552/97 13.10.97 Bavarian loan programme for SMEs OJ C 395, 31.12.97N 522/97 21.10.97 Privatisation of Leinefelder Textilwerke GmbH

(Thuringia)OJ C 395, 31.12.97

N 654/97 21.10.97 Rescue aid to Niemeyer & Söhne GmbH & CoKG

OJ C 395, 31.12.97

N 378/97NN 88/97

21.10.97 Privatisation and restructuring of Stahlbau CalbeGmbH

OJ C 395, 31.12.97

N 541/97 21.10.97 Aid for Batropa GmbH OJ C 377, 12.12.97

STATE AID


N 377/97 21.10.97 Privatisation and restructuration of MitteldeutscheStahlbau GmbH

OJ C 377, 12.12.97

N 181/97 22.10.97 Modification and integration of two aid schemesof the Land of Saxony: consolidation fund and theprogramme for restructuring SMEs

OJ C 065, 28.02.98

N 207/97 28.10.97 Aid to encourage the development of tourism inrural areas (Rheinland-Pfalz)

OJ C 395, 31.12.97

N 632/97 29.10.97 Programme of the Land of Brandenburg topromote the efficient use of energy and theutilisation of renewable forms of energy

OJ C 065, 28.02.98

N 428/97 05.11.97 Aid for the restructuring of Sprela SchichtstoffGmbH

OJ C 395, 31.12.97

N 547/97 05.11.97 Development aid to China under Art. 4(7) of the7th Directive on aid to shipbuilding

OJ C 003, 07.01.98

NN 62/97IP/97/950

05.11.97 Privatisation of Leuna Polymer GmbH (Saxony-Anhalt)

OJ C 395, 31.12.97

N 368/97 07.11.97 Grant scheme for renewable energy from woodchippings “Holzenergie 2000”

OJ C 025, 24.01.98

N 452/97 07.11.97 Programme for consolidation loans to enterprisesin the Land of Saxony-Anhalt

OJ C 065, 28.02.98

N 456/97 07.11.97 Aid in the car components sector for Ford-WerkeAG (west Berlin)

N 582/97 13.11.97 Participation capital for SME R&D OJ C 384, 18.12.97NN 91/97 18.11.97 Restructuring of Hochbau Luckenwalde GmbH

(Brandenburg)OJ C 003, 07.01.98

N 319/97 18.11.97 Aid scheme of the German Equalisation Bank forinvestment and skill-training projects in thecoalmining areas of Saarland and North Rhine-Westphalia: subsidised loans)

OJ C 065, 28.02.98

N 199/97IP/97/1007

18.11.97 Measures in favour of Volkswagen AG,Kassel/Baunatal plant (Hessen)

N 357/97 19.11.97 Biotechnology programme OJ C 025, 24.01.98N 517/97 03.12.97 Aid for restructuring Stamag Stahl- und

Maschinenbau AGOJ C 058, 24.02.98

N 565/97 04.12.97 European Centre for Extremophile Biotechnology(Hamburg)

N 125/97 15.12.97 Ecological water engineering initiative of the Landof North Rhine-Westphalia

OJ C 033, 31.01.98

N 728/96NN 6/97

16.12.97 Privatisation of Verwertungszentrum Zeitz GmbH,now Zeitzer Standort Gesellschaft GmbH

OJ C 058, 24.02.98

N 919/96 16.12.97 Restructuring of Chemie GmbH Bitterfeld-Wolfen(dimethylsulphate plant)

OJ C 051, 18.02.98

NN 114/96 16.12.97 Aid for Thuro Back Südthüringer BäckereienN 157/97N 170/97

16.12.97 R&D aid: crystal growth and treatment of 300 mmsilicon wafers (processes and equipment for 300mm wafers)

N 198/97 16.12.97 Financial assistance from the BvS for Chemische OJ C 051, 18.02.98



NN 81/97 Werke PisteritzN 201/97 16.12.97 Aid to promote civil aeronautics research and

technologyOJ C 033, 31.01.98

N 269/97 16.12.97 Fourth programme in favour of research andtechnology in the energy sector

N 499/97 16.12.97 Privatisation of Verpackungszentrum BitterfeldGmbH, Bitterfeld-Wolfen

OJ C 065, 28.02.98

N 600/97 16.12.97 Guarantee scheme of the Land of Saxony-Anhaltfor the acquisition of shareholdings abroad

OJ C 065, 28.02.98

N 570/97NN 134/97

16.12.97 Aid for Schmiedewerke Rosswein GmbH i.G. andPSW Press- und Schmiedewerk GmbH, BrandErbisdorf

OJ C 051, 18.02.98

NN 107/97IP/97/1147/

16.12.97 Recruitment grants for firms in the new Länder;employment promotion Act and social Act

NN 130/97 16.12.97 Aid for ICS Industriechemikalien SchwefelnatriumGmbH

OJ C 051, 18.02.98

NN 173/97 16.12.97 Aid for Stahl- und Maschinenbau GmbH OJ C 051, 18.02.98NN 174/97 16.12.97 Investment programme for the reduction of

environmental pollutionOJ C 047, 12.02.98

Austria

N 784/96 21.01.97 Guidelines on measures to repair past damageto the environment

OJ C 051, 21.02.97

N 833/96 21.01.97 Location of enterprises impulse programme(Upper Austria)

OJ C 058, 25.02.97

N 808/96 03.02.97 Graz innovation programme (City of Graz) OJ C 071, 07.03.97N 920/96IP/97/90

05.02.97 Aid in favour of Actual Maschinen AG(Upper Austria)

OJ C 302, 03.10.97

N 756c/96 21.02.97 Extension until 30 June 1997 and amendmentof the aid programme of the Land of Styria infavour of the setting-up and expansion ofbusinesses

OJ C 189, 20.06.97

N 902/96 21.02.97 ERP Programme: generation of district heatingfrom biomass

OJ C 110, 09.04.97

N 914/96 21.02.97 Seed financing programme OJ C 110, 09.04.97N 730/96 26.02.97 Investment aid in favour of Mölltaler

Gletscherbahnen GmbH (Carinthia)OJ C 302, 03.10.97

N 756e/96 05.03.97 Aid programme of the Styrian economicpromotion agency (Styria)

N 652/96 02.04.97 Programme of the Land of Styria for renewingstructures in the finished products and rawmaterials sectors

OJ C 197, 27.06.97

N 60/97 02.04.97 Guidelines for the promotion of the Styrianeconomy (Styria)

OJ C 201, 01.07.97

N 506/96 21.05.97 Aid in the health tourism sector in favour of OJ C 302, 03.10.97

STATE AID


Thermenzentrum Geinberg Errichtungs-GmbH(Upper Austria)

N 475/96IP/97/535

18.06.97 Aid in the motor vehicle sector in favour ofBMW Motoren AG Steyr (Upper Austria)

OJ C 012, 16.01.98

N 302/97 30.07.97 Amendment and extension of the ERP regionalprogramme

OJ C 288, 23.09.97

N 303/97 19.08.97 ERP/SME programme in the technologysector

OJ C 025, 24.01.98

N 464/97 19.08.97 ERP programme in the tourism sector OJ C 363, 29.11.97N 287/97 18.09.97 ERP technology programmeN 38/97 24.09.97 Guidelines on loan guarantees for the

promotion of tourism (Carinthia)OJ C 377, 12.12.97

N 335/97 13.10.97 ERP special programme for growth andtechnology: section SME technology growthprogramme

OJ C 395, 31.12.97

NN 68/97 21.10.97 Aid in favour of Therme BlimauAufschliessungs GmbH & Co KG

OJ C 395, 31.12.97

N 336/97 07.11.97 ERP special programme for growth andtechnology: section R&D growth programmeand R&D collaboration projects

OJ C 395, 31.12.97

N 508/97 19.11.97 Initiative to improve economic structures OJ C 025, 24.01.98N 521/97 27.11.97 Participation model - guidelines (Lower

Austria)OJ C 033, 31.1.98

N 507/97 01.12.97 Participation model in tourism industry(Lower Austria)

OJ C 033, 31.1.98

N 54/97 16.12.97 Guideline on guarantees for “defensivemeasures”

N 612/97 16.12.97 Tourism promotion programme for 1997-99 OJ C 051, 18.02.98NN 181/97 16.12.97 Rescue aid in favour of Ergee Textilwerk

GmbHOJ C 070, 06.03.98

Belgium

N 876/96 29.01.97 Additional budgetary contribution from theWalloon Region to the AIDE scheme (businessextensions and business start-ups)

OJ C 189, 20.06.97

N 78/97 11.04.97 Aid scheme under the Community framework forthe protection of the environment and regionaldevelopment (ERDF)

OJ C 197, 27.06.97

N 139/97 23.04.97 Amendment to the additional budgetarycontribution from the Walloon Region to the AIDEscheme (business extensions and business start-ups)

OJ C 239, 06.08.97

N 905/96 16.09.97 Investment aid scheme for firms in the cooperative,mutual and non-profit market sector

OJ C 395, 31.12.97

N 334/97 16.09.97 Investment aid scheme for firms in the Ittre-Tubizearea

OJ C 395, 31.12.97



N 444/97IP/97/905

29.10.97 Environmental aid in favour of Indaver BNV OJ C 395, 31.12.97

N 539/97 18.11.97 Innovative training schemeN 453/97IP/97/1009

18.11.97 Flanders-Asia Fund OJ C 051, 18.02.98

NN 76/95 16.12.97 Aid to promote external trade (Flemish Region)

Denmark

N 786/96IP/97/37

22.01.97 New assisted areas map for 1997-99 OJ C 189, 20.06.97

N 759/96 05.02.97 Application of the “new energy package” underthe ECSC Treaty

OJ C 197, 27.06.97

N 815/96 04.04.97 Electricity saving funds OJ C 172, 06.06.97N 214/97 22.05.97 Aid to energy efficiency measures OJ C 208, 09.07.97N 275/97 29.05.97 Guarantee scheme for venture capital

companiesOJ C 208, 09.07.97

N 917/96 02.07.97 Measures in the cultural sectorN 263/97 07.07.97 Industry and trade promotion measures OJ C 346, 15.11.97N 379/97 19.08.97 Amendment to the schemes of aid to SMEs:

application of the new Community definitionN 272/97 28.08.97 Modification of the new energy package OJ C 377, 12.12.97N 11/97 16.09.97 Modifications to Danish CO2 tax scheme OJ C 047, 12.02.98N 516/97 02.10.97 Social measures in the labour sector OJ C 342, 12.11.97N 305/96IP/97/1074

03.12.97 Measures in favour of centralised electricitygenerating plants

OJ C 058, 24.02.98

N 537/97 11.12.97 Modifications to the new energy package OJ C 25, 24.01.98

Spain

N 247/96 08.01.97 Aid schemes to promote the employment ofwomen (Andalusia)

OJ C 189, 20.06.97

N 248/96 08.01.97 Aid scheme to promote employment (Andalusia) OJ C 189, 20.06.97N 95/96 10.01.97 Amendment to aid scheme N 552/95 in favour of

R&D (Valencia)N 703/96 28.01.97 Aid scheme for SMEs (Extremadura) OJ C 189, 20.06.97N 537/95 21.02.97 Measures to boost employment (Andalusia) OJ C 110, 09.04.97N 873/96 21.02.97 Aid to support environmental protection activities

carried on by companies established in CataloniaOJ C 110, 09.04.97

N 929/96 17.03.97 Aid to research and to industrial safety andquality activities

OJ C 218, 18.07.97

N 3/97 19.03.97 Regional aid scheme for promoting investment bySMEs (AFI-97) (Basque Country)

OJ C 189, 20.06.97

N 375/96 08.04.97 Aid scheme for SMEs in the distributive sector(Extremadura)

OJ C 197, 27.06.97

N 102/97 08.04.97 Investment aid scheme for conversion ofdeclining industrial areas in certain assisted

OJ C 197, 27.06.97

STATE AID


regions (Andalusia, Asturias, Cantabria, Castile-Leon, Extremadura, Galicia, Murcia and BasqueCountry)

N 131/97IP/97/312

16.04.97 State funding and privatisation of Almegrera SA OJ C 245, 12.08.97followed by acorrigendum on30.04.97

N 163/97 16.04.97 Aid scheme to shipbuilding in 1997N 55/97 23.04.97 Plan to conduct innovation and employment

(PDIE) (Madrid)OJ C 201, 01.07.97

N 150/97 23.04.97 Extension of the regional aid scheme to fosterinvestment in gas infrastructures (Andalusia)

OJ C 231, 30.07.97

N 409/96 30.04.97 Aid scheme for SMEs (Cantabria) OJ C 231, 30.07.97NN 97/96 30.04.97 Environmental protection aid scheme (Galicia) OJ C 250, 15.08.97N 62/97 30.04.97 Measures to reduce pollution (Rioja) OJ C 189, 20.06.97N 151/97 30.04.97 Regional aid scheme for rural electrification, the

development of renewable energy sources andenergy conservation (Andalusia)

OJ C 231, 30.07.97

N 719/96 07.05.97 Aid for projects for environmental control ofindustrial activities (Navarra)

OJ C 218, 18.07.97

N 669/96 21.05.97 Aid in the motor vehicle sector for Opel España(Zaragoza, Aragon)

OJ C 245, 12.08.97

N 152/97 28.05.97 Regional aid scheme to promote investment bySMEs in tourism (Basque Country)

OJ C 239, 06.08.97

N 254/97 04.06.97 Amendment to the 1997 aid scheme toshipbuilding

N 268/97 12.06.97 Aid programme for investment projects in ERDFareas (Madrid)

OJ C 346, 15.11.97

N 16/97 01.07.97 Modification of investment aid scheme for SMEsin economic priority areas (Valencia)

OJ C 291, 25.09.97

N 141/97 07.07.97 Aid scheme to promote recruitment (BasqueCountry)

OJ C 291, 25.09.97

N 142/97 07.07.97 Aid scheme to promote recruitment of joblessyoung people (Basque Country)

OJ C 291, 25.09.97

N 308/97 07.07.97 Aid for commercial and industrial sectors andservices (Balearic Islands)

OJ C 346, 15.11.97

N 105/97 15.07.97 Adaptation to international competition anddiversification of regions with a strong textileindustry

OJ C 291, 25.09.97

N 230/97 30.07.97 Regional aid scheme to promote R&D (BasqueCountry)

OJ C 291, 25.09.97

N 448/97 30.07.97 Development aid to Tunisia under Art. 4(7) ofthe 7th Directive on aid to shipbuilding

OJ C 003, 07.01.98

N 481/97 16.09.97 Development aid to Morocco under Art. 4(7) ofthe 7th Directive on aid to shipbuilding

OJ C 003, 07.01.98

N 425/97 24.09.97 Measures to promote investment and employmentin SMEs (Navarra)



N 904/96 07.10.97 Aid scheme to foster business promotion andaccess to new markets for SMEs (Extremadura)

OJ C 025, 24.01.98

N 205/97 13.10.97 Resolution on fostering social economy(Catalonia)

OJ C 377, 12.12.97

N 45/97 05.11.97 Regional aid scheme for continuing training(Extremadura)

OJ C 025, 24.01.98

N 396/97 18.11.97 Aid for continuing trainingN 685/97 01.12.97 Extension in duration of, and increased budget

for, the infrastructure aid scheme N 97/96(Valencia)

OJ C 058, 24.02.98

N 391/97 11.12.97 Extension of an aid scheme to promotediversification of SMEs under the Retex initiative

OJ C 025, 24.01.98

N 144a/96IP/97/1141

16.12.97 Regional investment and operating aid scheme:changes to the economic and tax arrangementsfor the Canary Islands

OJ C 065, 28.02.98

Finland

N 810/96IP/97/88

05.02.97 Aid to shipbuilding for the prolongation of twoschemes for 1996-97: contract-related productionaid and tax concession for icebreakers

OJ C 302, 03.10.97

N 124/97 10.06.97 Venture capital guarantee scheme OJ C 250, 15.08.97N 884/96 18.06.97 Aid to small power plants OJ C 288, 23.09.97N 174/97IP/97/645

15.07.97 Aid to Valmet Automotive in support of itsinvestment in Uusikaupunki (Vakka-Suomi)

OJ C 058, 24.02.98

N 375/97 09.09.97 Amendment to SME aid schemes: application ofthe new Community definition of SME

N 304/97 03.12.97 Aid for processing waste oilN 343/97 05.12.97 Grants and loans for technological research and

developmentN 496/97 16.12.97 New regional aid map

France

N 848/96 21.01.97 SME-SMI development fund OJ C 058, 25.02.97N 882/96 04.03.97 State aid scheme for tourism OJ C 110, 09.04.97N 849/96 12.03.97 Aid for shipbuilding OJ C 197, 27.06.97N 10/97 04.04.97 R&D aid: new production technologies (ATOUT-

DROP)OJ C 172, 06.06.97

N 941/96IP/97/285

09.04.97 Tax exemption for biofuels OJ C 255, 20.08.97

N 202/97 16.04.97 Parafiscal charges on foundry and mechanicalengineering products

OJ C 197, 27.06.97

N 175/97 30.04.97 Amendment to the Defence MinistryRestructuring Fund

OJ C 239, 06.08.97

N 203/97 21.05.97 Quasi-fiscal levies in favour of the BureauNational Interprofessionnel du Cognac

N 847/96 21.05.97 Establishment of “most remote priority areas” OJ C 245, 12.08.97

STATE AID


and economic development measures in theoverseas departments

N 222/97 28.05.97 Extension of a motor vehicle components plant -Ford France SA (Charleville-Mézières)

OJ C 291, 25.09.97

N 294/97 18.06.97 Provision of additional resources for the ComitéProfessionnel de la Distribution de Carburants

OJ C 395, 31.12.97

N 233/97IP/97/727

30.07.97 Eurocopter: R&D aid for a new-generationhelicopter

OJ C 395, 31.12.97

N 257/97 30.07.97 Medea programme: Eureka 1535 OJ C 025, 24.01.98N 295/97 16.09.97 Investment aid for Delipapier: plant in Frouard

(Meurthe et Moselle)OJ C 333, 04.11.97

N 369/97 08.10.97 Measures in support of industrial real estate OJ C 346, 15.11.97N 617/97 21.10.97 Renewal of the parafiscal charge on foundry

productsOJ C 047, 12.02.98

N 606/97 28.10.97 Amendment to the scheme of parafiscal chargeson foundry and mechanical engineering products

N 679/97 10.11.97 Modification of an aid scheme in favour of localradio stations

N 281/97IP/97/1077

03.12.97 Shipbuilding aid: restructuring of Ateliers etchantiers du Havre

OJ C 050, 17.02.98

N 584/97IP/97/1079

03.12.97 Aid for Sextant Avionique for the development ofa new flight-management system for Airbusaircraft

OJ C 050, 17.02.98

N 683/97IP/97/1078

03.12.97 Regional aid for SOVAB (Société des véhiculesautomobiles de Batilly)

N 684/97IP/97/1078

03.12.97 Regional aid for MCA (Maubeuge ConstructionAutomobile)

OJ C 047, 12.02.98

N 622/97 12.12.97 Extension of an aid scheme in favour of localradio stations

Greece

N 69/97IP/97/158

26.02.97 Amendment and prolongation of shipbuilding aidlegislation until 31 December 1997

OJ C 197, 27.06.97

N 401/97IP/97/648

15.07.97 Investment aid under Art. 6(4) of the 7thDirective on aid to shipbuilding in favour ofHellenic Shipyards

OJ C 047, 12.02.98

N 154/97 16.09.97 Measures in favour of Halyvourgia ThessaliasSA

Ireland

N 32/97IP/97/537

18.06.97 Film board production loans scheme fundedunder the operational programme for industrialdevelopment

NN 121/97IP/97/1148

16.12.97 Aid to creation of enterprise zones: Finance Acts1995 and 1997



Italy

N 732/96 29.01.97 Konver Community programmeNN 109a/96 12.02.97 Measures in favour of cooperatives (Regional Law

No 6/95) (Molise)N 201/96 21.02.97 Aid scheme under the POP 94/99 (Campania)N 400/96 21.02.97 Measures to promote employment and SMEs

(Lazio)OJ C 189, 20.06.97

N 71/97 12.03.97 Extension of rescue aid to Fochi GruppoN 729a/95 17.03.97 Law No 85/95: Measures to promote integration

into the labour market in sectors other thanagriculture (Sicily)

N 381/96,NN 13/93

25.03.97 Measures to promote employment: LawNo 236/93 (Art.1, 1a, 1b and 4.3)

OJ C 207, 08.07.97

N 119/97 02.04.97 Aid for R&D under Article 2 of the Steel AidCode in favour of Acciaieria ISP Cremona

N 401/96 04.04.97 Decision by the CIPE of 13.03.96 to adjust thestructural index of the Debt Consolidation Fundfor SMEs in Objective 1 regions

OJ C 197, 27.06.97

N 924/96 11.04.97 Measures under the programming document1997-99 (Emilia-Romagna)

OJ C 197, 27.06.97

NN 35e/97 16.04.97 Application of the Tremonti Law to sectors notcovered by specific rules

OJ C 231, 30.07.97

N 86/97 30.04.97 Rescue aid for Morteo Industrie SpA OJ C 207, 08.07.97N 27a/97 21.05.97 Map of areas eligible for regional aid (92(3)(c)

areas)OJ C 242, 08.08.97

N 410/96 22.05.97 Measures in support of tourism (Sicily) OJ C 208, 09.07.97N 811/96 28.05.97 Amendment of Law No 26/95 on measures in

favour of industrial investment (Friuli-VeneziaGiulia)

OJ C 242, 08.08.97

N 649/96 28.05.97 Measures under the programming document1997-99 (Tuscany)

OJ C 231, 30.07.97

N 225a/96 03.06.97 PIC-SME measures 1994-99 OJ C 242, 08.08.97N 108/97 04.06.97 Shipbuilding aid OJ C 050, 17.02.98N 51/97 10.06.97 Measures under the programming document

1997-99 (Umbria)OJ C 231, 30.07.97

N 925/96 10.06.97 Measures under the programming document1997-99 (Tuscany)

OJ C 239, 06.08.97

N 82/97 10.06.97 Aid to promote R&D and quality improvements inindustry (Valle d’Aosta)

OJ C 346, 15.11.97

N 206/97 18.06.97 Rescue aid for IRA Costruzioni SpA (Sicily) OJ C 329, 31.10.97N 779/96 18.06.97 Regional law No 13 of 16.03.96 on measures to

assist SMEsOJ C 288, 23.09.97

N 225b/96 18.06.97 Measures under CIP-Resider 1994-99 OJ C 242, 08.08.97N 778/96 26.06.97 Measures under the programming document

1997-99 (Marche)OJ C 291, 25.09.97

N 556/96 07.07.97 Regional aid to Fiat Auto SpA in support of an OJ C 302, 03.10.97

STATE AID


investment project for the manufacture of carcomponents in Termoli

N 571/96 07.07.97 Aid for craft firms (Campania) OJ C 291, 25.09.97N 650a/96 07.07.97 Measures under the programming document

1997-99 (Veneto)OJ C 239, 06.08.97

N 737/96 17.07.97 Refinancing for 1996 of measures to createreplacement activities in mining

OJ C 291, 25.09.97

N 821/96 28.07.97 Measures under the programming document1997-99 (Piedmont)

OJ C 291, 25.09.97

N 161/97 28.07.97 Measures under the programming document1997-99 (Liguria)

OJ C 291, 25.09.97

N 408a/96 19.08.97 Regional laws Nos 81/95 and 18/96: amendmentof schemes

OJ C 288, 23.09.97

N 249a/97 22.08.97 Amendment of the guarantee fund forconsolidating the debts of SMEs in Objective 1regions

OJ C 291, 25.09.97

N 372/97 28.08.97 Amendment of SME aid schemes: introduction ofthe new Community definition

N 381/97 03.09.97 Measures to promote tourism: ERDF OPmeasure 1997-99 (Campania)

OJ C 377, 12.12.97

N 630/97 21.10.97 Aid for research and innovation OJ C 051, 18.02.98N 822/96 22.10.97 Measures under the programming document

1997-99 (Friuli-Venezia Giulia)OJ C 025, 24.01.98

N 533b/97 13.11.97 Programme for the purchase by AIMA ofproducts derived from the preventive distillationof nationally produced table wine (Art. 3(b))

OJ C 025, 24.01.98

N 562/96 18.11.97 Regional aid in support of Fiat Auto SpAN 467/97 18.11.97 Rescue aid to Fratelli Costanzo SpAN 688/97 03.12.97 Tax incentives in Objective 1 and 2 areas OJ C 058, 24.02.98N 737/97 03.12.97 Premiums to safeguard employment in

Article 92(3)(a) areasOJ C 058, 24.02.98

N 629/97 11.12.97 CIP Rechar II 1997-99: Support for investmentby SMEs (Tuscany)

OJ C 025, 24.01.98

N 457/97 16.12.97 Aid for biofuels derived from oilseed plantsN 192/97 19.12.97 Measures to support the economy (Provincia

autonoma di Bolzano e Alto-Adige)OJ C 047, 12.02.98

N 604/97 19.12.97 Amendments to Provincial Law No 15 of20.08.72: “legge di riforma dell’edilizia abitativa”

OJ C 065, 28.02.98

Netherlands

N 861/96 21.01.97 Measures for energy efficiencyN 197/96 29.01.97 R&D scheme: credit support for electronic

services developmentOJ C 58, 25.02.97

N 903/96IP/97/89

05.02.97 Extension of the subsidy regulation for thenewbuilding of sea-going ships until31 December 1996

OJ C 197, 27.06.97



N 963g/95N 12/97IP/97/115

12.02.97 R&D project Ecodesign OJ C 117, 15.04.97

N 196/96IP/97/115

12.02.97 R&D support for environment-oriented productdevelopment

OJ C 207, 08.07.97

N 908/96 21.02.97 Refinancing of the ADTT (Advanced DigitalTelevision Technologies) project

N 909/96 21.02.97 Refinancing of the JESSI projectNN 93/96 26.02.97 Guarantees for the FOLINED foundation OJ C 207, 08.07.97

followed by acorrigendum on30.04.97

N 806/96IP/97/252

25.03.97 Measures to lower the cost of research personnel OJ C 201, 01.07.97

N 91/97 02.04.97 Development aid to El Salvador under Art. 4(7)of the 7th Directive on aid to shipbuilding

OJ C 302, 03.10.97

N 172/97 04.06.97 Development aid to Morocco under Art. 4(7) ofthe 7th Directive on aid to shipbuilding

OJ C 302, 03.10.97

N 906/96IP/97/534

18.06.97 Training programme at Philips SemiconductorsBV

OJ C 245, 12.08.97

N 382/97 15.07.97 Contribution towards the cost of recycling plasticfacing materials

N 389/97 15.07.97 Development aid to Yemen (port of Aden)according to Art. 4(7) of the 7th Directive on aidto shipbuilding

OJ C 003, 07.01.98

N 20/97 30.07.97 Taxes on energy/CO2: exemptions for the steelindustry

N 349/97 30.07.97 MEDEA programme: Eureka 1535 OJ C 395, 31.12.97N 265/97 16.09.97 Reinsurance scheme for investmentsN 468/97 24.09.97 SME programme for environmental technology OJ C 395, 31.12.97N 149/97 21.10.97 Aid in the motor vehicle sector in favour of

Mitsubishi Motors Sales EuropeOJ C 025, 24.01.98

N 497/97 21.10.97 Development aid to Indonesia under Art. 4(7) ofthe 7th Directive on aid to shipbuilding

OJ C 003, 07.01.98

N 450/97 21.10.97 Development assistance to Cuba under Art. 4(7)of the 7th Directive on aid to shipbuilding

OJ C 003, 07.01.98

N 543/97 28.10.97 Amendment of the IPR schemes for NorthNetherlands, Twente and certain municipalities inSouth Limburg

OJ C 065, 28.02.98

N 487/97 28.10.97 Amendment of the employment aid premiumscheme in Flevoland

OJ C 377, 12.12.97

N 436/97 13.11.97 Grants for technological collaboration projects(south-east of North Brabant)

N 599/97 18.11.97 Co-combustion of bio-pellets in the EZHcoal-fired Maasvlatke power plant

OJ C 025, 24.01.98

N 699/97 18.11.97 Subsidy regulation for the newbuilding ofsea-going ships

OJ C 047, 12.02.98

N 963c/95 03.12.97 R&D aid: “LCD” (liquid-crystal display) and OJ C 058, 24.02.98

STATE AID


N 963e/95N 910/96N 911/96

“Radiology 2001” projects

N 722/97 04.12.97 Measures for energy efficiency (NEWS)N 337/97 11.12.97 Modification of the decision on export financing

Portugal

N 19/97 04.03.97 Pedip II: increased budget for measures 3.3 and4.4

N 755/96 19.03.97 Aid scheme for small-scale investments in theborder area (Rapif)

OJ C 189, 20.06.97

N 194/97 22.05.97 Operational programme (Community initiative)for SMEs

OJ C 239, 06.08.97

NN 76/97IP/97/536

18.06.97 Aid scheme for young entrepreneurs (SAJE) OJ C 242, 08.08.97

N 416/97 19.08.97 Amendment to the investment aid scheme fortourism (SIFIT III)

OJ C 384, 18.12.97

N 424/97 19.08.97 Amendment to the operational programme(Community initiative) for SMEs

OJ C 384, 18.12.97

N 475/97 19.08.97 Pedip II: extension of scope of measure 3.5 to theautonomous regions of the Azores and Madeira

OJ C 384, 18.12.97

N 393/97 12.09.97 Modification of the aid scheme to promoteefficient use of energy (SIURE)

OJ C 384, 18.12.97

N 417/97 12.09.97 Arrangements for direct financing of the TourismFund

OJ C 384, 18.12.97

N 386a/97IP/97/1149

16.12.97 Aid scheme to promote regional products(Azores)

OJ C 89, 25.03.98

N 795/97 16.12.97 Rescue aid to Dragapor SAN 385a/97 18.12.97 Programme of aid to economic operators affected

by the exceptional climatic conditions 05.12.96 to07.01.97

United Kingdom

N 858/96 22.01.97 Financial measures of the United Kingdom withinthe framework of the privatisation of RosythRoyal Dockyard

OJ C 088, 19.03.97

N 15/97 21.02.97 Regional innovation grant (Wales)N 817/96 26.02.97 Special area and key site investment grant

scheme (Merseyside)NN 58/94 26.02.97 Shortfall guarantee scheme OJ C 117, 15.04.97N 452/96 12.03.97 Aid in the motor vehicle sector in favour of

Vauxhall Motor Limited (Cheshire)OJ C 202, 02.07.97

N 602/96 12.03.97 Financial measures of the United Kingdom withinthe framework of the privatisation of theDevonport Royal Dockyard



N 835/96 17.03.97 Highland equity capital, structural funds,objective 1 (Highlands & Islands, Scotland)

OJ C 239, 06.08.97

N 64/97 19.03.97 Financial measures of the United Kingdom withinthe framework of the privatisation of CrownAgents for Oversea Governments andAdministrations

N 907/96IP/97/264

02.04.97 Investment aid in favour of LG ElectronicsWales Ltd and LG Semicon Wales Ltd (SouthWales)

OJ C 302, 03.10.97

N 126/97 04.04.97 Sector challenge OJ C 172, 06.06.97N 160/97 04.04.97 Local challenge OJ C 172, 06.06.97N 106/97 16.04.97 Inward investment support programme (South

Lanarkshire, Scotland)OJ C 197, 27.06.97

N 129/97 23.04.97 Continuation, unification and modification of theSmart scheme

OJ C 208, 09.07.97

NN 86/96 30.04.97 Use of discretionary resources by training andenterprise councils (TECS) in Wales

N 17/97 30.04.97 Harlesden City Challenge - Workshoprefurbishment

OJ C 197, 27.06.97

N 500/97 16.09.97 Application of shipbuilding aid schemes in 1997 OJ C 047, 12.02.98NN131/97 01.10.97 Scottish Enterprise support towards capital

investment by existing and new business(Scotland)

OJ C 025, 24.01.98

N 581/97 21.10.97 Sales of loans of the Student Loans CompanyLtd

N 545/97 21.10.97 Aid for Hyundai Semiconductor Europe Ltd OJ C 395, 31.12.97NN107c/95

21.10.97 Welsh Development Agency: business advisoryservices

OJ C 025, 24.01.98

N 376/97IP/97/1143

16.12.97 Aid to Rover in support of a new engine plant atHams Hall (West Midlands)

Sweden

NN 82/96IP/97/91

05.02.97 Reduction of transport costs in the northernregions

OJ C 291, 25.09.97

N 742/96IP/97/160

26.02.97 Act on excise duties on energy in the ECSC steelsector

OJ C 197, 27.06.97

N 943/96NN 70/96NN 74/96,NN 76/96

02.04.97 Transport aid to Scania CV AB, Saab AutomobilAB and Volvo Personvagnar Komponenter AB

OJ C 288, 23.09.97

N 454/97 18.11.97 Aid to the energy sectorN 88/97 16.12.97 Aid measures in favour of industry: fund aimed

at cooperation between Sweden and Norway

STATE AID


2. Cases in which the Commission found there was no aid element within the meaning ofArticle 92(1) of the EC Treaty

Germany

N 333/97 18.06.97 Reform of the German law on job creation -occupational integration contract

OJ C 065, 28.02.98

N 344/97 18.06.97 Injection of capital by HanseatischeIndustriebeteiligungen GmbH intoStahlwerke Bremen GmbH

OJ C 001, 03.01.98

N 262/97 15.07.97 Privatisation of AgrotechnikHandelsgesellschaft mbH (Saxony)

OJ C 288, 23.09.97

N 788/96 01.10.97 Venture capital fund of the Land ofMecklenburg-Western Pomerania

OJ C 050, 17.02.98

Austria

NN 118/96 12.03.97 Aid in the construction sector to Mayreder BauGmbH (Linz)

OJ C 302, 03.10.97

Belgium

N 132/97IP/97/251

25.03.97 Reduction in social security contributions forfirms employing manual workers (Maribelquater plan)

OJ C 201, 01.07.97

N 680/97IP/97/948

05.11.97 ECSC steel industry: assistance for SADuferco Clabecq

OJ C 020, 22.01.98Art. 1(2) of the Steel AidCode not applicable

Denmark

N 1051/95 10.06.97 Investment fund for emerging markets(“IFV Fonden”)

OJ C 231, 30.07.97

France

N 672/97IP/97/949

05.11.97 Renewal for 1998-2002 of the parafiscal chargeon certain petroleum products for the benefit ofthe IFP

Netherlands

N 463/95 02.07.97 Cost allocation rules of Nedcar BV (Limburg) OJ C 025, 24.01.98



3. Aid cases in which the Commission initiated or extended Article 93(2) proceedings in respectof all or part of the measure

Germany

NN 68/96(C 5/97)IP/97/38

22.01.97 Aid for NIR (Neptun Industrie RostockGmbH) (Mecklenburg-Western Pomerania)

OJ C 119, 17.04.97

NN 105/96(C 6/97)IP/97/38

22.01.97 Aid for Dieselmotorenwerk Vulkan GmbH(Mecklenburg-Western Pomerania)

OJ C 119, 17.04.97

NN 2/97(C 9/97)IP/97/92

05.02.97 Aid for SHB (Stahl und HartgusswerkeBösdorf AG) (Saxony)

OJ C 165, 31.05.97

NN 9/96(C 16/97)IP/97/159

26.02.97 Amendment of the German Income Tax Act(Einkommensteuergesetz)

OJ C 172, 06.06.97

N 727/96 andNN 1/97(C 18/97)

12.03.97 Aid in favour of Infraleuna GmbH (Saxony-Anhalt)

OJ C 196, 26.06.97

NN 8/97(C 22/97)

12.03.97 Aid to shipbuilding: development aid toIndonesia

OJ C 192, 24.06.97

N 90/97(C 23/97)

25.03.97 Aid in favour of Lautex GmbH Weberei undVeredelung (Saxony)

OJ C 192, 24.06.97

NN 24/97(C 24/97)

02.04.97 Aid in favour of Chemienlagenbau StassfurtAG (Saxony-Anhalt)

OJ C 196, 26.06.97

N 70/97(C 25/97)IP/97/309

16.04.97 Measures in favour of Dorries ScharmannGmbH

OJ C 230, 29.07.97

NN 129/96(C 35/97)IP/97/379

30.04.97 Aid in favour of Triptis Porzellan GmbH(Thuringia)

OJ C 250, 15.08.97

NN 121/96(C 42/97)

02.07.97 Aid in favour of Everts Erfurt GmbH(Thuringia)

OJ C 37, 04.02.98

NN 80/97(C 45/97)

15.07.97 Aid in favour of System MicroelectronicInnovation GmbH

OJ C 352, 20.11.97

N 109/93,NN 11/93 andN 543/94(C 47/97)

23.07.97 Aid in favour of Leuna 2000 OJ C 394, 30.12.97

NN 78/96(C 56/97)

30.07.97 Restructuring of Zeuro Möbelwerke GmbH(Thuringia)

OJ C 25, 24.01.98

NN 135/96(C 58/97)

30.07.97 Restructuring of Spindelfabrik Hartha GmbH(Saxony)

N 123/97(C 52/97)

30.07.97 26th framework programme of the joint task“Improvement of regional economicstructures”

partial initiationOJ C 341, 11.11.97

STATE AID


N 238/97(C 53/97)

30.07.97 Privatisation of CBW Chemie GmbHBitterfeld-Wolfen

OJ C 383, 17.12.97

NN 82/97(C 59/97)IP/97/728

30.07.97 Investment aid to promote lignite use OJ C 381, 16.12.97

N 771/96 andNN 128/96(C 61/97)IP/97/796

16.09.97 Restructuring aid for Elpro AG (Berlin)

NN 104/97(C 63/97)

16.09.97 Aid in favour of Riedel-de-Häen AG (Seelze,Lower Saxony)

OJ C 385, 19.12.97

NN 175/95(C 64/97)IP/97/834

01.10.97 Aid in the banking sector in favour ofWestdeutsche Landesbank/Girozentrale followed by a

corrigendum on03.12.97

NN 123/97(C 70/97)IP/97/904

21.10.97 Aid in favour of SKET Walzwerkstechnik

NN 122/97(C 69/97)IP/97/904

21.10.97 Aid in favour of SKET Maschinen undAnlagenbau GmbH

OJ C 79, 14.03.98

NN 124/97(C 72/97)IP/97/951

05.11.97 Restructuring aid for SKETVerseilmaschinenbau GmbH

OJ C 83, 18.03.98

N 793/96(C 74/97)IP/97/1011

18.11.97 Aid in favour of Kali und Salz GmbH

C 6/97 03.12.97 Aid in favour of Dieselmotorenwerk VulkanGmbH (Mecklenburg-Western Pomerania)

extension ofproceedings

NN 53/97(C 80/97)

03.12.97 Aid in favour of Pittler/TornosWerkzeugsmaschinen GmbH

NN 153/97(C 83/97)IP/97/1096

10.12.97 Privatisation of Buna SOW LeunaOlefinverbund

Austria

N 494/97(C 62/97)

16.09.97 Prolongation of rescue aid to ActualMaschinenbau AG (Upper Austria)

OJ C 390, 23.12.97

N 99/97(C 77/97)

03.12.97 Foreign direct investment in LiftgmbH

N 509/96(C 84/97)IP/97/1142

16.12.97 Measures in favour of Siemens BauelementeOHG



Spain

C 56/95IP/97/646

08.01.97 Restructuring aid for publicly ownedshipyards

OJ C 53, 22.02.97extension ofproceedings

NN 188/95(C 32/97)IP/97/380

30.04.97 Aid in favour of Porcelanas del Norte SAL(PONSAL) (Navarra)

OJ C 243, 09.08.97

NN 78/97(C 44/97)IP/97/647

15.07.97 Aid to companies of the Magefesa group andits successors

OJ C 330, 01.11.97

NN 118/97(C 68/97)IP/97/906

21.10.97 Aid for SNIACE SA OJ C 049, 14.02.98

NN 115/97(C 76/97)IP/97/1006

18.11.97 Aid in favour of Daewoo ElectronicsManufacturing España SA

France

NN 35/93(C 4/97)IP/97/40

22.01.97 Measures in favour of PMU (Paris MutuelUrbain)

OJ C 163, 30.05.97

NN 12/97(C 13/97)IP/97/116

12.02.97 Aid for the takeover of SFP (Société Françaisede Production)

OJ C 126, 23.04.97partial initiation

NN 43/96(C 19/97)N 136/97(C 20/97)

12.03.97 Restructuring of the financial institution GAN OJ C 149, 17.05.97reopening

C 44/96IP/97/261

02.04.97 Aid in favour of SDBO and Crédit Lyonnais OJ C 207, 08.07.97extension of proceedings

N 731/96 andNN 55/97(C 50/97)IP/97/726

30.07.97 Restructuring aid in favour of La Lainière deRoubaix

OJ C 392, 24.12.97

NN 146/97(C 73/97)IP/97/952

05.11.97 Recapitalisation of Stardust Marine: price atwhich Stardust Marine was sold to F.G.Marine

NN 183/95(C 88/97)IP/97/1144

16.12.97 Aid elements in the Crédit Mutuel’s“livret bleu” savings scheme

NN 185/95(C 89/97)

16.12.97 Grant to Crédit Agricole of the exclusive rightto receive deposits from notaries

STATE AID


Greece

C 10/94 08.01.97 Aid to shipbuilding in favour of HellenicShipyards

OJ C 080, 13.03.97extension of proceedings

Italy

N 546/96(C 3/97)IP/97/36

22.01.97 Order-book aid - extension of deadlines:Regional Law No 25/93, Art. 31 (Sicily)

OJ C 163, 30.05.97

E 13/92(C 7/97)

22.01.97 Receivership arrangements for large firms in astate of insolvency

OJ C 192, 24.06.97

NN 15/97(C 14/97)IP/97/114

12.02.97 Restructuring aid to the firms Keller SpA andKeller Meccanica SpA

OJ C 140, 07.05.97

NN 113a/93(C 21/97)

12.03.97 Regional law 25/93 on measures to promoteemployment (Sicily)

OJ C 204, 04.07.97

NN 35a/97(C 27/97)

16.04.97 Application of the Tremonti Act to the motorvehicle, shipbuilding and synthetic fibresindustries and to firms covered by the ECSCTreaty

OJ C 268, 04.09.97

NN 125/96(C 29, 30 and31/97)

16.04.97 Measures in favour of cooperatives: Marcoralaw

OJ C 309, 09.10.97ouverture partielle

NN 58/97(C 38/97)

04.06.97 Capital injections and privatisation of SocietàItaliana per Condotte d’Acqua SpA

OJ C 327, 29.10.97

NN 59/97(C 39/97)

04.06.97 Capital injections and privatisation of ItalstradeSpA

OJ C 328, 30.10.97

N 353/97(C 55/97)

30.07.97 Increase in the amount of aid for two contractsfor the conversion of ships in the INMAshipyard

OJ C 377, 12.12.97

NN 167/97(C 81/97)

03.12.97 Reduction of and exemption from social securitycontributions in Venice and Chioggia: Art. 27 ofLaw 30/97 and Art. 5a of Decree 96/95

OJ C 051, 18.02.98

NN 180/97(C 90/97)IP/97/1145

16.12.97 Capital injection in Enirisorse Spa

Netherlands

NN 38/97(C 28/97)IP/97/337

23.04.97 Technolease Philips-Rabobank OJ C 338, 08.11.97



Portugal

NN 9/97(C 10/97)

05.02.97 Aid to ship repair OJ C 98, 26.03.97

N 639/96(C 17/97)

12.03.97 Aid in synthetic fibres sector in favour ofCompanhia Industrial Textil SA [Cordex](Centro)

OJ C 194, 25.06.97

Sweden

NN 942/96,NN 75/96(C 48/97)

23.07.97 Aid to the motor vehicle industry in favour ofVolvo Trucks


C 66/97 08.10.97 Non-acceptance by Sweden of the proposal forappropriate measures on the framework for aidto the motor vehicle industry

OJ C 326, 28.10.97

4. Aid cases in which the Commission initiated or extended proceedings under Article 6(5) ofDecision 496/96/ECSC in respect of all or part of the measure

Germany

NN 46/94,N 361/97 (C43/97)

15.07.97 Steel aid (ECSC) in favour of GröditzerStahlwerke GmbH and Walzwerke Burg GmbH

OJ C 395, 31.12.97

NN 86/97(C 46/97)IP/97/650

15.07.97 Exemption from environmental obligationsgranted to Georgsmarienhütte GmbH by theLand of Lower Saxony

OJ C 323, 24.10.97

NN 85/97(C 60/97)

30.07.97 Aid for Eisen- und Stahlwalzwerke RötzelGmbH

OJ C 328, 30.10.97

NN 108/97(C 75/97)IP/97/1012

18.11.97 Aid in favour of ESF Elbestahlwerk FeralpiGmbH

OJ C 051, 18.02.98

N 301/97(C 85/97)

16.12.97 Environmental aid to MCR Gesellschaft fürmetallurgisches Recycling (Brandenburg)

Spain

NN 116/96(C 57/97)

30.07.97 Corporate tax law (Art. 34 of Law 43/1995) OJ C 329, 31.10.97

Luxembourg

N 668/96,N 72/97 andN 73/97(C 36/97)

21.05.97 1995 and 1996 R&D programme of the steelgroup Arbed SA and Ares SA

OJ C 250, 15.08.97

STATE AID


5. Cases in which the Commission terminated Article 93(2) proceedings on the ground that theaid was compatible with the common market

Germany

C 32/95 12.03.97 Extension of an aid award in the aircraft sectorin favour of ASL Lemwerder

OJ L 306, 11.11.97

C 35/96C 38/96

21.05.97 Shipbuilding aid for Bremer Vulkan Werft:COSTA I and container ship 110/111 contracts

OJ L 250, 13.09.97

C 60/96IP/97/724

30.07.97 Shipbuilding: restructuring of MTW-Schiffswerft and Volkswerft Stralsund

OJ C 344, 14.11.97

C 61/95 18.11.97 Aid in the machine-tool sector in favour ofGuildemeister AG

Spain

C 26/96 02.04.97 Aid in favour of Construcciones navales P.FreireSA for the construction of a fishing vessel

OJ C 196, 26.06.97

C 45/94IP/97/372

30.04.97 Aid for the development of the regional aircraftCASA 3000 by Construcciones Aeronauticas SA

OJ L 331, 03.12.97

C 53/95IP/97/649

15.07.97 Aid in favour of Grupo de Empresas Alvarez(Galicia)

C 56/95 15.07.97 Shipbuilding aid for the restructuring of thepublicly owned yards

OJ C 354, 21.11.97

France

C 5/96 02.07.97 Aid in the motor vehicle sector in favour ofScania (Loire Region)

Greece

C 10/94 15.07.97 Shipbuilding aid in favour of Hellenic Shipyards OJ C 306, 08.10.97

Portugal

C 10/97IP/97/912

21.10.97 Aid to ship repair: restructuring of Lisnave

6. Cases in which the Commission terminated Article 93(2) proceedings on the ground that no aidwas involved within the meaning of Article 92(1)

France

C 3/96IP/97/832

01.10/97 Alleged aid granted by France to SFMI-Chronopost

Art. 92(1) not applicable



Italy

C 29/95 05.11.97 Contribution to the recycling ofpolyethylene

Art. 92(1) not applicable

Netherlands

C 49/91 26.02.97 Special financing measures: ”Regelingbijzondere financiering” [RBF]

OJ C 202, 02.07.97Art. 92(1) not applicable

7. Aid cases in which the Commission terminated Article 93(2) proceedings after theMember State withdrew the proposed measure

Italy

C 15/96IP/97/485

04.06.97 R&D aid for Olivetti SpA

C 33/96IP/97/1140

16.12.97 R&D aid for SGS-Thomson Srl

8. Cases in which the Commission terminated proceedings under Article 6(4) of Decision3855/91/ECSC on the ground that the aid was compatible with the common market

Germany

C 2/96 21.10.97 Programme of investment in reducingenvironmental pollution in the ECSC steelindustry

OJ C 377, 12.12.97

Italy

C 54/95IP/97/157

26.02.97 Aid for restructuring the private steel sector inItaly

OJ L 139, 30.05.97

9. Aid cases in which the Commission terminated Article 93(2) proceedings by way of aconditional decision

Germany

C 34/96 12.02.97 Extension of the investment allowance andspecial depreciation schemes to west Berlin

OJ L 228, 19.08.97followed by acorrigendum on30.04.97

C 58/95IP/97/793

16.09.97 Aid in the waste management sector in favour ofGemeinnützige Abfallverwertung GmbH (NorthRhine-Westphalia)

STATE AID


France

C 19/97 andC 20/97IP/97/723

30.07.97 Restructuring of the financial institution GAN OJ L 78, 16.03.98

C 62/96IP/97/833

01.10.97 Support for and restructuring of Thomson SAand Thomson Multimedia

OJ L 67, 07.03.98followed by acorrigendum on03.12.97

Italy

C 55/95IP/97/310

16.04.97 Capital injections in favour of Enirisorse SpA OJ L 80, 18.03.98

10. Aid cases in which the Commission terminated Article 93(2) proceedings by way of anegative or partly negative decision

Germany

C 16/95IP/97/430

29.05.97 Aid to construction of heavy machinery infavour of Sket SchwermaschinenbauMagdeburg GmbH (Saxony-Anhalt)

OJ L 314, 18.11.97Followed by acorrigendum on 26.06.97

C 28/96 01.10.97 Prolongation of the 8% investment allowancein favour of investment in the former GDR

OJ L 73, 12.03.98

C 53/96 18.11.97 Special guarantee programme of the Land ofSaxony-Anhalt in favour of firms in difficulty

C 63/96 16.12.97 Aid for Thüringer Motorenwerke GmbH partly negativeAustria

C 6/96IP/97/426

21.05.97 Aid in the pharmaceutical sector in favour ofHoffmann La Roche

partly negative

Denmark

C 32/96IP/97/ 86

05.02.97 Financing of shipbuilding in Denmark during1987-93

OJ L 154, 12.06.97

Spain

C 58/96IP/97/725

30.07.97 Shipbuilding aid for Astilleros Zamacona SA OJ L 050, 20.02.98followed by acorrigendum on05.11.97



France

C 18/96IP/97/282

09.04.97 Experimental measures to reduce social securitycontributions in the textile, clothing, leather andfootwear industries

OJ L 334, 05.12.97

11. Aid cases in which the Commission terminated proceedings under Article 6(4) of Decision3855/91/ECSC by way of a negative decision

Italy

C 8/96IP/97/375

30.04.97 Receivership arrangement for large firms indifficulty: Ferdofin Siderurgica Srl

OJ L 306, 11.11.97

12. Aid cases in which the Commission proposed appropriate measures under Article 93(1) ofthe EC Treaty

Sweden

E 8/96 30.07.97 Reductions in social security contributions forfirms located in certain northern regions

OJ C 291, 25.09.97

13. Cases in which the Commission noted the Member State’s agreement to ensuring thecompliance of existing aid awards following the proposing of appropriate measures

Spain

E 12/91IP/97/263

02.04.97 National programme for developing renewableenergies

OJ C 172, 06.06.97

Sweden

E 23/95 18.06.97 Employment grant

14. Other Commission decisions

Germany

C 57/95 19.03.97 Aid in the chipboard and fibreboard sectors infavour of Bestwood E.F. Kynder GmbH(Mecklenburg-Western Pomerania)

OJ L 194, 23.07.97Revision by the legalrevisers of the negativedecision of 04.12.96

C 34/96IP/97/117

30.04.97 Extension of the investment allowance andspecial depreciation schemes to west Berlin

OJ L 228, 19.08.97Corrigendum to theconditional decision of12.02.97

C 9/97 15.07.97 Aid in favour of SHB Stahl- undHartgusswerke Bösdorf AG

OJ L 323, 26.11.97formal notice

STATE AID


NN 47/97 10.06.97 Aid in favour of Broerius AbfallwirtschaftSaxony GmbH (BAS) (Saxony)

OJ C 208, 09.07.97Corrigendum to thedecision to raise noobjection of 21.05.97

N 215/97 10.06.97 Aid in favour of Apparate- undIndustrieanlagebau Grüssing GmbH & Co.KG(AIG) (Thuringia)

OJ C 207, 08.07.97Corrigendum to thedecision to raise noobjection of 21.05.97

C 16a/95 26.06.97 Aid to construction of heavy machinery infavour of Sket SchwermaschinenbauMagdeburg GmbH (Saxony-Anhalt)

OJ C 314, 18.11.97Corrigendum to thenegative final decisionof 29.05.97

N 179/97NN 43/97

10.09.97 Aid in favour of Lausitzer Stahlbau RuhlandGmbH (Brandenburg)

OJ C 329, 31.10.97corrigendum to thedecision to raise noobjection of 02.07.97

NN175/95(C 64/97)

03.12.97 Aid in the banking sector in favour ofWestdeutsche Landesbank/Girozentrale

corrigendum to thedecision to initiateproceedings of01.10.97

Denmark

N 479/96 12.03.97 Draft law on the waste-water tax (L 249) OJ C 172, 06.06.97linguistic revision inDanish of the decision of04.12.96

Spain

N 131/97 30.04.97 State funding and privatisation of AlmegreraSA

OJ C 245, 12.08.97corrigendum to thedecision to raise noobjection of 16.04.97

C 58/96 05.11.97 Shipbuilding aid for Astilleros Zamacona SA OJ L 050, 20.02.98corrigendum to thenegative final decision of30.07.97

France

C 62/96 03.12.97 Support for and restructuring of Thomson SAand Thomson Multimedia

corrigendum to theconditional decision of01.10.97OJ L 67, 07.03.98



Netherlands

NN 93/96 12.03.97 Guarantee for the Folined Foundation OJ C 207, 08.07.97corrigendum to thedecision to raise noobjection of 26.02.97

Sweden

NN 942/96,NN 75/96(C 48/97)

10.09.97 Transport aid to Volvo Trucks OJ C 343, 13.11.97corrigendum to thedecision to initiateproceedings of23.07.97

D - List of state aid cases in other sectors

1. In the agriculture sector

1.1. Aid cases in which the Commission raised no objection

Austria

23.1.1997 INVESTMENT IN THE STARCH SECTOR OJ C 134 , 29.4.199719.2.1997 PROGRAMME TO PROMOTE ENVIRONMENT-FRIENDLY OJ C 148 , 16.5.1997

FARMING METHODS (ÖPUL)25.2.1997 STYRIA: OBJECTIVE 5b OJ C 148 , 16.5.199719.3.1997 UPPER AUSTRIA: AID FOR SLURRY-SPREADING OJ C 231 , 30.7.1997

EQUIPMENT24.4.1997 UPPER AUSTRIA: AID FOR THE PURCHASE OF OJ C 243 , 9.8.1997

BREEDING HEIFERS29.4.1997 LOWER AUSTRIA: AID FOR ENVIRONMENTAL PROTECTION OJ C 243 , 9.8.199729.4.1997 LOWER AUSTRIA: AID FOR ENVIRONMENTAL PROTECTION OJ C 243 , 9.8.199721.5.1997 UPPER AUSTRIA: GROUNDWATER 2000 PROGRAMME OJ C 346 , 15.11.199721.5.1997 PROGRAMME TO PROMOTE ENVIRONMENT-FRIENDLY OJ C 346 , 15.11.1997

FARMING METHODS (ÖPUL)5.6.1997 CARINTHIA: AID FOR HORSE BREEDING ON EXTENSIVE OJ C 334 , 5.11.1997

PASTURES20.6.1997 VORARLBERG: MEASURES TO ENCOURAGE HILL FARMING OJ C 362 , 28.11.199727.6.1997 AID FOR THE PURCHASE OF BREEDING HEIFERS OJ C 362 , 28.11.199730.7.1997 AMENDMENT TO DIRECTIVES ON INVESTMENTS AND OJ C 334 , 5.11.1997

STAFF IN THE AGRICULTURAL SECTOR18.8.1997 VORARLBERG: ENVIRONMENT-FRIENDLY FARMING METHODS3.9.1997 MEASURES IN FAVOUR OF THE WINE SECTOR (1996-98)27.10.1997 ERP PROGRAMME IN AGRICULTURE: "CONSTRUCTION AND EXPANSION OF GLASSHOUSES"19.11.1997 ENVIRONMENT-FRIENDLY FARMING METHODS19.11.1997 VORARLBERG: MEASURES TO IMPROVE THE QUALITY OF MILK AND MILK PRODUCTS15.12.1997 MEASURES IN FAVOUR OF POTATO GROWING

Belgium

28.2.1997 CONTRIBUTIONS AND TAXES TO THE FUND FOR ANIMAL HEALTH OJ C 148 , 16.5.1997AND LIVESTOCK PRODUCTION FOR VETERINARY CHECKS

6.3.1997 COMPULSORY CONTRIBUTIONS TO THE FUND FOR ANIMAL HEALTH OJ C 148 , 16.5.1997AND LIVESTOCK PRODUCTION

3.4.1997 CONTRIBUTIONS TO THE FUND FOR ANIMAL HEALTH AND LIVESTOCK OJ C 245 , 12.8.1997PRODUCTION

27.6.1997 WALLOON REGION: DRAFT DECREE ON AID FOR AGRICULTURE OJ C 362 , 28.11.1997

STATE AID


(AID FOR SETTING-UP, COMPETITIVENESS, MAINTAININGEMPLOYMENT)

8.9.1997 AID FOR VEGETABLE AND CHICKORY GROWING13.10.1997 AID FOR THE REBUILDING OF HERDS DECIMATED BY BRUCELLOSIS4.11.1997 FLEMISH REGION: AID FOR CONSULTANCY SERVICES FOR FARMS

IN FINANCIAL DIFFICULTY27.11.1997 DRAFT DECREE FIXING THE CHARGE

FOR AUTHORISATION AS CONTRACT SORTER11.12.1997 GRANTS TO REPLACEMENT SERVICES IN AGRICULTURE

Germany

9.1.1997 INCENTIVE PROGRAMME FOR INVESTMENTS IN AGRICULTURE OJ C 134 , 29.4.1997PURSUANT TO THE 1997-2000 FRAMEWORK PLAN

23.1.1997 HESSEN: STATE GUARANTEE IN FAVOUR OF KURHESSISCHE OJ C 051 , 21.2.1997MOLKEREIZENTRALE KASSEL

17.2.1997 BADEN-WÜRTTEMBERG: MEASURE TO ASSIST THE CONSTRUCTION OJ C 148 , 16.5.1997OF A SLAUGHTERHOUSE IN DONAUESCHINGEN

24.2.1997 SAARLAND: START-UP PREMIUM FOR YOUNG FARMERS OJ C 148 , 16.5.199725.2.1997 LOWER SAXONY: MEASURES TO ENCOURAGE THE DEVELOPMENT OJ C 148 , 16.5.1997

OF HORTICULTURE AND FRUIT GROWING28.2.1997 BAVARIA: ENCOURAGEMENT FOR THE CULTIVATION OF OJ C 148 , 16.5.1997

UPLAND MEADOWS28.2.1997 RHEINLAND-PALATINATE: PROMOTION OF TRADE AND OJ C 148 , 16.5.1997

LAND LEASING21.3.1997 BRANDENBURG: AID FOR PRODUCTION METHODS COMPATIBLE OJ C 231 , 30.7.1997

WITH ENVIRONMENT PROTECTION3.4.1997 LOWER SAXONY: ENCOURAGEMENT OF CONSULTANCY SERVICES

PROVIDED BY FARM MANAGEMENT BODIES3.4.1997 THURINGIA: AID FOR THE AFFORESTATION OF ARABLE LAND OJ C 231 , 30.7.19973.4.1997 THURINGIA: AID FOR STRUCTURAL IMPROVEMENT IN OJ C 231 , 30.7.1997

SMALL PRIVATE FORESTS3.4.1997 NORTH RHINE-WESTPHALIA: AID FOR ECOLOGICAL PRODUCTS OJ C 231 , 30.7.19973.4.1997 SAXONY-ANHALT: AID FOR FARMS OJ C 245 , 12.8.199714.4.1997 MECKLENBURG-WESTERN POMERANIA: AID FOR REGIONAL OJ C 231 , 30.7.1997

MARKETING OF AGRICULTURAL PRODUCTS CULTIVATEDUSING ECOLOGICAL METHODS

21.5.1997 OUTLINE PLAN FOR 1997 TO 2000: IMPROVEMENT OF STRUCTURES OJ C 346 , 15.11.199721.5.1997 BADEN-WÜRTTEMBERG: MEASURE FOR THE CONSTRUCTION OF OJ C 346 , 15.11.1997

A SLAUGHTERHOUSE AT SEELBACH-WITTELBACH29.5.1997 SAXONY: MEASURE TO ENCOURAGE INVESTMENT IN THE OJ C 346 , 15.11.1997

CONSTRUCTION OF HOUSING FOR ANIMALS30.5.1997 SAXONY: SCHEME ENCOURAGING MEASURES UNDER THE OJ C 333 , 4.11.1997

COMMUNITY INITIATIVE INTERREG II13.6.1997 SAARLAND: AID FOR PRIVATE CONSULTANCY SERVICES OJ C 347 , 18.11.1997

IN AGRICULTURE AND FORESTRY13.6.1997 SAXONY: AID FOR TRAINING AND FURTHER EDUCATION OJ C 347 , 18.11.1997

IN AGRICULTURE AND FORESTRY13.6.1997 SAXONY: PROMOTION OF INITIATIVES TO DEVELOP OJ C 347 , 18.11.1997

AGRICULTURE AND FORESTRY18.6.1997 NORTH RHINE-WESTPHALIA: AID FOR AGRICULTURAL OJ C 362 , 28.11.1997

PRODUCTS9.7.1997 MECKLENBURG-WESTERN POMERANIA: AID FOR THE SALE OF OJ C 334 , 5.11.1997

AGRICULTURAL PRODUCTS AND FOODSTUFFS30.7.1997 RHINELAND-PALATINATE: MEASURES IN FAVOUR OF THE OJ C 334 , 5.11.1997

CULTIVATION OF VINEYARDS30.7.1997 BAVARIA: MEASURE ENCOURAGING RESEARCH INTO THE USE OJ C 334 , 5.11.1997

OF VEGETABLE OIL AS A FUEL FOR MOTOR VEHICLES18.8.1997 THURINGIA: LOAN GUARANTEE FOR RESTRUCTURING A MEAT

PRODUCTS FACTORY3.9.1997 BRANDENBURG: AID FOR AGRICULTURAL ENTERPRISES

AFFECTED BY FLOODING IN THE ODER REGION11.9.1997 HESSEN: AID FOR BEE-KEEPING11.9.1997 BRANDENBURG: LOAN TO ENSURE THE LIQUIDITY OF

A VEGETABLE AND FRUIT FARM16.9.1997 SAARLAND: AID FOR THE MARKETING OF AGRICULTURAL

PRODUCTS AND FOODSTUFFS16.9.1997 SAXONY-ANHALT: AID FOR RELIEF SERVICES IN FARMS



10.10.1997 SEWAGE SLUDGE INDEMNITY FUND10.10.1997 LOWER SAXONY: WEED PROTECTION AID16.10.1997 RHEINLAND-PALATINATE: INVESTMENT IN MACHINERY

IN VINEYARDS16.10.1997 LOWER SAXONY: PILOT PROJECT IN THE FRESH MEAT

PRODUCTION SECTOR12.11.1997 HESSEN: ENVIRONMENT-FRIENDLY FARMING METHODS14.11.1997 RHEINLAND-PALATINATE: AID FOR CONSULTANCY SERVICES

TO ENCOURAGE EXPORTS OF AGRICULURAL PRODUCTS11.12.1997 RHEINLAND-PALATINATE: MEASURES UNDER THE COMMUNITY

INITIATIVE LEADER II11.12.1997 RHEINLAND-PALATINATE: MEASURE ENCOURAGING THE

ESTABLISHMENT OF LIVESTOCK FARMS OUTSIDE VILLAGES

Denmark

6.1.1997 AID AND PARAFISCAL CHARGES TO COMBAT SALMONELLA OJ C 127 , 24.4.1997IN CHICKENS AND TABLE EGGS

23.1.1997 AID AND PARAFISCAL CHARGES FOR SHIFTING PRODUCTION OJ C 134 , 29.4.1997CAPACITY IN THE EGG SECTOR

13.3.1997 AID FROM THE "PROMILLE" FUND (PARAFISCAL CHARGES OJ C 245 , 12.8.1997SCHEME): CHANGE TO THE BASE OF THE FUND

15.4.1997 AID AND PARAFISCAL CHARGES FOR CHRISTMAS TREES OJ C 243 , 9.8.1997AND OTHER DECORATIVE PLANTS

20.6.1997 AID FOR ORGANIC FARMING OJ C 362 , 28.11.19976.8.1997 AID AND PARAFISCAL CHARGES ON REAL ESTATE OJ C 334 , 5.11.19976.8.1997 AID FOR SMALL PLANTS FOR SUPPLYING WATER

THREATENED BY POLLUTION12.8.1997 AID TO COMBAT EPIDEMICS IN THE PIG SECTOR

FINANCED BY PARAFISCAL CHARGES ON PIG PRODUCTION20.8.1997 AID FOR R&D PROJECTS CONCERNING THE REDUCTION

OF PESTICIDES AND FERTILISERS

Spain

9.1.1997 CANTABRIA: IMPROVING MILK QUALITY22.1.1997 CASTILE-LA MANCHA: AID FOR PLANT PROTECTION OJ C 148 , 16.5.1997

GROUPS22.1.1997 ARAGON: MEASURES FOR THE MARKETING OF OJ C 148 , 16.5.1997

AGRICULTURAL PRODUCTS22.1.1997 CASTILE-LA MANCHA: AID TO ERADICATE ANIMAL OJ C 148 , 16.5.1997

DISEASES3.2.1997 ARAGON: MEASURES TO ASSIST AGRICULTURAL OJ C 148 , 16.5.1997

ASSOCIATIONS17.3.1997 CASTILE-LA MANCHA: DEVELOPMENT OF ECOLOGICAL OJ C 231 , 30.7.1997

AGRICULTURE18.3.1997 GALICIA: GENETIC IMPROVEMENT PLAN OJ C 231 , 30.7.199719.3.1997 MADRID: AID MEASURES FOR AGRICULTURAL OJ C 231 , 30.7.1997

DIVERSIFICATION UNDER OBJECTIVE 5(b)9.4.1997 CASTILE-LA MANCHA: AID MEASURES IN THE OJ C 231 , 30.7.1997

WINEGROWING SECTOR11.4.1997 ARAGON: AID FOR INTEGRATED PROCESSING GROUPS

IN AGRICULTURE (ATRIAS)14.4.1997 CANTABRIA: STRUCTURAL IMPROVEMENTS AND - OJ C 231 , 30.7.1997

MODERNISATION OF FARMS29.4.1997 NAVARRA: AID IN THE AGRI-FOODSTUFFS SECTOR OJ C 243 , 9.8.199730.4.1997 AID TO IMPROVE FARM MACHINERY2.5.1997 CASTILE-LEON: RESTRUCTURING OF VINEYARDS OJ C 346 , 15.11.199716.5.1997 AID TO PROMOTE RIOJA WINE OJ C 333 , 4.11.199713.6.1997 CASTILE-LA MANCHA: IMPROVING THE EFFICIENCY OJ C 347 , 18.11.1997

OF AGRICULTURAL STRUCTURES13.6.1997 NAVARRA: AID FOR LIVESTOCK HOLDINGS OJ C 347 , 18.11.199727.6.1997 CANTABRIA: MILK CONTROL AND GENETIC IMPROVEMENT OJ C 334 , 5.11.1997

OF DAIRY COWS7.7.1997 MURCIA: CONDITIONS FOR THE PROCESSING AND OJ C 334 , 5.11.1997

MARKETING OF AGRICULTURAL PRODUCTS29.8.1997 CASTILE-LEON: AID IN THE PLANT HEALTH SECTOR29.8.1997 VALENCIA: VINEYARD RESTRUCTURING

STATE AID


3.9.1997 BALEARIC ISLANDS: FARM MODERNISATION4.9.1997 MURCIA: STRUCTURAL IMPROVEMENTS AND

MODERNISATION OF FARMS27.10.1997 CASTILE-LEON: AID FOR MILK PRODUCTS28.10.1997 AID FOR TRADE ASSOCIATIONS IN THE AGRI-FOODSTUFFS

SECTOR31.10.1997 GALICIA: MEASURES IN FAVOUR OF THE DEVELOPMENT OF

YOUNG FARMERS' COOPERATIVES7.11.1997 MEASURES IN FAVOUR OF "QUALITY BEEF" PROGRAMMES13.11.1997 AID FOR PROMOTING AND MARKETING SHERRY20.11.1997 EXTREMADURA: MODERNISATION AND IMPROVEMENT

OF IRRIGATION27.11.1997 BALEARIC ISLANDS: AID TO LIVESTOCK FARMING27.11.1997 MADRID: AID IN THE PLANT HEALTH SECTOR5.12.1997 AID FOR THE TRANSPORTATION OF CARCASSES22.12.1997 AID FOR MAIZE SHELLERS

France

23.1.1997 AID FOR PERFUME PLANTS IN REUNION OJ C 134 , 29.4.199731.1.1997 RENEWAL OF AID AND PARAFISCAL CHARGES OJ C 148 , 16.5.1997

BENEFITING THE BUREAU NATIONAL INTERPROFESSIONNELDU PRUNEAU

19.2.1997 AID AND PARAFISCAL CHARGE FOR THE COMITE DES OJ C 148 , 16.5.1997FRUITS A CIDRE ET DES PRODUCTIONS CIDRICOLES

28.2.1997 AID AND PARAFISCAL CHARGE FOR THE SOCIETE OJ C 148 , 16.5.1997NATIONALE PROFESSIONNELLE DE LA TOMATE

20.3.1997 AID AND PARAFISCAL CHARGE FOR THE CENTRE DE OJ C 245 , 12.8.1997COOPERATION INTERNATIONALE EN RECHERCHE AGRONO-MIQUE POUR DEVELOPPEMENT

29.4.1997 AID AND PARAFISCAL CHARGE FOR THE COMITE OJ C 243 , 9.8.1997INTERPROFESSIONNEL DU VIN DE CHAMPAGNE (CIVIC)

29.4.1997 AID FOR THE PROTECTION OF BREEDS OF HORSE OJ C 243 , 9.8.1997THREATENED WITH EXTINCTION

16.5.1997 AID AND PARAFISCAL CHARGE FOR JOINT TRADE OJ C 333 , 4.11.1997ORGANISATIONS IN THE WINE SECTOR

16.5.1997 AID AND PARAFISCAL CHARGE FOR THE COMITE OJ C 333 , 4.11.1997INTERPROFESSIONNEL DES VINS DOUX NATURELS

27.6.1997 AID FOR THE CENTRE FOR INTERNATIONAL COOPERATION OJ C 334 , 5.11.1997IN AGRONOMIC RESEARCH FOR DEVELOPMENT (CIRAD)

18.8.1997 AGRICULTURE, FOODSTUFFS AND FORESTRY BILL20.8.1997 AID TO IMPROVE PIG QUALITY IN MOUNTAIN AREAS13.10.1997 PARAFISCAL CHARGE FOR THE CEREALS INDUSTRY

(RENEWAL)13.11.1997 AID AND PARAFISCAL CHARGE ON HORTICULTURAL PRODUCTS

FOR THE BENEFIT OF ANDA

Finland

23.1.1997 AID FOR FORESTRY OJ C 134 , 29.4.199728.1.1997 AID FOR INVESTMENT IN REINDEER BREEDING29.1.1997 AID FOR SMALL INDUSTRIES OJ C 134 , 29.4.19973.2.1997 INVESTMENT AID FOR SKOLTS OJ C 148 , 16.5.19977.3.1997 COMPENSATION FOR CESSATION OF FARMING OJ C 231 , 30.7.19973.4.1997 MEASURES TO CONSOLIDATE LOANS OJ C 245 , 12.8.199729.4.1997 AID FOR THE PARTIAL ACQUISITION OF FARMS OJ C 243 , 9.8.199718.8.1997 AID FOR ENVIRONMENT-FRIENDLY FARMING METHODS27.10.1997 AID MEASURES TO COMPENSATE FOR CROP LOSSES DUE

TO BAD WEATHER31.10.1997 AID MEASURES IN FAVOUR OF REINDEER

Greece

15.1.1997 IMPROVEMENT OF THE QUALITY OF AGRICULTURALPRODUCTS

21.3.1997 AID TO IMPROVE THE QUALITY OF MILK OJ C 231 , 30.7.199729.4.1997 PROGRAMME OF ALTERNATIVE METHODS FOR THE OJ C 243 , 9.8.1997

CONTROL OF CROP DISEASES



20.6.1997 AID FOR THE TRANSFER OF LIVESTOCK UNITS OJ C 362 , 28.11.19974.9.1997 MEASURES IN FAVOUR OF STORM- AND FLOOD-DAMAGED

HOLDINGS4.11.1997 MEASURES IN FAVOUR OF HOLDINGS DAMAGED BY FIRE7.11.1997 RESEARCH IN THE WINE SECTOR UNDER THE COMMUNITY

INITIATIVE INTERREG II

Italy

23.1.1997 FRIULI-VENEZIA-GIULIA: REGIONAL LAW NO 5 OF 28.4.1994 OJ C 134 , 29.4.1997ART. 109(9) AND (10); ART. 118(5); ART. 123

24.1.1997 EMILIA-ROMAGNA: MEASURES TO ASSIST AGRICULTURAL OJ C 148 , 16.5.1997HOLDINGS IN THE MUNICIPALITY OF CORNIGLIOFOLLOWING THE LANDSLIDE

29.1.1997 NATIONAL AIMA PROGRAMME: AID FOR THE PURCHASE OJ C 148 , 16.5.1997OF ETHYL ALCOHOL DISTILLED FROM TABLE WINE

12.2.1997 TUSCANY: AGRICULTURAL PRODUCTS PROMOTIONSCHEME; PARTICIPATION IN SPECIALISED FAIRS

18.3.1997 EMILIA-ROMAGNA: AID FOR AGRICULTURAL COOPERATIVES OJ C 231 , 30.7.199720.3.1997 NATIONAL AIMA PROGRAMME: INTER-BRANCH AGREEMENT OJ C 231 , 30.7.1997

ON THE PROCESSING OF POTATOES21.3.1997 BOLZANO: MEASURES IN THE FORESTRY AND AGRICULTURAL OJ C 245 , 12.8.1997

SECTOR3.4.1997 FRIULI-VENEZIA-GIULIA: REGIONAL LAW NO 200/2 OF 31/1/96, ART.

23, 5 AND 8 - START-UP AID FOR COOPERATIVES - AID FOR THEPURCHASE OF LAND

3.4.1997 FRIULI-VENEZIA-GIULIA: MEASURES IN FAVOUR OF OJ C 245 , 12.8.1997MOUNTAIN AREAS

3.4.1997 VALLE D'AOSTA: REGIONAL MEASURES IN THE OJ C 245 , 12.8.1997AGRICULTURAL SECTOR

21.5.1997 MEASURES TO IMPLEMENT A COMMUNITY SCALE FOR OJ C 346 , 15.11.1997THE CLASSIFICATION OF SHEEPMEAT

28.5.1997 TRENTO: MEASURES IN FAVOUR OF RURAL AREAS (OBJECTIVE 5(b))

29.5.1997 TUSCANY: PROMOTION OF REGIONAL AGRICULTURAL OJ C 376 , 11.12.1997PRODUCTS

29.5.1997 MEASURES IN THE POTATO SECTOR OJ C 376 , 11.12.19974.6.1997 UMBRIA: ADOPTION OF ZOOTECHNICAL STRUCTURES OJ C 347 , 18.11.1997

FOR ENVIRONMENTAL PURPOSES AND "QUALITY MILK"PLAN

4.6.1997 SICILY: MEASURES TO ASSIST YOUNG ENTREPRENEURS OJ C 347 , 18.11.199713.6.1997 TUSCANY: MEASURES TO PROTECT INDIGENOUS ANIMAL OJ C 347 , 18.11.1997

AND PLANT SPECIES13.6.1997 LAZIO: CREATION OF A REGIONAL AGENCY FOR OJ C 333 , 4.11.1997

AGRICULTURE DEVELOPMENT AND TECHNOLOGICALINNOVATION

13.6.1997 SALVI SERVICES SRL PROJECT: INVESTMENT IN THE OJ C 334 , 5.11.1997PROCESSING AND MARKETING SECTOR

27.6.1997 ADVERTISING CAMPAIGN IN THE FRUIT AND VEGETABLESSECTOR

27.6.1997 ABRUZZI: AID MEASURES FOR AGRICULTURE AND THE OJ C 362 , 28.11.1997AGRI-FOODSTUFFS SECTOR

27.6.1997 AID FOR ADVERTISING IN THE AGRICULTURAL SECTOR OJ C 334 , 5.11.199711.7.1997 VALLE D'AOSTA: PROVISION OF WORKING CAPITAL TO OJ C 334 , 5.11.1997

CARRY OUT LAND IMPROVEMENT24.7.1997 PIEDMONT: AID MEASURES TO DEVELOP MOUNTAIN AREAS OJ C 334 , 5.11.199729.7.1997 ADVERTISING CAMPAIGNS FOR AGRICULTURAL PRODUCTS OJ C 334 , 5.11.199729.7.1997 AID FOR INVESTMENTS IN THE AGRI-FOODSTUFFS SECTOR: OJ C 334 , 5.11.1997

"FRUTTAGEL SCRL" PROJECT6.8.1997 MEASURES IN FAVOUR OF CITRUS FRUITS6.8.1997 ADVERTIFING CAMPAIGNS IN THE FRUIT AND VEGETABLES

SECTOR7.8.1997 VENETO: MEASURES IN FAVOUR OF AGRI-FAUNISTIC PRODUCTS12.8.1997 PIEDMONT: REGIONAL LAW OF 6/8/96 ON THE DEVELOPMENT

OF THE AGRI-FOODSTUFFS INDUSTRY12.8.1997 PIEDMONT: AID FOR THE RESTRUCTURING OF SLAUGHTERHOUSES20.8.1997 EMILIA-ROMAGNA: AID IN THE ORGANIC AGRI-FOODSTUFFS

SECTOR12.9.1997 TUSCANY: AID FOR ORGANIC FARMING OJ C 334 , 5.11.1997

STATE AID


1.10.1997 TUSCANY: PROMOTION OF AGRICULTURAL PRODUCTS1.10.1997 PIEDMONT: DEVELOPMENT OF BEE-KEEPING13.10.1997 TUSCANY: IMPROVEMENT OF AGRICULTURAL STRUCTURES21.10.1997 ABRUZZI: EXTRAORDINARY MEASURES IN THE POTATO

SECTOR27.10.1997 BOLZANO: AID FOR MOUNTAIN PASTURES4.11.1997 SARDINIA: BUSINESS LOANS IN THE AGRICULTURAL SECTOR14.11.1997 TRENTO: NATURAL DISASTERS IN THE AGRICULTURAL

SECTOR27.11.1997 NATIONAL AIMA PROGRAMME - PURCHASE OF PRODUCTS

OBTAINED FROM THE PREVENTIVE DISTILLING OF NATIONALTABLE WINES

27.11.1997 MOLISE: AID TO FARMERS' ASSOCIATIONS FOR THE KEEPINGOF HERD-BOOKS

2.12.1997 LOMBARDY: STANDARDS FOR THE PROCESSING, STORAGEAND USE OF LIVESTOCK MANURE

11.12.1997 NATIONAL AIMA PROGRAMME - AID FOR STORING POTATOES GROWN IN 199711.12.1997 AID FOR BUFFALO MILK PRODUCTION11.12.1997 FRIULI-VENEZIA-GIULIA: MEASURES IN THE AGRI-TOURISM

SECTOR; REGIONAL LAW NO 10, ARTS. 24, 20 AND 3119.12.1997 TUSCANY: AID IN THE ZOOTECHNICAL SECTOR19.12.1997 BASILICATA: AID FOR AGRICULTURAL PRODUCT PROCESSORS19.12.1997 AID FOR MILK PRODUCTS

Ireland

20.5.1997 AGRIMONETARY COMPENSATION29.7.1997 AGRIMONETARY COMPENSATION OJ C 334 , 5.11.19977.8.1997 FOOD SUB-PROGRAMME - INDUSTRIAL DEVELOPMENT14.11.1997 AGRIMONETARY COMPENSATION

Luxembourg

7.3.1997 MODERNISATION OF THE SEED STATION AT THE MERSCH AGROCENTER

Netherlands

13.3.1997 AID AND PARAFISCAL CHARGES FOR PUBLICITY FOR FRUITAND VEGETABLES OJ C 245 , 12.8.1997

20.3.1997 AID AND PARAFISCAL CHARGES FOR THE MARKETINGOF MUSHROOMS OJ C 245 , 12.8.1997

3.4.1997 IMPROVEMENT OF AGRICULTURAL STRUCUTRES OJ C 231 , 30.7.19973.4.1997 AID AND PARAFISCAL CHARGES FOR RESEARCH IN THE

FEEDINGSTUFFS SECTOR OJ C 231 , 30.7.199713.5.1997 AID FOR DEMONSTRATION PROJECTS OJ C 243 , 9.8.199716.5.1997 AID AND PARAFISCAL CHARGES FOR PUBLICITY AND

RESEARCH IN THE POTATO SECTOR OJ C 333 , 4.11.199728.5.1997 AID AND PARAFISCAL CHARGES FOR RESEARCH AND

ADVISORY SERVICES IN FORESTRY OJ C 333 , 4.11.199729.5.1997 AID FOR INNOVATIONS IN RURAL AREAS OJ C 376 , 11.12.19974.6.1997 QUALITY CONTROL MEASURES FOR FLOWER BULBS OJ C 362 , 28.11.199724.7.1997 AID AND PARAFISCAL CHARGES IN CONNECTION

WITH COMPESNATION FOR DAMAGE CAUSED BY POTATODISEASE OJ C 334 , 5.11.1997

7.8.1997 AID AND PARAFISCAL CHARGES FINANCING AID FOR PUBLICAWARENESS CAMPAIGNS AND COMBATING EPIZOOTICDISEASES IN THE BEEF AND VEAL AND PIGMEAT SECTORS OJ C 334 , 5.11.1997

4.9.1997 AID FOR IMPROVING STRUCTURES IN HORTICULTURE UNDERGLASS

19.12.1997 AID AND PARAFISCAL CHARGES IN THE POULTRY ANDEGG SECTOR

Portugal

23.1.1997 MADEIRA: MARKETING OF AGRICULTURAL PRODUCTS OJ C 134 , 29.4.19974.2.1997 PROCESSING AND MARKETING OF AGRICULTURAL AND

FORESTRY PRODUCTS OJ C 148 , 16.5.1997



11.2.1997 MADEIRA: PROGRAMME REGIS II OJ C 148 , 16.5.19974.3.1997 MEASURES TO ASSIST BUSINESSES IN DIFFICULTY OJ C 148 , 16.5.19973.4.1997 MADEIRA: MEASURES TO CONVERT CROPS AND IMPROVE

AGRICULTURAL PRODUCTS OJ C 245 , 12.8.19973.4.1997 IMPROVEMENT OF AGRICULTURAL STRUCTURES OJ C 231 , 30.7.199712.8.1997 MADEIRA: IMPROVEMENT OF AGRICULTURAL STRUCTURES4.11.1997 EXCEPTIONAL CLIMATIC CONDITIONS - AID FOR ECONOMIC

OPERATORS14.11.1997 CROP INSURANCE SCHEMES, SIPAC22.12.1997 DEVELOPMENT LOANS IN AGRICULTURE

Sweden

23.1.1997 AGRIMONETARY COMPENSATION OJ C 134 , 29.4.19973.4.1997 AID FOR RELIEF SERVICES ON FARMS OJ C 245 , 12.8.199712.8.1997 AGRIMONETARY COMPENSATION12.8.1997 SCHEME TO REDUCE NITRATE INFILTRATION INTO THE SOIL BY

MULTIANNUAL GRASSLAND CULTIVATION

United Kingdom

22.1.1997 AMENDMENT TO THE WOODLAND GRANT SCHEME OJ C 148 , 16.5.199723.1.1997 ISLE OF MAN: CRISES AFFECTING CATTLE AND ACTIVITIES

CONNECTED WITH CATTLE FARMING OJ C 134 , 29.4.199725.2.1997 AID FOR THE NATIONAL MILK RECORDS TRANSFER PRODUCE OJ C 148 , 16.5.199728.2.1997 COMPENSATION FOR THE LOSSES INCURRED BY THE RENDERING

INDUSTRY AS A RESULT OF THE BSE CRISIS OJ C 148 , 16.5.199713.3.1997 THE FARM WOOODLAND PREMIUM SCHEME OJ C 245 , 12.8.19973.4.1997 SCOTLAND: COUNTRYSIDE PREMIUM SCHEME OJ C 245 , 12.8.199729.4.1997 WALES: PROGRAMME LEADER II (IMPLEMENTATION OJ C 243 , 9.8.1997

OF THE COMMUNITY INITIATIVE LEADER II)30.4.1997 ENGLAND: ENVIRONMENTALLY SENSITIVE AREAS OJ C 243 , 9.8.199730.5.1997 ISLE OF MAN: CONSTRUCTION OF A NEW SLAUGHTERHOUSE OJ C 334 , 5.11.199718.6.1997 BRITISH POTATO COUNCIL (ASSISTANCE FOR THE POTATO AND

PROCESSED PRODUCTS INDUSTRY) OJ C 334 , 5.11.199720.6.1997 WALES: TIR CYMEN FARMLAND STEWARDSHIP OJ C 362 , 28.11.1997

SCHEME (PROMOTION OF PRACTICES COMPATIBLE WITH THEREQUIREMENTS OF THE ENVIRONMENT)

27.6.1997 NORTHERN IRELAND: PROTECTION AND IMPROVEMENT OFNATURE RESERVES OJ C 362 , 28.11.1997

27.11.1997 COUNTRYSIDE STEWARDSHIP SCHEME2.12.1997 SMALL FIRMS LOAN GUARANTEE SCHEME

1.2. Aid cases in which Article 93(2) proceedings were initiated

Austria

18.8.1997 INVESTMENT IN THE STARCH SECTOR OJ C 342 , 12.11.1997

Germany

31.1.1997 BADEN-WÜRTTEMBERG: AID FOR FARMS

Spain

6.3.1997 LA RIOJA: AID FOR THE AGRI-FOODSTUFFS INDUSTRY OJ C 135 , 30.4.199729.4.1997 AID FOR HIJOS DE ANDRÉS MOLINA OJ C 196 , 26.6.1997

(HAMSA)16.5.1997 BALEARIC ISLANDS: AID FOR ASOCIACIÓN OJ C 204 , 4.7.1997

GENERAL AGRARIA MALLORQUINA SA

STATE AID


France

28.1.1997 REDUCTION IN THE EXCISE DUTY ON MINERAL OILS

Greece

30.5.1997 AID FOR LENTIL PRODUCERS IN THE LEVKADA PREFECTURE OJ C 225 , 24.7.199719.12.1997 FINANCIAL REORGANISATION OF A DAIRY COOPERATIVE19.12.1997 AID FOR THE REPAYMENT OF COOPERATIVES' DEBTS

Italy

23.1.1997 SICILY: REGIONAL LAW NO 81/95: APPLICATION IN THE SECTORSOF THE PRODUCTION OR PROCESSING AND MARKETING OF ANNEX IIPRODUCTS OJ C 088 , 19.3.1997

21.3.1997 SICILY: REGIONAL LAW NO 33/96; PROVISIONS APPLICABLE TOTHE SECTORS OF PRODUCTION OR PROCESSING ANDMARKETING OJ C 201 , 1.7.1997

27.6.1997 SICILY: AID FOR CITRUS FRUIT PRODUCTION12.8.1997 FRIULI-VENEZIA-GIULIA: AID FOR INFORMATION,

DEMONSTRATION AND PILOT PROJECTS; COMPENSATIONFOLLOWING BSE

31.10.1997 MOLISE: AID FOR COOPERATIVES

Netherlands

30.5.1997 AID AND PARAFISCAL CHARGES FOR ADVERTISING ORNAMENTAL OJ C 227 , 26.7.1997 PLANTS

Portugal

27.2.1997 AID FOR EPAC10.10.1997 LINE OF CREDIT FOR RELIEF FROM INDEBTEDNESS OF INTENSIVE STOCK-REARING

BUSINESSES AND RECOVERY OF THE PIG-BREEDING SECTOR

1.3. Aid cases in which Article 93(2) proceedings were terminated by way of a positive decision

Germany

24.7.1997 BADEN-WÜRTTEMBERG: AID FOR FARMS

Spain

2.6.1997 NAVARRA: AID FOR CÁRNICAS DEL SADAR OJ C 320 , 21.10.199724.7.1997 IMPROVEMENT AND MODERNISATION OF FARMS OJ C 316 , 17.10.19976.8.1997 LA RIOJA: AID FOR THE AGRI-FOODSTUFFS INDUSTRY OJ C 311 , 11.10.1997

Italy

7.8.1997 SICILY: REGIONAL LAW NO 81/95: APPLICATION IN THESECTORS OF PRODUCTION OR PROCESSING ANDMARKETING OF ANNEX II PRODUCTS OJ C 269 , 5.9.1997



Portugal

27.2.1997 SUBSIDISED SHORT-TERM LOANS IN AGRICULTURE OJ C 121 , 19.4.1997

1.4. Aid cases in which the Commission took a negative final decision pursuant to the firstsubparagraph of Article 93(2) of the EC Treaty

Belgium

22.12.97 GRANT OF A REGIONAL PREMIUM FOR GROWING WINTER RAPE FORNON-FOODSTUFF PURPOSES

France

2.4.97 AID TO THE SHEEPMEAT INDUSTRY OJ L 248 , 11.9.97

Italy

18.3.97 BIO-FUELS DERIVED FROM OLEAGINOUS PLANTS16.4.97 ARTICLE 12 OF REGIONAL LAW NO 17/92 AND ARTICLE 5 OJ L 248 , 11.9.97

OF REGIONAL LAW NO 44/88 (MUTUI DI ASSESTAMENTO)

Portugal

9.7.97 AID FOR EPAC OJ L 311 , 14.11.97

1.5. Council Decisions under Article 93(2) of the EC Treaty

COUNCIL DECISION OF 22 JULY 1997 CONCERNING THE UNDERWRITING BY THE ITALIAN GOVERNMENT OF PERSONALGUARANTEES PROVIDED BY MEMBERS OF AGRICULTURAL COOPERATIVES

2. In the fisheries sector

2.1. Measures which the Commission considered compatible with the common market withoutopening an investigation under Article 93(2) of the EC Treaty

Netherlands

N 460/97 11.12.1997 EARLY RETIREMENT AIDN 690/97 12.12.1997 PROMOTION FUND PAID FOR BY

PARAFISCAL CHARGESOJ C 25, 24.1.1998

Spain

NN 4/96 12.02.1997 AID TO THE OWNERS OF FISHINGVESSELS OPERATING IN MAURITANIANWATERS

OJ C 93, 22.3.1997

N 178/97 22.05.1997 MEASURES TO IMPROVE FISHING PORTS OJ C 218, 18.7.1997NN 115/96 04.06.1997 SOCIO-ECONOMIC MEASURES IN THE

FISHING INDUSTRYOJ C 218, 18.7.1997

N 244/97 04.06.1997 AID FOR THE TEMPORARY LAYING-UP OFFISHING VESSELS

OJ C 231, 30.7.1997

N 116/97 17.07.1997 AID FOR THE FISHING INDUSTRY(BASQUE COUNTRY)

OJ C 245/97, 12.8.1997

STATE AID


Germany

N 83/97 10.03.1997 AID FOR INVESTMENTS IN AQUACULTUREAND THE MARKETING OF FISHERYPRODUCTS

OJ C 106, 4.4.1997

N 26/97 11.03.1997 AID FOR THE FISHING INDUSTRY(MECKLENBURG-WESTERN POMERANIA)

OJ C 129, 25.4.1997

N 68/97 01.04.1997 AID FOR FISHERIES AND AQUACULTURE(HESSEN)

OJ C 141, 8.5.1997

N 93/97 04.04.1997 STRUCTURAL MEASURES IN THEFISHERIES AND AQUACULTURE SECTOR

OJ C 173, 7.6.1997

N 762/97 04.04.1997 AID FOR PROCESSING AND MARKETINGFISHERY PRODUCTS (LOWER SAXONY)

OJ C 218, 18.7.1997

N 164/97 21.04.1997 AID TO THE KIELER FÖRDE COOPERATIVE OJ C 173, 7.6.1997N 291/97 17.06.1997 AID TO THE MAASHOLM COOPERATIVE OJ C 231, 30.7.1997N 130/97 11.07.1997 AID FOR EXPERIMENTAL FISHING OJ C 245, 12.8.1997N 602/97 04.11.1997 IMPROVEMENT OF THE PROCESSING AND

MARKETING CONDITIONS FOR FISHERYPRODUCTS

OJ C 363/97, 9.11.1997

Denmark

N 803/97 13.02.1997 AID FOR CONSULTANCY SERVICES OJ C 173, 7.6.1997N 544/A/96 12.03.1997 AID FOR YOUNG FISHERMEN OJ C 173, 7.6.1997N 535/97 22.09.1997 AID FOR EXPERIMENTAL FISHING OJ C 329, 31.1.1997

Portugal

N 718/96 12.03.1997 AID FOR NON-INDUSTRIAL FISHING OJ C 173, 7.6.1997

France

N 448/95 17.02.1997 AID FOR THE PURCHASE OF THEJEGOQUERE GROUP BY PESCANOVA

OJ C 88, 19.3.1997

N 850/96 16.04.1997 JOINT OWNERSHIP FUND FORNON-INDUSTRIAL FISHING

OJ C 173, 29.6.1997

N 297/97 11.06.1997 PARAFISCAL CHARGES TO FUNDFISHERIES COMMITTEES

OJ C 207, 8.7.1997

N 614/97 01.12.1997 PARAFISCAL CHARGES TO FINANCE FIOM OJ C 395, 1.12.1997

United Kingdom

NN 116/92 13.02.1997 AID FOR THE BUILDING, MODERNISATIONAND PURCHASE OF FISHING VESSELS

OJ C 173, 7.6.1992

N 298/97 19.08.1997 LIFE FISHERIES ASSISTANCE SCHEME OJ C 288, 23.9.1997NN 53/96 16.09.1997 LOANS TO SMES IN THE FISHERIES AND

AQUACULTURE SECTOROJ C 342, 2.11.1997

NN 140/97 18.11.1997 AID FOR THE DEFINITIVE WITHDRAWALOF FISHING VESSELS

OJ C 395, 1.12.1997

Belgium

N 879/96 20.01.1997 CREATION OF A FINANCING INSTRUMENTFOR THE FISHERIES AND AQUACULTURESECTOR

OJ C 39, 8.2.1997



NN 73/96 22.01.1997 PROMOTION FUND FINANCED OUT OFPARAFISCAL CHARGES

OJ C 67, 4.3.1997

N 325/B/96 05.03.1997 AID FOR AQUACULTURE OJ C 141, 8.5.1997NN 127/97 03.12.1997 AID FOR JOINT VENTURES, THE

CREATION OF COASTAL MARINE AREASAND THE TEMPORARY CESSATION OFFISHING

OJ C 25/98, 24.1.1998

Italy

NN 138/94 12.02.1997 AID FOR THE TEMPORARY LAYING-UP OFFISHING VESSELS - 1993

OJ C 93, 22.3.1997


OJ C 93, 26.4.1997


OJ C 93, 22.3.1997

N 414/96 16.04.1997 INVESTMENT AID IN THE FISHERIESSECTOR

OJ C 173, 7.6.1997

NN 112/96 04.06.1997 APPLICATION OF LAW NO 72 OF 5.5.1992ON THE NATIONAL FISHERIESSOLIDARITY FUND

OJ C 207, 8.7.1997

NN 413/93 30.07.1997 AID TO SUPPORT FISHERIES ANDAQUACULTURE (ABRUZZI)

OJ C 288, 23.9.1997

NN 84/96 30.07.1997 AID FOR THE TEMPORARY CESSATION OFFISHING ACTIVITIES

OJ C 291, 25.9.1997

N 248/97 30.07.1997 AID FOR TEMPORARY CESSATION 1997-98(SICILY)

OJ C 288, 23.9.1997

N 245/97 30.07.1997 AID FOR THE TEMPORARY CESSATION OFFISHING ACTIVITIES

OJ C 288, 23.9.1997

N 250/97 30.07.1997 AID FOR FISHERIES (SICILY) OJ C 288, 23.9.1997N 146/97 02.09.1997 EXCEPTIONAL MEASURES TO ASSIST

COMMERCIAL FISHERMEN ON LAKEMAGGIORE

OJ C 329, 1.10.1997

N 340/C/96 02.09.1997 AID FOR FISHERIES OJ C 329, 1.10.1997N 348/97 24.09.1997 INTERREG II MEASURES -

ITALY/SWITZERLAND (LOMBARDY)OJ C 329, 1.10.1997

N 665/97 12.12.1997 AID FOR COMMERCIAL FISHERMEN INDIFFICULTIES AS A RESULT OFEXCEPTIONAL EVENTS (LOMBARDY)

OJ C 3, 7.1.1998

N 757/97 19.12.1997 AID FOR THE WITHDRAWAL OF VESSELSFROM FISHING

OJ C 25, 24.1.1998

N 570/96 19.12.1997 AID FOR TUNA FISHING (SARDINIA) OJ C 25, 24.1.1998

2.2. Aid cases in which the Commission initiated Article 93(2) proceedings

Netherlands

C 42/96 18.06.1997 INDIVIDUAL AID TO A FISH AUCTIONMARKET

OJ C 334, 5.11.1997

Italy

C 54/97 30.07.1997 AID FOR TEMPORARY LAYING-UP (SICILY) OJ C 327, 9.10.1997C 79/97 03.12.1997 AID FOR RECAPITALISING FISHERIES

COOPERATIVES

STATE AID


2.3. Aid cases in which the Commission terminated Article 93(2) proceedings

Italy

C 10/95 12.02.1997 AID FOR FISHERIES - LAW NO 650 OJ C 93, 22.3.1997C 61/96 07.08.1997 ARTICLE 9 OF REGIONAL LAW NO 81/95

Germany

C 43/91 21.05.1997 AID FOR THE MODERNISATION, BUILDINGAND PURCHASE OF VESSELS

OJ C 204, 4.7.1997

France

C 54/91 02.04.1997 RENEWAL OF THE FISHING FLEET -LOWER NORMANDY

OJ C 179, 13.6.1997

2.4. Aid cases in which the Commission proposed appropriate measures under Article 93(1) ofthe EC Treaty

Netherlands

E 14/95 04.06.1997 HERRING PROMOTION FUND OJ C 235, 2.8.1997

Sweden

E 18/95 16.09.1997 EXISTING MEASURES IN THEAQUACULTURE AND FISHERIES SECTOR

OJ C 354, 1.11.1997

3. In the transport sector

3.1. Inapplicability of Article 92

Denmark

NN 141/95 14.5.1997 DSB RederiN 589/97 3.12.1997 Compensation for expropriation of a ferry berth in Helsingørport

Italy

C 38/94 16.7.1997 Lloyd Triestino

United Kingdom

N 392/95 21.10.1997 Northern Isles Passenger Ferry



Portugal

N 601/97 16.12.1997 Exceptional measures in favour of road transport

3.2. Decisions to raise no objection

Denmark

N 306/97 30.7.1997 Training of seafarers/stamp dutyN 387/97 30.7.1997 Guarantee scheme for small cargo vessels

France

NN 51/97 30.4.1997 Merchant marine support planN 490/97 1.10.1997 Measures in favour of waterway transport

Sweden

NN 63/97 28.5.1997 Aid for shipping companies

Netherlands

NN 89/97 16.7.1997 Tonnage taxN 79/97 22.10.1997 Combined transportN 115/97 30.7.1997 Railway siding

Belgium

N 380/96 12.3.1997 Inland navigation

United Kingdom

N 29/97 19.11.1997 Railfreight distribution

Germany

N 224/97 16.7.1997 Bruno Bischoff Rederei (Bremen)N 525/97 16.12.1997 Inland navigation

Ireland

N 322/97 17.12.1997 Reimbursement of social security contributions (partly noobjections)

Luxembourg

N 571/97 1.10.1997 Inland navigation

STATE AID


Greece

N 713/97 5.11.1997 Rion-Antirion motorway bridge

3.3. Initiation of Article 93(2) proceedings

Italy

NN 129/95 5.2.1997 Measures in favour of road transport (Friuli-Venezia Giulia)NN 144/97 21.10.1997 Aid for the purchase of ships (Sardinia)

Ireland

N 322/97 17.12.1997 Reimbursement of social security contributions (partialinitiation)

Netherlands

N 854/95 20.1.1997 Combined transport

3.4. Positive final decisions

Portugal

C 15/9416.4.1997 TAP

France

C 23/9416.4.1997 Air France

Italy

C 38/9415.7.1997 AlitaliaC 52/9530.7.1997 Regional Law No 8/93 (Friuli-Venezia Giulia)

3.5. Negative final decisions

Italy

C 45/95 22.1.1997 Measures in favour of road transport(decision correcting the decision of 22.10.96)

C 23/96 21.10.1997 Aid for the purchase of ships (Sardinia)C 8/97 30.7.1997 Measures in favour of road transport

(Friuli-Venezia Giulia)



3.6. Appropriate measures

Spain

NN 1/96 5.11.1997 Trasmediterranea

E - Judgments of the Community courts


Case Parties Date PublicationT-106/95 FFSA v Commission 27.2.97 [1997] ECR II-229T-25/96 Arbeitsgemeinschaft Deutscher

Luftfahrt-Unternehmen and Others vCommission

14.3.97 [1997] ECR II-363

T-40/97 Pearle BV and Others v Commission 23.7.97T-150/95 UK Steel Association v Commission 25.9.97T-4/97 Roberto d’Orazio and Pierre Hublau v

Commission29.9.97

T-70/97 Région wallonne v Commission 29.9.97T-239/94 Association des aciéries européennes

indépendantes v Commission24.10.97

T-243/97 British Steel v Commission 24.10.97T-244/94 Wirtschaftsvereinigung Stahl and Others

v Commission24.10.97

T-149/95 J. Richard Ducros v Commission 5.11.97T-85/97 Fédération Horeca-Wallonie v

Commission20.11.97

T-178/94 Asociación Telefónica de Mutualistas(ATM) v Commission

18.12.97

2. Court of Justice

Case Parties Date PublicationC-169/95 Spain v Commission 14.1.97 [1997] ECR 135C-46/96R Germany v Commission 4.3.97C-24/95 Land Rheinland-Pfalz & Alcan

Deutschland v Commission20.3.97 [1997] ECR I-1591

C-95/97 Région wallonne v Commission 21.3.97 [1997] ECR I-1787C-292/95 Spain v Commission 15.4.97 [1997] ECR I-1931C-278/95P Siemens SA v Commission 15.5.97 [1997] ECR I-2507C-355/95P Textilwerke Deggendorf GmbH v

Commission and Federal Republic ofGermany

15.5.97 [1997] ECR I-2549

C-66/97 Banco de Fomento e Exterior SA v 30.6.97 [1997] ECR I-3757

STATE AID


Pechim and OthersC-55/97P AIUFASS and AKT v Commission 6.10.97C-353/95P Tiercé Ladbroke SA v Commission 9.12.97

F – Enforcement of Commission decisions ordering the recovery of aid(1982-1997)

MS Name Date ofdecision

OfficialJournal

Formtaken bythe aid

Amountto be

repaid

Current status Remarks

(ECUmillion)

Repaid Notrecoverable

Not yetrepaid

B Balamundi 10.3.1982 L 138(1982)

Capitalinjection,soft loan,loanguarantee

7 x Company insolvent.

NL Leeuwarder 22.7.1982 L 277(1982)

Capitalinjections

1.84 x Decision annulled byCourt of Justice.(13.3.1985, Cases296/82 and 318/82).

B Intermills 22.7. 1982 L 280(1982)

Capitalinjections

58.75 x Decision annulled byCourt of Justice.(14.11.1984), Case323/82).

B Boch 16.2.1983

24.10.1984

10.6.1986

L 91(1983)L 59(1985)L 223(1986)

Capitalinjection

11.9

2

2.5

x

x

x

Company insolvent.See also judgments ofCourt of Justice of15.1.1986, Case 52/89,and 10.7.1986, Case40/85.

B Beaulieu I(Fabelta)

30.11.1983 L 62(1984)

Capitalinjection

13.27 x Action brought againstMS for failure to fulfilobligations. CJ judg.finding that dec. had notbeen implemented(21.1.90, Case C-74/89).Latest national crt judg.in 1994. Appeal pendingbefore Crt of Appeal.Amount to be repaid isin blocked account



B Meura 17.4.1984

22.10.1986

L 276(1984)L 20(1987)

Capitalinjection

3.6

1.2

x

x

Company insolvent.Judgment of the Court ofJustice upholdingdecision (10.7.1986,Case 234/84).

B Beaulieu II(Idealspun)

27.6.1984 L 283(1984)

Capitalinjection

5.41 x Action against MS forfailure to fulfilobligations. CJ judg.finding that dec. notimplemented (9.4.87,Case 5/86); non-compliance with judg. inCase 5/86 (19.2.91,Case C-375/89). Appealpending before Crt ofAppeal. Amount due inblocked a/c.

UK DeanDove

23.7.1984 L 238(1984)

Grant 1.5 x Company stoppedtrading in 1989 and waswound up in 1994.Actions before nationalcourts againstcompany's directors.

F LaChapelle-Darblay

28.9.1984 L 273(1984)

Equityloan

30 x Company insolvent.

NL RSV 19.12.1984 L 188(1985)

Grant 135 x Decision annulled byCourt of Justice(24.11.1987, Case223/85).

D Deufil 10.7.1985 L 278(1985)

Grants 1.53 x Judgment of Court ofJustice upholdingdecision (24.2.1987,Case 310/85); nationalcourt upholds decision.Tax authorities recoverthe investment grant.As regards aid from theLand: action beforenational courts.

STATE AID


D Alcan 14.12.1985 L 72(1986)

Grants 4.18 x Action against MS forfailure to fulfilobligations. Judgment ofthe Court of Justicefinding that decision hadnot been implemented(2.2.89, Case C-94/87).Case pending beforenational courts. See alsojudgment of 20.3.97 inCase C-24/95.

D Deggendorf I 21.5.1986 L 300(1986)

Grant andsoft loan

3.2 x Case pending beforenational courts.Judgment given byCourt of Justice inresponse to a requestfor a preliminary ruling(9.3.1994, Case C-188/92).

F SEB 14.1.1987 L 152(1987)

Soft loan 12.7 x Judgment of Court ofJustice upholdingdecision (13.7.1988,Case 102/87).

B Tubemeuse 4.2.1987 L 227(1987)

Capitalinjections

292 x Judgment of Court ofJustice upholdingdecision (21.3.1990,Case C-142/87).

F Usinor-Sacilor

25.3.1987 L 290(1987)

Capitalinjections

470 x

F Boussac 15.7.1987 L 352(1987)

Capitalinjections,soft loans,reductionsin socialsecuritycontributions

51.5 x Judgment of Court ofJustice upholdingdecision (14.2.1990,Case C-301/87).Judgment of nationalcourt in 1994 upholdingrepayment of theprincipal but not of theinterest. Repayment ofFF 358 million (FF338.56 million principal+ interest).



D BUG-Aluminium

17.11.1987 L 79(1988)

Grant 1.05 x Action brought againstMS for failure to fulfilobligations. CJ judg.finding that dec. had notbeen implemented(20.9.90, Case C-5/89).Various national courtshave confirmed thatrepayment is due.Appeal pending beforeFederal AdministrativeCourt.

F Isoroy 9.12.1987 L 119(1988)

Interest-free loan,equityloans,repaymentholiday

2.09 x

F Renault 29.3.1988 L 220(1988)

Soft loans 33.9 x

F Tenneco 29.3.1988 L 229(1988)

Grantsandinterestsubsidies

26 x Decision implemented in1990.

I ENI/Lanerossi

26.7.1988 L 16(1989)

Capitalinjection

136.5 x Judgment of Court ofJustice upholdingdecision (21.3.1991,Case C-303/88).Judgment of Court ofJustice in action againstMS for failure to fulfilobligations (4.4.1995,Case C-350/93).

F Valeo 23.11.1988 L 143(1989)

Soft loans 1.68 x

F Peugeot 21.12.1988 L 123(1988)

Soft loans 16.1 x

G Exemptionfrom taxeson exports

3.5.1989 L 394(1989)

Taxexemptiononearningsfromexports

Notspecified

x Action brought againstMS for failure to fulfilobligations. Judgmentof Court of Justicefinding that decision hadnot been implemented(10.6.1993, Case C-183/91).

STATE AID


I Aluminia-Comsal

24.5.1989 L 118(1990)

Interest-free loans

54 x Judgment of CJupholding dec. in 1991(Case C-261/89). Actionbrought against MS forfailure to fulfilobligations. Judgment ofCJ finding that the dec.had not beenimplemented (23.2.95,Case C-349/93). Repaidin the context of Alumixcase.

I AlfaRomeo

31.5.1989 L 394(1989)

Capitalinjection

339 x Judgment of Court ofJustice upholdingdecision (21.3.91, CaseC-305/89). Actionbrought against MS forfailure to fulfilobligations. Judgment ofCourt of Justice findingthat decision had notbeen implemented(4.4.95, Case C-348/93).

F Machinesfrançaiseslourdes(MFL)

20.12.1989 L 182(1992)

Soft loan 3.7 x Decision implemented:soft loan converted intoa loan at a commercialrate.

E Magefesa 20.12.1989 L 5(1991)

Loanguarantees,soft loans,grants

7.2 x The aid has not yet beenrepaid in full. Initiationof 93(2) proceedings on15.7.1997 and inquiryinto the repaymentsituation.

G Halkis 2.5.1990 L 73(1991)

Repaymentholiday

Not-quantifie

d

x Sale of Halkis toCalcestruzzi (highestbid) and agreement withcreditors have producedthe best achievableresult. The Commissionaccordingly decided on29.5.1996 that Greecehad implemented thedecision.

D Montblanc-Simploand others

18.7.1990 L 215(1991)

Grants 14.26 x Decision annulled byCourt of Justice(13.4.1994, Cases C-324/90 and C-342/90).



I Mezzogiorno 25.7.1990 L 86(1991)

Grants Notspecified

x Decision partiallyannulled by Court ofJustice (28.4.1993, CaseC-364/90). The Italianauthorities haveindicated that they donot intend to grant theaid. A decision closingthe file on the case ispending.

D SchiffswerftGermersheim

12.12.1990 L 158(1991)

Loanguarantees

1.11 x

D Reinhold 17.12.1990 L 156(1991)

Interestsubsidy

0.029 x

F Saint-Gobain

26.3.1991 L 215(1991)

Grant 0.37 x

I Ferriereacciaieriesarde SpA

5.6.1991 L 298(1991)

Grant 0.96 x Judgment of Court ofJustice upholdingdecision (5.3.1993, CaseC-102/92).

UK Toyota 31.7.1991 L 6(1992)

Sale of landat apreferentialprice

5.46 x

I Arbatax 27.11.1991 L 159(1992)

Capitalinjectionandinterestsubsidy

36 x Company insolvent(Prodi Act).

E Intelhorce 25.3.1992 L 176(1992)

Capitalinjection

27.7 x Recovery of ESP 485million as part ofwinding-up of thecompany.

E Imepiel 25.3.1992 L 172(1992)

Capitalinjection

53 x Company insolvent. Norecovery of aid.

E Hytasa (nowMediterraneoTecnicaTextil SA)

25.3.1992

18.9.1996

L 171(1992)L 96(1997)

Capitalinjection

26 x

x

Decision partly annulledby Court of Justice(14.9.1994, Case C-278/92). NewCommission decision of18.9.1996 before theCourt (Case C-415/96).

D Daimler-Benz

14.4.1992 L 263(1992)

Sale ofland at apreferential price

17.7 x

STATE AID


B Siemens 24.6.1992 L 288(1992)

Grant 5.6 x

largelyrepaid

Capital + interest repaidon 6.7.95. Talks withthe authorities abouthow to calculate theinterest. Balance stilloutstanding. Court ofJustice dismissedappeal against judgmentof CFI upholdingdecision (15.5.97, CaseC-278/95P).

UK BritishAerospace/ Rover

9.3.1993 L 143(1993)

Grants 60.68 x Commission's firstdecision annulled by theCourt of Justice(4.2.1992, Case C-294/90).

D BremerVulkan

6.4.1993 L 185(1993)

Capitalinjectionwith aview to theacquisitionof anothercompany

65 x Decision annulled byCourt of Justice(24.10.1996, Case C-329/93). Commissionprepared new decision.Meanwhile companydeclared insolvent.

F Parismutuelurbain

22.9.1993 L 300(1993)

Taxbreaks

2.2 x Judgment of CFI(27.1.1988, Case T-67/94) annulled decisionof 22.9.1993.

D Volkswagen-Sachsen

27.7.1994 L 38531.12.1994

Grant 8.3 x

F AlliedSignalFibersEurope SA

17.1.1995 L 159(11.7.1995)

Grant 0.9 x

E Piezas yRodajes(PYRSA)

14.3.1995 L 25727.10.1995

Grant;loanguarantee;interestsubsidy;gift of land

Notspecified

x Judgment of Court ofJustice upholdingCommission decision(14.1.1997, Case C-169/95). Company hassuspended payments.Appeal by companyagainst theadministrative decisionordering thereimbursement.

B DAF TrucksVlaanderen

4.10.1995 L 1520.1.1996

Grant 0.23 x

NL DAF NV(Netherlands)

4.10.1995 L 15(20.1.1996)

Grant 8.1 x Company being woundup; repayment unlikely.



D NeueMaxhütteStahlwerkeGmbH(decisions IIandt III)

18.10.1995

13.3.1996

L 53(2.3.1996)

L 198(8.8.1996)

Loans

Loans

25.64

12.39

x

x

Decisions of 18.10.95and 13.3.96 before CFIand CJ (Cases T-2/96,T-97/96 and C-195/96).Order of 3.5.96 (C-399/95R) rejectssuspension ofimmediate application ofthe decision of 18.10.95.Appeal by the Land tonational courts.

D HamburgerStahlwerkeGmbH

31.10.1995 L 78(28.31996)

Soft loans approx. 82

x Pending before CFI(Case T-234/95) andCourt of Justice (CaseC-404/95). Appeal byGovernment to nationalcourts. Aid has beenpartly repaid.

F CDRA 21.2.1996 L 144(18.6.1996)

Grant 1.4 x

I Altiforni eFerriere diServola

27.3.1996 L 216(17.8.1996)

Guarantee 1 x Company being woundup. The State has takenover its debts.Reference made to theCourt of Justice for apreliminary ruling (C-200/97).

D WalzwerkIlsenburg

29.5.1996 L 233(14.9.1996)

Grant 3.5 x Pending before CFI(Case T-129/96).

I BredaFucineMeridionali

29.5.1996 L 27225.10.1996

Grants;capitalinjection

60 x Application made byrecipient to CFI (Case T-126/96). The assetshave been transferred toanother publicundertaking.

I Siderpotenza 20.6.1996 L 314 Grants 5 x Appeal by company tonational courts.

D MercedesBenzLudwigsfelde

26.6.1996 L 5(9.1.1997)

Sale of landat apreferentialprice

4.41 x

D SiemensAG/SiemensNixdorfInformations-systeme AG

17.7.1996 L 283(5.11.1996)

Sale ofland at apreferential price

2.52 x Appeal by City of Mainzto CFI. Order of Courtof Justice of 6.12.96rejects suspension ofimmediate application.Appeal withdrawn.

STATE AID


I Acciaieriedi Bolzano

17.7.1996 L 27426.10.1996

Loans,outrightgrants

6.5 x Pending before CFI(Case T-158/96).

Pending beforeadministrative court.

The Italian authoritieshave suspended the aidalready authorised.

E Tubacex 30.7.1996 L 8(11.1.1997)

Soft loans;repaymentholiday

Notspecified

x Pending before Court ofJustice (Case C-342/96).

D Werkstoff-UnionLippendorf

30.7.1996 L 48

(19.2.1997)

Grants;guarantee

23

145

x Company being woundup. The State has takenover its debts.

F SociétéfrançaisedeProduction

2.10.1996 L 95(10.4.1997)

Capitalinjection

171 x Repayment obligationincorporated in a newaid measure (NN 17/97).Appeal by works councilto CFI against decisionof 2.10.96 (Case T-189/97).

D BestwoodKynder

4.12.1996 L 194(23.7.1997)

Soft loan;guarantee

15 x Bestwood has becomeinsolvent and ceasedtrading. The State hastaken over its debts.

B Maribelbis/ter

4.12.1996 L 95(10.4.1997)

Reduction ofsocialsecuritycontributions

Notspecified

x Appeal by MS to Courtof Justice againstdecision of 4.12.96(Case C-75/97)

B Forges deClabecq

18.12.1996 L 106(24.4.1997)

Capitalinjections;guarantees;debt write-offs;bridgingloans

approx. 75

x Appeal to CFI (Cases T-2/97, T-4/97, T-37/97and T-70/97). T-2/97removed from registeron 6.3.97. T-4/97 andT-70/97 inadmissible.

DK OdenseStålskibs-værft

5.2.1997 L 154(12.6.1997)

Interestsubsidies

0.137 x



D West Berlintaxconcessions

12.2.1997 L 228(19.8.1997)

Taxbreaks

Notspecified

x The German authoritieshave notified theCommission that thedecision has beenimplemented. Thenotification is beingexamined. The need forrepayment depends onany domesticproceedings.

F Borotraplan

9.4.1997 Notspecified

x Appeal by MS to Courtof Justice againstdecision of 9.4.97 (CaseC-251/97).

I Ferdofin 30.4.1997 L 306(1997)

Suspensionof debts tothe State

approx. 55

x Aid partly repaid.

E Casa-3000

30.4.1997 L 331(1997)

Loansrepayablein theevent ofsuccess

12 x

D SKETMaschinen-bau

29.05.1997 C 302(1997)

Suspension of debtsto theState;loans;grants;interestsubsidies

approx. 300

x Company insolvent.The State has takenover its debts.

F Thomson 1.10.1997 Overvaluation of anassetpurchasedfrom thecompanyby theState.

22.43 x

D Taxconcessions formerGDR (8%)

1.10.1997 Taxpremiums

Notspecified

x Repayment as part ofthe BVS/MIDER debtcompositionproceedings.

D Land ofSaxony-Anhalt

18.11.1997 Guarantees Notspecified

x

D ThüringerMotorenwerke

16.12.1997 Loan Notspecified

x

STATE AID


D Loid'impôtssur lesrevenus

15.1.1998 Allégementfiscal

Pasprécisé

x

NL FMC 15.1.1998 Subventions,vente deterrain à prixinférieur

2,85 x

D IncomeTax Act

15.1.1998 Taxbreaks

Notspecified

x

NL FMC 15.1.1998 Grants; saleof land at apreferentialprice

2.85 x

INTERNATIONAL


V - International

COMMISSION REPORT TO THE COUNCIL AND THE EUROPEAN PARLIAMENT ONTHE APPLICATION OF THE

Agreement between the European Communities and the Government of the United States ofAmerica regarding the application of their competition laws

1 January 1997 to 31 December 1997

1. INTRODUCTION

On 23 September 1991 the Commission concluded an Agreement with the Government of the UnitedStates of America regarding the application of their competition laws110 (“the 1991 Agreement”), theaim of which is to promote cooperation between the competition authorities. By a joint decision of theCouncil and the Commission of 10 April 1995111 the Agreement was approved and declared applicablefrom the date it was signed by the Commission.

On 8 October 1996 the Commission adopted the first report on the application of the Agreement for theperiod of 10 April 1995 to 30 June 1996112. The second report completes the 1996 calendar year,covering the period of 1 July 1996 to 31 December 1996113. The present report covers the calendar yearfrom 1 January 1997 to 31 December 1997. This report should be read in conjunction with the firstreport which sets out in detail the benefits, but also the limitations of this kind of cooperation.

2. MAIN AREAS OF COOPERATION UNDER THE 1991 AGREEMENT

Case specific EC/US cooperation pursuant to the provisions of the 1991 Agreement is carried out in thefollowing main areas:° notification of cases handled by the competition authorities of one party, when these cases

concern important interests of the other Party (Article II), and exchange of information ongeneral matters relating to the implementation of the competition rules (Article III);The exchange of basic information in the form of notification, or in less formal ways, is theclearest obligation stemming from the agreement. The agreement provides for an alert systemwhereby each party notifies its partner when it deals with cases which may affect importantinterests of the latter. Successive notifications may occur in the same case: e.g. in a merger casewe shall notify at the outset of the case, then, when appropriate, when the Commission decidesto initiate proceedings and, eventually, “ far enough in advance ...to enable the other Party’sviews to be taken into account”, before a final decision is adopted.

° coordination of the actions of both Parties’ competition authorities (Article IV);Provisions on coordination of enforcement activities are also very important. In all cases ofmutual interest it has become the norm to establish contacts at the outset in order to exchangeviews and, when appropriate, to coordinate enforcement activities. The respective approaches

110 Agreement between the Government of the United States of America and the Commission of the European

Communities regarding the application of their competition laws (OJ L 95, 27.4.95, pp.47 and 50)111 See OJ L 95, 27.4.95, pp.45 and 46.112 Com(96) 479 final, see XXVIth Report on Competition Policy, pp. 299-311.113 Com(96) 346 final, see XXVIth Report on Competition Policy, pp. 312-318.



on the definition of relevant markets are very often central to the discussions. The parties willoften exchange views on possible remedies in order to ensure that they do not conflict.Cooperation may also, in certain cases, help to clarify a point of foreign law relevant to theinterpretation of an agreement or to the effectiveness of a remedy. Factual elements relevant tothe case are also exchanged within the limits of legal constraints on the protection ofconfidential information. Cooperation under this heading has recently involved a successfulsynchronisation of investigations and searches114. This is designed to make fact-finding actionmore effective. It also helps prevent companies suspected of cartel activity from destroyingevidence located in the territory of the agency investigating the same conduct after itscounterpart on the other side of the Atlantic has acted.

° so-called “traditional comity” provisions by virtue of which each Party undertakes to take intoaccount the important interests of the other Party when it takes measures to enforce itscompetition rules (Article VI);The parties are, for instance, within the realm of traditional comity when they cooperate in acertain case to bring their respective positions and remedies closer to each other in order toavoid creating a harmful effect to the market of the partner. Each party may draw the attentionof the partner to its concerns in a certain case. This may open a new trail for the partner'sinvestigation and lead to a final result taking the other party's interests into consideration in amore appropriate way.

° so-called “positive comity” provisions by virtue of which either party can invite the other Partyto take, on the basis of the latter’s legislation, appropriate measures regarding anti-competitivebehaviour implemented on its territory and which affects the important interests of therequesting Party (Article V).Activation of the positive comity provision was felt appropriate for the first time in a recentcase. The US authorities requested the Commission to investigate specific allegations ofdiscrimination regarding the operation of a computerised reservation system (Amadeus) set upby Lufthansa, Air France and Iberia. The Commission is currently investigating the case inclose cooperation with the DoJ.

° the Agreement makes clear that none of its provisions may be interpreted in a manner which isinconsistent with the legislation in force in the European Union and the United States ofAmerica (Article IX).

3. RULES REGARDING THE PROTECTION OF CONFIDENTIALITY

Currently the most intensive case related115 cooperation between the European Commission andcompetition authorities in third countries is carried out either on the basis of specific bilateralagreements (1991 EC/US Competition Cooperation Agreement116; and in the near future: ProposedEC/US Positive Comity Agreement117, Draft EC/Canadian Competition Cooperation Agreement), orunder the 1995 OECD Recommendation118.

114 The case is still pending and can not, at this stage, be included in this report for reasons of confidentiality. Details

of EC/US cooperation on this case will be included in the first annual report following the closure of the case.115 It is mainly the cooperation regarding specific pending cases which can give rise to issues of protection of

confidential information.116 Agreement between the Government of the United States of America and the European Communities regarding the

application of their competition laws (OJ L 95, 27.4.95, pp. 47-50 as corrected by OJ L 131\38 of 15.6.95).117 COM (97) 233.118 Revised Recommendation of the Council concerning Cooperation between Member Countries on Anticompetitive

Practices affecting International Trade, 27 and 28 July 1995 - C(95)130.

INTERNATIONAL


All these instruments provide explicitly119 under the heading "Confidentiality and Use of Information"that:

"... neither Party is required to disclose information to the other Party where such disclosure isprohibited by the laws of the Party possessing the information or would be incompatible with thatParty’s important interests."

The first and (up to now) most comprehensive clarification regarding the scope of the protection ofconfidential information is contained in the "Statement on Confidentiality of Information" made by theCommission to the Council during the adoption on 10.04.1995 of the Joint Council and CommissionDecision regarding the entry into force of the 1991 EC/US Agreement.

In this Statement the Commission distinguishes between two types of information which may, underdifferent circumstances, be considered confidential.

First, information acquired by the Commission and the authorities of the Member States in the courseof an investigation and which is of the kind covered by professional secrecy is subject to Article 20 ofCouncil Regulation 17/62 and to similar provisions in the equivalent implementing Regulations.Essentially, this refers to information which is not in the public domain and which may be discoveredduring the course of an investigation or which may be voluntarily notified to the Commission underRegulation 17/62 or in reply to a request for information. This information also includes business ortrade secrets. Such information is not be disclosed to the US antitrust authorities save with the expressagreement of the source concerned.

Second, there is information which relates to the conduct of an investigation or the possible conduct ofan investigation and which is not subject to Article 20 of Regulation 17/62 or to similar provisions inthe equivalent implementing Regulations. Such information includes the fact of the investigation takingplace, the subject-matter of the investigation (for example, an agreement on prices or sharing out ofmarkets or abuse of a dominant position, such as tied selling or discriminatory prices), the identity ofthe undertaking being investigated and the steps which it is proposed to take in the course of theinvestigation. This information is kept confidential to ensure the proper handling of the investigation.However, it may be communicated to the US competition authorities as these are obliged to maintainthe confidentiality of the information under the terms of Articles VIII and IX of the Agreement and bythe exchange of letters between the parties.

As regards the notifications carried out between the two Parties (under Article II(4) of the 1991Agreement), these notifications do not include either the draft statement of objections, or any otherconfidential element. The undertakings concerned are informed of the existence of such notifications, atthe latest when the statement of objections is issued.

In general it must be noted that, where it is appropriate to provide confidential information to the USantitrust authorities in order to keep them informed of a development in a specific case, the consent ofthe source of that information must be obtained by the means of a waiver. Community law provides ahigh level of protection to confidential information provided to the Commission, and it will be necessarythat any consent obtained is sufficient to discharge the Commission from its obligation of

119 i) Article VIII of the 1991 EC/US Agreement, ii) Article V of the Proposed EC/US Positive Comity Agreement, iii)

Section 10 of the Draft EC/Canadian Agreement, and iv) Section 10 of the Guiding Principles annexed to the 1995OECD Recommendation.



confidentiality as provided by general principles of Community Law, the case law of the EuropeanCourt of Justice and Article 20 of Regulation No. 17.

The envisaged EC/US Positive Comity Agreement, makes it clear that information provided under theseinstruments may only be used for their implementation unless the competition authority that providedthe information has consented to another use. A further safeguard is provided to those who haveconsented to certain confidential information being disclosed, in that such information may not be usedfor any other purpose unless the competition authority and the source of the information consent.

4. RULES REGARDING TRANSPARENCY

Member States are kept informed of cooperation activities under the 1991 EC/US Agreement inaccordance to the "Statement on Transparency" made by the Commission to the Council during theadoption on 10.04.1995 of the Joint Council and Commission Decision regarding the entry into force ofthe 1991 EC/US Agreement.

Pursuant to this Statement the Commission forwards to the Member State or Member States whoseinterests are affected the notification sent by the Commission or received from the US competitionauthorities under the 1991 EC/US Agreement. Member States are notified as soon as is reasonablypossible in the language of the exchange. Where the Commission sends information to the USauthorities, Member States are notified at the same time.

The Commission also notifies the Member State or Member States whose interests are affected of anycooperation or coordination of enforcement activities, as soon as is reasonably possible.

It is considered that the interests of a Member State are affected where the enforcement activities inquestion:° are relevant to the enforcement activities of the Member State;° involve anticompetitive activities (other than a merger or acquisition) carried out in the

Member State's territory;° involve a merger or acquisition in which one or more of the parties to the transaction, or a

company controlling one or more parties to the transaction, is a company incorporated ororganized under the laws of the Member State;

° involve conduct believed to have been required, encouraged or approved by the Member State;° involve remedies that would, in significant respects, require, or prohibit conduct in the Member

State's territory.

In addition, at least twice a year at meetings of government competition specialists, the Commissionwill inform all the Member States about the implementation of the Agreement, and particularly aboutthe contacts which have taken place with the US authorities as regards the forwarding to the MemberStates of information received by the Commission under the Agreement.

5. CASE SPECIFIC COOPERATION WITHIN 1997

The cases listed below are those which fall directly under the EC/US Agreement. Some cases in theaviation sector for example, are dealt with by another Agency, the US Department of Transportation(the DoT). The DoT does not formally cooperate with the Commission directly, but does do so

INTERNATIONAL


indirectly, through the DoJ. There are therefore informal contacts between the Commission and theDoT. These cases are not discussed in this report.

5.1 Statistical information

a) Number of cases notified by the Commission and by the US

There were the total of forty-two notifications made by the Commission during the period between 1January 1997 and 31 December 1997. The cases are divided into merger and non-merger cases and arelisted in the Annex 1.

The Commission received the total of thirty-six notifications from the US authorities during the sameperiod. Twenty-four were received from the US Department of Justice (“the DoJ”) and twelve from theUS Federal Trade Commission (“the FTC”). A list of these cases is found in the Annex 2, again brokendown in merger and non-merger cases.

Merger cases made up the majority of all notifications in both directions. There were thirty-one mergernotifications by the Commission and twenty by the US authorities.

The figures given represent the number of cases in which one (or more) notifications took place and notthe total number of individual notifications. Under Article II of the Agreement, notifications are made atcertain stages of the procedure and so several notifications may be made concerning the same case. Forinstance, in the Boeing/McDonnell Douglas case the Commission sent seven notifications to the USauthorities and received six notifications from the FTC on the same case.

Table 1 sets out in figures the number of cases notified under the 1991 EC/US Agreement during theperiod of 1 January 1997 to 31 December 1997. Table 2 sets out in figures the number of cases notifiedsince 23 September 1991.

Table 1CASES NOTIFIED

Year No. of EC No. of US No. of mergernotifications notifications notifications

FTC DoJ__________________________________________________________________________1997 42 12 24 30 (EC) 20 (US)_____________________________________________________________________



Table 2CASES NOTIFIED

Year No. of EC No. of US No. of mergernotifications notifications notifications

FTC DoJ__________________________________________________________________________1991 5 10 2 (=12) 3 (EC) + 9 (US)1992 26 20 20 (=40) 11 (EC) + 31 (US)1993 44 22 18 (=40) 20 (EC) + 20 (US)1994 29 16 19 (=35) 18 (EC) + 20 (US)1995 42 14 21 (=35) 31 (EC) + 18 (US)1996 48 20 18 (=38) 35 (EC) + 27 (US)1997 42 12 24 (=36) 30 (EC) + 20 (US)__________________________________________________________________________

b) Notifications by the Commission to Member States

The text of the interpretative letter sent by the European Communities to the US (as well as theStatement on Transparency made by the Commission to the Council on 10 April 1995, see point 4above) provides that the Commission, after notice to the US Competition authorities, will inform theMember State or Member States, whose interests are affected, of the notifications sent to it by the USantitrust authorities. Thus, when notifications are received from the US Authorities, they are forwardedimmediately to the relevant units of DG IV and at the same time copies are sent to the Member States,if any, whose interests are affected. Equally, at the same time that DG IV makes notifications to the USauthorities, copies are sent to the Member State(s) whose interests are affected.

In most instances, the US authorities also notify the Member States directly, under the OECDRecommendation120. During the period under review 24 cases were notified to the United Kingdom, 21to Germany, 10 to France, 9 to the Netherlands, 2 to Denmark, 2 to Finland, 2 to Italy and 1 toPortugal and Spain each.

5.2 Substantive aspects of case-specific cooperation121

During the year 1997 cooperation between the Commission’s officials and their counterparts in theUnited States continued to be productive. The 1991 Agreement offers a framework for a meaningfuland useful cooperation regarding competition cases of mutual interest to the two sides. This type ofcooperation and coordination of enforcement activities has been beneficial to both competitionauthorities and companies involved.

120 Revised recommendation of the OECD Council concerning cooperation between Member countries on anti-

competitive practices affecting international trade, adopted 27/28 July 1995121 This report concentrates on aspects of case handling related to the EC/US cooperation. For more information on a

particular case see the XXVIIth Report on Competition Policy.

INTERNATIONAL


a) The Boeing/MDD merger122

EC/US cooperation in the Boeing/MDD merger was particularly intensive.

The US Department of Defense and Department of Justice, on behalf of the US Government, informedthe European Commission of concerns that (i) a decision prohibiting the proposed merger could harmimportant US defence interests, (ii) despite any measures the Commission could impose on a third partypurchaser, a divestiture of Douglas Aircraft Company (DAC, the civil aircraft branch of McDonnellDouglas) would be likely to be unsuccessful in preserving DAC as a stand alone manufacturer of newaircraft, resulting in an inefficient disposition of whatever of DAC’s new aircraft manufacturingoperations that potentially could be salvaged by Boeing, and in the loss of employment in the UnitedStates, and (iii) any divestiture of DAC to a third party that would not operate DAC as a manufacturerof new aircraft would be anticompetitive in that it would create a firm with the incentive and means toraise price and diminish service in respect of the provision of spare parts and service to DAC’s fleet-in-service, a large portion of which is owned by US airlines.

The Commission took the above concerns into consideration to the extent consistent with Communitylaw. In particular, as far as US defence interests were concerned, the Commission has limited the scopeof its action to the civil side of the operation. The Commission has not pursued further the concerns itexpressed in its Statement of Objections concerning the effect of the concentration on the internationalmarket for fighter aircraft. As far as DAC is concerned, the Commission has not considered adivestiture as a remedy to resolve the competition problems created by the concentration.

Although this case had its own difficulties, the authorisation under the conditions put forward by theCommission at the end of its investigation ensured that effective competition was maintained on themarket for large commercial aircraft.

b) Cooperation in other major cases

i) Aspects related to the product market

Discussions between the case handlers frequently focus on the product market to determine whetherboth sides have arrived at similar conclusions. These discussions are based on general informationwhich is publicly available. Undoubtedly these kind of exchanges have disclosed a high degree ofsimilarity between the market analyses of the Commission and the US authorities.

This is very important, given the need to have meaningful exchanges while observing the rules onconfidentiality. If the Commission and the US authorities took different initial views on marketdefinition, it might not be possible to explore fully the reasons for the different approaches withoutdiscussing confidential information which the parties had provided. Under our present rules this couldonly be done with the agreement of the parties.

There were frequent contacts between EC officials and the Department of Justice in the course of theinvestigation of the then proposed BT/MCI merger. Meetings between the two sides were held in bothWashington and Brussels. Because the case required assessment of product markets related to the 122 For more details on this case see among other sources: A.Schaub, "International cooperation in antitrust matters:

making the point in the wake of the Boeing/MDD proceedings", Competition Policy Newsletter, nr. 1/1998(February), pp. 2-6.



offering of transatlantic telephony services, and in particular consideration of the impact of the mergeragainst the background of international accounting rate arrangements, the discussions between the twosides were helpful not only in terms of refining market definitions, but also in pooling knowledge aboutthe regulatory background on each side of the Atlantic.

Also in the Guinness/Grand Metropolitan case there was a good deal of discussion betweenCommission officials and their opposite numbers in the United States regarding the different relevantproduct markets which led to compatible remedies.

In the Santa Cruz/Microsoft case there were no differences of opinion on market definition. Also in theBoeing/McDonnell Douglas case both the FTC and the Commission reached the same product marketdefinition of "large commercial aircrafts". After exchanging views on how to define markets for PETfilm and Titanium Dioxide in the DuPont/ICI case, certain potential differences were noticed both ondemand side and on supply side substitutability in the US and in the EC.

Although the EC and US authorities used sometimes different product market definitions for theirrespective assessments, the contacts between them served the purpose of allowing each to understandthe thinking of the other, and to refine their analyses accordingly. Close cooperation allowed the twosides to avoid conflicting decisions.

ii) Aspects related to the geographical market

Discussion of the geographical market tends to be more limited, as usually the Commission and the USauthorities are concentrating on the competitive effects of the behaviour or transaction on their ownmarkets, even in cases where the activity under investigation is organized on a transatlantic orworldwide scale.

However, in the Boeing/MDD and the GE Aircraft Engines/Pratt & Whitney cases the samegeographical market definition of global market was retained by both sides. In the case of DuPont/ICIthere was an exchange of views on whether the US and EC markets for both products, PET andTitanium Dioxide, should be regarded as distinct or comprised within a world-wide dimension.

iii) Aspects related to the anti-competitive effects

In the Santa Cruz/Microsoft case general discussion established that the Commission and its UScounterpart at the staff level had largely similar views of the facts. The Guinness/Grand Metropolitancase was a good example of complementary analyses of anticompetitive effects. In that case agreementon market definition led to agreement on competitive effects and ultimately to a common remedy.

Commission/FTC consultations led each side to take greater account of concerns raised by the otherconcerning the potential anticompetitive effects of the merger. The FTC took a more critical view ofBoeing’s exclusive agreements as its investigation progressed.

iv) Ascertaining law and fact in the other jurisdiction

Jurisdiction to deal with a specific case was not challenged from either the US or the Commission’sside. Exchanges of information and discussions took place in cases where jurisdiction for one authorityor the other was not beyond doubt.

INTERNATIONAL


Close cooperation in the Santa Cruz/Microsoft case made evident that the US “rule of reason”approach to restrictions in contracts would make it more difficult to attack the behaviour at issue in theUS courts than under EC legal standards. Conversely as regards remedies, an Undertaking given to theCommission is not directly enforceable, in the way that the US consent decree is.

v) Avoiding conflicting remedies

In the Guinness/Grand Metropolitan case the parties were prepared, once negotiations had reached acertain point, to allow discussions to take place between the antitrust authorities on the proposedremedies. This was valuable in ensuring an element of coordination which might not otherwise havebeen possible. In particular it ensured that the remedies finally agreed upon in each of the jurisdictionswere consistent with one another.

Although the FTC was not concerned about remedies in the Boeing/MDD case, as they wouldeventually clear the merger, the Commission, which was looking very closely at some form ofdivestiture of DAC, informed the FTC of such a possibility. However, as the FTC expressedreservations on the feasibility of such a remedy, , and given that the Commission’s enquiry showed thatthere was no potential buyer for DAC, the Commission informed the FTC that it would take intoaccount its concerns and would therefore abandon the idea of DAC’s divestiture.

vi) Traditional comity

The Commission notified to the US authorities on 26 June 1997 its preliminary conclusions andconcerns in the Boeing/MDD case and asked the FTC to take account of the European Union’simportant interests in safeguarding competition in the market for large civil aircraft. The FTCresponded the same day indicating that the FTC would take into account the expressed interests of theEuropean Communities when reaching its decision.

vii) Participation of US antitrust authorities in the Commission's hearings

Following requests put forward by the Federal Trade Commission, officials from the US authority wereauthorised by the Hearing Officer to take part as observers in the public hearings held pursuant to theEC Merger Regulation in the framework of the examination of the Guinness/Grand Metropolitanmerger. Further the Us Department of Justice requested and was granted attendance (as observer) at thehearing in the Boeing/MDD merger.

6. CONCLUSIONS

The services of the two antitrust authorities on both sides perceive frequent contacts and discussions asparticularly useful. They help clarify the understanding of the issues involved. It was consideredefficient and useful to have an idea of how the US enforcement agencies intended to respond to certainevents in a competition case. Despite the limited amount of information that we are able to exchange,except when waivers are obtained, the Commission and the two US antitrust authorities benefit frombeing able to behave in a consistent manner, to avoid conflicting decisions and incoherent remedies, andto obtain quicker decisions.



ANNEX 1: NOTIFICATIONS BY THE EUROPEAN COMMISSION TO THE USAUTHORITIES 01.01.1997 - 31.12.1997

Merger cases123:01 Case IV/M.882 - Archer-Daniels-Midland / Grace Cocoa Associates02 Case IV/M.890 - Blokker/Toys “R” Us03 Case IV/M.867 - Wagons-Lits/Carlson04 Case IV/M.846 - Philips/Hewlett-Packard05 Case IV/M.877 - Boeing/McDonnell Douglas06 Case IV/M.856 - BT/MCI (II)07 Case IV/M.905 - Schweizer Rück/S.A.F.R.08 Case IV/M.833 - The Coca-Cola company/Carlsberg A/S09 Case IV/M.902 - Warner Bros./Lusomundo/Sogecable10 Case IV/M.920 - Samsung/AST11 Case IV/M.915 - Tyco/ADT12 Case IV/M.906 - Mannesmann /Vallourec13 Case IV/M.917 - Valinox/Timet14 Case IV/M.938 - Guinness/Grand Metropolitan15 Case IV/M.933 - ICI/Unilever16 Case IV/M.936 - SIEBE PLC/APV PLC17 Case IV/M.885 - MERCK/RHÔNE-POULENC/MERIAL18 Case IV/M.951 - CABLE AND WIRELESS/MAERSK DATA-NAUTEC19 Case IV/M.937 - LEAR/KEIPER20 Case IV/M.932 - SEHB/VIAG/PE-BEWAG21 Case IV/M.942 - VEBA/DEGUSSA22 Case IV/M.941 - ADM/ACATOS & HUTCHESON/SOYA MAINZ23 Case IV/M.963 - COMPAQ/TANDEM24 Case IV/M.723 - ALCOA/ELKEM25 Case IV/M.966 - Philips/Lucent Technologies26 Case IV/M.954 - BAIN/HOECHST - DADE BEHRING27 Case IV/M.977 - Fujitsu/Amdahl28 Case IV/M.984 - DUPONT/ICI29 Case IV/M.950 - Hoffmann-La Roche/Boehringer Mannheim30 Case IV/M.1016 - Price Waterhouse/Coopers & Lybrand

Non-merger cases124:01 Case IV/36.365 - NEC/PB/CMB02 Case IV/36.213/F - GEAE / P&W03 Case IV/E-3/36.204 - GENUSA04 Case IV/36.420 - Microsoft Explorer Licensing05 Case IV/36.365 - NEC/PB/CMB06 Case IV/36.382 - Santa Cruz Operation/Microsoft07 Case IV/36.474 - IBM/STET08 Case IV/35.969 - Canal+ - GDI - TINTA09 Case IV/36610/ - Sanofi Pharma Bristol - Myers

123 Due to the confidentiality requirements, this list includes only those investigations or cases which have been made

public124 Due to the confidentiality requirements, this list includes only those investigations or cases which have been made

public

INTERNATIONAL


ANNEX 2 - NOTIFICATIONS BY US AUTHORITIES TO THE EUROPEAN COMMISSION01.01.1997 - 31.12.1997

Merger cases125

01 The Boeing Comp./McDonnell Douglas Corp.02 Metal Leve S.A./Mahle GmbH03 Cargill Inc/Akzo Nobel N.V.04 Guinness/Grand Metropolitan05 British Telecommunications/MCI Communications Corp.06 Corange Ltd./Dr.H.C. Paul Sacher

Non-merger cases126

01 Hoffmann-La Roche, Jungbunzlauer International AG02 Sodium gluconate investigation03 International Association of Conference Interpreters04 SKW Metals & Alloys05 AIG Trading Corp./BP Exploration & Oil Inc/Cargill International SA06 HeereMac Offshore Construction Group Inc./HeereMac07 Graphite electrodes investigation

125 Due to the confidentiality requirements, this list includes only those investigations or cases which have been made

public126 Due to the confidentiality requirements, this list includes only those investigations or cases which have been made

public



THE APPLICATION OF COMPETITION RULES IN THE MEMBER STATES


VI - The application of competition rules in the Member States

This chapter is based on contributions from Member States’ competition authorities. Fuller details oftheir activities may be found in the national reports which most of them draw up.

A - Legislative developments

In 1997 new competition legislation was enacted in Denmark and the Netherlands and the Danishlegislation entered into force in that year. In both cases the legislation was closely aligned onCommunity law. Draft amending legislation containing provisions along the lines of Community lawwas tabled before Parliament in Germany and in the United Kingdom. Amending legislation is beingconsidered in Spain (procedure), Finland (government proposal) and Sweden (report of a working partyon legislation).

Competition law has not been amended nor, according to the Commission’s information, is amendmentunder way, in the other Member States (Austria, Belgium, France, Greece, Ireland, Italy, Luxembourgand Portugal).

Germany

In October 1997 the Federal Government submitted draft legislation amending for the sixth time the ActProhibiting Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen - GWB). On19 December the upper house delivered its opinion on the draft legislation. This draft legislation, whichshould be enacted this year, has still to be debated in the lower house. It is intended to strengthen theprinciple of competition to meet new requirements and to bring German legislation into line withCommunity law in this area. It is nevertheless proposed to retain those provisions of the GWB whichhave proved appropriate, for example the differences in treatment between horizontal restrictions ofcompetition (prohibited) and vertical restrictions (monitoring of abuses). The main matters harmonisedare horizontal agreements (outright prohibition of agreements, introduction of an additional materialfact giving rise to exemption for agreements) and monitoring of mergers (prevention as a general ruleand formal exemption decisions). The regulation of improper refusal to grant access to essentialfacilities is an important ancillary aspect of monitoring of abuses. The sectors currently benefitingfrom exemption arrangements (transport, banking and insurance) have been reduced. The exemptionscovering electricity and gas are scheduled for abolition in the Federal Government’s draft legislationreforming the law applicable to energy.

Austria

The legislation on competition was not reformed during the period under review, but new legislation ontelecommunications and amendments to other laws producing a significant impact on competition wereenacted. Those provisions include the industrial and labour codes and a new law on the stockexchange. Provisions liberalising the law applicable to tangible fixed assets are being prepared.

Denmark

On 30 May the Danish Parliament adopted new competition legislation, Act No 384 of 10 June 1997,which entered into force on 1 January 1998. With the new Act, Danish competition law changes overfrom the monitoring principle to the prohibition principle.



The Act provides the basis necessary for more effective regulation of competition. In addition, it is inlarge measure aligned on the Community rules and the rules in most other Member States in this area.It centres on two prohibitions, on agreements that restrict competition and on abuse of a dominantposition.

The two prohibitions, which apply in principle to all enterprises, public or private, are based onArticles 85 and 86 of the EC Treaty. The Danish provisions must therefore be interpreted in the lightof the practice developed in the EU by the Commission and the European Court of Justice.

The new Act incorporates the one-stop-shop principle, whereby agreements restricting competitionmust be considered in the light of either the European competition rules or the national competitionrules.

This means, for example, that the Danish competition authorities must respect agreements restrictingcompetition covered by an individual or block exemption granted by the Commission and that theprovisions in the Danish Act prohibiting such agreements will not apply.

Under the Act, the Danish competition authorities must not handle a case which is being dealt with bythe Commission. On the other hand, the Danish Competition Council (Konkurrencerådet) isempowered to deal with cases remitted to it by the Commission in accordance with the Commissionnotice on cooperation between national competition authorities and the Commission.

The Act is applied by the Competition Council, with the Competition Board (Konkurrencestyrelsen)acting as secretariat.

Some exceptions to the general prohibition on the conclusion of agreements restricting competition havebeen introduced in order to adapt the prohibition to the structure of the Danish economy. First there isa “de minimis” rule exempting agreements concluded between businesses with a turnover belowDKR 1 billion and a market share below 10%; both conditions must be fulfilled. There is also anabsolute threshold of DKR 150 million, irrespective of market share. The Competition Council canexempt agreements which fulfil conditions similar to those in Article 85(3) provided that they have beennotified to it; however, this does not apply to agreements already exempted under the Community rules.

As in the case of the Community rules, certain categories of agreements are automatically exempted.Thus the Minister for Economic Affairs can grant block exemptions corresponding to the Communityexemptions, which have simply been adapted to the position in Denmark, and there are specificexemptions for Denmark. Thus a special block exemption is envisaged for retail chain stores along thelines of a similar exemption provided for in Swedish law.

The new Act prescribes heavier penalties than those laid down by the legislation it replaces, but lessstringent than the penalties under Community law. The general sanction for abuse of a dominantposition is a prohibitory injunction unless the enterprise has already received an order to that effectwithin the last five years. However, refusal to comply with a prohibitory injunction is punishable by afine.

The new Act does not cover merger control. Enterprises are merely required to notify the CompetitionBoard of mergers which have already taken place. The obligation of subsequent notification is intended



to keep the competition authorities abreast of significant mergers in Denmark with a view to takingfuture action.

Spain

In 1997 the Spanish Government decided to recast Royal Decree No 1882/86 of 29 August 1986 forthe application of Articles 85 and 86 by the national competition authorities. The draft legislation isbeing considered by the Council of State, which must be consulted in such matters; when the Councilhas given its opinion, the draft is to be transmitted to the Council of Ministers for approval andpromulgation.

The essential objectives of the amendments are as follows: to specify the procedure to be followed inproceedings initiated under the Community competition rules and decisions taken in those proceedings;to enable the Royal Decree to provide a more flexible response to any amendments introduced to theCommunity rules; to bring the Royal Decree into line with the Competition Act, No 16/1989 of17 July 1989 (Ley de Defensa de la Competencia (LDC)); and to designate the authorities responsiblefor applying the merger control rules, recently amended by Council Regulation (EC) No 1310/97.

Section 100 of Act No 66/97 of 30 November 1997 on tax, administrative and social measures hasamended the LDC, introducing new provisions, Section 56, which lays down the maximum time-limitsfor the stages of the procedure in cases of infringement of the Act; these time-limits are 18 months forthe procedure with the Competition Service and 12 months for the procedure before the CompetitionTribunal. If these time-limits are not respected, the procedure is declared time-barred, either on theapplication of the authorities acting of their own motion or on the application of a party. There areonly a limited number of grounds which will justify exceeding these time-limits, one being the need tocoordinate measures with the Commission.

Finland

Act No 480/92 on competition restrictions was not modified in 1997.

The working group set up by the Ministry of Trade and Industry to review the legislation applicable tocompetition submitted its report on 30 January and on 30 December the Government submitted toParliament a draft law amending the Act on competition restrictions and other related legislation.

The Government is proposing to introduce into the Act rules on the acquisition of undertakings. Therules will apply to acquisitions where the parties’ total turnover exceeds FIM 2 billion and at least twoparties have a turnover of more than FIM 150 million. It is a further condition for the application ofthe rules that the transaction involves activities carried on in Finland. The rules do not apply if theacquisition falls within the scope of the EC Merger Regulation.

Acquisitions where the turnover exceeds the specified limits must be notified to the Office of FreeCompetition (Kilpailuvirasto). If the acquisition creates or reinforces a dominant position whichappreciably impedes competition on the Finnish market or an essential part of that market, the Officemay propose to the Competition Council (Kilpailuneuvosto) that the acquisition be prohibited.However, if the adverse effects of the acquisition can be countered by making it subject to conditions,the Office must negotiate these conditions with the parties. The Council may also make an acquisitionsubject to conditions instead of prohibiting it.



There is a time-limit of one week for notifying the acquisition of an enterprise to the Office, which mustdecide within one month whether a further report is required. If the Office proposes that the Councilshould prohibit the acquisition, the latter must respond within three months. An appeal against theCouncil’s decisions lies to the Supreme Administrative Court.

It is proposed to amend the Act on competition restrictions by introducing special provisions on theacquisition of enterprises operating on the electricity market; under those provisions the Office maypropose that the Council should prohibit an acquisition if the acquirer will secure a market share ofmore than 25% of the national distribution networks.

It is also proposed to include in the Act, in addition to the provisions regulating acquisitions, provisionson non-intervention; the Office, acting on the application of an enterprise, may decide that theprocedure initiated by the applicant is not caught by the prohibitions in the Act (Sections 4-6). Deminimis proposals are also being put forward whereby the Office would not be required to act in thecase of measures having only an insignificant effect on competition. There are also proposals to amendthe Act to include provisions on compensation for loss and damage caused by restriction ofcompetition.

Italy

Act No 249 of 31 July 1997 establishing the Communications Authority (Autorità per le Garanzienelle Comunicazioni), the regulatory body in the communications, radio and television, publishing andmultimedia sectors, assigned to the Competition and Market Authority (Autorità Garante dellaConcorrenza e del Mercato) antitrust powers in those sectors. An advisory function has beenconferred on the Communications Authority regarding the antitrust decisions of the Competition andMarket Authority.

The Netherlands

The objective of Netherlands competition policy is to apply effective controls to restrictions ofcompetition introduced by enterprises and to establish a pro-business climate. The new CompetitionAct (Mededingswet), which enters into force on 1 January 1998, is a key factor. It is intended toeliminate the negative economic effects of restrictions of competition and will apply to restrictionsmainly on the basis of their nature rather than their legal form. It prohibits restrictive agreements andabuses of dominant positions; nevertheless, it provides for a system of exemptions and authorisations inexceptional circumstances and also includes provisions on de minimis agreements. Unlike the previouscompetition legislation (Wet Economische Mededinging - WEM), the new Act contains merger controlprovisions.

The Act’s main features are that the provisions on control of abuses in the WEM are replaced byprohibitions closely modelled on Articles 85 and 86 and arrangements for the prior verification ofmergers in two phases following the Community pattern have been introduced.

Unlike the WEM, where infringements were subject to criminal-law sanctions, the new Act is enforcedbefore the civil courts and by an administrative body empowered to impose fines. This body, theNetherlands Competition Authority (Nederlandse Mededingingsautoriteit), which is independent, hasthe main responsibility for applying the new Act.



At the request and with the approval of Parliament, five decrees were issued for the implementation ofthe Act in the following areas: (1) provision of information; (2) exemption for joint calls for tenders;(3) exemption for certain agreements providing guarantees against competition in specifiedcircumstances in the retail trade; (4) exemption for certain retail trade partnerships; (5) temporaryexemption for agreements fixing newspaper prices.

United Kingdom

In August the Government published a draft competition bill strengthening UK competition law byintroducing two prohibitions. The first is in respect of agreements which have as their object or effectthe prevention, restriction or distortion of competition. The second is in respect of the abuse of adominant position by a party or parties. The prohibitions are based on Articles 85 and 86 and theirinterpretations are to be interpreted so as to be consistent with these articles. Agreements whosebenefits outweigh their anticompetitive effects may benefit from individual or block exemptions. Thenew legislation is to replace the Restrictive Trade Practices Act 1976, the Resale Prices Act 1976 andmost of the provisions of the Competition Act 1980. It gives the Director General of Fair Trading(DGFT) significantly improved powers of investigation and enforcement, including power to levy fines.

It also allows the DGFT to impose interim measures to suspend alleged infringements while aninvestigation is in progress. The Office of Fair Trading is responsible for enforcing both prohibitions.A new authority, the Competition Commission, will take over the current role of the Monopolies andMergers Commission and in addition will hear appeals against the DGFT’s decisions.

The draft bill does not contain any provisions for the direct application of Articles 85(1) and 86. Thebill was introduced into Parliament in October and the new regime is likely to become fully operative in2000.

Sweden

In February the committee set up to review the legislation applicable to competition presented its reportentitled "The Competition Act 1993-96" (SOU 1997:20) to the Government. The committee found thatthe rules were too complicated and cumbersome and should therefore be simplified and clarified. It wasnecessary that competition issues be resolved more quickly and effectively. The report proposes thatapplications for exemptions submitted to the Competition Authority (Konkurrensverket) should beprocessed within a tighter deadline. An amendment to the rules of procedure is proposed, so that theStockholm Municipal Court would hear appeals against the Competition Authority’s decisions.

After 1 July it has been unnecessary to notify the acquisition of an enterprise with a turnover of belowSEK 100 million. Nevertheless, the Competition Authority is empowered, in certain cases and onspecific grounds to request the notification of the acquisition of an enterprise with a turnover below thatamount. As a result of this amendment, the number of notifications of acquisitions of enterprises fellsharply in the second half of 1997.

The Government has extended the period for the application of the regulations on the Swedish blockexemption for retail chains until the end of June 1999. The Swedish rules on block exemptions forexclusive distribution and exclusive purchasing agreements have been extended until 1 July 2000.



The regulations on block exemptions for certain agreements, decisions and concerted practices enteredinto force on 1 February. These regulations, which include provisions on standard conditions and ruleson the approval of safety devices, are to apply until the end of March 2003.

The Government has also set up a working party to report on issues coming within the scope of theCompetition Act, including the law governing cooperation between small businesses.

B - Application of the Community competition rules by nationalauthorities

Currently, in seven Member States (Belgium, France, Germany, Greece, Italy, Portugal and Spain) thecompetition authorities have power to apply Articles 85(1) and 86 directly, so that the situation remainsunchanged from 1996.

Those articles have in fact been applied by the competition authorities in France, Germany and Spain.

This chapter also contains a summary of decisions and procedure based on domestic law reported bythe national competition authorities of certain Member States who considered that they were ofparticular significance from the standpoint of Community competition policy.

Germany

During the period under review, the Federal Cartel Office applied the Community competition rules inthree cases.

It instituted a proceeding under Article 88 of the EC Treaty read in conjunction with Section 47 of theGWB against Deutsche Lufthansa AG and the second largest American airline, United Airlines, Inc., todetermine whether the agreement between the two airlines on strengthening their cooperation wascompatible with Article 85. The cooperation sought by the two companies, which is akin to a merger,will have the effect of restricting competition on the market for direct flights between cities in Germanyand the United States and on the German market for connecting flights.

The agreement is also being examined by the Commission. Regarding links between airports in theCommunity and in non-member countries, the Commission is proceeding under Article 89. Closecooperation has been established between the Commission and the Office and both are working togetherto adopt a decision by mutual agreement. Since the Commission has no power to grant an exemptionunder Article 85(3), the Office intends to support the Commission when application of an exemptionbecomes possible. If it considers the requirements and conditions envisaged by the Commission to beinadequate, it reserves the right to take the necessary measures under Article 88 in conjunction withArticle 85.

The Office issued a warning to the Federal Transport and Storage Association (BundesverbandSpedition und Lagerei e.V.) because its recommended prices for collective goods transport were inbreach of Article 85(1). Since many transport sectors have been liberalised, those prices are no longerjustified on competition policy grounds. The only course open to the Association is therefore to applyto the Commission for exemption under Article 85(3). If the Commission does not grant the exemption,the Office will prohibit the recommended prices.



The Office considers that clauses on total coverage of requirements contained in the terms of gasdistribution enterprises’ contracts for the supply of natural gas were in breach of Articles 85 and 86.Most of the proceedings initiated have been suspended since the gas distribution enterprises havealready desisted from applying the clauses or have renounced their rights under them.

The Federal Court of Justice (Bundesgerichtshof - BGH) confirmed the Office’s prohibitory injunctionissued to Touristik Union International GmbH (TUI) and NUR Touristik GmbH for infringement of thecompetition rules of the EC Treaty. The Office, in a procedure initiated solely on the basis ofArticle 85(1), objected to the exclusive dealing clauses employed by both TUI and NUR, which wereapplied selectively to specified competitors. Under those clauses hoteliers were forbidden to let roomsto TUI and NUT competitors. The clauses applied in most cases to two competitors, whose verycompetitive rates were thus excluded. TUI tried to have the proceedings stayed, lodging an applicationfor negative clearance or exemption for the exclusive dealing clauses under Article 85(3) but did soonly at the appeal stage. The BGH expressly upheld the lawfulness of the Office’s decentralisedapplication of Community competition law and ruled that the selective application of the exclusivedealing clauses seriously harmed competition on the German package-tour market. It refused to staythe proceedings pending a decision on the application for exemption on the ground that the clauses wereunacceptable in view of the negative effects on price competition.

In the application for a preliminary ruling submitted by the Berlin Higher Regional Court in theproceedings between Ruhrgas AG and Thyssen GmbH concerning a contract concluded between themon the geographical delimitation of their business, the European Court of Justice stayed the opening ofthe oral procedure indefinitely . In the proceedings between RWE Energie AG and the municipality ofNordhorn concerning the licensing agreement concluded between them, the Court of Justice has not yetfixed a date for opening the oral procedure in the application for a preliminary ruling submitted to it.

Austria

a) Application of national law on restrictive practices

1. Horizontal restrictive practices

In accordance with the practice applied hitherto for agreements, many more procedures have beennotified to the Restrictive Practices Court (Kartellgericht) for an authorisation of (potential) membersof an agreement than actual complaints procedures.

2. Non-binding recommendations by professional associations

To date about 80 non-binding recommendations have been registered with the Restrictive PracticesCourt, most of which concern specific cases of price recommendations and/or rates of increase inprices, not general systems for the calculation of costs.

3. Vertical distribution agreements

In 1997 activity centred essentially on examining agreements concluded in the motor-vehicle sector andtheir terms have had to be altered in view of the adoption of Commission Regulation (EC) No 1475/95,which establishes a block exemption for certain categories of motor vehicle distribution and servicingagreements; as a result, the agreements have had to be notified afresh to the Restrictive Practices Court.



In addition, other vertical distribution agreements were subjected to random checks.

4. Abuse of market power

In the reference period the restrictive practices courts have dealt with more than ten cases concerning apotential abuse of a dominant position. The media alone account for four of those cases.

Five other cases originated in complaints lodged against (former) public undertakings.

b) Mergers

There were a large number of merger operations in the reference period: 217 cases were entered in theregister of agreements (101 notified in advance and 116 notified), the majority being in the constructionindustry.

Of particular significance was the Stuag/Strabag/Innerebner merger, under which Stuag AG acquiredcontrol of the construction company Innerebner und Maier GmbH, operating mainly in the Tyrol. TheAustrian authorities requested the agreement for examination since it appeared possible that a dominantposition on certain construction markets in the Tyrol was being established In-depth enquiries carriedout on competitors and their customers and discussions with the parties submitting the notification ledthe Austrian authorities to determine that the withdrawal of the Innerebner group from the civilengineering market, the withdrawal of Bank Austria from the Stuag group and the different nature ofthe sectors where the parties making the notification operate did not constitute sufficient grounds forupholding the objections put forward. The Austrian authorities consequently decided to withdraw theirrequest to examine the agreement.

Belgium

In 1997 the Competition Council (Conseil de la concurrence) adopted its first decision on retail pricemaintenance. The decision was adopted in response to a complaint submitted against S.A.Laroy-Duvo, the sole importer for Belgium of a well-known American brand of cat and dog foods.According to the complaint, the terms S.A. Laroy-Duvo imposed on retailers were in breach ofArticle 2(1) of the Belgian Competition Act. After the complaint was lodged, S.A. Laroy-Duvosubmitted a reasoned application to the Competition Council requesting that the agreements beexempted from the prohibition. In its decision the Council considered that the system of retail pricemaintenance constituted an agreement in breach of competition which could not be authorised becauseit did not contribute to improving the distribution of the products, promoting economic progress orimproving the competitive position of small and medium-sized enterprises. Moreover, the CompetitionCouncil considered that consumers were not allowed a fair share of any resulting benefit; it alsoconsidered that, in view of the circumstances, the agreement by its very nature (i.e. S.A. Laroy-Duvo'simposition of price restrictions on sellers) constituted a significant distortion of competition.Consequently, it concluded that there had been a practice restricting competition on the part of S.A.Laroy-Duvo, which was ordered to terminate that practice on pain of a fine of BEF 250 000 per day.In its decision, the Competition Council thus formally applied, in the framework of Belgian antitrustlaw, principles of Community competition law on retail price maintenance.



Denmark

The Danish competition authorities investigated a complaint submitted by an association comprising thetop Danish football clubs (Divisionsforeningen) (DF) against the Danish Football Union (DanskBoldspil-Union) (DBU), which, in terms of its internal regulations, is the sole Danish footballorganisation and officially represents Danish football abroad. DBU is the only Danish member ofUEFA and of FIFA; it organises Danish football matches, including top football league (Superliga)matches.

In general, DF’s complaint concerns the commercial activities of the football clubs grouped underDBU. It pointed to 11 cases in which it considered that DBU had abused its dominant position withclubs.

In the Competition Council's view DBU held a dominant position in Danish football and there wasreason to investigate the behaviour and restriction of the commercial activities of football clubs raisedin the complaint. Its decision dealt with the following questions: the sale of radio and TV broadcastingrights in Danish football matches, the right to organise Danish league football, the terms for theconclusion of sponsorship agreements and league clubs’ payment of Superliga referees’ fees.

DF also raised the issue of the precise allocation of radio and TV broadcasting rights for Danishfootball and of DBU’s exclusive right to sell these rights. DBU’s internal regulations lay down that allagreements on radio and TV broadcasting of Danish football are subject to DBU approval.

The Competition Council’s decision was based on the fact that, following a 1982 ruling of the DanishSupreme Court, DBU and the clubs agreed to share the radio and television broadcasting rights, DBUas the party initiating the matches and the clubs as the organisers of the matches. The Council refusedto settle the exact allocation of the radio and television rights in Danish football matches, which fell tobe determined by negotiations between the parties or, if necessary, the courts.

The Competition Council decided that DBU, which held a dominant position, was not entitled to thesole right to sell radio and television broadcasting rights to matches, since these broadcasting rightswere owned both by DBU and the various clubs. It was a condition for the sale of joint rights that therewas agreement between the rightholders. The Council also pointed out that the rights belonging solelyto clubs could be sold by them without any involvement on the part of DBU. However, DBU must notbe prevented from discharging its duties under the rules of FIFA or UEFA insofar as these rules hadbeen accepted by the Commission.

The Competition Council refused to intervene in DBU’s administration of its own matches since noabuse had been proved in this connection.

Regarding the terms of sponsorship agreements concluded by clubs and of referees’ fees, theCompetition Council considered that DBU’s internal regulations should be amended to restrict the DBUboard’s general power to require all terms to be submitted to it for approval so that those regulations nolonger authorised the adoption of decisions restricting clubs’ commercial operations. The clubs will infuture be able themselves to conclude sponsorship agreements which relate solely to clubs’ rights and toconclude agreements on referees’ fees.



Spain

1. Judgment of 30 January 1997 in Case No 188/96 UNESPA

The Competition Tribunal (Tribunal de Defensa de la Competencia - TDC) dismissed the appealagainst the decision of 9 October 1996 of the Directorate-General for Economic Policy andCompetition (the Competition Service - SDC) . By that decision the SDC closed the file in the caseinvolving a complaint against a putative infringement of Section 1 of the Competition Act (LDC), andof the Supplementary Agreement to the Spanish Convention on direct compensation (ASCIDE) betweenthe motor-vehicle insurers on the calculation of damage, concluded by the Spanish Association ofInsurance Companies.

The plaintiff complained that the ASCIDE had adversely affected him since his insurance companyassessed the damage to his vehicle at an amount below the true cost of repairs. The SDC, in closing thefile in the case, indicated that the ASCIDE was one which insurance companies acceded to voluntarily,in order to speed up payment of compensation to their customers and it was therefore ultimatelybeneficial to the latter. Moreover, the Agreement had been notified to DG IV, which, in a comfortletter, considered that the conditions for exemption in accordance with Article 85(3) were fulfilled.Finally, the dispute between the insured and the insurance company should be settled before theordinary civil courts.

2. Judgments of 26 May and 22 December 1997 in Cases MC 21/97 and MC25/97Tabacalera/McLane

On 16 May the TDC authorised the interim measures sought by the SDC, at the request of the plaintiff,McLane España S.A., in the investigation of practices believed to be in breach of Sections 1 and 6 ofthe LDC and of Articles 85(1) and 86. It also ordered Tabacalera to provide supplies for McLane, onnon-discriminatory terms, from the entire range of manufactured tobacco produced by it for asix-month period. In addition, it also requested the SDC to examine the contracts under whichTabacalera produces manufactured tobacco on the market in question (mainland Spain and the BalearicIslands) for other companies.

Tabacalera holds a monopoly in the manufacture of tobacco on that market and holds a de factodominant position in the wholesale distribution and importation of manufactured tobacco. In terms ofthe complaint, although in 1995 McLane was duly authorised to operate as a distributor, it wasprevented from doing so by Tabacalera’s refusal to supply it and by the exclusive distribution contractsconcluded between Tabacalera and other tobacco companies.

In view of Tabacalera’s dominant position, its refusal to provide supplies is sufficient proof of practicesrestricting competition. Since the complaint is manifestly well founded and in view of the serious losscaused to the plaintiff and the period of time (three years) for which the authorisation was granted to it,the adoption of the above-mentioned preventive measures is justified.

On 22 December the TDC, acting on the proposal of the SDC, issued a fresh interlocutory order toTabacalera SA to provide supplies to McLane España SA, for a period of six months onnon-discriminatory terms, of all manufactured tobaccos sold under its brands and in the event ofnon-compliance to pay a fine of ESP 150 000 per day.



The TDC intends to apply the interlocutory order after the period of six months laid down in thejudgment of 26 May (MC 21/97) if the circumstances in which the December interlocutory order wasmade continue.

3. Judgment of 29 July 1997 in Case No 185/96, Radio Fórmula (merger)

In this judgment the TDC dismissed the applications submitted by a number of plaintiffs against thedecision of the SDC of 11 October 1996 partially closing the investigation of the Grupo Prisa andAntena 3 of Radio S.A. concerning putative infringements of Sections 6 and 7 of the LDC andArticle 86.

The actions in question took place in July 1992, when Grupo Godó, the majority shareholder inAntena 3 Radio, and Grupo Prisa, the majority shareholder in Sociedad Española de Radiodifusión(SER), concluded a cooperation agreement; the enterprises controlled by the two groups carried out ashare transfer, making Prisa an indirect minority shareholder of Antena 3 Radio.

In November 1993 agreements were signed concerning the merger between SER and Antena 3 Radio,whereby management of the two chains were transferred to Sociedad de Servicios Radiofónicos UniónRadio S.A.; the agreements were voluntarily notified to the SDC. The Spanish Council of Ministersdecided not to raise any objection to the merger provided certain conditions were met. The actsoccurring in 1992 were in the meantime reported to the SDC on the ground that they infringed Section 6of the LDC by reinforcing Prisa’s dominant position on the radio-broadcasting market and, in thealternative, of Section 1 of the LDC and, in so far as the practices affected intra-Community trade,Articles 85(1) and 86. In addition it was probable that Section 7 of the LDC had been infringed sincethe operations constituted unfair competition.

The SDC considered that the facts relied upon did not amount to the acquisition of control of Antena 3Radio by Prisa and that moreover they did not constitute an infringement of Section 6 of the LDC, sothat the LDC closed the file in the case. The operation in question could only be considered anagreement concluded between competitors, as specified in Section 1 of the LDC.

In its judgment the TDC found that there was evidence that a merger was carried through in 1992.Since notification of mergers is voluntary under Spanish competition law and the investigation ofmergers is incompatible with the procedure followed in the case of practices restricting competition, thefacts of the case could not be deemed contrary to Section 6 of the LDC or consequently to Article 86.The application under Section 7 of the LDC was also dismissed.

4. Judgments of 11, 12, 14, 24, and 28 November in Cases 233, 234, 235, 236 and 237 (MontresRolex)

In the proceedings initiated following the complaint submitted by several independent watch-retailersagainst Rolex de España S.A., Farlabo Relojería S.A. (the Ebel brand) and S.M.H. S.A. (the Rado andTissot brands) on the grounds that those enterprises had refused to sell them spare parts for the brandsdistributed by them, the TDC, in five identical cases, partially quashed the reporter’s order staying theproceedings against Rolex de España S.A. The stay of proceedings was granted because the standardcontracts used in setting up the distribution network of Montres Rolex S.A., the parent company ofRolex de España, had been notified to the Commission seeking negative clearance or exemption underArticle 85(3) and the Commission had not yet taken a decision.



The TDC considered that the Commission should be consulted in accordance with the Commissionnotice of 15 October 1997 to obtain a preliminary opinion and indicated that, if the opinion were notissued within three months, the stay of proceedings would be lifted and the procedure would continue.

Finland

In 1997 the Finnish authorities did not directly apply Article 85(1) or Article 86. However, on15 January the Office of Free Competition granted an exemption for an agreement on the round-timbertrade applicable until 30 April 1999 concluded by the enterprises which were members of the CentralUnion of Agriculture and Forestry Producers (Maa- ja metsätaloustuottajain Keskusliitto MTK ry) andof the Federation of Forestry Industries (Metsäteollisuus ry). On 16 December 1996 the Commissionhad issued a comfort letter, authorising the parties to implement a plan for the round-timber trade for aperiod of five years. The exemption granted by the Office under the Act on Competition Restrictions isin line with the Commission’s opinion.

In its decision of 13 June, the Competition Council imposed on the Finnpap Trade Association(Finnpap-Markkinointiyhdistys) and its members, Metsä-Serla, Myllykoski, Veitsiluoto (now Enso)and Yhtyneet Paperitehtaat (now UPM-Kymmene) fines amounting in all to FIM 5.5 million by reasonof the conclusion of an agreement on prices under the aegis of the Trade Association and of measuresrestricting production. The decision dealt with the Finnish markets in paper for periodicals and finepaper sold by roll.

Lastly, the Competition Council, by decision of 24 October, imposed a fine of FIM 5 million on ValioOy for abuse of its dominant position on the market in milk products in Finland (milk, cream andcurdled milk). Valio gave traders rebates on the wholesale price of liquid milk products on the basis ofthe average value of all products supplied; in order to obtain the maximum rebate, traders were obligedto secure all of their supplies of dairy products from Valio, thereby tying them to the company andexcluding smaller competitors. This also constitutes an unfair competitive practice, which is alsoprohibited by Article 86 of the Treaty.

France

1. Agreements and abuses of a dominant position

The Community rules were applied in four proceedings before the Competition Council (Conseil de laConcurrence) as court of first instance.

Agreements

In three decisions,127 the Competition Council held that restrictive clauses in distribution contracts wereunlawful under Article 85(1). The clauses which were liable to affect trade between Member Statescontained the following terms:- in two cases, absolute territorial protection;

- in the third case, a requirement of specialisation which was considered discriminatoryin that it reserved the selective distribution of Rolex products to traditional outlets andjewellers and not to any other categories of traders.

127 Decisions No 97 D-21 of 25 March 1997, No 97 D-68 of 23 September 1997 and No 96 D-72 of

11 November 1996.



Abuse of a dominant position

The practice of the original operator, France Télécom, in granting free access to the Numéris networkto its own subsidiary, Transpac, was held to be an abuse of a dominant position under Article 86.128

Transpac’s advantage was liable to affect its tenders at the expense of the competing technology,VSTA, offered by a British Telecom subsidiary.

2. Mergers

The Commission was requested to refer the Promodès/Casino case to the competent French authoritiessince the new entity threatened to create a dominant position in a number of customer catchment areasin the food distribution trade. It acceded to the request, which is the second occasion on which Francehas applied Article 9 of Regulation No 4064/89 (the first occasion being in 1994 in theHoldercim/Cedest case).

Italy

Although the Competition and Market Authority has been empowered, after the promulgation of ActNo 52 of 6 February 1996 (Section 54), to apply Articles 85(1) and 86 directly, relying on the powersand the procedures available to it for the application of the national antitrust rules, it has not yetadopted any decisions in application of those provisions in the areas within its jurisdiction.

Likewise, the Authority has not dealt with any mergers in relation to the reference procedure underArticle 9 of Regulation No 4064/89.

The Netherlands

In the Netherlands the national authorities did not apply Articles 85 and 86 during the reference period.

The Administrative Court of Last Instance in Matters of Trade and Industry (College van Beroep voorhet Bedrijfsleven) dismissed Eurocard’s application against the decision of the President of the Courtthat an appeal lodged by Eurocard was inadmissible for failure to pay registry charges. Eurocard’sappeal was submitted against the decision of the Minister of Economic Affairs, acting on a complaint,whereby Eurocard was refused exemption under the Decree on horizontal agreements on prices. TheCourt also dismissed the appeals submitted by Visa, American Express and Diners Club against similardecisions, adopted in response to complaints, involving credit-card companies' practice of prohibitingtraders from charging extra costs to certain customers, i.e. the "non-discrimination rule". In thosejudgments the Court ruled that those prohibitions were null. It considered that the Dutch authoritieshad power to intervene in the case even though the Commission had already indicated its opinion,although without formal proceedings having been initiated. The Dutch authorities were neverthelessrequired to comply with the Commission’s opinion.

On 10 March the Minister of Economic Affairs, after consulting the Secretary of State for Education,Culture and Science, granted the Royal Association for the Promotion of the Interests of Booksellersand Publishers (Koninklijke Vereniging ter Bevordering van de Belangen des Boekhandels) exemption

128 Decision No 97 D-53 of 1 July 1997.



from the prohibition on retail price maintenance in respect of its regulation of the book trade in theNetherlands. The exemption is to last until 2005.Portugal

In applying the Portuguese competition rules, the Competition Council (Conselho da Concorrência)adopted decisions in five cases involving the following issues: two cases of refusal to supply products(items of clothing) to a supermarket under a selective distribution system; sale of televisionbroadcasting rights in professional football matches; abuse of a dominant position on thetobacco-distribution market; and abuse of a selective distribution system for various brands of graincertified to constitute hybrid maize. No fines were imposed in any of those cases.

In 1997 the Directorate-General for Trade and Competition received 23 merger notifications, of which22 were in the following sectors: industry (15); trade (5); and services (2).

No case involved the direct application of the Community competition rules.

Sweden

In Sweden the competition authorities have no power to apply Articles 85(1) and 86 directly. However,this issue is currently being discussed in the Ministry of Trade and Industry.

A number of decisions under Swedish law are of particular interest for Community competition policy.

As is indicated in the 1996 Competition Report, the Competition Authority decided that an agreementon prices concluded between the forestry companies Stora, MoDo and Munsksjö operating through acommon purchasing organisation, Sydved, was prohibited under the competition legislation. When theAuthority’s decision was appealed to the Stockholm District Court, that body reviewed the decisiononly in that Stora, MoDo and Munsksjö were granted exemption for their cooperation within Sydvedfor a transitional period while that cooperation was gradually discontinued.

The Market Tribunal ruled that a consortium operated by Cementa and Aalborg Portland to supplycement for the construction of the Öresund link between Denmark and Sweden could not be consideredharmful to competition or to have an appreciable effect on the Swedish market. The Tribunal thusupheld the judgment of the Stockholm District Court to the effect that no intervention was required.The Commission had already sent a comfort letter stating that an in-depth enquiry was unnecessary inview of the negligible effect of the enterprises' cooperation on trade between Member States. However,the Competition Authority considered that the agreement was in breach of the Competition Act.

The Competition Authority considered that Nitro Nobel AB, an explosives manufacturer, had abusedits dominant position by granting to a sales company marketing terms more favourable than thosegranted to other companies with a view to eliminating competition and binding some of its customersthrough an exclusive purchasing agreement. This meant that Nitro Nobel AB’s competitorsexperienced greater difficulty in distributing their products. The Authority brought the proceedingsbefore the Stockholm District Court, seeking an order that Nitro Nobel should pay SEK 5 million forits breach of the competition rules.

Swedish dairy associations, members of agricultural cooperatives, sought negative clearance andexemption for their cooperation in the dairy sector. The Competition Authority decided that the dairy



association’s cooperation on production and marketing under a common brand constituted aninfringement of competition and contributed to maintaining geographic market-sharing. The dairyassociations restructured their activities and the Authority in certain cases granted an exemption inorder to facilitate restructuring.

The 1996 Competition Report indicates that the Competition Authority instituted proceedings beforethe Stockholm District Court against Statens Järnvägar (SJ), the state railways undertaking, requestingthe Court to impose a fine for infringement of the competition rules in the BK case. SJ requested anexemption, arguing that the Competition Authority and SJ, a commercial enterprise, form part of thesame legal person i.e. the State. When the Court did not uphold that plea, SJ appealed to the MarketTribunal, which held that there was nothing to prevent the Authority from instituting court proceedingsto oblige SJ to pay a fine for infringing the competition rules.

The Competition Authority dealt with a number of competition cases involving the market in postalservices, which is now deregulated. In one case the Stockholm District Court found for the Authorityand imposed a fine of SEK 3.8 million on Posten Sverige AB for infringing the competition rules bynegligently abusing its dominant position on the market in the distribution of mail-order companies'parcels. In another case Posten Sverige AB requested negative clearance concerning the principle ofaccess for other postal operators to its post-office box facilities. The Authority considered it necessaryfor other mail-distributing enterprises to have access to those facilities; these boxes formed a servicewhich was necessary for the other enterprises. No decision on abuse of a dominant position wasadopted in view of the grant of negative clearance.

Concentration on financial markets was increased through cooperation between banks, on the one hand,and between banks and insurance companies, on the other. The Competition Authority did not takeaction when Sparbanken Sverige acquired Föreningsbank. Sparbanken Sverige, the Swedish SavingsBank, undoubtedly holds a strong position but is not dominant. Likewise, the Competition Authoritydid not intervene in S-E-Bank’s acquisition of Trygg-Hansa. The two enterprises' businesses are lifeassurance and banking. Regarding increased concentration, the number of specialised banks hasincreased and the Competition Authority dealt with some cases involving the banks' access to transferand automatic-teller facilities.

C - Application of the Community competition rules by courts in theMember States

This section does not include judgments delivered by courts with jurisdiction over decisions of nationalcompetition authorities. These judgments were mentioned in the previous section (Application of theCommunity competition rules by national authorities). The competition authorities of eightMember States only (Austria, Belgium, Denmark, France, Italy, Germany, the Netherlands and theUnited Kingdom) have reported decisions by a national court applying the Community competitionrules or referring a preliminary question to the European Court of Justice.

Germany

The judgments of the German civil courts delivered in 1997 applying Community competition law andnotified to the Federal Cartel Office are indicated below.

Federal Court of Justice (Bundesgerichtshof), judgment of 11 January 1997, KRV 25/91 (P-17/91)



Abandonment of claims in appeal proceedings; order of costs against appellant; the Federal CartelOffice was upheld in prohibiting the appellant from engaging in certain activities concerning motorvehicle concession holders in connection with hire-purchase.

Frankfurt am Main Higher Regional Court (Oberlandesgericht), judgment of 12 February 1997,11 U (Kart) 18/69, (P-150/95)Pricing practices of the plaintiff in the supply of telephone cards not abusive (Article 138 of the CivilCode (Bürgerliches Gesetzbuch); Section 26(2) of the GWB; Article 86 of the EC Treaty).

Düsseldorf Higher Regional Court, judgment of 11 February 1997, U (Kart) 3/97 (P-20/97)The validity of an exclusive purchasing contract concerning ice creams; contracts for the supply ofrefrigerators conditional on an additional exclusive dealing clause and indicated recommended prices donot lead to revocation of exemption (Article 85; Commission Regulation (EEC) No 1984/83).

Federal Court of Justice, judgment of 11 March 1997, KZR 2/96 (P-104/94)A reference was made to the European Court of Justice on the applicability of Articles 85 and 90 tocontracts on concessions and a prohibition of competition on behalf of the local-authority energydistributor in an agreement on the installation of a natural gas link concluded between the localauthority and another energy distributor.

Munich Regional Court (Landgericht) (First Chamber), judgment of 9 April 1997, 1 HKO 6195/96(P-95/97)Application of a perfume retailer under Article 823(2) of the Civil Code in conjunction withArticle 85(1) of the EC Treaty concerning the supply of cosmetic products to be warehoused.

Düsseldorf Regional Court, judgment of 16 April 1997, 12 O (Kart) 428/96 (P-178/96)Obligation to compensate the loss and injury resulting from the establishment of Telekom-GU beforethe conditions applicable to the Commission’s exemption decisions were fulfilled (Articles 823 and1004 of the Civil Code; Section 1 of the Unfair Competition Act (UWG); Article 85 of the EC Treaty).

Düsseldorf Regional Court, judgment of 18 April 1997, 38 O (Kart) 33/97 (P-54/97)There is no claim for an injunction against central health-insurance funds to determine fixed sums sinceit has not been proved that there has been a breach of Article 85 of the EC Treaty or that the applicantis directly concerned (provisional measures; Section 35 of the GWB read in conjunction withArticles 823(2) and 1004 of the Civil Code); there is recourse to the ordinary courts although thedetermination under Section 35 of the Social Security Code has been made (Sections 87 and 97 of theGWB).

Düsseldorf Higher Regional Court, judgment of 30 April 1997, 12 O (Kart) 386/96 (P-150/96)Prohibition of the grant of commissions on life assurance under Point I of the 1934 Decree of the Reichprivate insurance supervision authority is not contrary to Article 3g, the second paragraph of Article 5or Article 85(1) of the EC Treaty.

Düsseldorf Higher Regional Court, judgment of 13 May 1997, U (Kart) 24/96 (P-8/97)Claim under Section 1 of the UWG to cease and discontinue certain forms of remailing; reliance onreservation of right to carry mail under Section 2(1) of the Post Act is not contrary to Articles 86 and90 of the EC Treaty.



Naumburg Higher Regional Court, judgment of 22 May 1997, 2 U 1/96 (Kart) (P-95/95)A contract for supplies to service stations was invalid on formal grounds; applicability of Section 34 ofthe GWB to contracts covered by a block exemption.

Frankfurt Regional Court, judgment of 4 June 1997, 2/6 O 84/97 (P-80/97)Prohibition of the applicant from claiming that it holds the television rights to certain motor racingcompetitions or that it is authorised to market them (Articles 823 and 1004 of the Civil Code;Article 85 of the EC Treaty; injunction).

Munich Regional Court, judgment of 17 July 1997, 4 HKO 16 318/96 (P-152/96)The defendants were not entitled to access to selective distribution arrangements after the plaintiffoffered to supply an unauthorised trader (Article 823 of the Civil Code in conjunction with Article 85of the EC Treaty; Sections 26(2) and 35 of the GWB).

Düsseldorf Higher Regional Court, judgment of 29 July 1997, U (Kart) 13/97 (P-54/97)Although it was foreseeable that there would be an infringement of Article 85 of the EC Treaty ifamounts fixed under Article 35 of the Social Security Code were reduced, no injunction was issuedsince the determining factor was that the balance of the interests involved indicated a risk of creating aprecedent in favour of the defendant, which was decisive (Article 935 of the Code of Civil Procedure).

Düsseldorf Higher Regional Court, judgment of 29 July 1997, U (Kart) 14/97 (P-63/97)Although it was foreseeable that there would be an infringement of Article 85 of the EC Treaty ifamounts fixed under Article 35 of the Social Security Code were reduced, no injunction was issuedsince the determining factor was that, the balance of the interests involved indicated a risk of creating aprecedent in favour of the defendant, which was decisive (Article 935 of the Code of Civil Procedure).

Munich Regional Court (First Chamber), judgment of 30 July 1997, 8 HKO 17838/95 (P-182/97)Contractual provisions requiring the defendants to refrain from supply glass-processing machines tocompetitors or to customers of the defendant are compatible with Sections 20 and 21 of the GWB andArticle 85 of the EC Treaty.

Düsseldorf Regional Court, judgment of 29 August 1997, 38 O 123/96 (Kart) (P-45/97)The decision of a foreign arbitration body has force of res judicata from the outset (Article 1040 of theCode of Civil Procedure and Section 91 of the GWB); there was no right to require defendants to waivetheir rights under a contract concluded with the applicant company.

Frankfurt-am-Main Higher Regional Court, judgment of 9 September 1977, U (Kart) 58/96 (P-67/96)The applicant did not have a right to be supplied with cosmetic products intended for warehousingbecause he had failed to provide conclusive evidence that he fulfilled the criteria required for ordinarysellers of such products. Selection in accordance with the qualitative criteria, which the applicant failedto meet, was justified (Section26(2) of the GWB; Article 85 of the EC Treaty).

Hamburg Higher Regional Court, judgment of 25 September 1997, 3 U 66/94 (P-67/96)There was no claim for an injunction against a third-party insurer in accordance with theRecommendation on third party, accident and motor insurance since compatibility is not justiciable(Sections 25 and 35 of the GWB; Article 85 of the EC Treaty).



Austria

The Supreme Court, in its capacity as Supreme Restrictive Practices Court, dismissed an appeal by acompany holding a certain degree of market power against a decision of the Vienna Higher ProvincialCourt, in its capacity as Higher Restrictive Practices Court, to refer a question for a preliminary rulingto the European Court of Justice under Article 177. The Supreme Court’s ruling was therefore inaccordance with the prevailing view in Germany that references to the European Court of Justice madeby a court which is not a court of final instance can never be challenged.

Belgium

The President of the Brussels Commercial Court delivered a judgment laying down that Belgacom, theBelgian telecommunications operator, had abused its dominant position within the meaning ofArticle 86 by engaging in price discrimination against certain press agencies and had thereby infringedthe Belgian and European competition rules.

The President of the Brussels Commercial Court delivered a judgment finding that a natural person andan enterprise had committed an abuse of a dominant position by acquiring certain company names onthe Internet and selling them at a very high price. The defendants thus acquired a monopoly on themarket in question i.e. upper-grade COM names on the Internet and used this monopoly to fix their ownfinancial terms. Those terms were not proportionate to the services actually provided, which consistedin reserving well-known company names on the Internet unknown to the companies themselves; theenterprises in question were obliged to accept those terms for purely commercial reasons. ThePresident ruled that both Belgian and European competition rules had been infringed.

Denmark

The Supreme Court, in a judgment delivered on 15 April 1997 in the case Supermarket systems SA vCateena Systems Aps in a claim for damages, ruled that a non-competition clause in an exclusivedistribution agreement valid for three years from the term of the agreement was not covered byCommission Regulation No (EEC) 1983/83 on the application of Article 85(3) of the Treaty tocategories of exclusive distribution agreements and must therefore be considered incompatible withArticle 85(1) of the Treaty. The agreement concerned the exclusive distribution of coin-operated locksfor supermarket trolleys in France.

In a judgment of 15 December 1994, the European Court of Justice replied to a series of questionsreferred to it for a preliminary ruling by the Eastern Regional Court (Østre Landsret) in an action fordamages brought by Gøttrup-Klim and others Grovvareforeninger (LAG) against Dansk LandbrugsGrovvareselskab A.m.b.a. (DLG). LAG, a cooperative, excluded DLG because it made cooperativepurchases of fertilisers and plant-protection products, in breach of DLG’s internal rules which had beenadopted against LAG's wishes. In LAG’s view, the DLG internal rules concerning cooperativepurchases were incompatible with the Community competition rules. Accordingly, a reference for apreliminary ruling was submitted to determine whether Articles 85 and 86 applied to the statutes ofcooperative associations.

The European Court of Justice ruled that a provision in the statutes of a cooperative purchasingassociation forbidding its members to participate in other forms of organised cooperation which are incompetition with it did not necessarily constitute a restriction of competition within the meaning of



Article 85(1) and might indeed produce positive effects on competition. Nevertheless, the Court ruledthat the restrictions imposed on members must be limited to what was necessary to ensure that thecooperative functioned properly and maintained its contractual power in relation to producers.

In the light of that judgment, the Eastern Regional Court laid down, in a judgment of 6 November 1996,that LAG as a purchasing cooperative represented a considerable threat to the DLG’s contractualpower on the market in fertilisers and plant-protection products. The DLG feared, or had reason tofear, that the cooperative set up by local enterprises might develop to such an extent that the prospect ofa considerable and increasing loss of part of its market for those products would be liable to weaken itspurchasing power seriously; it was therefore necessary to take measures against those enterprises inorder to maintain the contractual power it had hitherto enjoyed and thus ensure that the cooperativefunctioned properly.

France

1. Ordinary courts

Paris Court of Appeal

Two appeals were submitted by businesses to the Paris Court of Appeal against decisions of theCompetition Council involving the direct application of Community law.

The Court of Appeal upheld under Article 85(1) the penalties imposed by the Competition Council inrespect of agreements dividing public works contracts concerning the Pont de Normandie, the TGVnorth and south-east links and their interconnection; however, it reduced the amount of the penalties onsmall and medium-sized enterprises, as sought by the Ministry of Economic Affairs.129

The second judgment130 involves the application of Article 86 to the linking of lots in a public tenderingprocedure practised by the pharmaceutical company, Lilly-France, which was seeking a contract for thesupply of medicinal products to hospitals. The Competition Council considered this to be improper.Lilly-France’s tender, which made the reduced rate for one lot of medicinal products for which it heldthe patent conditional on its winning the tender for a second lot of generic products, was considered toconstitute abuse of a dominant position.

Court of Cassation

The Court of Cassation, in a judgment131 delivered on an appeal submitted by an independent motorvehicle dealer, Espace Diffusion, which had had to pay damages following complaints submitted byconcessionaires, involved the interpretation of the case-law of the Court of Justice in this area. TheNîmes Court of Appeal considered that advertising panels on the dealer's vehicles were not inaccordance with the Community rules since they failed to specify that the seller was acting as an agentand ordered the dealer to bring the panels into line with the Community rules. In its judgment the Courtof Cassation relied on the judgments of the European Court of Justice of 15 February 1996 in theGrand Garage Albigeois and Nissan France SA cases, laying down that the block exemption

129 Judgment of 6 May 1977 and corrigendum of 17 May 1997 of the Paris Appeal Court, “Pont de Normandie”.130 Judgment of 6 May 1997, “Lilly-France”.131 Commercial Division of the Court of Cassation, judgment of 15 October 1996, "Espace Diffusion" (the date of

publication of the judgment precluded its inclusion in the 1996 Competition Report).



Regulation did not prevent an operator who is not a car manufacturer’s authorised seller in adistribution network or an authorised intermediary from carrying out parallel imports and reversed theCourt of Appeal’s judgment.

2. Administrative courts

In 1996 the Council of State for the first time applied Article 86 directly in its judgment in theFédération Française des sociétés d’assurance case.132 It was required to determine the legality of adecree assigning to an agricultural national mutual insurance fund exclusive responsibility for operatinga supplementary retirement insurance scheme for self-employed persons in the agricultural sector. TheCouncil held that, since the insurance fund derived a decisive competitive advantage in that taxableincome was deductible, the holding of exclusive rights itself established the existence of a dominantposition. Applying the concept from Community case-law on automatic abuse,133 it considered that theenterprise’s behaviour could be considered intrinsically abusive and partially annulled the decree,upholding the argument based on Article 86.

This decision forms the point of departure for the case-law on the annulment of administrative actscontrary to the competition rules of the EC Treaty; it also paves the way for the application by theadministrative courts of national competition law which was marked, in 1997, by three judgments onthe law of contract concerning concessions in the funeral sector.

3. Judgments submitting a reference for a preliminary ruling to the European Court of Justice

In 1997 only one preliminary question concerning Community competition law was referred to theCourt of Justice.

The question arose in proceedings between Saint Laurent Parfums and one of its distributors,Javico International, and concerns the lawfulness under Article 85(1) of terms in a selective distributioncontract prohibiting the reimportation to the Community of products intended for distribution in a thirdcountry.

Italy

In a judgment of 28 March 1997 (No 2787), the Court of Cassation ruled that certain provisions of theNavigation Code (in particular, Articles 110 and 112, which reserved to companies based in the portthe right to carry out loading and unloading and handling of goods) were inapplicable, having regard tothe judgment of the European Court of Justice of 10 December 1991 in Case C-179/90 (Merciconvenzionali Porto di Genova v Siderurgica Gabrielli), ruling that national measures of aMember State conferring on an enterprise established in that State (in this case the Port of Genoa) theexclusive right to organise port services were contrary to Articles 90(1), 30, 48 and 86 of theEC Treaty.

In its judgment of 5 June 1996 (lodged at the Registry on 14 November 1997) in Telecom Italia vPresidenza del Consiglio dei Ministri, the Lazio Regional Administrative Court ruled that Article 2(1)of Commission Directive 90/388/EEC on competition in the markets for telecommunications serviceswas directly applicable. 132 Judgment of the Council of State of 8 November 1996.133 Judgment of the Court of Justice in Case C-41/90 Höfner v Macrotron [1991] ECR I-1979.



In the period under review, three judgments submitting a reference for a preliminary ruling to theEuropean Court of Justice under Article 177 of the Treaty were made in cases concerning thecompatibility of national rules or of the behaviour of enterprises with Articles 85, 86 and 90.134

Of particular significance is an order of the Pavia Regional Court of 22 March 1997 (Telecom ItaliaSpa and Seat Spa v Ferdinando Sobacchi), subsequently reviewed, dismissing Telecom Italia andSeat’s application for an injunction prohibiting the marketing of a CD-ROM carrying the contents of allthe telephone books in the Italian network and ordering it to be seized. In that order the Courtconsidered that Article 4(c) of Commission Directive 96/19/EC, which liberalised the provision ofinformation for telephone subscribers (at the time of the events giving rise to the case, the Directive hadonly been transposed “in principle”, under Article 1 of the Directive and of Act No 650 of 1996) wasdirectly applicable, even in relations between individuals (the direct effect of “in a horizontal policy”),and disregarded certain provisions of the Postal Code, which in fact created exclusive rights to publishtelephone books.

That judgment was completely reviewed at the time of the complaint by a second order by the sameCourt of 21 April 1997 which ruled that (i) in general, Community directives which have not beentransposed can produce a direct effect in relations between individuals, and (ii) Directive 96/19 can beconsidered self-executing since it makes liberalisation conditional on national authorisation proceduresdeveloped on objective, transparent and non-discriminatory bases.

The Netherlands

The 's Hertogenbosch Court of Appeal and the Zutphen Court of First Instance have delivered finaljudgment on the arrangements applicable to members of the Coberco and Melkunie dairy cooperativeswishing to resign. In considering those arrangements, the courts followed the line adopted by theCommission in the Campina case (cf. Commission press release of 5 June 1995). The Commissionconsidered that resignation conditions enabling members to leave on 1 April, 1 September or31 December on two years’ notice without having to pay a resignation fee in fact constituted arestriction of competition but one which was acceptable in view of the structure of the market andCampina’s position on that market.

The Coberco and Melkunie conditions are more restrictive than those of Campina, which theCommission considered to be at the limit of what is acceptable. The two schemes were thereforeconsidered unacceptable. The ruling of the Zutphen Court differed from that of the 's HertogenboschCourt of Appeal; the latter laid down that the Melkunie arrangements were simply null and void, whilethe former court considered that Coberco’s arrangements which had been annulled should be adapted toform a valid system.

Judgment of the 's Hertogenbosch Court of Appeal of 29 April 1997 in Case 713/95 CampinaMelkunie B.A. v De Bie and others; Judgment of 1 May 1997 of the Zutphen Court of First Instance inCase 119h Aza-175 Coberco B.A. v Oude Luttikhuis and others.

In another case the 's Hertogenbosch Court of Appeal submitted questions to the Commissionconcerning a clause in the internal regulations of a cooperative in the stock-raising and meat sector

134 Rome District Court (Tivoli), judgment of 5 November 1997; Magistrates Court Rome (Tivoli), judgment of

19 February 1997; District Court Genoa, judgment of 21 March 1997.



since those markets have not yet been described in detail (Case 705/94 Brabantse Vee-en Vleescentralevan de Noord-Brabantse christelijke Boerenbond BZ v Van Boxmeer).

Other cases

* Judgment of 7 February 1997 of the Amsterdam Court of First Instance, Price Waterhouse andothers v Algemene Raad van de Nederlandse Orde van Advocaten; Article 3(g), the second paragraphof Article 5, Article 85, Article 86 and Article 90 of the EC Treaty;* Judgment of 1 November 1997 of the Supreme Court, Van Schijndel v Stichting Pensioenfonds voorFysiotherapeuten; Article 90 of the EC Treaty;* Order of 30 October 1997 of the President of the Amsterdam Court of First Instance, Audax MediaB.V. and other v IPN S.A. and RTL v Veronica De Holland Media Groep S.A.; Article 86 of theEC Treaty.

Lastly, there was a reference to the European Court of Justice for a preliminary ruling in the VanSchijndel and Van Veen cases,135 in which the European Court of Justice ruled that, in the particularcircumstances of those cases, it is for the national court to apply the directly applicable provisions ofArticle 85 et seq. of the EC Treaty where domestic law allows such application by the national court.In the case of Eco Swiss v Benneton,136 the Supreme Court raised the point whether this obligationextended to arbitrators and a court seized of an application to set aside the arbiters' award; by an orderof 21 March 1997 the Supreme Court therefore referred preliminary questions on this matter to theEuropean Court of Justice.

United Kingdom

In March the Court of Appeal delivered judgment in the Scottish and Newcastle Breweries v Bondcase, in which a brewer succeeded in the proceedings raised against a tenant who argued that the termsof his tenancy infringed Article 85(1) of the EC Treaty. In March the Court of Appeal upheld thejudgment of the High Court in the Potato Marketing Board v Hampden-Smith case, ruling that theBoard did not hold a dominant position and, even if it were accepted that it did, there had been no abuseof the position. In May, in the case of Harrison and another v Matthew Brown Plc (intervener,Scottish and Newcastle Breweries), the High Court dismissed a plea for damages to be paid prior to theCommission deciding whether an exclusive supply contract for beer infringed Article 85. In July theCourt of Appeal reported in the case of Greenalls Management Ltd v Brendan Aloysius Canavan,which concerned unsuccessful action over loss of a beer tie. In the same month the case of Esso vDavid Rowley, involving a petrol licence, was referred to the Court of Appeal. Both cases concern theinterpretation of Commission Regulation (EEC) No 1984/83 on exemption for categories of exclusivepurchasing agreements.

135 Judgment of 14 December 1995 in Joined Cases C-430/93 and C-431/93 ECR 1995 I-4705.136 Judgment of 21 March 1997 in Case 8850.



D - Application of the 1993 notice on cooperation between theCommission and national courts

An account follows of replies given before 1997 but not reported in the 1996 Competition Report,137 inresponse to questions raised by national courts under the 1993 notice on cooperation between nationalcourts and the Commission in applying Articles 85 and 86 of the EEC Treaty.138

By letter of 2 October 1995 the competent Director in the Directorate-General responded, on the basisof the data in his possession, on developments on the French beer market between 1987 and 1995. Thisinformation was requested by the Vice-President of the Mulhouse Court of First Instance, France,acting as investigating judge, to determine whether a contract between an Alsatian café proprietor and aGerman brewery was compatible with Article 85 of the EC Treaty. The data were intended to allow thetrial judge to determine whether, in April 1987, when the contract was concluded, it was easy ordifficult for competitors to enter the French market in the supply of beer to beverage outlets andwhether the situation had changed in the intervening period.

On 6 May 1996, a judge of the Offenburg Regional Court, Germany, sitting as a single judge, appliedto Mr Van Miert on the issue of the lawfulness under Community law of the prohibition of remailing bythe Deutsche Post AG, asking whether the European Court of Justice had delivered any judgmentsdealing with that issue. Those matters arose in the course of proceedings between Deutsche Post AGand a German remailing enterprise operating near the French frontier. By letter of 23 July 1996Mr Van Miert informed the judge that his questions were being dealt with by his Directorate-Generaland indicated that the Frankfurt am Main Regional Court had delivered judgments on 8 May 1996 insimilar cases. By letter of 16 October 1996, Mr Van Miert indicated that the legal issues involved inremailing were highly controversial; they were being considered in detail by the Commission’sdepartments but it was not yet possible to say whether formal proceedings would be initiated against theGerman postal authorities; the Commission had not departed from the views set out in its letter of25 March 1995 to the Federal Minister for Postal Affairs and Telecommunications. He added that theissues involved in remailing undoubtedly called for clarification through a test case at the highest levelof the Community court but it remained to be determined whether the Commission itself would takesteps in that connection or whether the matter would be left for a national judge to raise by submitting areference to the European Court of Justice for a preliminary ruling. Subsequently two preliminaryquestions were referred by the Frankfurt am Main Appeal Court on 25 March 1997 (Cases C-148/97and C-147/97).

By letter of 2 December 1996 Mr Van Miert replied to a request of 12 December 1995 for informationon Case IV/34.293 (BRC/Visa + Europay) submitted by the Netherlands Administrative Court of LastInstance in Matters of Trade and Industry. The Court was requesting information in connection withappeals submitted by credit-card companies against decisions of the Secretary of State forEconomic Affairs refusing exemptions from the Dutch Order on agreements concerning prices forcertain clauses in contracts concluded between the companies and businesses. Under those clausesbusinesses were obliged to offer their goods or services to consumers at the same price and on the sameterms as in the case of cash payments (non-discrimination clause). Mr Van Miert replied that theCommission had not yet adopted an official position on the issue of whether businesses were free to

137 See pp. 338-340; with the summary of the replies provided in the 1994 Competition Report (point 51) and this

summary, all the reports given to date appear in the annual reports on competition policy.138 OJ C 39, 13.2.1993, p. 6.



charge commission on persons paying for purchases by credit card but that in several casesCommission departments were carrying out in-depth examinations of whether such clauses werecompatible with the Community competition rules and a formal decision would be taken in one of them,which would form a precedent for the others. He explained that the Commission had not formallyparticipated in the procedure referred to by the Court since it had not decided whether formalproceedings would be initiated in that particular case; the Netherlands court was free to applyArticle 85(1) and the Commission was not aware of other cases giving rise to the same issue pendingbefore other national courts. Lastly, Mr Van Miert undertook to inform the Netherlands court ofprogress in any proceedings instituted on this issue.

A Commission Director replied on 20 December 1996 to a request for information presented by aCourt of First Instance, Madrid, to assist the court in dealing with a case involving a retailer and amanufacturer of electronic games. The Director stated that the manufacturer’s standard distributionagreement for the Community had been notified for the first time in October 1973 and most recently inJune 1989. He stated that a comfort letter on the matter had been sent on 10 August 1989 and provideda copy for the court. Lastly, he pointed out that no subsequent version of the agreement had beennotified and that the Commission was not aware that a later version was being applied.

STATISTICS


VII - Statistics

A - Articles 85, 86 and 90 of the EC Treaty + Article 65 of the ECSC Treaty

1. Activities in 1997

1.1. New cases opened during 1997

Type Number %Notifications 221 44Complaints 177 35Ex officio139 101 21TOTAL 499 100

1.2. Cases closed during 1997

By formal decisions By informal procedureInfringement of Article86 with fine

1 Comfort letter 85(1) 110

Exemption 3 Comfort letter 85(3) 100Rejection of complaint 13 Rejection of complaint 45Non-opposition 6 Administrative closure 231Infringement of Article65 ECSC

1 Discomfort letter 4

Article 90 decision 3TOTAL 27 TOTAL 490

2. Four-year overview140

2.1. Evolution of stock of cases

Cases open at the end of the calendar year94 95 96 97

Notifications 783 625 726 589Complaints 284 371 368 450Ex officio 152 121 127 223TOTAL 1 219 1 117 1 221 1 262

139 An ex-officio case is one opened on the Commission’s own initiative.140 The Commission’s departments have introduced a new method of registering antitrust cases so as to obtain more

accurate statistics. Cases are now registered when an application or notification takes effect. This method has ledto a revising of the statistical data, hence the changes to the data contained in previous reports.



2.2. Evolution of input

New cases registered during the year94 95 96 97

Notifications 235 360 206 221Complaints 170 114 159 177Ex officio 21 47 82 101TOTAL 426 521 447 499

2.3. Evolution of output

Cases closed during the year94 95 96 97

Formal decisions 33 14 21 27Informal procedures 495 403 367 490TOTAL 528 417 388 517

B - Merger Regulation

1. Notifications received

93 94 95 96 97Cases notified 58 95 110 131 172Notifications withdrawn 2 5 4 6 9Total cases closed by final decision 57 88 109 125 136

2. Article 6 decisions

93 94 95 96 97Article 6(1)(a) 4 7% 5 5% 9 8% 6 5% 4 3%Article 6(1)(b) 49 85 80 88 93 85 109 90 114 88Article 6(1)(c) 4 7 6 7 7 7 6 5 11 9TOTAL 57 100 91 100 109 100 121 100 129 100Cases in which undertakingsaccepted during phase I

0 2 2 0 2

3. Article 8 decisions

93 94 95 96 97Article 8(2) withconditions and obligations

2 67% 2 40% 3 42% 3 43% 7 78%

Article 8(2) withoutconditions and obligations

1 33 2 40 2 29 1 14 1 11

Article 8(3) prohibition 1 20 2 29 3 43 1 11TOTAL 3 100 5 100 7 100 7 100 9 100Article 8(4) divestiture 2

STATISTICS


ordersArticle 8(5) revocation ofpreviously approveddecisions

4. Referral decisions

93 94 95 96 97Article 9 (to a Member State) 1 1 3 1 (+ 6)141

Article 22(3) (to the Commission) 1 1 1 1

5. Procedural decisions

93 94 95 96 97Article 7(2) continuing suspensiveeffect

3 12 12 17 36

Article 7(4) terminating suspensiveeffect

3 0 3 3 5

Article 4(2) Regulation 2367/90notification declared incomplete

2 2 5 14

C - State aid

1. New cased registered in 1997

Agriculture

Transport

Fisheries Coal Other TOTAL

Notified aid N 268 26 43 5 515 857 81.23%Non-notified aid NN 31 12 12 0 140 195 18.48%Existing aid E 1 1 0 0 1 3 0.28%Total 300 39 55 5 656 1055 100.00%

28.44% 3.70% 5.21% 0.47% 62.18% 100.00%

In this table and those that follow, “coal” means all products of the coal industry.

2. Cases being examined as at 31 December 1997

Agriculture Transport Fisheries Coal Other TOTALNotified aid N 130 33 52 5 220 440 49.44%Non-notified aid NN 105 18 18 0 118 259 29.10%Existing aid E 24 3 1 0 13 41 4.61%Initiation procedures C 54 10 4 2 80 150 16.85%Total 313 64 75 7 431 890 100.00%

141 Partial referral.



3. Cases dealt with in 1997 according to the register in which they were recorded

3.1. Cases closed by Commission decision

Agriculture Transport Fisheries Coal Other TOTALNotified aid N 224 17 38 3 380 662Non-notified aid NN 22 5 17 0 110 154Existing aid E 0 1 2 0 3 6Procedures underway

C 14 8 3 0 46 71

Total 260 31 60 3 539 893

3.2. Cases removed from Commission registers

Agriculture Transport Fisheries Coal Other TOTALAt request ofMember State

24 0 0 0 82 106

de minimis 0 0 0 0 20 20change of register 13 4 0 0 62 79Total 37 4 0 0 164 205

The number of cases dealt with is larger than the number of Commission decisions because decisions oftencover more than one case.

4. Decisions taken by the Commission in 1997

Agriculture Transport Fisheries Coal Other TOTALNo objection 234 20 50 1 385 690 80.51%Decisions aspart of the

Initiation 16 4 3 2 68 93 10.85%

formal Positive 6 4 4 0 18 32 3.73%scrutinyprocedure

Negative 5 3 0 0 9 17 1.98%

Conditional 0 0 0 0 5 5 0.58%Appropriatemeasures

0 1 2 0 3 6 0.70%

Other decisions 0 0 0 0 14 14 1.63%Total 261 32 59 3 502 857 100%

30.46% 3.73% 6.88% 0.35% 58.58%

100.00%

- The “initiation” line also includes extensions and re-openings.- The “negative” line also includes partly negative decisions.

STATISTICS


5. Evolution over the period 1988-97

D e c is ions taken in. . . 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997No object ion 303 259 415 493 473 399 440 504 373 385D e c is ions as par t o f Initiation 36 36 34 54 30 32 40 57 43 68the form al scrut iny P o s itive 20 21 20 28 25 19 15 22 14 18procedure Negative 14 16 14 7 8 6 3 9 23 9 Condi t iona l 9 0 0 2 7 1 2 5 3 5Appropr ia te m easures /o ther dec is ions 28 11 9 13 9 10 27 22 18 17Total 410 343 492 597 552 467 527 619 474 502

6. Decisions broken down by Member State

D A B D K E F I F E L IR I L N L P UK S E UNo object ion # # 2 8 1 1 1 4 3 9 8 2 4 3 2 46 0 30 1 2 21 5 # #Dec i s i ons as pa r t Initiation 33 3 0 0 6 0 8 1 0 11 1 1 2 0 2 6 8of the form a l Posit ive 5 0 0 0 4 0 2 1 0 4 0 1 1 0 0 1 8scru t iny p rocedure Negat ive 4 1 0 1 1 0 1 0 0 1 0 0 0 0 0 9 Condi t iona l 2 0 0 0 0 0 2 0 0 1 0 0 0 0 0 5Appropr ia te m e a s u r e s 0 0 0 0 1 0 0 0 0 0 0 0 0 0 2 3O ther dec is ions 8 0 0 1 2 0 1 0 0 0 0 1 0 0 1 1 4Total # # 3 2 1 1 1 6 5 3 8 3 8 5 2 63 1 33 1 5 21 10 # #



STUDIES


VIII - Studies

DG IV commissioned 12 studies in 1997. The four studies summarised below have been completedand there are no plans to publish them.

Groundhandling at Frankfurt airport (IV/34.801) - The impact of the introduction ofcompetition on the ramp in 1997 and 1999

The final report on groundhandling at Frankfurt Airport is the culmination of a study on the presentgroundhandling monopoly there.

The consultants had three main tasks: firstly, to review documentation submitted and presentationsmade in the course of past hearings at which the European Commission, the complainants (variousairlines) and Frankfurt Airport Authority (FAG) were represented; secondly, to visit Frankfurt Airportto discuss the present operational environment with them and to ascertain their views (and those of theairlines operating there) on the current groundhandling monopoly; and lastly, to investigate the effect ofchanges during the transition from monopoly to multiple groundhandling status at other airports.

Early on in the study it became apparent that, of all the issues, the most important was that of spacerequirements and the availability of parking for groundhandling equipment which, in the opinion ofFAG, precluded the admission of additional handlers.

Equipment-parking areas at Frankfurt are currently located at a number of separate sites and equipmentis also parked within the confines of individual aircraft stands. Potential additional parking areas weredifficult to identify in view of the ongoing building works. Nevertheless, parking areas were identified.

Taking into consideration the potential availability of these additional parking areas, the imminentcommissioning of new stands at Pier A/Pier C, a reduced dependency on remote stands and theexperience of other airports, the following conclusions were reached:• Terminal 1 is currently congested and likely to remain so.• Additional parking space for groundhandling equipment is available.• Additional handlers should be allowed to operate at Frankfurt in Terminal 2, the ‘link’ between

Terminals 1 and 2 and the north side of Pier A.• There should be no more than three handlers in Terminal 2.• No distinction is made as to the type of handler; the options include self-handling and/or independent

companies.• However, ‘open’ self-handling in Terminal 2 (more than two airlines with or without third-party

work) will, for reasons of space, reduce the opportunities for admitting one or more independentgroundhandlers.

The competition implications in the telecoms and multi-media markets of: a) joint provision of cable and telecoms networks by a single operator; and b) restrictions on the use of telecoms networks for the provision of cable TV services The study analyses the optimal conditions for the development of telecommunications and multimediamarkets enabling prosperous economic growth and increasing employment opportunities and socialwelfare for all.



The report particularly stresses the need for competition at infrastructure level. As regards the jointownership of telecommunications and cable networks, the study analyses a number of options. The study finds that joint ownership is delaying rather than encouraging the development of Europeantelecommunications and multimedia markets. It concludes that the legal separation oftelecommunications network and cable network operations, i.e. the creation of a 100% cable subsidiary,is the minimum condition for an effective surveillance of the competitive behaviour of the operator. However, the study goes further than our conclusions so far by suggesting that a full divestiture wouldhave the strongest positive impact on multimedia and telecommunications markets. As regards the restrictions on telecommunications operators providing cable television capacity overtheir telecommunications networks, the study finds that these restrictions could soon become anobstacle to the optimal development of multimedia in Europe and should therefore be lifted in the nextfew years. The cable review was adopted by the Commission on 17 December 1997. Assessment of some aspects of the restructuring programme of MTW Schiffswerftand Volkswerft (follow-up) This short study is an update of the previous assessment of the restructuring plan of the two shipyards. It examines the changes made to the plan and the progress made in implementation in the period fromOctober 1996 to May 1997. In particular it deals with the requirements under the monitoring provisions of Council Directive1013/97 of 2 June 1997, i.e.• viability of the restructuring plan• productivity• compliance with the capacity limitations• staffing• investments. The findings of the study are set out in Document COM(97)132 final, Annex 1. The study containsbusiness secrets and cannot be made available. Financial situation, restructuring and privatisation prospects of the GAN Group This study was commissioned in connection with the preparation of the final Commission Decision onaid granted by France to the publicly owned banking and insurance group GAN. The aid runs toFRF 23.76 billion. It was conditionally approved by the Commission on 30 July 1997. The contractor was asked to analyse GAN’s restructuring plan as presented by the French authoritiesusing documents handed over by them. The report assesses the group’s viability in the various areas inwhich it is active (life assurance, non-life insurance, global finance, retail banking, the bank specialisedin the property sector, the hive-off vehicles), stressing the critical aspects of the plan. It also considerswhether greater restructuring efforts and additional divestitures are possible. The report examinespossible quid pro quos and the question of privatisation.

STUDIES


Having considered the restructuring plan and the replies to the additional questions put by theconsultant, the report concludes that the plan is likely to bring GAN out of the red and beyond, but thatthe group’s viability remains precarious while its various activities are not backed by stronger and morehighly capitalised partners. Seven studies commissioned the previous year were completed in 1997. One concerns an individualcase and must remain confidential. It is therefore not dealt with here. Two other confidential studieswere completed. Only their title is given below: Direct liability of the controlling shareholder under German law and case law for therecovery of illegal state aid pursuant to a negative Commission decision Electricity capacity and prices in France The other four studies completed in 1997 are summarised below. Study on publishing The study had a number of questions to answer on the publishing market. Its purpose was to find outwhether systems of retail price maintenance for books have the positive impact on the market whichtheir proponents believe they have. The questions put to the consultants concerned a number ofEuropean countries (with and without retail price maintenance) and the US and dealt with the growingnumber of publishers, concentration in publishing, the structure of the retail sector, state subsidies forthe book sector, the relation between hardback books and paperback books, price trends, titleproduction and other matters. The study concludes that as far as the alleged advantages of book retailprice maintenance are concerned, namely to further title production, to prevent concentration inpublishing, to guarantee a wide network of retail outlets and to keep prices down for the consumer,countries with retail price maintenance have no substantial advantage, if any, over countries without. Implementation of the Commission’s new policy on inland price fixing by liner shipping conferences as set out in its Report to the Council of 8 June 1994 (report ofthe Multimodal Group) Background to the Multimodal Group’s work During the November 1994 Council meeting of Transport Ministers, Mr Van Miert presented theCommission’s report of 8 June 1994 on maritime transport. This report states that the current joint fixing ofinland rates for multimodal transport operations practised by shipowners who are members of shippingconferences contravenes the competition rules and does not qualify in its present form for any exemption,whether block or individual. The Commission has already applied this principle in two individual cases: firstly in the TAA (Trans AtlanticAgreement) Decision of 19 October 1994 and again in the Decision of 21 December 1994 against the FEFC.In 1996 it also decided to withdraw TACA’s (Trans Atlantic Conference Agreement) immunity from fines inconnection with the same practice. These Decisions have all been appealed against before the Court of FirstInstance by the shipowners, who obtained an order suspending implementation of the first two. The sameissue is also pending before the Court of Justice in the SUNAG case, on which a judgment is expected in thefirst half of 1998.



Besides finding against the present system, the Commission report proposed a new approach enablingoverland container transport to be organised more efficiently and a new system to be set up which wouldstrike a better balance between the interests of shippers and shipowners. This approach would mean that, where groups of shipowners concluded cooperation agreements of sufficienteconomic importance as far as the land leg of the journey was concerned, the Commission might in certaincircumstances be able to grant these agreements an individual exemption on inland price fixing in so far asthis was indispensable to the cooperation proving beneficial. If the logistics on the land leg (container depots,container fleets, etc.) were managed jointly, rather than individually as at present, this would enableshipowners to cut their costs, improve their services and thus create benefits which could be passed on toshippers and if necessary justify the exemption. At the Council meeting, Mr Van Miert informed the Ministers that the Commission was prepared to reportto the Council, with the help of a committee of wise men, on the application of this new approach. The wise men’s committee was set up in June 1995. It comprised shipowners, shippers and independentexperts and was called the Multimodal Group. Its chairman was Sir Bryan Carsberg, the former head of theOffice of Fair Trading. The Group drew up an interim report in February 1996 and a final report inNovember 1997, which it submitted to Mr Van Miert. Interim report On submitting the interim report on this multimodal issue the Group had stated its intention of providingMr Van Miert with a final report analysing the specific proposals for cooperation on the land leg that theGroup had requested from shipowners along with an explanation of how this would benefit shippers and whycollective inland price fixing was indispensable to these benefits being attained. The interim report wastransmitted to the Council under cover of a letter dated 21 February 1996. The analysis in the report concentrated on the standard conference system involving the liner conferencemembers jointly fixing a tariff for inland rates without actually cooperating on the land leg. This “old” systemis still the rule for all conferences except the TACA, which at the end of 1996 introduced a trial system, for alimited number of inland operations, known as the “hub & spoke system”. This system as operated by the TACA initially involves three inland hubs142 being set up where a sufficientnumber of containers to be transported to the ports are kept. Freight is transported overland to the port via thehub using convoys of trains or barges. If such a system were implemented on a large scale, the considerablenumber of empty containers moved about under the old system could be reduced, thereby bringing costsdown, and shippers would ultimately be able to collect or return containers from or to the hub rather than justthe port. The Group’s principal conclusion on the old system was that it had so far heard no convincing argument thatcollectively fixing land rates was indispensable to the provision of multimodal transport services or to thedevelopment of cooperation between shipowners on the land leg and that as matters stood there was no reasonto grant either a block or an individual exemption to this conference practice.

142 Frankfurt, Lyon and Munich.

STUDIES


Completion and presentation of the final report Sir Bryan sent the final report to Mr Van Miert on 18 November 1997. Structure and contents of the final report The report runs to 23 pages ( plus 4 annexes) and has three sections:– a first section entitled General background summarising the circumstances which led to the creation of

the Group, its terms of reference and the Commission’s policy;– a second section entitled Views of witnesses and description of the hub & spoke system indicating who

was interviewed, with their principal arguments, and containing a detailed study comparing the hub &spoke with the old system;

– a third section entitled Conclusions and recommendations setting out the Group’s final position withregard to both the old and the hub & spoke system.

In this section the Group points out that the matter fell to be considered in the context of Article 85(3) ofthe Treaty, and that the key question it had to answer was: "Does collective price fixing by conferencesfor the land leg of multimodal transport operations bring about benefits for shippers and is itindispensable for the attainment of those benefits?"

The Group’s main conclusions are:– firstly, that it confirms its view put forward in the interim report that it has heard no convincing argument

showing that collectively fixing land rates is indispensable in order to gain benefit from the provision ofmultimodal transport services;

– and secondly, that it sees no reason to grant either a block or an individual exemption to this conferencepractice, whether it takes place under the old or the hub and spoke system, and that the same should applyto any other operator besides shipowners providing land transport services in combination with seatransport.

In reaching this conclusion, the Group makes two interesting statements: i) The concept of the hub & spoke system is better than the old one. If it were widely implemented,

which it is not, it could improve the way in which overland container transport is organised and result incertain benefits for both shipowners and shippers. It could then meet the first two conditions ofArticle 85(3), but the collective fixing of inland rates by the parties in no way seems indispensable to sucha system being set up and proving beneficial.

ii) The Group once again advised rejection of the shipowners’ argument that collective inland price

fixing should be authorised because it was indispensable to their easily making the requisite investments,in order to be able to increase cooperation on the land leg as in the case of the hub and spoke system. Onthis subject it stated that, even if conferences lost the right to fix prices, it was in the shipowners’ interestto make investments which could lead to greater inland cooperation and reduce the costs that this entailed.

Besides these main conclusions, the final report also contains other recommendations or important

lessons:– The solution of setting a reference tariff for the overland section rather than a binding one as at present is

not acceptable.– A temporary “not-below-cost clause” could be authorised in certain circumstances for conferences not

permitted to collectively set inland prices. This could allow shipowners who belong to a conference toinclude a provision in their agreement to the effect that they undertake not to allow their land rates to fallbelow the real cost of services provided, thus limiting the risk of price instability for the sea leg, which isan argument put forward by the shipowners.



– Whatever the system, shippers should have true freedom of choice between "carrier haulage" and"merchant haulage"143 and access under certain conditions to land depots or hubs belonging to theshipowners.

Assessment of the final report As with the interim report, the Group’s recommendations and conclusions are very much in line with theguidelines proposed by the Commission in its report of 8 June 1994. The Group’s report also confirms theCommission’s analysis of the economic inefficiency and problems for shippers caused by current practiceunder the old system. The interim and final reports therefore firmly support the Commission’s action with regard to theconferences’ practice and the development of the new approach advocated by the Commission. Transmission of the final report to the Council In accordance with the undertaking given in 1994, it is intended to submit the final report to the Council. Study on the liquid petroleum gas (LPG) market in Spain and analysis of the barriersto entry The study concludes that to facilitate the entry of new operators into the market, measures should betaken inter alia to:• use redundant Repsol facilities to free up storage/processing facilities for competitors• impose transparent, non-discriminatory conditions for third-party access to storage/processing

facilities• encourage limited legislative changes in connection with storage facilities• reform strategic reserves rules and• introduce transparent pricing. In addition, the following legislative requirements, among others, should be abolished:• obligation to supply• contracts for supply of bottled LPG• obligation to supply to domestic address and• prohibition on bottle sales at service stations. Background study of US law with respect to the rules on confidentiality applicable toinformation, including business secrets, received by the US competition authoritiesfrom foreign competition authorities under an international cooperation agreement The study analyses the regulatory and judicial framework governing the use and disclosure ofinformation in antitrust cases in the US. In particular, it indicates the various circumstances in whichinformation communicated to the US antitrust authorities by a party to a mutual assistance agreement(MAA) might be requested by, and if appropriate disclosed to, third parties (defendants, other federal

143 When it is the shipowner who provides overland container transport one speaks of carrier haulage. When it is the

shipper or a forwarding agent on the shipper’s behalf, one speaks of merchant haulage.

STUDIES


agencies, state attorneys, Congress), as well as the safeguards available to protect the information asfar as possible from some types of disclosure. The study concludes that:• Disclosure to defendants before a US court is possible. However, it should be borne in mind that not

all information available to the US antitrust authorities is finally filed as evidence and that protectiveorders of the court can exclude or limit the disclosure of information worthy of protection.

• Disclosure to US federal agencies with sector-specific powers to enforce antitrust rules (DoT etc.) isless probable since the agency receiving the information under an MAA (i.e. the DoJ or the FTC)could refuse the request for disclosure.

• Disclosure to other US state agencies can be avoided. Courts would probably uphold confidentialityagainst a request for disclosure from a state.

• As regards disclosure to Congress, it seems unlikely that a request for disclosure to Congress wouldbe made in the first place.



REACTIONS TO THE TWENTY-SIXTH REPORT


IX - Reactions to the Twenty-sixth Report

A - European Parliament

1. Resolution on the XXVIth report by the Commission on competition policy -1996(SEC(97) 628)144

A4-0316/97

Resolution on the XXVIth report by the Commission on competition policy - 1996 (SEC(97)0628 - C4-0209/97)

The European Parliament,

- having regard to the XXVIth report by the Commission on competition policy - 1996 (SEC(97)0628 -C4-0209/97),

- having regard to the report from the Commission on the Fifth Survey on state aid in the EuropeanUnion in the manufacturing and certain other sectors (COM(97)0170),

- having regard to its resolutions of 13 November 1996145 on the XXVth report on competition policyand of 18 July 1997146 on the Commission's Green Paper on vertical restraints in EC competitionpolicy,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policyand the opinion of the Committee on Legal Affairs and Citizens' Rights (A4-0316/97),

A. whereas the stated objective of the EU's competition policy is 'to ensure that markets acquire ormaintain the flexibility they need to allow scope for initiative and innovation and to allow an effectiveand dynamic allocation of society's resources',

B. whereas the free play of market forces alone cannot, in an imperfect market, achieve certain priorityobjectives of the European Union, namely economic and social cohesion, an adequate level of researchand development, environmental protection, the growth of SMEs and structural adjustment,

C. whereas the proper development of competition and the quest for equal opportunities for allbusinesses constitute essential preconditions for the smooth functioning of the internal market,

D. whereas free-market competition is hampered as a result of the changing role of the State, theinterdependence of national economies and the need to preserve regional and social cohesion,

E. whereas monetary union demands a higher degree of control of competition distortion to safeguardthe internal market, in particular of the state aids given by Member States sharing the same currency,

144 OJ C 358 , 24.11.1997, p. 55.145 OJ C 362, 2.12.1996, p.135.146 Minutes of that Sitting, Part II, Item 7.



F. whereas the existing structures and resources of the Commission to control practices prejudicial tofair competition are neither adequate, nor sufficient,

G. whereas safeguarding competition inside the Monetary Union requires further coordination withinthe Commission services responsible for the various Community policies concerned (competition,industrial, commercial and internal market policy) and between those services and the different MemberStates' competition authorities, in order to establish a common EU system to safeguard faircompetition,

H. whereas the allocation of state aid in breach of the EC Treaty is counter- productive in that itfavours the inefficient over the efficient, distorts competition between regions and companies andimposes an excessive burden on public budgets,

I. whereas competition policy should be used as an instrument to promote healthy, fair competitionbetween the United States, the EU and Japan,

J. whereas at the Singapore Conference of 11 December 1996 a working group was set up within WTOto 'study issues relating to the interaction between trade and competition policy, including anti-competitive practices',

K. whereas merger control activity once again expanded substantially (by about 15%) compared withthe preceding year, the increase being accounted for primarily by high-technology growth sectors, i.e.sectors of particular strategic importance (media, telecommunications, etc.); whereas this trend is likelyto take root, in view of globalization and growing economic liberalization; whereas, furthermore, theincreasingly international nature of concentrations poses a special challenge to Community competitionpolicy,

1. Welcomes the XXVIth report on competition policy and considers it a useful document upon whichthe accountability of the Commission in pursuing its Treaty duties and responsibilities could beexercised, thus bringing Community competition policy closer to the public; in this context, supportsthe Commission's DG IV in its endeavour to be equipped with adequate human resources andtransparent investigative instruments;

2. Encourages the Commission and the Member States to coordinate and integrate their resources betterin order to establish an efficient EU system and structure to safeguard fair competition; repeats its callfor closer cooperation among the Commission departments concerned, an aim which could be achievedmost effectively by setting up a separate department within the Commission to evaluate the costs andbenefits - especially in terms of employment - arising when the four above-mentioned policies(competition, industrial, commercial, and internal market policy) are framed and implemented, and todraw up recommendations to the Commission, set out in an annual policy coordination report thatshould also be submitted to the European Parliament and the Council;

3. Hopes that the Commission's approach to concentrations will take account of non-technical matterssuch as the impact of concentration on consumers, employment, cultural diversity and freedom ofexpression, or the local industrial system; calls for the above points to occupy a prominent place in thedecisions taken, in keeping with the economic and/or social appraisal referred to in recital 13 of CouncilRegulation (EEC) No 4064/89;



As regards the application of Articles 85 and 86

4. Agrees with the Commission's new Regulation on block exemption regarding technology transferagreements (Regulation (EC) No 240/96 of 31 January 1996) but recalls the four advantages uponwhich the Commission had based its decision, namely the clarification of what is and is not exempted,the specific obligations to be respected, the procedure of notification and approval and the licensee'smarket share threshold of 40% when applied to SMEs;

5. Deplores the lack of a genuine internal market relating to the distribution and servicing of motorvehicles, as numerous complaints from consumers prove; calls on the Commission to ensure once andfor all a free market where consumers can without any problems buy a car outside their own MemberState and where no obstacles to parallel trade exist;

6. Urges the Commission to take the first steps to decentralize control of collusive practices; considersthat cooperation between national competition authorities and the Commission with a view toenforcement of Articles 85 and 86 of the EC Treaty should gradually lead to approximation of therelevant national laws, enabling the subsidiarity principle to find clear expression;

7. Encourages the Commission to seek additional instruments in its campaign against harmful types ofsecret cartels which either fix prices or set production and sales quotas or seek to share markets;

8. States that it can accept neither the contents nor the form of the Commission's notice on the non-imposition or reduction of fines in cartel cases; calls upon the Commission to take measures aimed atintroducing a legally binding instrument with an appropriate legal basis; expresses the wish that thislegally binding instrument duly take account of the legal traditions of the majority of the MemberStates;

9. Requests the Commission to report to Parliament in its forthcoming competition report on whetherthe economic and legal grounds underlying the revision of the Notice of the Commission concerningagreements of minor importance147 actually justified its revision;

10. Agrees with the content of the Commission Notice on the internal rules of procedure for processingrequests for access to the file of an enterprise148 but recalls its aforementioned resolution of 13November 1996 on the XXVth competition report as regards openness, transparency andaccountability, and asks the Commission to be meticulous in distinguishing between non-communicableand communicable documents;

11. Reiterates its position as stated in its aforementioned resolution of 18 July 1997 on theCommission's Green Paper on vertical restraints;

As regards the abuse of a dominant position

12. Recognizes that imperfect competition is the order of the day and that the most commonly usedpractices employed by dominant firms to eliminate competition are: access to an essential technology orinfrastructure, predatory pricing, exclusionary dealing agreements, discrimination among suppliers and

147 OJ C 29, 30.1.1997, p. 3.148 OJ C 23, 23.1.1997, p. 3.



exclusionary rebate schemes; hence encourages the Commission to pursue its fight against theseabusive practices exercised by certain enterprises;

13. Recalls its position as stated in its aforementioned resolution of 13 November 1996, and inparticular paragraphs 2, 3 and 4 thereof, and requests the Commission to examine, on the basis of theownership criterion, predatory pricing and other unfair practices, regulatory and non-regulatorybarriers in the fields of telecommunications in both mobile and satellite communications as well as on-line services, of media, of air transport and of the banking and financial sectors;

As regards State monopolies and the Amsterdam Treaty

14. Requests the Commission to submit a report on the implications for the competition policy of theTreaty of Amsterdam, and in particular, Article 7d on services of general economic interest, theProtocol on public broadcasting in the Member States and the declaration on credit institutions inGermany, paying particular attention to the definition and meaning of services of general economicinterest, public obligations, universal service, equality of treatment, quality of public services and theprinciple of common interest;

15. Recognizes the need for a new government role in the sectors of: telecommunications, energy, postalservices, transport and broadcasting, stressing the aspects of establishing standards for both the privateand the public sector and the new partnerships between the public and private sectors;

16. Supports the efforts of the Commission to liberalise gradually the electricity market and expectsthat the Commission will apply with determination the common rules for the internal market for gasstill to be adopted by the European Parliament and the Council;

17. Equally supports the efforts of the Commission to introduce an element of competition in themanagement of airport and port infrastructure and in the access to essential infrastructure;

18. Is concerned that the increasing concentrations arising through mergers or cross-border allianceshave blurred the definition of the 'Relevant Market'; the geographic aspects, legal barriers of entry,security, transport costs and other factors should be used for an operational definition based on theconcept of substitutability of goods and services;

As regards State aid

19. Considers it unacceptable that the Commission is unable to provide state aid surveys concerningrecent years;

20. Recalls the main findings of the Vth Survey on State aid in the EC of Twelve over the period 1992-1994:(a) the overall aid, on average per year, was more than ECU 95 billion, representing 1.7% of GDP, aECU 713 subsidy for each person employed, and 3.3% of government expenditure;(b) overall state aids given by some Member States are extremely high (reaching 88% of their budgetdeficit);(c) about 45% of overall aid (i.e. ECU 42 639 million per year on average) went to industry, which ifexpressed as a percentage of intra-Community exports of manufactured goods gives a clear indicationof the potential for distorting competition;



(d) State aid to industry was distributed as follows: 30% for horizontal objectives (i.e. R&D,environment, SMEs, trade, energy saving etc.), 17% for shipbuilding, steel and other sectors, and 53%for regional objectives;(e) aid to agriculture, fisheries, transport and coal mining accounted for approximately 55% of theoverall aid although the exact amount is not known due to lack of complete information;

21. Reaffirms its support for State aid deemed to be in the common interest, such as aid for the regions,R&D, SMEs, training, energy saving and the environment; notes however that such aid has beendecreasing while aid granted to individual enterprises has been rising;

22. Believes, nevertheless, that a significant proportion of aid in the Community indicates a stabletendency which distorts fair competition, is incompatible with the internal market, undermines the EU'scommitment to a free world market and will become a source of potential friction between MemberStates participating and those not participating in EMU; points, however, to the need to employ the'alignment clause' concept (mentioned in connection with State aid for research and development149 toensure that Community industry is not penalized on account of self- restraint not imposed on non-European firms, as the Commission itself implied in its response to Parliament's aforementionedresolution of 13 November 1996 when it observed that a provision of this type, in a globalizedeconomy, should not be used so widely as to disturb the balance between competitiveness and freecompetition;

23. Proposes that stability and convergence programmes including State budget objectives should alsobe considered from the point of view of competition;

24. Proposes that all State aid, irrespective of its form or purpose, should be governed by rules makingfor transparency and supervision and that a code of conduct should accordingly be drawn up along thelines of the Commission's proposed code on tax-related subsidies;

25. Is concerned that the proposed Regulation for a block exemption on certain categories of State aidwill create market distortions; recalls that certain national markets are more characterized by small andmedium-sized enterprises (SMEs) than others; urges the Commission to watch closely theimplementation of the Regulation in order to ensure that SMEs can be protected in the event of abusiveaid being given to competitors;

As regards international cooperation

26. Believes that the determining factors of globalization: technological progress, deregulation ofmarkets, liberalisation of key sectors and intensification of trade in goods and of capital markets havereduced the effectiveness of the traditional policies of the State, one of them being competition policy;

27. Believes, in view of globalization, that future reports on competition policy should include a chapteron the state of competition law in the other economic regions;

28. Is of the opinion that the interdependence resulting from globalization of production, distributionand trade and the markedly international dimension of competition problems necessitate a newapproach to EU competition policy;

149 OJ C 45, 17.2.1996, p. 5.



29. Believes it essential to strengthen and continue the close and careful cooperation with the applicantcountries with a view to establishing effective competition policies and competition authorities; stressesthat the applicant countries must comply with the EU competition rules in order to avoid underminingthe Union's own foundations;

30. Favours an increasing role for the World Trade Organisation (WTO) in international competitionpolicy; welcomes the fact that a working party on international competition law has been set up withinthe WTO; considers that the EU needs to play a more active role in order to achieve results rapidly andavert ruinous competition; asks therefore the Council to mandate the Commission - while takingaccount of the Agreement between the EU and the US Government regarding the application of theircompetition laws - to pursue the following objectives:(a) adoption of common competition principles at international level to deter the 'most harmfulpractices', providing in particular for a ban on price and area cartels and for anti-trust legislation;(b) creation of the means of cooperation between competition authorities;(c) adapting of the WTO rules for the settlement of disputes to the competition rules;

31. Instructs its President to forward this resolution to the Commission and to the Council.

2. Reply by the Commission to Parliament's Resolution on the XXVIth Report onCompetition Policy

Rapporteur: Mr Areitio TOLEDOEP No: A4-0316/97Date of adoption of the resolution: 6 November 1997Parliamentary Committee responsible:Committee on Economic and Monetary Affairs and Industrial Policy

Analysis of the text and Parliament’s requests

A. Whereas the stated objective of the EU’s competition policy is “to ensure that marketsacquire or maintain the flexibility they need to allow scope for initiative and innovation andto allow an effective and dynamic allocation of society’s resources”.The Commission shares Parliament’s views on the objectives of competition policy.

B. Whereas the free play of market forces alone cannot, in an imperfect market, achieve certainpriority objectives of the European Union, namely economic and social cohesion, anadequate level of research and development, environmental protection, the growth of SMEsand structural adjustment.The Commission shares Parliament’s views on the objectives mentioned. In most cases thoseobjectives can be reconciled with competition policy.

C. Whereas the proper development of competition and the quest for equal opportunities for allbusinesses constitute essential preconditions for the smooth functioning of the internalmarket.The Commission shares Parliament’s views on these objectives of competition policy.

D. Whereas free-market competition is hampered as a result of the changing role of the State,the interdependence of national economies and the need to preserve regional and socialcohesion.



Parliament appears to be suggesting here that there is an almost inevitable causal connectionbetween services of general economic interest and restriction of competition. While in manyMember States monopolies on telecommunications and transport services or on the productionand distribution of energy have been and still are hampering the free play of competition, theCommission considers that the liberalisation of those services and the introduction ofcompetition remaincompatible with the principles applicable to services of general economic interest. It is possiblethat this recital also refers to state aid intended to ensure “regional and social cohesion” incertain less-favoured regions of the Union and that such aid restricts the free play ofcompetition. In this area, too, the Commission considers that there is no automatic linkbetween cohesion and restriction of competition.

E. Whereas monetary union demands a higher degree of control of competition distortion tosafeguard the internal market, in particular of the state aid given by Member States sharingthe same currency.The Commission shares Parliament’s views. It is important to have a large measure of controlof competition in the common market, particularly in the run-up to monetary union andespecially regarding state aid.

F. Whereas the existing structures and resources of the Commission to control practicesprejudicial to fair competition are neither adequate nor sufficient.The Commission considers that the structures available to it for control of anti-competitivepractices are appropriate. On the other hand, it shares Parliament’s view that it lacks theresources, particularly human resources, necessary to perform its duties. The number of casesto be dealt with is continually increasing but staff numbers are unfortunately failing to keeppace.

G. Whereas safeguarding competition inside the monetary union requires further coordinationwithin the Commission services responsible for the various Community policies concerned(competition, industrial, commercial and internal market policy) and between those servicesand the different Member States’ competition authorities, in order to establish a common EUsystem to safeguard fair competition.The Commission shares Parliament’s concern to see coordination between servicesstrengthened. As far as competition policy is concerned, coordination is already very close.Strengthened cooperation between the Commission and the competition authorities of theMember States is required under the Commission notice on cooperation between it and thoseauthorities adopted on 10 October 1997 and published in Official Journal C 313 of15 October 1997. Detailed arrangements for the application of the notice are being developedby the Commission and the national authorities.

H. Whereas the allocation of state aid in breach of the EC Treaty is counter-productive in that itfavours the inefficient over the efficient, distorts competition between regions and companiesand imposes an excessive burden on public budgets.The Commission welcomes Parliament’s views on this matter, which are identical with its own.

I. Whereas competition policy should be used as an instrument to promote healthy, faircompetition between the United States, the EU and Japan.The Commission agrees that competition policy enforcement should play an increasing role inaddressing anti-competitive practices and structures which create obstacles to trade with theCommunity’s major trading partners.

J. Whereas at the Singapore Conference of 11 December 1996 a working group was set upwithin WTO to “study issues relating to the interaction between trade and competitionpolicy, including anti-competitive practices”.



K. Whereas merger control activity once again expanded substantially (by about 15%)compared with the preceding year, the increase being accounted for primarily byhigh-technology growth sectors, i.e. sectors of particular strategic importance (media,telecommunications, etc.); whereas this trend is likely to take root, in view of globalisationand growing economic liberalisation; whereas, furthermore, the increasingly internationalnature of concentrations poses a special challenge to Community competition policy.By the end of October 1997, more than 115 concentrations will have been notified to theCommission and more than 100 decisions adopted, corresponding to a further increase over1996 (nearly 6% in the first half-year in the case of notifications). The increasing numbers ofconcentrations giving rise to Community control activity are occurring chiefly in thetelecommunications and media sectors (13 cases by the reference date) and also in electronics,banking and finance and major retail chains. Moreover, operations effected in those sectorshave led the Commission several times to initiate the in-depth examination procedure providedfor in the Merger Regulation (for example, in the case of the British Telecom/MCI merger).

1. Parliament welcomes the XXVIth report on competition policy and considers it a useful documentupon which the accountability of the Commission in pursuing its Treaty duties and responsibilitiescould be exercised, thus bringing Community competition policy closer to the public; in thiscontext, it supports the Commission’s DG IV in its endeavour to be equipped with adequate humanresources and transparent legal investigative instruments.

The Commission duly notes Parliament’s wish that DG IV should be equipped with “adequatehuman resources and transparent legal investigative instruments”. However, it considers thatits instruments for investigation, i.e. Regulation 17/62 and the Merger Regulation, in factconstitute transparent legal instruments.

2. Parliament encourages the Commission and the Member States to coordinate and integrate theirresources better in order to establish an efficient EU system and structure to safeguard faircompetition; it repeats its call for closer cooperation among the Commission departmentsconcerned, an aim which could be achieved most effectively by setting up a separate departmentwithin the Commission to evaluate the costs and benefits - especially in terms of employment -arising when the four above-mentioned policies (competition, industrial, commercial and internalmarket policy) are framed and implemented, and to draw up recommendations to the Commission,set out in an annual policy coordination report that should also be submitted to the EuropeanParliament and the Council.

The Commission does not agree with Parliament’s view of the need to create a specific structureresponsible for coordinating various Union policies. It would point out to Parliament that allsignificant Commission decisions on competition are prepared through interdepartmentalconsultations and account is taken of observations made by the directorates-general concerned.Moreover, major decisions concerning competition policy are adopted by the Commission as acollegiate body, where all members are able to bring out the interests of the policies for whichthey are responsible. Regarding the annual report on the activities of the European Union, thisalready covers the coordination of various Commission policies.

3. Parliament hopes that the Commission’s approach to concentrations will take account ofnon-technical matters such as the impact of concentration on consumers, employment, culturaldiversity and freedom of expression, or the local industrial system; it calls for the above points tooccupy a prominent place in the decisions taken, in keeping with the economic and/or socialappraisal referred to in recital 13 of Council Regulation (EEC) No 4064/89.



In appraising the effects of a concentration, the Commission proceeds essentially underArticle 2 of Regulation 4064/89, which requires it to include among its criteria the interests ofultimate consumers and the development of economic progress, but it may also refer to thegeneral principles set out in the recitals of the Regulation. Accordingly, in cases concerningthe media it takes into consideration, for example, the cultural diversity of the Union. However,decisions do not provide an express reference to the criteria for assessing the impact of aconcentration, although they are taken into consideration at the analysis stage, unless they arenecessary to justify the Commission’s conclusions. An example of this is the 1993 decisionKali und Salz/MdK/Treuhand, when the Commission had to make an express reference to theprinciples set out in recital 13 of the Merger Regulation.

As regards the application of Articles 85 and 86 4. Parliament agrees with the Commission’s new Regulation on block exemption regarding technology

transfer agreements but recalls the four advantages upon which the Commission had based itsdecision, namely the clarification of what is and is not exempted, the specific obligations to berespected, the procedure of notification and approval and the licensee’s market share threshold of40% when applied to SMEs.

The Commission welcomes Parliament’s positive appraisal of the Regulation on exemptions fortechnology transfer agreements. The new provisions have the considerable advantage that theyare both clearer and simpler. It is worth bearing in mind in this context that, with a view tolegal certainty, the final version of the Regulation allows all enterprises to qualify for the blockexemption irrespective of their size. Nevertheless, the Commission is empowered to withdrawthe benefit of the Regulation if the territorial exclusiveness granted to the licensee is liable tojeopardise the maintenance or development of effective competition, which is liable to occur ifthe licensee’s market share exceeds 40%. It will not hesitate to exercise this power wherenecessary to guarantee access to new technology for all interested parties.

5. Parliament deplores the lack of a genuine internal market relating to the distribution and servicingof motor vehicles, as numerous complaints from consumers prove; it calls on the Commission toensure once and for all a free market where consumers can without any problems buy a car outsidetheir own Member State and where no obstacles to parallel trade exist.

The Commission shares Parliament’s view that consumers should be able to buy their vehicleswithin the European Union wherever they find it most advantageous to do so. The increasednumber of complaints from consumers shows that they are becoming more aware of thispossibility. It is aware that, in practice, parallel imports by consumers have increasedconsiderably in recent years. It seems that the new Regulation (EC) 1475/95 on motor vehicledistribution is contributing to the creation of the internal market for cars.Regulation (EC) 1475/95 stipulates that a dealer within the common market may not reject aconsumer’s offer to buy a car, or ask for a higher price for it, simply because the consumer is aresident of another EU Member State. However, since it is normally in a dealer’s interest tomaximise sales, the consumer’s right is not accompanied by an obligation imposed on dealersto sell. The Regulation establishes the following rights for a consumer resident in one MemberState who wants to buy a motor vehicle in another Member State:– the consumer can be requested to complete only the same documentation, and in the usual

manner, as is normally and lawfully required of a consumer resident in the Member Statewhere the vehicle is bought. Usually such documentation relates to the name and address ofthe consumer;



– the producer and all dealers should honour the guarantee and provide free servicing, vehiclerecall work, and repair and maintenance services necessary for the safe and reliablefunctioning of the vehicle, irrespective of where and from whom in the common market thevehicle was purchased;

– the manufacturer, the supplier or another undertaking within the network who directly orindirectly restricts the freedom of final consumers, authorised intermediaries or authoriseddealers to obtain a new motor vehicle from whichever authorised dealer they choose withinthe common market, automatically loses the benefit of the exemption from Article 85(1) ofthe Treaty, granted by the Regulation. As a consequence the manufacturer’s distributionagreements, covering his/her whole network, are automatically void pursuant to Article 85(2).

The Commission’s policy is implemented through investigating significant cases and takingappropriate action to ensure that these requirements are met by the car manufacturers as wellas by their dealers.

6. Parliament urges the Commission to take the first steps to decentralise control of collusivepractices; it considers that cooperation between national competition authorities and theCommission with a view to enforcement of Articles 85 and 86 of the EC Treaty should graduallylead to approximation of the relevant national laws, enabling the subsidiarity principle to find clearexpression.

The Commission considers that its notice of 10 October 1997 on cooperation between nationalcompetition authorities and the Commission in handling cases falling within the scope ofArticles 85 or 86 of the Treaty forms a significant step in the decentralisation procedure soughtby Parliament. It welcomes the increasing tendency of national legislatures to align nationallaw on Articles 85 and 86, a development already observed in DG IV’s contribution to thereport under examination (cf. VI. The application of competition rules in the Member States;A. Legislative developments). Legislation was aligned in Denmark and the Netherlands and,more recently, the United Kingdom.

7. Parliament encourages the Commission to seek additional instruments in its campaign againstharmful types of secret cartels which either fix prices or set production and sales quotas or seek toshare markets.

The Commission considers, like Parliament, that everything possible must be done to repressimproper cartels. The Commission will do all it can to seek new instruments to repress secret cartels betweenenterprises aimed at fixing prices, production or sales quotas, sharing markets or banningimports or exports, which are among the most serious restrictions of competition encounteredby it, as is indicated in its notice published on 18 July 1996 on the non-imposition or reductionof fines in cartel cases. However, from the first months of its application is seems that thisnotice, which has already been relied upon several times by enterprises, is producing theanticipated results.

8. Parliament states that it can accept neither the contents nor the form of the Commission’s notice onthe non-imposition or reduction of fines in cartel cases; it calls upon the Commission to takemeasures aimed at introducing a legally binding instrument with an appropriate legal basis; itexpresses the wish that this legally binding instrument duly take account of the legal traditions ofthe majority of the Member States.



9. Parliament requests the Commission to report to Parliament in its forthcoming competition reporton whether the economic and legal grounds underlying the revision of the notice of the Commissionconcerning agreements of minor importance actually justified its revision.

In consulting the Member States and the business and industry interests concerned, theCommission made sure that the revision of its notice on agreements of minor importance wasfully justified by the legal and economic reasons set out at page 3 of the Official Journal of30 January 1997. It consequently adopted a new notice corresponding almost entirely to thewording of the draft. The next issue of the Report on Competition Policy will contain moredetailed explanations of this aspect.

10. Parliament agrees with the content of the Commission notice on the internal rules of procedure forprocessing requests for access to the file of an enterprise but recalls its aforementioned resolutionof 13 November 1996 on the XXVth Competition Report as regards openness, transparency andaccountability, and asks the Commission to be meticulous in distinguishing betweennon-communicable and communicable documents.

The Commission can assure Parliament that all requests for access to its files are examinedwith due care.

11. Parliament reiterates its position as stated in the aforementioned resolution of 18 July 1997 on theCommission’s Green Paper on vertical restraints.

The Commission duly notes the reminder of the position adopted by Parliament on theGreen Paper on vertical restraints.

As regards the abuse of a dominant position 12. Parliament recognises that imperfect competition is the order of the day and that the most

commonly used practices employed by dominant firms to eliminate competition are: access to anessential technology or infrastructure, predatory pricing, exclusionary dealing agreements,discrimination among suppliers and exclusionary rebate schemes; hence it encourages theCommission to pursue its fight against these abusive practices exercised by certain enterprises.

The Commission shares Parliament’s awareness of the need to combat abuses of dominantpositions.

13. Parliament recalls its position as stated in its aforementioned resolution of 13 November 1996, andin particular paragraphs 2, 3 and 4 thereof, and requests the Commission to examine, on the basisof the ownership criterion, predatory pricing and other unfair practices, regulatory andnon-regulatory barriers in the fields of telecommunications in both mobile and satellitecommunications as well as on-line services, of media, of air transport and of the banking andfinancial sectors.

The Commission duly notes the concern expressed by Parliament. As regards state monopolies and the Amsterdam Treaty 14. Parliament requests the Commission to submit a report on the implications for the competition

policy of the Treaty of Amsterdam, and in particular, Article 7d on services of general economicinterest, the Protocol on public broadcasting in the Member States and the declaration on creditinstitutions in Germany, paying particular attention to the definition and meaning of services of



general economic interest, public obligations, universal service, equality of treatment, quality ofpublic services and the principle of common interest.

Parliament calls on the Commission to submit a specific report on the competition policyimplications of the Treaty of Amsterdam, and particularly Article 7d. The Commission’s policyon the liberalisation of services of general interest, the principles of which were set out in anotice adopted on 11 September 1996, was expressly endorsed at theIntergovernmental Conference. Although at the Conference proposals were put forward foramending Article 90 of the Treaty, which prohibits restrictions on competition in excess of thoseessential for the performance of tasks of general economic interest, the Member States retainedthe existing wording of the article and introduced new provisions, Article 7d, into the draftTreaty of Amsterdam. That article emphasises the importance the Community attaches to thoseobjectives of general economic interest. Since the new Treaty, which has yet to be ratified bythe Member States, in fact confirms existing practice, the Commission does not consider itappropriate to draw up such a report. On the other hand, it is not against devoting space tothis question in a forthcoming issue of the competition report when the actual effects of theTreaty make themselves felt after ratification. Moreover, the Commission notes that a protocol on public service broadcasting whichemphasises the special nature of this sector in view of its cultural and political dimension(plurality of opinions) was adopted at the Intergovernmental Conference. Regarding the Declaration on public credit institutions in Germany and the Conclusions of thePresidency on that point, which requested the Commission to carry out a study on the structureof the banking sector in the Community and possible services of general economic interest inthat sector and to inform the Ecofin Council of the findings, the Commission wrote to allMember States requesting appropriate information. It has to be determined to what extentpublic tasks actually exist in the field of financial services and how their provision is secured bythe particular Member States. On the basis of the results of this exercise it will be decided how to create fair and equalconditions for all credit institutions within the Community. It has to be ensured that all citizenshave access to efficient financial services and at the same time that the development of theinternal market in banking services is not adversely affected. Equal opportunities for allcompetitors are even more important in view of the emerging monetary union.

15. Parliament recognises the need for a new government role in the sectors of: telecommunications,energy, postal services, transport and broadcasting, stressing the aspects of establishing standardsfor both the private and the public sector and the new partnerships between the public and privatesectors.

After the liberalisation of services of general economic interest which were formerlystate monopolies, the public authorities have a role to play in ensuring that this liberalisation isfully effective and that the principle of the universal service is complied with. They willcontribute to this process by adopting new regulatory frameworks, e.g. by establishingindependent bodies to supervise and regulate liberalised markets, which will, in particular,secure access for third parties to the infrastructure of the former monopolies.

16. Parliament supports the efforts of the Commission to liberalise gradually the electricity market andexpects that the Commission will apply with determination the common rules for the internalmarket for gas still to be adopted by the European Parliament and the Council.

The Commission welcomes the support of Parliament for its policy of progressive liberalisation,which is already leading to an increase in its competition enforcement activities.



17. Parliament equally supports the efforts of the Commission to introduce an element of competitionin the management of airport and port infrastructure and in the access to essential infrastructure.

18. Parliament is concerned that the increasing concentrations arising through mergers or cross-border

alliances have blurred the definition of the “relevant market”; the geographic aspects, legal barriersof entry, security, transport costs and other factors should be used for an operational definitionbased on the concept of substitutability of goods and services.

On 8 October 1997 the Commission adopted a notice on the definition of relevant market forthe purposes of Community competition law with a view to providing guidance on the approachadopted in this matter. The notice, which was preceded by wide-ranging consultations withnational competition authorities and trade and industry associations, deals with the lawapplicable to both concentrations and anti-competitive practices. Regarding merger control, if a decision so requires a precise definition of the geographicmarket must be laid down on the basis of criteria which have been developed in thedecision-making practice. In general, the Commission proceeds by analysing the breakdown ofmarket shares, the fixing of and differences in prices at national, Community and EEA level. Aworking hypothesis is thus developed, which is verified in the investigations against an analysisof substitutability from the standpoint of demand and, if appropriate, an examination ofsupply-related factors. Of those factors, the principal items of evidence applied in eachindividual case include the following: the existence of tariff or regulatory barriers to entryand/or technical standards, conditions of access to distribution networks, and trade patterns(generally including transport costs). In addition it takes into consideration the on-goingintegration of markets in the European Union, which may lead to enlarging the scope ofmarkets artificially isolated in the past.

As regards state aid 19. Parliament considers it unacceptable that the Commission is unable to provide state aid surveys

concerning recent years. The Commission takes due note of Parliament’s wish to have information on aid granted morerecently in the Union. It will do its best to reduce the time required to compile data. However,all of the economic indicators indispensable for drawing significant comparisons betweenmember countries are in general available only after a period of one and a half years, whichmakes it difficult to publish this information more quickly.

20. Parliament recalls the main findings of the Vth Survey on state aid in the EC of Twelve over theperiod 1992-1994.

(a) the overall aid, on average per year, was more than ECU 95 billion, representing 1.7% ofGDP, a ECU 713 subsidy for each person employed, and 3.3% of government expenditure;

(b) overall state aid given by some Member States is extremely high (reaching 88% of theirbudget deficit);

(c) about 45% of overall aid (i.e. ECU 42 639 million per year on average) went to industry,which if expressed as a percentage of intra-Community exports of manufactured goods, givesa clear indication of the potential for distorting competition;

(d) state aid to industry was distributed as follows: 30% for horizontal objectives (i.e. R&D,environment, SMEs, trade, energy saving etc.), 17% for shipbuilding, steel and other sectors,and 53% for regional objectives;

(e) aid to agriculture, fisheries, transport and coal mining accounted for approximately 55% ofthe overall aid although the exact amount is not known due to lack of complete information.



The Commission welcomes Parliament’s interest in the fifth survey on aid in the Union.

21. Parliament reaffirms its support for state aid deemed to be in the common interest, such as aid forthe regions, R&D, SMEs, training, energy saving and the environment; it notes, however, that suchaid has been decreasing while aid granted to individual enterprises has been rising.

The Commission is concerned at the increase in grants of individual aid, whose effects areundoubtedly more harmful than those of aid granted under schemes approved in advance.Individual aid is mainly granted in the form of rescuing or restructuring aid, for which it willshortly adopt more stringent guidelines.

22. Parliament believes, nevertheless, that a significant proportion of aid in the Community indicates astable tendency which distorts fair competition, is incompatible with the internal market,undermines the EU’s commitment to a free world market and will become a source of potentialfriction between Member States participating and those not participating in EMU; it points,however, to the need to employ the “alignment clause” concept (mentioned in connection with stateaid for research and development150 to ensure that Community industry is not penalised on accountof self-restraint not imposed on non-European firms, as the Commission itself implied in itsresponse to Parliament’s aforementioned resolution of 13 November 1996 when it observed that aprovision of this type, in a globalised economy, should not be used so widely as to disturb thebalance between competitiveness and free competition.

The Commission shares Parliament’s concern that Community industry should not be weakenedby being subjected to more stringent rules than those imposed on non-Community enterprises.It takes account of the international environment and of the globalisation of trade in applyingcompetition policy. In the particular case of research and development, it has indeed takenaccount of the support which companies based outside the Community can receive and hasincluded a clause for alignment on the maxima provided in the WTO agreements on subsidiesand compensatory amounts. It has not hitherto had occasion to invoke this clause. Clauses ofthis nature cannot become a general feature of Community competition policy, which must takeinto account the degree of integration of the single market.

23. Parliament proposes that stability and convergence programmes including state budget objectivesshould also be considered from the point of view of competition.

In the conclusions of the fifth survey on state aid in the European Union in the manufacturingand certain other sectors, the Commission announced its intention of engaging in a dialoguewith all Member States with a view to fixing precise objectives and a timetable for reducingoverall aid budgets. Its services are developing methods to fix the objectives to be attained.The basis of the procedure will be the mutual interest of Member States in coordinating theiraid policies to avoid “beggar-my-neighbour” policies and spillover and to set their publicfinances on a sounder footing.

24. Parliament proposes that all state aid, irrespective of its form or purpose, should be governed byrules making for transparency and supervision and that a code of conduct should accordingly bedrawn up along the lines of the Commission’s proposed code on tax-related subsidies.

Since the Council cannot reach agreement on harmonisation and the Commission cannotunilaterally adopt tax legislation, a code of conduct in tax matters is justified. Regarding aid,the Commission has power to act directly and has already announced that it will apply a series

150 OJ C 45 of 17 February 1996.



of Community provisions (new rules on regional aid, new guidelines for aid for rescuing andrestructuring firms in difficulty and the multisectoral framework), which should help to reduceaid. Moreover, the Commission’s procedures serve to provide a significant degree oftransparency concerning state aid, i.e. information for Member States under the procedure laiddown in Article 93(2) and publication of its decisions in the Official Journal. As indicated inpoint 23, it intends to engage in a dialogue with the Member States with a view to fixingobjectives and a timetable for reducing the overall volume of aid. If the Member States adopt acode of conduct to reduce the volume of aid along the lines of the code for corporation tax, itmay form one of an array of means to attain the objectives in view.

25. Parliament is concerned that the proposed Regulation for a block exemption on certain categoriesof state aid will create market distortions; it recalls that certain national markets are morecharacterised by small and medium-sized enterprises (SMEs) than others; it urges the Commissionto watch closely the implementation of the Regulation in order to ensure that SMEs can beprotected in the event of abusive aid being given to competitors.

The Commission takes due note of Parliament’s concern. It emphasises that the Regulationempowering it to adopt block exemptions for certain categories of aid subject to certainconditions will not lead to a slackening in effective controls on aid. First of all, it will itselfcontinue to fix the criteria for compatibility with the common market and has no intention ofproposing rules that are less rigorous than those currently in force. Moreover, blockexemptions will enable it to concentrate on aid which deserves closer scrutiny, for examplead hoc aid. Its exemption regulations will prescribe thresholds beyond which aid must alwaysbe notified to and examined by it. In the case of aid which is exempted, Member States will beunder an obligation to send it a summary report, which will be published in the OfficialJournal. Lastly, in the case of exempt aid, it will continue to carry out subsequent verifications,which will be reinforced by information transmitted to it on the application of block exemptionsaccording to requirements specified by it. It will diligently follow up all complaints concerningabuse of exemption regulations, as it does in the case of aid granted without its approval orwhere aid that has been approved is improperly applied.

As regards international cooperation 26. Parliament believes that the determining factors of globalisation: technical progress, deregulation of

markets, liberalisation of key sectors and intensification of trade in goods and of capital marketshave reduced the effectiveness of the traditional policies of the State, one of them being competitionpolicy.

It is too much to argue that the determining factors of globalisation have reduced theeffectiveness of traditional competition policy. On the other hand, the competition authorities’traditional instruments may well sometimes prove ill-suited to countering cross-borderanti-competitive practices. This has led to the idea of establishing a body of international competition rules applicable toall countries, irrespective of their level of development. This idea, adopted by the Commissionin a communication dated 18 June 1996, was taken up by the WTO Conference held inSingapore in December 1996, which established a working group to study areas where aconsensus might be reached on interaction between trade and competition policy.



27. Parliament believes, in view of globalisation, that future reports on competition policy shouldinclude a chapter on the state of competition law in the other economic regions.

The Commission has tried to reduce the size of the annual report to make it easy to read andquickly available. However, it takes note of this request and intends to examine how futurecompetition reports can provide a better perspective on European competition policy in thecontext of developments in other countries, in particular those that are the Community’s mostimportant trading partners.

28. Parliament is of the opinion that the interdependence resulting from globalisation of production,

distribution and trade and the markedly international dimension of competition problems necessitatea new approach to EU competition policy.

Cf. point 26. 29. Parliament believes it essential to strengthen and continue close and careful cooperation with the

applicant countries with a view to establishing effective competition policies and competitionauthorities; it stresses that the applicant countries must comply with the EU competition rules inorder to avoid undermining the Union’s own foundations.

The Commission agrees that cooperation between the EU and the CEECs in the field ofcompetition policy is an essential part of the Union’s pre-accession strategy. This cooperationincludes different forms of bilateral and multi-country technical assistance actions, mutualinformation exchanges and consultations. It is aimed at ensuring that the CEECs adopt newlegislation that respects the basic principles of free competition in accordance with thecompetition provisions of the Europe Agreements and the respective Implementing Rules.Having adopted a legal framework, the law must also be applied. The Commission is thereforeincreasingly focusing on the effective application of the law by assisting the competitionauthorities in the enforcement of the competition rules.

30. Parliament favours an increasing role for the World Trade Organization (WTO) in international

competition policy; it welcomes the fact that a working party on international competition law hasbeen set up within the WTO; it considers that the EU needs to play a more active role in order toachieve results rapidly and avert ruinous competition; it therefore asks the Council to mandate theCommission - while taking account of the Agreement between the EU and the US Governmentregarding the application of their competition laws - to pursue the following objectives:(a) adoption of common competition policies at international level to deter the “most harmful

practices”, providing in particular for a ban on price and area cartels and for anti-trustlegislation;

(b) creation of the means of cooperation between competition authorities;(c) adapting of the WTO rules for the settlement of disputes to the competition rules.

The Commission is playing and will continue to play a very active role within the WTOworking group on trade and competition policy. It has taken the initiative to begin substantivediscussions on competition instruments within the group, in which many developing countries havetaken an interest.



B - Economic and Social Committee

1. Opinion of the Economic and Social Committee on the 'XXVIth Report onCompetition Policy (1996)`151

On 24 April 1997, the Commission decided to consult the Economic and Social Committee, underArticle 198 of the Treaty establishing the European Community, on the 'XXVIth Report onCompetition Policy (1996)`.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing theCommittee's work on the subject, adopted its opinion on 3 December 1997. The rapporteur was MrSimpson.

At its 350th plenary session (meeting of 10 December 1997) the Economic and Social Committeeadopted the following opinion by 98 votes to two with four abstentions.

1. Preliminary comments

1.1. The Economic and Social Committee (ESC) has, each year, taken the opportunity to comment onthe report prepared by the European Commission on Competition Policy.

1.2. The report on developments in 1996, the XXVIth in the series, was published in April 1997, withindays of the separate publication of the Fifth Survey on State Aid in the European Union. The report onState aid, containing information for the years 1990 to 1994, updates the last survey published in 1994.

1.3. Because of the close relationship between the policy questions raised by the analysis in the FifthSurvey and the review of policy and decisions on State aid in the Competition Policy report, the ESCdecided to prepare one opinion dealing with both documents.

1.4. These reports offer a valuable insight into many of the difficult questions faced by the Commissionin the evolution and promotion of competition policy and the application of State aids.

1.5. The ESC commends the Commission on the expeditious publication of both documents.

1.6. The ESC:

- congratulates the Commission on the clarity of exposition of the general principles of competitionpolicy;- endorses the methods used to evaluate whether various business agreements are compatible withTreaty obligations;- accepts the rationale underpinning the review of the impact of State aid; and- welcomes the measures taken to create an outcome which balances the often conflicting interests ofconsumers and businesses, or between citizens living in different parts of the Union.

1.7. In later sections of this opinion, the Committee offers comments and suggestions which, it is hoped,will assist the Commission in the further evolution of its competition policies and practices. 151 OJ C 73 , 9.3.1998, p. 9.



2. Principles underpinning competition policy

2.1. Competition policy is a critical component of the range of economic policies affecting thedevelopment of the EU. Whilst the practical basis is determined by the content of the Treaties andsubsequent decisions, the objective is to try to ensure that economic resources are allocated in the bestpossible way. This should have as a consequence consumers who gain protection from many businessarrangements which might unreasonably prevent or restrict the operation of normal competitive marketforces, or where an abuse of market influence could allow consumers to be exploited. In addition,competition policy can be an aid to securing improved business efficiency, better market integration andcreating more advantageous trading links between Member States.

2.2. The Treaties envisage possible actions against agreements to fix prices or trading conditions;control production, markets, technical development or investment; market sharing; and actions whichare discriminatory between customers or suppliers. Exceptions are possible where businessarrangements contribute to improvements in production, distribution or technical or economic progress,provided that the consumer is allowed a fair share of the resulting benefits.

2.3. Comparable actions by a single firm, or a group of firms, holding a dominant position in themarkets within the Union, which are adjudged to be an abuse of that position, are also prohibited(Article 86).

2.4. Whilst the objectives as stated in the Treaties are widely supported, in practice the range ofactivities which can give a cause for concern about unacceptable arrangements is so wide and variedthat an adjudication mechanism must be created. As the Commission notes, there is a presumption that'market forces produce a better allocation of resources..., the principal beneficiary being the consumer,who gets better quality at a lower price.152 However, 'these mechanisms sometimes have their limits; asa result the potential benefits might not extend to the entire population... The public authority must thenensure that the general interest is taken into account.`

2.5. The ESC shares this point of view and considers that on some occasions competition policies mustalso take account of, or be modified to acknowledge, the need to ensure that identified essential servicesare made available on a universal basis.

2.6. A further possible consideration for competition policy relates to the inter-relationship ofcompetition questions and those based on environmental considerations. The Commission publishedguidelines in the 1995 report on the consideration of overlapping environmental and competition issues.Clearly the Commission needs to consider when, and in what circumstances, environmental issueswould offer a justifiable case for exemption from the normal competition criteria and whenenvironmental criteria should be constrained by the need to avoid distortion of competition.

2.7. Commission competition policy is aimed to identify where market forces have, or potentially could,lead to barriers to trade which, as a result, affect trade between Member States and adversely affect thesmooth functioning of the market. Corporate conduct and State aid policies must be monitored.Judgements are needed to determine when 'market failure` or 'market abuse` need to be addressed.

152 SEC(97) 628 final, paragraph 1.3 quoting from the earlier Communication on 'Services of general interest in

Europe



Inevitably, the Commission must continuously ensure that relevant actions are reported andinvestigated, decisions made on those adjudged unacceptable and enforcement procedures put in place.

2.8. With the increased globalization of trade, this process is gaining increased significance for allbusinesses and all consumers. Some of the emerging questions relate not only to competition policywithin the European Union but to wider international implications. Where the decisions of a businessrelate to activities on a world-wide scale, a dominant position within the EU should be evaluated notsimply with respect to internal EU market arrangements since the 'relevant market` is an internationalone. The Commission needs to take account of the global competitive position in the assessment of theactions of large individual firms (as, for example, in the recent consideration of the actions of BritishAirways or the merger of Boeing and McDonnell Douglas).

2.9. A consequence of decisions relating to businesses which are located outside the EU is that it maybe more difficult to monitor compliance with approved arrangements. Receiving monitoring reports,gathering credible evidence, and ensuring that behavioural obligations are observed from organizationsbased in 'third` countries may pose particular difficulties which require international cooperation (seesection 3 below).

2.10. The ESC recognizes the importance attached by the Commission to:

- modernizing the instruments of competition policy;- developing appropriate analytical instruments;- improving cooperation with Member States;- modernizing the legislative instruments and through the WTO, developing an international frameworkof competition rules.

3. International cooperation

3.1. The ESC has noted with particular interest the recommendation (paragraph 235) that the WorldTrade Organization should set up a working group to do initial work on the development of aninternational framework for competition rules. This is a necessary project which is relevant whereglobalization is increasingly affecting trade.

3.2. Improved relations with the US competition authorities have facilitated, with agreement from thebusinesses concerned, some exchange of information. The bilateral arrangements with the US antitrustauthorities opens up further opportunities for cooperation in the exchange of non-confidentialinformation. Confidential information can also be exchanged but only with the agreement of thebusiness involved. However, there is a concern that the relative openness of investigations by theCommission can be commercially disadvantageous to firms in the EU when competitors outside the EU,possibly in the USA, may obtain competitive data that is not available on a reciprocal basis to EUbusinesses.

3.3. The recent work within OECD also has enhanced international understanding and cooperation oncompetition issues. Questions of competition policy at an international level need to be seen as criticallylinked to developments in international trade policy and will benefit from the highest possible level oforganizational links between the relevant Directorates-General in the Commission.



3.4. The ESC regards these steps to set competition policy in a global framework as significant andrelevant. Of course, the EU Treaties have been formulated to give effect to competition policy withinthe Union. Securing global cooperation requires an extra dimension in addition to the internal EUcompetition policies. As already suggested (paragraph 2.8) a dominant position within the EU shouldbe evaluated not simply with respect to internal EU market arrangements when the 'relevant market` isan international one.

3.5. However, whilst the objective may be easy to express in principle, securing the desirable levels ofinternational cooperation may be difficult to deliver in practice. The ESC hopes that the Commissionwill further develop its approach, policies and methodology on these global aspects of competitionquestions. Any enquiries about a firm's competitive position, or that of a specific sector, within the EUshould systematically be accompanied by an analysis of the situation in relation to world-widecompetition. A similar comparative analysis should be made of financial aid given by Member Statesand compared with the aid given by other countries to the same sectors.

3.6. There are particular critical opportunities for extended cooperation with countries in EasternEurope, some of which have an aspiration to become members of the European Union. The ESCwelcomes the acceptance by some of these countries of the current EU competition policies.

3.7. The Commission should ensure that the effective implementation of competition policy is part ofthe pre-accession strategy for the potential new Member States in Eastern Europe. In addition,assistance from the Community will be an important contribution as they prepare for entry and wouldhelp to maintain and sustain social, economic and industrial stability during the transition.

3.8. A critical feature in the pre-accession stages is the implementation of national rules on the grantingof State aid and the means of enforcing these rules. The ESC endorses the actions of the Commission inits efforts to ensure that appropriate measures on State aids and competition policy are taken in eachaspirant Member State at an early stage.

4. Competition policy developments: Articles 85 and 86 - Changes in legislation and interpretativerules

4.1. A key objective of Articles 85 and 86 is to ensure that the different forms of cooperation betweenbusinesses should not be disadvantageous to consumers. They should be mutually beneficial. Within theEuropean Union, businesses know that Articles 85 and 86 of the Treaties set the parameters for theiractions if they affect trade between Member States. However, the general principles have, over time,been amplified and illustrated by particular decisions which set the framework for more detailedquestions.

4.2. To reduce the burden of administrative investigation, to increase the degree of legal certainty todecision makers and to improve transparency, one of the desirable features of Commission policy isthat, where possible, further guidelines, or rules, on the form and content of acceptable cooperation inspecific circumstances should be prepared.

4.3. During 1996 (and early 1997) the Commission published:



- a new block exemption regulation on technology transfer agreements153 ;- a draft notice on cooperation between national competition authorities and the Commission in

handling cases within the scope of Articles 85 and 86154 ;- a notice on the non-imposition of fines in cartel cases155 ;- a draft revised notice on agreements of minor importance, which do not fall under Article 85(1)156;- a notice on procedure for processing requests for a right of access to files by firms being investigated

for a presumed infringement157;- a revised policy on SMEs158.

4.4. Each of these decisions, or draft proposals, should help to codify the application of competitionpolicy and reduce the number of notifications which must be processed by the Commission.

4.5. Technology transfer agreements

Whilst the block-exemption agreement is welcome, its introduction was not without problems. Theagreement was finalized in March 1996 but the Regulation (EC) No 240/96 did not come into forceuntil 30 January 1997. This created a period of legal uncertainty.

4.6. A more detailed examination of Regulation (EC) No 240/96 suggests that the absence of aseverability clause, which would have clarified the treatment of non-exempt clauses, may be aweakness.

4.7. The Commission is invited to consider, for future clarification, a more precise interpretation of theRegulation, in particular the concept of 'ancillary provisions` in Article 10, to ensure that the goals ofthe regulation are not unduly hampered.

4.8. Role of national competition authorities

The Committee endorses the efforts to ensure that national authorities adopt decisions which arecompatible with Community law by introducing national legislation enabling their competitionauthorities to apply Articles 85(1) and 86 effectively.

4.9. The relationship between the Commission and the national authorities in the application ofCompetition Law is evolving. With the fuller realization of the internal market and the pendingintroduction of EMU, this may be an appropriate time to re-orientate the relationships to develop theprinciples of subsidiarity, ensure greater consistency, share the workload and integrate actions based oncommon policy decisions.

4.10. The draft Notice on Cooperation with national authorities might be developed by an agreementthat Community law should be translated into national law in each Member State and then enforced, indefined types of case, by the national authorities. The Commission would then exercise, in part, asupervisory role, as well as determining those cases remaining within its remit. But, as the Committee

153 OJ L 31, 9.2.1996.154 OJ L 262, 10.9.1996.155 OJ C 207, 18.7.1996.156 OJ C 29, 30.1.1997.157 OJ C 23, 23.1.1997.158 OJ L 107, 30.4.1996.



suggested recently159, 'an efficient and workable decentralization would require more incisive action,such as a revision of Regulation (EEC) No 17/62; `.

4.11. As an initial pilot project, these principles might be developed to apply to those agreements whichare defined as 'vertical` restraints on competition.

4.12. Non-imposition of fines

The Commission now has discretionary power to waive or reduce fines in cases where cartel activitieshave been voluntarily disclosed. The ESC understands the logic of this change since it may offer anincentive to firms to cooperate in an investigation. Nevertheless, this discretion contains an inherentdanger that investigations will produce unpredictable 'plea bargaining` which may damage theperception of the independence of the official investigation. Whilst there are arguments that suchbargains should be confidential, the ESC agrees with the Commission notice that where a decision ismade that a fine should be reduced, or not imposed, the identity of the offending business should berevealed along with details of the scale of the remission of the potential fine.

4.13. Agreements of minor importance

The Commission has proposed that the de minimis rule, which establishes the turnover thresholdsbelow which agreements are considered to be of minor importance, should be extended to include largefirms with modest market shares. This proposal is still subject to wide ranging consultations. However,the ESC would support the removal of the turnover criterion and the increased reliance on theproportion of the market share held by individual businesses. The ESC has already commented on theGreen Paper on vertical restraints160. It accepts that a limit of 5 % for horizontal agreements and 10 %for vertical agreements seems appropriate.

4.14. The draft Notice on Agreements of Minor Importance has attracted some criticism in tworespects. First, the proposed definition used to determine 'types of agreement` may need to be furtherrefined. Second, the concept of 'serious` restrictions may itself be too restrictive. The Commissionshould consider how these concepts might be redefined to give reassurance on legal certainty and togive greater clarity to make them more capable of general application.

4.15. The extension of the de minimis rule to include all actions of SMEs is also a welcome recognitionboth of the importance of encouraging SMEs to engage in intra-Community business as well as a usefulsimplification of the procedures.

4.16. Access to files

The notice allows firms being investigated to gain access to relevant files held by the Commission inDG IV and this may not be as helpful as it could be. Pending a major review of Regulation 17, theCommission should consider an amendment to the Notice to allow access to relevant files heldelsewhere in the Commission as well as in DG IV.

159 ESC opinion of 19.12.1996, point 11, OJ C 75, 10.3.1997, p. 22.160 ESC opinion of 9.7.1997, OJ C 296, 29.9.1997, p. 19.



4.17. The ESC has considered a further suggestion for a possible improvement in the application of theprocedures under Article 85. This stems from a concern about the timeliness of the Commissionprocedures when assessing applications for individual exemption or negative clearance. The existingprocedure, using Regulation (EEC) No 17/62, might be changed to add a series of trigger points for theautomatic clearance of an application using similar concepts to those already included in the mergercontrol system. If, after acknowledging an application, the Commission has not reacted within, say,four months, then that application should be automatically approved. This might be furthersupplemented by setting a time limit of, say, one year if the Commission decides that an applicationshould receive a full investigation. (This suggestion is similar to a procedure which is in force inSwedish national competition law.) Provision might be made for cases where a particular applicationmerited an extended period for detailed consideration. A predetermined extended period might bepermitted, exceptionally, on the basis of a reasoned statement which could be challenged in theEuropean Court.

5. Competition policy and the Information Society

5.1. One of the sectors of economic activity which is expanding rapidly and is posing opportunities andproblems which also affect trade between Member States is the range of enterprises forming part of(what is known as) the Information Society. As the Commission notes, the new and emergingtechnological developments have not only raised questions about restrictive practices and dominantpositions which affect the liberalization of markets but they have also highlighted the need to carefullyconsider the impact of possible mergers.

5.2. A critical feature of the actions by the Commission in 1996 was the examination of restructuringproposals. In authorizing the Atlas project, between France Telecom and Deutsche Telekom, as well asGlobal One, a joint venture between Atlas and the Sprint Corporation, the Commission insisted onmodifications, including liberalization of the telecoms infrastructure, which helped to ensure that theseprojects did not eliminate competition.

5.3. Similar conditions were relevant to the Unisource/Telefonica and Uniworld cases for which theCommission was, in 1996, preparing to take a favourable view. This is expected to be confirmed late in1997.

5.4. A feature of the telecommunications sector across the European Union, and indeed on a globalscale, is the need to balance the economic logic of an existing single infrastructure network with theprovision of opportunities for service providers to have access to core elements of the network at priceswhich are determined in a manner which does not attempt, unreasonably, to restrict competition.

5.5. The Commission has shown that it is prepared to intervene if existing service providers reducetariffs where competition is more intense and cross-subsidize these services by higher tariffs on otherservices which is effectively a method of unfairly exploiting the consumers.

5.6. In 1998, national operators who still hold a monopoly in the provision of voice telephony will losethe right to a legally protected monopoly. The risk, prior to 1998, is that operators would distort themarket place for voice telephony by imposing higher prices, or price increases, for residentialcustomers. The Commission is aware of this threat and will be expected to take appropriatepreventative measures.



5.7. The ESC hopes that Member States will be able to ensure that this is not a serious problem but,nevertheless, welcomes the statement of intent by the Commission.

5.8. Because of the international implications of the liberalization of telecommunications, a criticalfeature is that the conditions of access by one enterprise to the networks of others should be clear andoperate to avoid distortion of competition. The Commission is called on to closely scrutinize the mostrecent merger plans of the German media conglomerates Bertelsmann and Leo Kirch in the area of pay-TV, and to prevent the monopolization of this sector which this would entail. The ESC notes that theCommission has published a draft notice on the application of competition rules to access agreements inthe telecommunications sector. The ESC has welcomed this initiative161.

5.9. In other opinions the ESC has drawn attention to the problems of concentration of ownership andgrowing alliances in the audiovisual sector (which includes terrestrial, satellite and cable services). TheCommission needs to be aware of the wider range of policy questions which need to be taken intoaccount, over and above questions of market dominance and adequate access for alternative providers.There are a number of public policy issues, such as ensuring that public service obligations are met andmaintaining minimum standards in the content of programmes. The decision by the Commission toconduct a wide-ranging consultation on the application of competition rules to the broadcasting ofsports events raises a topic of specific interest to many people. The ESC believes that a solution mustbe found which allows general public access to an agreed number of major sports events which are ofnational interest in a Member State(s).

6. Other sectors affected by competition policy

6.1. The Commission report contains a review of developments affecting transport services, includingliner shipping consortia, inland rate fixing by liner conferences, price consultations allowed or notallowed, between competitors, and cooperation between airlines.

6.2. Two of these topics raise questions which the Commission may wish to further consider.

6.3. Air transport is now of particular interest in terms of competition policy. Since 1987, civil aviationhas been progressively liberalized, at least on paper. In reality, the competition between airlines, excepton some routes, is limited. A number of features continue to have the potential to constrain theemergence of normal competition. There is provision for a block exemption on tariff consultations(Regulation (EC) No 1617/93); a shortage of 'slots`; further State aid to some airlines; the effects ofeconomies of scale within the industry; the expanding use of 'code-sharing` agreements; and restrictionson the foreign ownership of airlines. The ESC suggests that the Commission should carry out anevaluation study on the effects of deregulation of the European air transport market.

6.4. Similarly with respect to liner shipping, there is a block exemption for some of the actions of linershipping conferences (Regulation (EEC) No 4056/86). The structure of this sector has changedsignificantly since this Regulation was adopted. Consortia and global alliances now play an importantrole. Since this Regulation has no expiry date, the ESC requests the Commission to evaluate the effectsof the existing regulations on maritime liner services.

161 ESC opinion of 28.5.1997, OJ C 287, 22.9.1997, p. 8.



7. State monopolies and monopoly rights

7.1. The Commission has reported on its actions to further secure the liberalization of the traditionalstate-owned monopolies in services such as telecommunications, energy, postal services, certaintransport services, and the state monopolies in Austria (affecting alcohol and tobacco), Sweden andFinland (affecting alcohol sales).

7.2. In many cases, the liberalization measures need to be supplemented by measures to supervise theoperations of these enterprises in the wider market place of the whole of the European Union on acompetitive basis.

7.3. Reflecting the experience to date on the efforts to liberalize these sectors, the Commission arguesthat 'the objectives of liberalization and of public service can be kept fully compatible under the existingCommunity rules. It was therefore opposed to the proposals to amend Article 90 of the Treaty at theIntergovernmental Conference.

7.4. The proposals to amend Article 90, considered at the IGC, were, in June 1997, not accepted.

7.5. In principle the ESC agrees that no change in Article 90, which under the proposal to the IGCwould have had the effect of protecting some state-owned undertakings in at least one Member Statefrom the disciplines of competition policy, would have been acceptable, particularly if this createdunfair competitive conditions between operators in different Member States.

7.6. In a related but wider discussion about the scope for Community policies which specify minimumlevels for universal services for all citizens, the Commission suggests that this should be seen in thecontext of the liberalized public sector services. The ESC has stated its Opinion on the CommissionCommunication on 'Services of General Interest` and has emphasized the importance of the principlethat appropriate measures should be in place to make public services accessible to all consumers162.

7.7. These efforts by the Commission to extend the concept of minimum levels of universal service intoa wider setting, including initiatives concerning the environment, consumer policy and trans-Europeannetworks, would be underpinned by a Commission proposal to add a new paragraph to Article 3 of theEU Treaties. The new paragraph (u) would add 'a contribution to the promotion of services of generalinterest`.

7.8. Whilst this precise recommendation was not adopted at the Amsterdam IGC, the intention wasfulfilled by a proposed new Article 7d on this topic which is to be inserted in the Treaties.

7.9. In other opinions, the ESC has already commented on the recent legislation ontelecommunications163 164, energy165, postal services166 and airports167.

162 Notice on Services of general interest, OJ C 281, 26.9.1996 and ESC Opinion of 29.5.1997, OJ C 287, 22.9.1997, p.

85.163 Directive with regard to mobile and personal communications, OJ L 20, 26.1.1996 preceded by ESC opinion OJ C

15, 20.1.1996.164 Directive with regard to the implementation of full competition in telecommunications markets, OJ L 74,

22.3.1996, preceded by ESC opinion OJ C 39, 12.2.1996.165 Directive concerning common rules for the internal market in electricity, OJ L 27, 30.1.1997, preceded by ESC

opinion OJ C 73, 15.3.1993.



8. Merger control

8.1. As the Single European Market becomes more deeply embedded in the commercial realities forbusiness enterprises, there is no surprise in a trend for more businesses to see the advantages ofintegrating their activities to take advantage of the single market. In part this economic process willgive an incentive to more mergers and take-overs which have cross-border effects.

8.2. The Commission has the responsibility to ensure, as far as its legislative remit permits, that theeconomic gains are to the mutual benefit of consumers and businesses. Mergers which affect cross-border trade and have the potential to allow an abuse of market influence by the operator must benotified and scrutinized. The Commission must interpret notifications of intended mergers or take-oversusing the 1989 Merger Regulation168.

8.3. A proposal for a review of the Merger Regulation was published in a Green Paper in January1996. This proposed, inter alia;

- lower turnover thresholds for compulsory notification (ECU 3 billion instead of 5 billion forworldwide turnover and ECU 200 million instead of 250 million for Community-wide turnover);

- lower turnover thresholds for mergers which would require notification in at least three MemberStates (ECU 2,5 billion and 100 million respectively);

- extension of the procedure to full-function joint ventures;- simplified conditions for referral from the Commission to a Member State, or vice versa.

8.4. The ESC issued a broadly favourable opinion on the proposals169.

8.5. The Council of Ministers was unable to completely endorse the proposals, which required aqualified majority, insofar as they suggested reduced turnover thresholds for notification to theCommission. However, new criteria on Commission competence have been agreed (see Regulation(EC) No 1310/97) which extend the competence of the Commission to analyse the implications of awider range of merger proposals at lower thresholds and also where three, or more, Member Statescould be involved.

8.6. Since some critical aspects of the original proposal to amend the Merger Regulation did not secureready agreement from the Member States, the ESC suggests that the Commission might now undertakea more fundamental review of the balance between agreed EU policy and appropriate nationalresponsibilities. In this setting, a reconsideration of the appropriate mechanisms to make decisions on arevised merger regulation could be combined with the consideration of proposals on competition policyas summarized (above) in point 4.8 et seq.

8.7. The ESC has reviewed the summary reports of various merger proposals (paragraphs 140-157)considered by the Commission and welcomes the availability of this information in this summarized

166 Proposal for a Communication on competition rules as applied to the postal sector, SEC(95)830 final, 26.7.1995;ESC opinion OJ C 174, 17.6.1996.

167 Directive on access to the ground handling market at Community airports, OJ L 272, 25.10.1996, preceded by ESCopinion OJ C 301, 13.11.1995.

168 Regulation (EEC) No 4064/89, 21.12.1989.169 ESC opinion: OJ C 295, 7.10.1996.



form and notes that the decisions taken, when merger proposals are evaluated, have had particularregard to the interests of consumers.

8.8. The ESC is pleased to note the action taken to examine mergers which, although outside the EU,could severely affect competition within the EU (as in the case of Boeing-McDonnell Douglas). As thisopinion has already noted (see point 2.8) such action needs to be followed by arrangements to overseethe compliance with any stated conditions (for example the avoidance of exclusive supply agreementsby Boeing with clients).

8.9. When merger proposals are examined in detail by the Commission, the ESC is concerned that thisprocedure can sometimes be unduly prolonged. The Committee considers that the Commission shouldaccept that decisions should be within (as far as possible) predetermined time limits.

9. State aid: overview

9.1. Within the European Union, state financial and/or fiscal aid to enterprises in different sectors is notuncommon. The provision of State aid is regulated particularly by the terms of Articles 92 and 93 ofthe Treaties. However, in an integrated Single Market, the existence of State aid can potentially distortcompetition and create a perception of unfairness between firms, some of which receive aid and othersdo not.

9.2. Whilst there is a major concern, underlined by the most recent Commission survey (see Section10), that the scale of State aid is too large, a revision of the rules to regulate State aid depends on aclearer understanding of the circumstances in which State aid can be justified and the scale on which itmight be available. Achieving this consensus will necessitate a re-examination of some difficultquestions.

9.3. One of the simplest principles to endorse is that State aid might be justified where the adversesocial, or environmental, impact of normal economic (or market) forces outweighs the effects of thepossible distortion of competition which the aid may cause. In turn, this principle opens the possibilitythat State aid may help to maintain or create employment in areas of high unemployment or facingrestructuring as a result of other changes. State aid may also be introduced in circumstances where theobjective is to speed up the development of an industry, area, or type of business (e.g. to assist with thedevelopment of SMEs).

9.4. Whilst there is a shared interest in minimizing the scale and cost of State aids, at levels which areproportionate with the agreed objectives, within the EU there is also a shared interest in avoidingundesirable distortions to competition by an inappropriate use of State aid in some countries, industriesor regions. The need to harmonize the permitted scale and circumstances for the provision of State aidis accepted. The Committee has a growing concern that in a reconsideration of the impact of State aid,account should be taken of fiscal differences as well as the other forms of more direct financial support.

9.5. The Commission proposed to the Council in November 1996 which accepted that it should prepareproposals for two regulations on the basis of Article 94 of the Treaty: the first one shall codifyprocedures in the field of State aid; the second one shall enable the Commission to exempt certain typesof aid (environment, SME, R&D, training and employment aid) under certain circumstances from thenotification obligation, since such aid can be considered as compatible with the common market, aslong as certain criteria are fulfilled.



9.6. The ESC welcomes this review and wishes to be consulted about proposals to amend theframework of State aid both in the context of proposed formal decisions from the Council (whichnormally are addressed to the ESC for an opinion) and in the adoption of formal procedural rules andguidelines which will be used by the Member States (which might otherwise not be subject to scrutinyby the ESC). This debate will also need to examine the relationship of State aid to the role andoperations of the Structural Funds and the Cohesion Fund which are themselves currently under review.

9.7. The essential objective is that the review should reinforce the means available within the EuropeanUnion to assist the less prosperous regions, and regions affected by deep recessions in key sectors, togenerate improved living standards and employment prospects for their residents.

10. The Fifth Survey on State Aid170

10.1. The Fifth Survey on State Aid is a comprehensive assessment, as far as can be achieved by theCommission, bearing in mind the problems of obtaining data from Member States and the furtherproblems of quantifying indirect, or fiscal, aid. The ESC congratulates the Commission on itscompletion, even though some of the evidence is not as reliable as would have been wished.

10.2. The Fifth Survey includes State aid for manufacturing and certain other sectors and estimates thatthe Member States in 1994 (twelve members at that time) spent more than ECU 95 billion a year inpublic assistance to manufacturing, agriculture (excluding the price guarantees of the CAP), transport,fisheries and coal mining. Manufacturing alone received ECU 43 billion a year.

10.3. Whilst the quality of the information in the Fifth Survey has improved on earlier surveys, becauseof the value of a study of this type in framing future policy, the ESC hopes that the Commission willcontinue to undertake this work on a biannual basis in a standardized format and that Member Stateswhose data sources are incomplete or inadequate will be required to improve the quality and quantity ofthe data available.

10.4. Of course, the cost of some forms of aid, such as loan or interest guarantees, equity investmentsand more favourable tax regimes, is inherently difficult to quantify and must always be a moresubjective calculation. This is, of course, indirectly a further argument to ask Member States to makeoffers of aid in more transparent form171

10.5. The estimated cost of State aid as assessed in the Fifth Survey is large. The Commission hascommented on its size, concentration, distribution by sector and country, and the overall trend which, itbelieves, is not showing the reductions which the Commission thinks are desirable.

10.6. Whatever the qualifications, the Fifth Survey confirms that, for manufacturing industry alone,nearly ECU 43 billion was made available in 1994, at 1993 prices. This was the equivalent of 3,8 % ofthe value added by manufacturing industry, ECU 1 472 per person employed and 20,7 % of the valueof intra-community exports. Aid on this scale obviously has a potential to affect trading conditionsbetween Member States. 170 COM(97) 170 final.171 There is, of course, a need to understand how the impact of State aid in other, non-EU countries is operating and

its impact on business decisions which, indirectly, are relevant to EU policies. The work of agencies such as theOECD, in its review of Public Support to Industry, 1996, illustrates the benefit of setting the EU survey in aninternational setting.



10.7. The qualification which can be added is that these global indicators, which are available for eachMember State (12) as well, show how significant State aid is, but do not illustrate its impact inparticular regions or sectors. For example, State aid was the equivalent of 3,8 % of value added in allmanufacturing industry. Whilst it may not yet be possible to prepare refined calculations it is obviousthat this figure would be higher if it measured the value of State aid as a proportion of value added inthe enterprises which received State aid. This is particularly significant where only some regions (orsome sectors) of a national economy are eligible to receive State aid.

10.8. Some of the aid to other sectors is determined by criteria relevant to the sector concerned. Forexample, State aid to the railway sector is heavily influenced by the fulfilment of public serviceobligations and social obligations by the operators and accounts for over ECU 32,6 billion on averageeach year. Aid to the coal mining industry cost ECU 13,2 billion. Both of these might be regarded asbased on justifications which are conceptually different from that to manufacturing industry.

10.9. Almost half of the total State aid, 45 %, is targeted in the manufacturing sector. In terms ofindustrial, regional and competition policy, the aid to manufacturing is the most critical area of debatefor future policy.

10.10. The evidence in the Fifth Survey on the trend and amount of aid to manufacturing industry is notas clear as the ESC would have wished. For example, whilst the Commission concludes that for theperiod 1990 to 1994 'the gradual downward trend observed in the past appears to have come to an end`(paragraph 9), this conclusion is reached without making explicit allowance for the additionalexpenditure directed to the 'new` Lander in Germany. If these amounts are excluded, as introducing abig non-comparable element in this decade, the annual cost in 1993-1994 was lower than in 1990-1992.The known annual value in 1993 prices was just under ECU 29 billion in both 1993 and 1994,compared to over ECU 40 billion in 1990. However, this takes no account of the probable re-allocationof aid within Germany in favour of the eastern Lander.

10.11. Whilst the concerns about the merits and scale of State aid are an important part of Commissionthinking, if the total for manufacturing industry is, on a comparable basis, continuing to decrease, thenthis suggests that some progress has been made and this may have some influence on the policyprerogatives.

10.12. The impact of the new Lander also affects other parts of the analysis. One of the starkconclusions (paragraph 38) is that 'ad hoc` aids have increased from 7 % of the total in 1990 to 36 % in1994. This would suggest a major policy change in this period but for the next comment that thisconsists in 'the main of aid granted for rescue and restructuring of companies together with aid grantedby the Treuhandanstalt (in the new Lander)`. The Commission could have been expected to offer thisevidence in a more helpful way. To draw any conclusions, some evidence is needed of the allocation of«ad hoc» aid in each of the Member States and with particular information on the impact of the Germanchanges.

11. Policy questions arising from the Fifth Survey

11.1. Arising from the Fifth Survey and other evidence available to the Commission, the followingpolicy conclusions are highlighted in the published reactions of the Commission:



a) dialogue with the Member States is needed to establish precise targets and a timetable for thereduction of aid budgets alongside actions to be taken by the Commission itself;b) steps are needed to counteract the damaging effects of national aid policies on economic cohesion inEurope. The rich central regions receive 85 % of the total aid while the share of the cohesion countries,excluding Ireland, is shrinking;c) the Commission is proposing new guidelines for the regional aid granted by Member Statesincluding, it is expected, a proposal to reduce the permitted ceilings on maximum financial aid by one-third;d) the Commission intends to propose a simplification of procedure for the approval of aid schemeswhich contribute to EU objectives;e) the Commission proposes to tighten even further the rules on aid towards the rescue andrestructuring of enterprises in difficulty;f) the Commission intends to propose a set of across-the-board guidelines which will allow it to vetindividual cases in which large amounts of aid are to be paid and which may cause serious distortionsin competition.

11.2. Each of these suggestions raises questions which need to be examined in detail before decisionsare made on the direction and scale of changes in the application of State aid.

11.3. The Fifth Survey helps to place these questions in a factual perspective of the division betweenthe responsibilities of the Member States (and their sub-national administrative structures) and those ofthe Community as represented by the Commission.

11.4. It also helps to give cogency to a debate about the scale of spending on State aid and to examinethe suggestion by the Commission that it is too large and not falling fast enough.

11.5. Critical, and implicit to the policy questions, is the debate about the scale and sources of fundingfor the 'poorer` Member States for whom, for example, budgetary constraints are more important thanpermitted maximum levels of State aid. In this context, the EU will need to have clearer policies on theallocation of funds from the Community budget, whether through the Structural Funds or the CohesionFund, or through redesigned financial instruments.

11.6. The recent Conference on Cohesion Policy was a useful introduction to some of these questions.The publication of Agenda 2000 has provided an immediate opportunity to reconsider them.

11.7. The ESC hopes that each of these topics will form a part of the review which the Commission hasnow launched on the policy constraints on State aid. In addition, the ESC, as possibly the most broadlyrepresentative body of the citizens of Europe, alongside the European Parliament, is willing tocontribute to this debate and expects to be consulted at an early stage by the Commission.

11.8. At this early stage in the review, the ESC suggests that the Commission should identify a numberof principles which should underpin the policy decisions. In particular, the ESC reminds theCommission of the relevance of the First Report on Cohesion Policy which was published in 1996 andon which the ESC has expressed an opinion172.

172 ESC opinion: OJ C 206, 7.7.1997.



11.9. In addition, the ESC would commend a clear distinction between (1) the role of the Community insetting guidelines for State aid in the context of regional policy or of industrial policies and (2) the roleof the Community in providing financial resources to support acceptable policies in Member States, ortheir regions. The former is critical to the coordination of policy across the Community and, especiallyfor the richer Member States, is important in the context of the subsidiarity of actions. The latter is acore element in the debate about the reform of the Community budget.

11.10. When the Commission proposes revised guidelines on the permitted levels of State aid forindividual business projects, the ESC recognizes the conflicting tensions between ensuring that (1) aidis only permitted for enterprises (whether newly formed or subject to rescue arrangements) which havethe prospect of viable operations and avoid the need for continuing aid, (2) aid can be large enough tooffset the scale of initial disadvantage in an industry or region, (3) maximum aid levels are graduallylowered and (4) the outcome of making aid available is that the economic and social disadvantage ofdefined regions or industries is reduced.

11.11. There is a particularly pressing need for the Commission to publish proposals on future policieson the use of aid for the rescue and restructuring of firms in difficulty. The present guidelines expire atthe end of 1997. The ESC acknowledges that there is a balance to be struck between avoiding joblosses at firms in difficulty and the safeguarding of the competitive position of enterprises. Whilst theaim must be to maximize durable employment in viable projects, the risk to be avoided is that short-term expediency should over-ride longer term objectives.

11.12. The ESC recommends that, where large amounts of financial assistance are likely to be neededto launch a new enterprise or maintain an existing enterprise, the assistance should be scrutinized by theCommission to test the potential for the survival of a competitive entity. This market study, conductedby the Member State, on the basis already used in the Commission's merger control procedures and insome specified sectors, should apply to businesses in all sectors and should include an examination ofthe effects on the competitive position of other firms in the same sector.

12. Action taken on State aid in 1996

12.1. The Report on Competition Policy in 1996 reflects the emerging policy debate in the review ofState aid which has been initiated and also reports on the actions of the Commission during the year. Anumber of steps were taken which clarify aspects of the existing criteria used to assess aid underArticles 92 and 93.

12.2. In an effort to reduce the involvement of the Commission in notified assistance which is unlikelyto be significant in scale or potentially distorting to trade in the EU, the Commission introduced a noticeon 'de minimis` aid173, and new guidelines on State aid for SMEs which introduces the prospect of aidfor intangible investments, possibly in the form of technology transfers174, and a framework for theextension of the scope of State aid for firms in deprived urban areas175.

12.3. The ESC welcomes each of these initiatives which will allow greater concentration by theCommission on the more difficult decisions related to State aid. However, the ESC hopes that the

173 OJ C 68, 6.3.1996.174 OJ C 213, 23.7 1996.175 SEC(96) 1706/2.



Commission will be prepared, after a short period of experience of the effects of the relaxation of therules for aid in defined and deprived urban areas, to widen the list of activities which are eligible forthis type of incentive.

12.4. During the past year the Commission continued to refine the features of the measures which are,legally and technically, regarded as aid and therefore falling within the ambit of Article 92(1). The ESCwelcomes the statement of the four criteria, all of which must be satisfied, which determine whenArticle 92(1) is applicable.

12.5. Three of the four criteria seem unlikely to be controversial. The aid must give a firm anadvantage; it must be granted by the state, or using state resources; and it must affect trade betweenMember States.

12.6. The fourth is less certain. It requires that the aid must have particular characteristics to the pointof favouring certain undertakings or the production of certain goods. The ESC notes that this conditionis capable of differing interpretations. To illustrate the possible difference, the Commission shouldclarify whether it would exist if a Member State extended the aid only to manufacturers as opposed toall other businesses or would it only exist if applied to a smaller industrial sector? The Commissionrelies on a distinction between 'general` measures, available to all firms, and 'specific` measuresavailable to a limited group. However, this distinction does not, without further clarification, answer thequestion posed. The ESC suggests that the Commission should clarify how the term 'certainundertakings` is to be defined.

12.7. The defining of aid relative to 'certain undertakings` has been a recurring problem for theCommission. During 1996, the issue was relevant to decisions on aid to reduce labour costs. TheCommission has decided that measures to reduce labour costs on a national basis do not fall to beconsidered under Article 92(1). Reductions on labour costs in specified industrial sectors wouldhowever not escape. The details have been published in an explanatory notice.176 The ESC welcomesthis step which helps to clarify the position.

12.8. The Commission pursues a number of specific aid policies in relation to a number of sectors suchas shipbuilding, steel, coal, motor vehicles, synthetic fibres, clothing and textiles, transport, agricultureand fisheries. The ESC has noted the consistent application of these policies in 1996.

12.9. Nevertheless, the ESC regrets that the proposed OECD sponsored international agreement onshipbuilding has not yet been ratified by all the participants. The delay by the USA has now placed thefuture of this agreement in doubt. The ESC reminds the Commission of the earlier opinion whichproposed that, in the event of such a delay, the Commission should make alternative proposals asquickly as possible, and notes that a new draft regulation has indeed been published177.

12.10. The ESC has noted that an advisory study has recommended that the special sectoral frameworkfor the textiles and clothing industries be abolished and replaced by the same regime as applies ingeneral to other industries (see paragraph 194 of the Annual report). This decision was postponed until1997. In the particular circumstances of severe competition faced by this sector, the ESC would urge

176 OJ C 1, 3.1.1997.177 OJ C 153, 22.5.1997.



caution that such a change would not further erode the viability of, and employment offered by, firms inthis sector.

12.11. The ESC has noted the modest success in the first year of application of the guidelines whichdefine when employment aid is acceptable. It also noted the positive outcomes of aid linked toenvironmental protection.

12.12. With rather more apprehension, the ESC has noted that some 'direct investments abroad` arenow coming to the attention of the Commission as possible sources of distortion of competition in theCommunity (see paragraph 224 of the Annual report). The ESC appreciates that this raises complexquestions on whether (a) aid takes place and (b) the incidence of that aid, as opposed to (c) the locationof the investment. The ESC requests the Commission to engage in a wide-ranging consultation beforereaching definite conclusions on the appropriateness of the existing rules for aid to cases of this kind.

13. Outlook for 1997

13.1. The Commission has included in the 1996 report a final section summarizing the workprogramme contemplated for 1997. The ESC welcomes this increased transparency about the activitiesof the Commission.

13.2. Many of the legislative priorities are logical developments from the policies already reviewed inthis opinion. The ESC agrees that they are all of considerable significance. The caveat which theCommittee would enter is that some of the policy reviews deserve an open and full debate beforedecisions are finalized. In particular, the Committee would request an opportunity to comment on newguidelines for the granting of State aid, sectoral aid and regional aid rules.

13.3. The ESC also welcomes the acknowledgement that effective enforcement policy is becoming morenecessary as the complexity and range of competition policy proceedings increase.

14. Conclusions

14.1. The ESC commends the Commission on the expeditious publication of the Report on CompetitionPolicy (1996) and the Fifth Survey of State Aids (point 1.5).

14.2. Because of the growing significance of global trading, the ESC has noted with particular interestthe recommendation that the World Trade Organization should set up a working group to do initialwork on the development of an international framework for competition rules. The ESC hopes that theCommission will further develop its approach, policies and methodology on these global aspects ofcompetition questions (point 3.5). In support of this work, the Commission should call on the resourcesof the offices of the EU in other States to collect information on the way in which competition policiesare being developed elsewhere, often to the disadvantage of the businesses in the EU.

14.3. This opinion has reviewed a number of aspects of competition policy which were outlined in the1996 report. It also reflects the early reactions of the ESC to the publication of the Fifth Survey ofState Aids. The Committee hopes that the Commission will consider the suggestions outlined in thisopinion in the further evolution of its important work in ensuring that competition policy functions tothe benefit of the citizens of the Union.



14.4. In particular (and inter alia) the ESC would draw the attention of the Commission to thefollowing conclusions:- a dominant position within the EU should be evaluated not simply with respect to the internal marketwhen the relevant market is an international one (3.4);- appropriate measures should be taken to ensure that EU policies on competition policy and State aidsare developed in each of the aspirant countries prior to enlargement (3.8);- Community competition law should be translated into national law in each Member State and thenenforced, in defined types of case, by the national authorities (4.10);- when agreements are submitted for consideration under Article 85, the procedure might be changed toadd a series of trigger points for the automatic clearance of an application, using similar concepts tothose already included in the merger control system (4.17);- State aid (and aid from the Community) should be carefully targeted in a disciplined manner whichminimizes the effects on competition, limits the scale of any subsidies, and reduces the scale of Stateaid where possible;- in a reconsideration of the impact of State aid account should be taken of fiscal differences as well asother forms of more direct financial support (9.4); this should take account of the code of conductagreed by the ECOFIN Council in December 1997;- during the reconsideration of the impact of State aid, the issue of employment must also be clearlytaken into consideration;- the relationship of State aid to the role and operations of the Structural Funds and the Cohesion Fundshould be reviewed;- a clear distinction should be made between (1) the role of the Community in setting guidelines forState aid in the context of regional policy or of industrial policies and (2) the role of the Community inproviding financial resources to support acceptable policies in Member States, or their regions (11.9);- after a short period of experience of the effects of the relaxation of the rules for aid in defined anddeprived urban areas, the Commission should widen the list of activities which are eligible for this typeof incentive (12.3);- the Commission should clarify how the distinction is made between general measures and specific aidas it applies to different groups of undertakings (12.6).

14.5. The ESC notes that the suggestions made in this opinion will have relevance in the debate onAgenda 2000, published in July 1997, which has implications for competition, regional, industrial andagricultural policies in the next millennium.

14.6. In view of the evolution of several critical aspects of competition policy in recent years, this maybe an appropriate time to reconsider the application of competition policy. The general principles mightbe reviewed and then used as a basis for a reallocation of responsibilities for enforcement which allowsfor both decentralization and the application of subsidiarity. In this way, openness and transparencycould be enhanced and a sharper focus on the needs of consumers and the role of SMEs might bedeveloped.

14.7. As globalization increasingly affects competition, the ESC suggests that the Commission shouldamplify its annual report on competition with a review of the state of competition policies in majorcompetitor countries, particularly where their actions may affect the business of EU firms.

Brussels, 10 December 1997The President of the Economic and Social CommitteeTom JENKINS



2. Reply by the Commission to the opinion on the XXVIth Report on CompetitionPolicy

XXVIth Report on Competition Policy (1996) - SEC (97) 628 final – DecemberRapporteur : Mr. SimpsonMain points of the ESC Opinion Commission position

2. Principles underpinning competition policy2.1 Competition policy is a critical componentof the range of economic policies affecting thedevelopment of the EU. Whilst the practicalbasis is determined by the content of theTreaties and subsequent decisions, the objectiveis to try to ensure that economic resources areallocated in the best possible way. This shouldhave as a consequence consumers who gainprotection from many business arrangementswhich might unreasonably prevent or restrictthe operation of normal competitive marketforces, or where an abuse of market influencecould allow consumers to be exploited. Inaddition, competition policy can be an aid tosecuring improved business efficiency, bettermarket integration and creating moreadvantageous trading links between MemberStates.

The Commission shares the views expressed bythe Economic and Social Committee, withregard to the objectives of competition policy asa means of allocating resources in the commonmarket in the best possible way. TheCommission also considers that the consumershould be the ultimate beneficiary of thispolicy.

2.4 Whilst the objectives as stated in the reatiesare widely supported, in practice the range ofactivities which can give a cause for concernabout unacceptable arrangements is so wideand varied that an adjudication mechanismmust be created. As the Commission notes,there is a presumption that "market forcesproduce a better allocation of resources”, theprincipal beneficiary being the consumer, whogets better quality at a lower price.

Te Commission agrees with the position of theEconomic and Social Committee that a publicauthority needs to be in charge of controllingthe operation of the markets, insofar as themarket is not always able to achieve the bestpossible allocation of resources amongst all theeconomic actors on its own.

However, "these mechanisms sometimes havetheir limits; as a result the potential benefitsmight not extend to the entire population... Thepublic authority must then ensure that thegeneral interest is taken into account".2.5 The ESC admits that, on some occasions,competition policies must also take account of,or be modified to acknowledge, the need toensure that identified essential services aremade available on a universal basis.

The Commission agrees with the Economic andSocial Committee that competition policy musttake account of the principle of general-interestservices. It is precisely what the Commissionadvocated in its communication of 11September 1996 on services of general interest



in Europe. The draft Amsterdam Treaty hasalso confirmed once again the compatibility ofthe principles of free competition and servicesof general economic interest.

2.6 A further possible consideration forcompetition policy relates to theinterrelationship of competition questions andthose based on environmental considerations.The Commission published guidelines in the1995 report on the consideration of overlappingenvironmental and competition issues. Clearlythe Commission needs to consider when, and inwhat circumstances, environmental issueswould offer a justifiable case for exemptionfrom the normal competition criteria and whenenvironmental criteria should be constrained bythe need to avoid distortion of competition.

The Commission may in fact take into accountconsiderations of an ecological nature underArticle 85(3), in order to grant exemptions inline with the criterion of contribution technicaland economic progress.

Nevertheless, the Commission must ensure thatthe other criteria of this Article are fulfilled andin particular that direct competition on themarket in question remains real.

2.7. Corporate conduct and State aid policiesmust be monitored.

The Commission has noted this consideration.



Judgements are needed to determine when"market failure" or "market abuse" need to beaddressed. Inevitably, the Commission mustcontinuously ensure that relevant actions arereported and investigated, decisions made onthose adjudged unacceptable and enforcementprocedures put in place.

International cooperation3.6 There are particular critical opportunitiesfor extended cooperation with countries inEastern Europe, some of which have anaspiration to become members of the EuropeanUnion. The ESC welcomes the acceptance bysome of these countries of the current EUcompetition policies.

All the CEECs have made progress towards acompetition policy based on Communityprinciples.

3.8 A critical feature in the pre-accession stagesis the implementation of national rules on thegranting of State aid and the means of enforcingthese rules. The ESC endorses the actions of theCommission in its efforts to ensure thatappropriate measures on State aid andcompetition policy are taken in each aspirantMember State at an early stage.

The Commission is pleased that the ESC sharesits views on the importance of transparency andguidance practices for State aid during the pre-accession period.

4. Competition policy developments: Articles85 and 86Changes in legislation and interpretativerules4.1 A key objective of Articles 85 and 86 is toensure that the different forms of cooperationbetween businesses should not bedisadvantageous to consumers.

The Commission agrees with the Committee’sdescription of developments in case law.



4.11 As an initial pilot project, these principlesmight be developed to apply to thoseagreements which are defined as "vertical"restraints on competition.

The communication on cooperation betweennational competition authorities and theCommission is a text of general scope whichapplies to all types of agreements. TheCommission therefore does not consider itnecessary to make provision for specificapplication to vertical restraints on competition.

5. Competition policy and the InformationSociety5.8 Because of the international implications ofthe liberalisation of telecommunications, acritical feature is that the conditions of accessby one enterprise to the networks of othersshould be clear and operate to avoid distortionof competition. The Commission is called on toclosely scrutinise the most recent merger plansof the German media conglomeratesBertelsmann and Leo Kirch in the area of pay-TV, and to prevent the monopolisation of thissector which this would entail. The ESC notesthat the Commission has published a draftnotice on the application of competition rules toaccess agreements in the telecommunicationssector.The ESC has welcomed this initiative.

The planned merger in the digital televisionsector between the Bertelsmann and Kirchcompanies was reported at the end of 1997 andhas already led to an injunction by theCommission to end the marketing of decodersimmediately, which represented the start of theoperation being carried out, whilst it was in aperiod of legal suspension. In addition, theCommission decided in 1998 to extend thisperiod of suspension until a final decision hasbeen adopted. Without anticipating thisdecision, it may be indicated that a detailedexamination procedure is already planned.

5.9 In other opinions the ESC has drawnattention to the problems of concentration ofownership and growing alliances in theaudiovisual sector (which includes terrestrial,satellite and cable services). The Commissionneeds to be aware of the wider range of policyquestions which need to be taken into account,over and above questions of market dominanceand adequate access for alternative providers.There are a number of public policy issues,such as ensuring that public service obligationsare met and maintaining minimum standards inthe content of programmes. The decision by theCommission to conduct a wide-rangingconsultation on the application of competitionrules to the broadcasting of sports events raisesa topic of specific interest to many people. TheESC hopes that a solution will be found whichallows general public access to an agreednumber of major sports events which are ofnational interest in a Member State(s)

.

Concerning the need to make provision for apublic service obligation in the audiovisual areato be met, the Commission considers, in linewith the protocol on public broadcasting signedin Amsterdam, that the Member States canentrust public service remits to radio andtelevision operators, on condition thatCommunity competition rules and in particularto the principle of proportionality with regardto financing are observed.



6. Other sectors affected by competitionpolicy6.3 Air transport is now of particular interest interms of competition policy. Since 1987, civilaviation has been progressively liberalised, atleast on paper. In reality, the competitionbetween airlines, except on some routes, islimited. A number of features continue to havethe potential to constrain the emergence ofnormal competition. There is provision for ablock exemption on tariff consultations (Reg.1617/93); a shortage of “slots”; further Stateaid to some airlines; the effects of economies ofscale within the industry; the expanding use of“code-sharing” agreements; and restrictions onthe

The Commission agrees with the Committeethat the developments in the air transport are ofparticular interest in terms of competition law.Through its decision practice the Commissionwill ensure that more competition will beintroduced in the air transport sector.The Commission is aware that a number offeatures potentially constrain normalcompetition and will look into these issues atseveral occasions (for example the review ofRegulation 1617/93 until summer 1998, thedecisions on the transatlantic alliances).



foreign ownership of airlines. The ESCsuggests that the Commission should carry outan evaluation study on the effects ofderegulation of the European air transportmarket.

The Commission already carried out anevaluation of the deregulation in the Europeanair transport market and presented itsconclusions to the Council and the EuropeanParliament through its communication on theimpact of the third package of air transportliberalisation measures (COM(96)514 final of22.10.1996). Certainly the Commission willcontinue to monitor the continuing progress inthe aviation sector.

6.4 Similarly with respect to liner shipping,there is a block exemption for some of theactions of liner shipping conferences(Reg. 4056/86). The structure of this sector haschanged significantly since this Regulation wasadopted. Consortia and global alliances nowplay an important role. Since this Regulationhas no expiry date, the ESC requests theCommission to evaluate the effects of theexisting regulations on maritime liner services.

The scope of the block exemption is underreview in a number of respects by theCommunity Courts in Luxembourg: it wouldtherefore appear premature at this time tolaunch the study requested.

7. State monopolies and monopoly rights7.1 The Commission has reported on its actionto further secure the liberalisation of thetraditional state-owned monopolies in servicessuch as telecommunications, energy, postalservices, certain transport services, and thestate monopolies in Austria (affecting alcoholand tobacco), Sweden and Finland (affectingalcohol sales).

The Commission takes note of the descriptionof its action in the area of liberalisation of statemonopolies. It notes the reference to its positionon this subject. Finally, the Commissionconfirms that Article 90 of the Treaty has notbeen amended by the IGC and the Treaty ofAmsterdam.

7.2 In many cases, the liberalisation measuresneed to be supplemented by measures tosupervise the operations of these enterprises inthe wider market place of the whole of theEuropean Union.

The Commission takes note of the descriptionof its action in the area of liberalisation of statemonopolies. It notes the reference to its positionon this subject. Finally, the Commissionconfirms that Article 90 of the Treaty has notbeen amended by the IGC and the Treaty ofAmsterdam.

7.5 In principle, the Committee agrees that nochange in Article 90, which would have had theeffect of protecting some state-ownedundertakings in at least one Member State fromthe disciplines of competition policy, wouldhave been acceptable, particularly if thiscreated unfair competition conditions betweenoperators in different Member States.

The Commission agrees with the Committee onthe need to preserve the balance between theprinciples of competition and services ofgeneral interest, established by Article 90.

7.6 In a related but wider discussion about thescope for Community policies which specifyminimum levels for universal services for all

The Commission has read with interest theopinion of the Committee of September 1997on the Commission communication on services



citizens, the Commission suggests that thisshould be seen in the context of the liberalisedpublic sector services. The ESC has stated itsOpinion on the Commission Communication on“Services of General Interest” and hasemphasised the importance of the principle thatappropriate measures should be in place tomake public services accessible to allconsumers.

of general interest in Europe.

7.7 These efforts by the Commission to extendthe concept of minimum levels of universalservice into a wider setting, including initiativesconcerning the environment, consumer policyand trans-European networks, would beunderpinned by a Commission proposal to adda new paragraph to Article 3 of the EUTreaties. The new paragraph (u) would add "acontribution to the promotion of services ofgeneral interest".

The Commission had in fact proposed theinclusion of a new paragraph (u) in the draftTreaty of Amsterdam which would haveintroduced the notion of a “contribution to thepromotion of services of general interest”. Infact, the Intergovernmental Conference led tothe addition of a new Article 7d which refers tothe necessary balance between the principles offree competition and services of generaleconomic interest. The Commission isparticularly satisfied with this new Articlewhich confirms the balance which theCommission has always defended.



8. Merger control8.6 Since some critical aspects of the originalproposal to amend the Merger Regulation didnot secure ready agreement from the MemberStates, the ESC suggests that the Commissionmight now undertake a more fundamentalreview of the balance between agreed EU policyand appropriate national responsibilities. In thissetting, a reconsideration of the appropriatemechanisms to make decisions on a revisedmerger regulation could be combined with theconsideration of proposals on competitionpolicy as summarised (above) in point 4.8 etseq.

The Commission shares this wish and notesthat the Regulation on merger control alreadyestablishes a division of responsibilitiesbetween the national and Communityauthorities and places certain tools forcooperation at their disposal, such as thepossibility to refer back to the competentnational authorities any Community matters theeffects of which are limited to the nationalterritory. In addition, greater harmonisation ofregulations is already becoming apparent inseveral Member States, particularly thosewhich currently have legislation based on theCouncil Regulation.

8.8 The ESC is pleased to note the action takento examine mergers which, although outside theEU, could severely affect competition within theEU (as in the case of Boeing-McDonnellDouglas). As this opinion has already noted(see point 2.8) such action needs to be followedby arrangements to oversee the compliance withany stated conditions (for example theavoidance of exclusive supply agreements byBoeing with clients).

In the matter referred to, the Commission hasunderlined its intention to closely monitorcompliance with the undertakings given and haspointed out that the Regulation on mergercontrol provides it with the appropriate meanswhich it can implement in the event of acompany’s failure to comply with theundertakings given as a condition for theauthorisation of an operation. In this matter, asin all those which are the subject ofundertakings, the Commission provides for anumber of means in its final decision whichenable compliance with the undertakings givento be monitored, for example by requiring theproduction of periodical reports. Moreover, theRegulation allows the Commission to revoke anauthorisation decision if the declaration ofcompatibility is based on inexact indications orif the companies contravene a requirementwhich accompanied the decision, irrespective ofthe origins of the companies in question. TheCommission may also order the separation ofassets which would have been acquired orcombined. Furthermore, the Commission mayimpose a fine or daily penalty on companieswhich contravene a requirement.



8.9 When merger proposals are examined indetail by the Commission, the ESC is concernedthat this procedure can sometimes be undulyprolonged. The Committee considers that theCommission should accept that decisionsshould be within (as far as possible)predetermined time limits.

Such time limits are taken into account in theprocedures provided for by the Regulation onmerger control. In fact, the maximum time limitfor the detailed examination is four months andmay not be exceeded under any circumstances.In addition, for the processing of cases in thecoal and steel sector, the Commission hasannounced, in its communication on theapproximation of procedures for processingmergers under the EC and ECSC Treaties, thatit will endeavour to apply the same time limitsto these types of operation.

9. State aid: overview9.1 Within the European Union, state financialand/or fiscal aid to enterprises in differentsectors is not uncommon. The provision ofState aid is regulated particularly by the termsof Articles 92 and 93 of the Treaties. However,in an integrated Single Market, the existence ofState aid can potentially distort competition andcreate a perception of unfairness between firms,some of which receive aid and others do not.

It is true that the Commission is concernedabout the volume of aid granted in the EU. Thisdoes not prevent aid policy, and in particular,the criteria for assessing the compatibility ofaid, from being based on the principle that aidmay be justified if its positive effects (on asocial, environmental and regional level, etc.)are greater than distortion to competition, as theCommittee rightly notes.

9.4 Whilst there is a shared interest inminimising the scale and cost of State aid, atlevels which are proportionate with the agreedobjectives, within the EU there is also a sharedinterest in avoiding undesirable distortions tocompetition by an appropriate use of State aidin some countries, industries or regions. Theneed to harmonise the permitted scale andcircumstances for the provision of State aid isaccepted. The Committee has a growingconcern that in a reconsideration of the impactof State aid, account should be taken of fiscaldifferences as well as the other forms of moredirect financial support.

The Commission shares the Committee’sopinion. The assessment criteria used by theCommission and set out in its guidelines aim toensure that aid does not exceed the levelnecessary in relation to its objectives and doesnot create unwarranted distortion tocompetition.The Commission points out that aid rules applyirrespective of the form of aid. It is alsoexamining fiscal advantages which representaid within the meaning of Article 92(1) of theTreaty.



9.5 The Commission proposed in November1996 to the Council, which accepted, that itshould prepare for two regulations on the basisof Article 94 of the Treaty: the first one shallcodify procedures in the field of State aid, thesecond one shall enable the Commission toexempt certain types of aid (environment, SME,R&D, training and employment aid) undercertain circumstances from the notificationobligation, since such aid can be considered ascompatible with the common market, as long ascertain criteria are fulfilled.

The Commission welcomes the Committee’sinterest in these projects. It has consulted theCommittee on the enabling regulation proposal.The proposal for rules of procedure is still atthe preparatory stage.

12. Action taken on State aid in 199612.1 The Report on Competition Policy in 1996reflects the emerging policy debate in the reviewof State aid which has been initiated and alsoreports on the actions of the Commission duringthe year. A number of steps were taken whichclarify aspects of the existing criteria used toassess aid under Articles 92 and 93.

The Commission will continue its efforts toincrease transparency in the area of aid.Naturally, it will assess the effects of rulesestablished in recent texts and, on the basis ofthe experience acquired, it will give thought tothe appropriateness of making amendments, ifnecessary.

12.4 During the past year the Commissioncontinued to refine the features of the measureswhich are, legally and technically, regarded asaid and therefore falling within the ambit ofArticle 92(1). The ESC welcomes the statementof the four criteria, all of which must besatisfied, which determine when Article 92(1) isapplicable.

The Commission admits that the specificitycriterion, which is used to distinguish generalmeasures from aid within the meaning ofArticle 92, is not always easy to interpret.However, the rulings of the Court and thedecision-making practices of the Commissionhave helped to clarify this concept. Moreover,the Commission has endeavoured to provideexplanations concerning this criterion invarious communications and guidelines and willcontinue to do so.

12.9 Nevertheless, the ESC regrets that theproposed OECD sponsored internationalagreement on shipbuilding has not yet beenratified by all the participants. The delay by theUSA has now placed the future of thisagreement in doubt. The ESC reminds theCommission of the earlier opinion whichproposed that, in the event of such a delay, theCommission should make alternative proposalsas quickly as possible, and notes that a newdraft regulation has indeed been published.

Commission takes note of observations.Since the entry into force of OECD agreementhas been further delayed, Commission putsforward two proposals: prolongation ofshipbuilding aid directive until 31 December1998; and successor regime if OECDagreement has still not entered into force(COM(97)469, not the proposals referred to inESC’s opinion, which in fact relate to aids forcertain yards under restructuring). ESC hasalready begun its consideration of the proposednew aid regime at Industry Section level(preliminary draft opinion R/CES 1124/97rev.).



12.10 The Committee has noted that anadvisory study has recommended that thespecial sectoral framework for the textiles andclothing industries be abolished and replaced bythe same regime as applies in general to otherindustries (see paragraph 194 of the Annualreport). This decision was postponed until1997. In the particular circumstances of severecompetition faced by this sector, the ESCwould urge caution that such a change wouldnot further erode the viability of, andemployment offered by, firms in this sector.

The Commission agrees. On 16.12.1997 itadopted a “multi-sectoral” framework whichwill cover, inter alia, the textile and clothingsector. It will ensure favourable treatment foraid which creates jobs. It will come into effecton 1.9.1998.

12.11 The ESC has noted the modest success inthe first year of application of the guidelineswhich define when employment aid isacceptable. It also noted the positive outcomesof aid linked to environmental protection.

The Commission considers that the guidelineson employment aid have improved transparencyby clarifying guidelines and criteria used toassess the compatibility of employment aid withthe common market.

12.12 With rather more apprehension, the ESChas noted that some "direct investments abroad"are now coming to the attention of theCommission as impossible sources of distortionof competition in the Community (seeparagraph 224 of the Annual report).

The Commission points out that in order to beable to define general principles in a new area,a certain number of cases are required in orderto provide the Commission with the necessaryexperience. At present, the number of dossiersexamined does not yet enable conclusions to bedrawn in this area.



The ESC appreciates that this raises complexquestions on whether (a) aid takes place and (b)the incidence of that aid, as opposed to (c) thelocation of the investment. The ESC requeststhe Commission to engage in a wide-rangingconsultation before reaching definiteconclusions on the appropriateness of theexisting rules for aid to cases of this kind.

When sufficient experience has been acquiredin the future, the Commission will proceed inthe usual way by consulting its variousdepartments and experts from the MemberStates, before adopting specific rules.

13. Outlook for 199713.2 Many of the legislative priorities arelogical developments from the policies alreadyreviewed in this opinion. The ESC agrees thatthey are all of considerable significance. Thecaveat which the Committee would enter is thatsome of the policy reviews deserve an open andfull debate before decisions are finalised. Inparticular, the Committee would request anopportunity to comment on new guidelines forthe granting of State aid, sectoral aid andregional aid rules.

The Commission points out that, in accordancewith Articles 92-94 of the Treaty, it isresponsible for defining aid policy. There is noprovision for consulting the Committee oncommunications or guidelines explaining thecriteria which the Commission will use toassess the compatibility of certain types of aid,although the Committee is consulted onproposals for regulations pursuant to Article94.With regard to future regulations grantingexemptions for certain categories of horizontalaid, the enabling regulation provides for thepublication of a draft and a hearing with theinterested parties.

13.3 The ESC also welcomes theacknowledgement that effective enforcementpolicy is becoming more necessary as thecomplexity and range of competition policyproceedings increase.

The Commission agrees with the Committeethat the efficiency of competition policy needsto be increased. It continues to take initiativesin this respect.



14. Conclusions14.4 In particular (and inter alia) the ESC

would draw the attention of theCommission to the following conclusions:

− a dominant position within the EU should beevaluated not simply with respect to theinternal market when the relevant market isan international one (3.4.);

The Commission fully agrees with theCommittee’s suggestion and makes the pointthat a dominant position is evaluated on thebasis of a relevant market. Once this markethas an international dimension, the Commissioncarries out an analysis of the effects of thedominant position at world level. TheCommission did this in the Boeing affair, forexample. .

– in a reconsideration of the impact of Stateaid account should be taken of fiscaldifferences as well as other forms of moredirect financial support (9.4.);

– during the reconsideration of the impact ofState aid, the issue of employment must alsobe clearly taken into consideration.

The Commission had committed itself inparticular to publishing guidelines on fiscal aidin 1998 and reconsidering fiscal regimes inoperation in the Member States.

Employment represents more than ever a majorpreoccupation for the Commission. To takeaccount of this clearly, the new guidelinesconcerning regional State aid, adopted by theCommission on 16 December 1997, allowregional aid to be granted not only in the formof aid for productive investment (expressed as apercentage of capital), but also in the form ofaid for job creation directly associated withinvestment (as a percentage of wage costs).This will enable intensive investment in thelabour force to be supported more efficientlyand will therefore contribute to achieving theobjective of an increase in employment.Furthermore, in order to reduce the negativeeffects of relocations which may be supportedby regional aid, investment and jobs receivingaid will have to be maintained in the region inquestion for at least five years.



The relationship of State aid to the role andoperations of the Structural Funds and theCohesion Fund should be reviewed.

The Commission has always ensured that theobjectives established by the Treaty in the areaof free competition, and economic and socialsolidarity and cohesion are reconciled. In thiscontext, the guidelines concerning regionalState aid will have to contribute to increasingcoherence between the two policies due to theinclusion in these guidelines of Structural Fundeligibility as an additional criterion for aregion’s eligibility for national aid. In addition,there are plans to align the timetables fornational aid schemes with the Structural Fundstimetable.Moreover, by adopting a communication to theMember States on regional policy andcompetition policy on 16 December 1997, theCommission has set out a coordinated strategyaiming to ensure greater coherence betweennational State aid and European Unionstructural assistance, whilst concentrating moreon efforts to reduce regional disparities in theleast favoured regions of the Union, as itannounced in Agenda 2000.

After a short period of experience of the effectsof the relaxation of the rules for aid in definedand deprived urban areas, the Commissionshould widen the list of activities which areeligible for this type of incentive.

As the State aid scheme has not yet beenapplied to a significant number of companies indeprived urban areas, the Commission is notyet in a position to fully assess the effects ofthis new instrument.



It points out, however, that the list of activitieseligible for aid under this scheme has beendrawn up so as to ensure that State support forcertain companies in deprived urban areaseither will not generally affect trade betweenthe Member States and does not thereforerepresent aid within the meaning of Article 92(1) of the Treaty, or contains an element of aid,but may be considered compatible with thecommon market insofar as the conditionsestablished by the scheme guarantee that anyeffect on trade is not contrary to commoninterest.

14.5 The ESC notes that the suggestions madein this opinion will have relevance in the debateon Agenda 2000, published in July 1997, whichhas implications for competition, regional,industrial and agricultural policies in the nextmillennium.

The Commission notes the ESC’s comment andalso considers that the discussion raised by theAgenda 2000 communication has an impact oncompetition policy.

14.6 In view of the evolution of several criticalaspects of competition policy in recent years,this may be an appropriate time to reconsiderthe application of competition policy. Thegeneral principles might be reviewed and thenused as a basis for a reallocation ofresponsibilities for enforcement which allowsfor both decentralisation and the application ofsubsidiarity. In this way, openness andtransparency could be enhanced and a sharperfocus on the needs of consumers and the role ofthe SMEs might be developed.

The Commission is also convinced that it is at acrucial moment with regard to competitionpolicy, which does in fact need to bemodernised in order to meet the challenges ofdeepening the internal market, the globalisationof markets and enlargement to the East. TheCommission is working on this and isdeveloping a policy of decentralisation(communication on cooperation betweennational competition authorities and theCommission) and reduction of companies’administrative burdens (revision of theRegulation on merger control, amendedcommunication on agreements of minorimportance, revision of policy on verticalrestraints). It is also endeavouring toconcentrate its efforts on affairs which have areal impact on the common market.

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