INTRODUCTION Newsletter nº 18 | Março de 2009 | Abreu Advogados Welcome to the first Aware of the 10 th Practice Area of Abreu Advogados created in January 2009: Competition, Regulatory and EU (APCRUE). In this edition we provide an overview of the main events occurred in 2008 and in the first quarter of 2009. Feel free to expect more on a regular basis. We’ll soon meet again. The APCRUE team PAGE 01 I - COMPETITION IN EUROPE PAGE 03 II - COMPETITION IN PORTUGAL PAGE 05 IV - TELECOMS IN PORTUGAL PAGE 04 III - TELECOMS IN EUROPE I - COMPETITION IN EUROPE - Merger Control Non-horizontal mergers (vertical and conglom- erate) gained relevance in 2008 both in terms of the amount of notifications and in the application of the 2007 Commission’s Guidelines to concrete cases. The 2008 economic recession also led to greater flexibility as regards mandatory prior clearance of concentrations. The Commission acknowledged that delays arising from the obligation to notify could have a disastrous impact in rescue plans for specific sectors (e.g. the banking sector) and sanctioned the immediate implementation of certain concentrations. In October 2008 a new Notice regarding reme- dies acceptable by the Commission was published with the purpose of easing or removing competition prob- lems. It essentially corresponds to a consolidation of recent community case-law and the Commission’s on- going practice. In what concerns the European Court of Justice (ECJ), the judgement of 10 July 2008 in SonyBMG / Impala set aside the decision of the Court of First In- stance (CFI) by determining that: • there is no general presumption in favour of the compatibility of concentrations with the Com- mon Market, the Commission being required to provide the same standard of evidence both as regards clearance and prohibition of merg- ers; • the objections raised by the Commission against the parties in the first phase of the proceedings are provisional and the Commission can alter its position in the final decision; • the Commission and the CFI cannot ground their decisions on documents that the notifying companies did not have access to due to confi- dentiality reasons. PAGE 06 V - EC COURTS - Public Contracts - Intellectual Property - Tax - Corporate Newsletter AB nr 18 | March 2009 | Abreu Advogados www.abreuadvogados.com
Transcript
INTRODUCTION
Newsletter nº 18 | Março de 2009 | Abreu Advogados
Welcome to the first Aware of the 10th Practice Area of Abreu Advogados created in January 2009: Competition, Regulatory and EU (APCRUE). In this edition we provide an overview of the main events occurred in 2008 and in the first quarter of 2009. Feel free to expect more on a regular basis. We’ll soon meet again. The APCRUE team
PAGE 01 I - COMPETITION IN EUROPE
PAGE 03 II - COMPETITION IN PORTUGAL
PAGE 05
IV - TELECOMS IN PORTUGAL
PAGE 04 III - TELECOMS IN EUROPE
I - COMPETITION IN EUROPE - Merger Control
Non-horizontal mergers (vertical and conglom-erate) gained relevance in 2008 both in terms of the amount of notifications and in the application of the 2007 Commission’s Guidelines to concrete cases.
The 2008 economic recession also led to
greater flexibility as regards mandatory prior clearance of concentrations. The Commission acknowledged that delays arising from the obligation to notify could have a disastrous impact in rescue plans for specific sectors (e.g. the banking sector) and sanctioned the immediate implementation of certain concentrations.
In October 2008 a new Notice regarding reme-
dies acceptable by the Commission was published with the purpose of easing or removing competition prob-lems. It essentially corresponds to a consolidation of recent community case-law and the Commission’s on-going practice.
In what concerns the European Court of Justice (ECJ), the judgement of 10 July 2008 in SonyBMG / Impala set aside the decision of the Court of First In-stance (CFI) by determining that: • there is no general presumption in favour of the
compatibility of concentrations with the Com-mon Market, the Commission being required to provide the same standard of evidence both as regards clearance and prohibition of merg-ers;
• the objections raised by the Commission against the parties in the first phase of the proceedings are provisional and the Commission can alter its position in the final decision;
• the Commission and the CFI cannot ground their decisions on documents that the notifying companies did not have access to due to confi-dentiality reasons.
PAGE 06 V - EC COURTS
- Public Contracts - Intellectual Property - Tax - Corporate
Newsletter AB nr 18 | March 2009 | Abreu Advogados
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In what concerns State Aid, 2008 clearly re-flects the international financial crisis. The Commission recognized the need for further public intervention but alerted Member States to the fact that granted aid will only be effective to the extent that it is sustainable. The Commission also stressed the specific needs of SMEs (in fact, in February 2009 the Handbook on State aid rules for SMEs was updated). A more flexible Temporary Community Framework meant to support access to finance was ap-proved (Communication 2009/C 16/01), as were specific measures for the financial sector aimed at fighting finan-cial instability, the shortage of lending to the economy and the systemic risk of insolvency (Communications 2008/C 270/02 and 2009/C 10/03). The Commission paid special attention to aid granted in the form of guar-antees (Communication 2008/C 155/02) and to aid granted to employment and development (Commission Regulation No 800/2008). Also worth noticing is the updated publication of the Community rules in matters of State aid (Vademecum of 30.09.2008) and of the State aid Score-board Autumn 2008. Public consultations were launched concerning the guidelines for in-depth assess-ment of regional aid to large investment projects, a best
practices code on the conduct of State aid control pro-ceedings and the simplified procedure for the treatment of certain types of State aid. 2009 will also be marked by the crisis, which is noticeable from the notifications presented by the Member States to the Commission (aid aimed at sup-porting real economy) and in the Commission’s more recent communications (namely Memo 09/87 on guar-antees adopted under the temporary framework and the Communication on the treatment of impaired assets in the banking sector).
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COMPETITION IN EUROPE - State Aid
COMPETITION IN EUROPE - Antitrust
2008 was a vintage year in what concerns cartel fighting at EU level, namely by means of:
• the confirmation of the leniency regime as “the”
tool for fighting cartels and the application of the Commission Notice on immunity from and reduc-tion of fines in all of last year’s decisions;
• the full-blown use of the 2006 Guidelines on the method of setting fines (first applied only by late 2007), the new and harder rules of which helped establishing new fine records, both globally and individually, in the Car Glass cartel
(global: EUR 1.383.896.000; individual: Saint Gobain, EUR 896.000.000);
• the adoption, in June, of the Settlement proce-dures in cartel cases, with the purposes of bring-ing flexibility in proceedings and freeing the Commission’s resources for new investigations. The mechanism is currently being undertaken;
• adoption of the new Guidelines on the application of Article 81 EC Treaty to maritime transport.
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In what concerns abuse of dominance (Article 82 EC Treaty), the highlights were: • the adoption of the long awaited Guidelines on
the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings. The Guidelines enshrine a more economical approach to exclu-sionary behaviour and serve as a map for the course of action to be adopted by the Commis-sion;
• the CFI’s Deutsche Telekom judgement on mar-gin-squeeze;
• the ECJ’s GlaxoSmithKline (Greece) judgement, discussing the existence of per se abuses and the admissibility of refusals to supply as protection of commercial interests to the extent that it is not aimed at preventing parallel imports.
Another widely discussed issue in 2008 was
private enforcement – compensation of private parties for damages resulting from antitrust violations – follow-ing the adoption, in April 2008, of the White Paper on damages actions for breach of the EC antitrust rules.
II - COMPETITION IN PORTUGAL
One of 2008 highlights was the analysis by the Portuguese Competition Authority (PCA) of the Portu-guese fuel market. The Government requested an ur-gent study on the possible existence of restrictive prac-tices. The PCA preliminarily concluded for the non-existence of illegal practices. The final result of the in-depth analysis is expected by March 2009.
Decree-Law nr. 18/2008, of 29 January, which
approved the Public Contracts Code, amended Article 45 of the Portuguese Competition Act and entailed the PCA with the possibility of supplementing fines with the additional penalty of prohibiting undertakings con-demned of engaging in restrictive practices from the participation in public tenders for a term of up to two years.
As regards public tenders, the PCA applied
fines in the global amount of EUR 13.467.435,44 to Abbot, Bayer, Johnson & Johnson and Menarini for the adop-tion of restrictive practices under Article 4 of the Portu-guese Competition Act.
Regarding mergers, the operations Catvp / Bra-gatel, Pluricanal Leiria, Pluricanal Santarém and Catvp / TVTel were approved subject to conditions. The condi-tions essentially amounted to the promotion of a new entry in cable TV distribution, in making room available in secondary and tertiary network infrastructures and the provision of a wholesale offer on national satellite TV market.
The EDP / Pebble Hydro concentration was also approved subject to conditions.
PT Comunicações was found guilty of an abuse
of a dominant position in the wholesale market for cir-cuit leasing by applying discriminatory conditions for equivalent services during 2004 and was consequently fined in the amount of EUR 2.100.000.
In 2009, interim measures were imposed by the
PCA for the very first time in the framework of an anti-trust procedure, leading to the suspension of the pro-motional campaign “myZONcard” by ZON regarding a fidelity card in the TV and film exhibition markets.
On 5 March 2009,
Miguel Mendes Pereira,
partner of Abreu
Advogados, presented
the first Commentary to
t h e P o r t u g u e s e
Competition Act at the
P o r t u g u e s e B a r
Association.
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In 2008 the Telecom Regulatory Framework Re-view evidenced the lack of consensus between the Com-mission, the European Parliament and the Council of Ministers regarding: • greater independence of the National Regula-
tion Authorities (NRAs); • creation of an European Regulatory Authority; • suppression of the Commission’s veto right
over the NRAs’ decisions; • imposition of functional separation between
network infra-structure and services.
The Commission also presented at the end of the year a proposal regarding the reduction of prices for text messages and mobile data roaming services, which was accepted by the European Parliament in March 2009.
Along the year the Commission opened several in-
fringement procedures (Article 226 EC) against Mem-ber States in connection with the implementation of the Regulatory Framework, namely as regards NRAs, Uni-versal Service (US) and the implementation of the coop-eration mechanism of Article 7 of the Framework Di-rective.
Two infringement procedures against Portugal for
non compliance with the Universal Service Directive stand-out: • the procedure grounded on the impossibility
for alternative operators to apply for the provi-sion of US before the term of the concession contract entered into between PT Comunica-
ções and the Portuguese State (in 2025), now pending before the ECJ;
• the judgement delivered by the ECJ on 12 March 2009 considering Portugal to be in breach of EC law for not ensuring to end users the availability of neither a complete list of all telephone service customers nor access to tele-phone assistance services.
In what concerns Community case-law regarding tele-coms the highlights are: • ECJ, case C-387/06 of 10/01/2008, Commis-
sion / Finland: Legal limitation of NRA’s pow-ers to determine the connection conditions be-tween fixed and mobile networks. The ECJ rejected the Commission’s appeal considering it to be unfounded;
• ECJ, case C-220/07 of 19/06/2008, Commis-sion / France: Inadmissibility of operators un-able to supply Universal Service in the entirety of the national territory. Following the confir-mation of the infringement by the ECJ, France amended its legislation;
• ECJ, case C-227/07 of 13/11/2008, Commis-sion / Poland: Incorrect implementation of the Regulatory Framework: national law cannot allow the imposition of regulatory obligations irrespectively of undertaking’s market power unless in the circumstances provided for in the Regulatory Framework.
III - TELECOMS IN EUROPE
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4 |aware nr 18 | COMPETITION, REGULATORY AND EU PRACTICE AREA
ANACOM’s highlights in 2008:
• launch of a public consultation concerning the markets for wholesale network (physical) infra-structure access at a fixed location and whole-sale broadband access. As regards the latter, a decision on the means to implement obligations incumbent on the PT Group was also ap-proved;
• dismissal of SONAECOM’s claim against PT Comunicações for alleged non-compliance in 2006 with levels of quality of service;
• final report of the consultation procedure on the designation of the Universal Service pro-vider. The evaluation of the net costs resulting from the provision of this service is still pend-ing a concept definition by ANACOM.
In 2009 the Commission approved ANACOM’s
proposal of deregulating some parts of the broadband wholesale market and mentioned the need to ensure access to new optical fibre technology to all operators. These matters are also discussed in the recently ap-proved public consultation report on the regulatory ap-proach to next generation access networks (NGA)
launched in 2008. After launching a public consultation, in March
2009 the Portuguese Council of Ministers approved the Decree-law defining the framework applicable to the construction, access and installation of networks and electronic communications infrastructures, as well as a project (to be submitted to the Parliament) empower-ing the Government to legislate in matters related to the abovementioned framework.
The documents are aimed at fostering an attractive
environment for the investment in optical fibre in fixed network infrastructure access (wholesale markets 4 and 5) and at widening to all kinds of entities the obligation to grant open and non discriminatory access to conduits and other relevant passive equipments.
Lastly, the Portuguese Media Regulator (Entidade
Reguladora para a Comunicação Social - ERC) refused the proposals submitted by Zon and Telecinco in the frame-work of the tender launched for a fifth open-air TV channel.
IV - TELECOMS IN PORTUGAL
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Arbitration • ECJ, case C-185/07 of 10/02/2009, Riunione
Adriatica Di Sicurta: A national court cannot prevent a person from filing a civil action be-fore a court of another Member State even if such proceedings are contrary to an arbitration agreement.
Competition
• CFI, Order of President of the CFI of 18/03/08 in
case T-411/07R Aer Lingus Group / Commission (pending): The CFI President rejected Aer Lin-gus’ application for interim measures, clarifying that Commission powers under the EC Merger Regulation are limited to situations where a change of control in the target undertaking oc-curs.
• CFI, case T-212/03 of 9/09/2008, MyTravel / Commission: The CFI denied the request for compensation by MyTravel against the Com-mission following its decision of forbidding the acquisition of First Choice, on grounds that the Commission did not manifestly and seriously infringe Community law.
• ECJ, case C-196/07 of 6/03/2008, Commission / Spain: Spain infringed Community law by ille-gally exercising Commission powers concern-ing merger control. By not eliminating the con-ditions imposed by the National Commission of Energy regarding the acquisition of ENDESA by E.ON, Spain interfered with an exclusive power of the Commission.
• CFI, case T-354/05 of 11/03/2009, TF1 / Com-mission: The payment of an audiovisual fee to public broadcasting channels in France is State aid compatible with the Common Market.
• General Advocate Ruiz-Jarabo’s Opinion of 3/02/09 in case C-440/07P, Commission / Schneider Electric: With reference to the dam-ages resulting from the Commission decision prohibiting the Schneider/Legrand merger, the Advocate-General proposes to partially set aside Schneider’s right to compensation recog-nised by the CFI, considering that the causal
link between the action by the Commission and part of the damages alleged by Schneider does not suffice.
Public Contracts
• ECJ, case C-213/07 of 16/12/2008, Michaniki:
Even though Community law lists exhaustively the grounds for exclusion of a contractor from participating in a public works contract, a Member State is not prevented from providing for other exclusion measures provided that the proportionality principle is respected.
Consumer
• ECJ, case C-205/07 of 16/12/2008, Gysbrechts e
Santurel Inter: A national law that prohibits the consumer from being requested for an advance or a payment before the term of resolution in a cross-border distance sale is compatible with Community law.
Environmental Law / Maritime Law
• ECJ, case C-188/07 of 24/06/2008, Commune de
Mesquer / Total France SA, Total International Ltd: The “polluter pays” principle requires the as-sumption of financial responsibility for the cost of disposing of spills caused by the sinking of an oil tanker. However, the originator of the spills is subject to bear these costs only if he contrib-uted for the risk of the occurrence.
Tax
• ECJ, case C-132/06 of 17/07/2008, Commis-
sion / Italy: Italy was condemned for having adopted a tax amnesty regarding VAT.
• ECJ, case C-318/07 of 27/01/2009, Persche: Tax deduction for gifts offered to charitable bodies must not be restricted to bodies established in the national territory.
• ECJ, case C-502/07 of 15/01/2009, K-1: The additional charge such as the one imposed by Polish legislation in the event of a mistake in
V - EC COURTS
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6 |aware nº 18 | COMPETITION, REGULATORY AND EU PRACTICE AREA
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the VAT form does not constitute a tax but rather an administrative sanction compatible with Community law.
Freedom to Provide Services
• ECJ, case C-222/07 of March 5/03/2009,
UTECA: The protection of Spanish multilin-guism constitutes an overriding reason in the public interest which justifies the obligation of TV broadcasters allocate a percentage of their revenue to financing the production of feature films in an official Spanish language.
Intellectual Property
• ECJ, case C-533/06 of 12/06/2008, O2 Hold-
ings e O2: The owner of a registered trademark cannot prohibit the use by a third party of an identical or similar mark in the framework of a lawful comparative advertisement campaign.
• ECJ, case C-102/07 of 10/04/2008, Adidas and Adidas Benelux: The imperative of not unduly restricting the use of certain signs cannot limit the exclusive rights of a trademark holder.
• ECJ, case C-275/06 of 29/01/2008, Promusicae: Community law does not require Member States to lay down an obligation to disclose per-sonal data in the context of civil proceedings in order to ensure the effective protection of
copyright. Data Protection / Freedom of Press
• ECJ, case C-73/07 of 16/12/2008, Satakunnan
Markkinapörssi e Satamedia: In the framework of a conflict between freedom of press and data protection, the processing of personal data made available by tax authorities for the pur-poses of creating an SMS service may be subject to derogation from data protection rules pro-vided it is carried out solely for journalistic purposes.
• ECJ, case C-304/07 of 9/10/2008, Directmedia Publishing: The transfer of elements from a pro-tected database to another database further to an on-screen review of the first database and an individual assessment of the elements contained therein, may constitute an “extraction” suscep-tible of prohibition by the creator of the data-base.
Corporate
• ECJ, case C-210/06 of 16/12/2008, Cartesio:
The Member State of incorporation may pre-vent the transfer of the headquarters of a com-pany registered under its law to another Mem-ber State.
For further information please contact Armando Martins Ferreira ([email protected]) or Miguel Mendes Pereira ([email protected]) or visit our website: www.abreuadvogados.com
