In his Opinion issued in case C-329/15 ENEA SA w Poznaniu v Prezes Urzędu Regulacji Energetyki on 22 March 2017, AG Saugmandsgaard ØE held that the quota-based system designed by Poland in order to support the production of energy from cogeneration (‘Combined Heat and Power electricity’ or ‘CHP electricity’) should be sheltered from the application of State aid rules as it does not fulfil all the conditions enshrined in Article 107(1) TFEU (‘Article 107(1)’). In particular, the missing piece of the ‘aid jigsaw’ is, according to AG Saugmandsgaard ØE, that the national measure in question does not entail the use of ‘State resources’.
The interpretation of the State resources criterion is a classic battleground between the effectiveness of EU rules and the protection of national regulatory autonomy. On the one hand, a broad reading of the State resources criterion is justified by the fact that Member States may feel tempted to assume a ‘private form’ to evade the application of State aid rules; on the other hand, a narrow reading averts the risk of enabling the Commission to conduct ‘an inquiry on the basis of the Treaty alone into the entire social and economic life of Member States’, as famously summarized by AG Jacobs in Viscido. The EU case law has, after some fluctuations, opted for a broad approach leaving only limited room for a finding of no State resources and therefore no aid (PreussenElektra). This was particularly evident when the Court was called to examine energy production-supporting measures taken by the Member States: the Netherlands (Essent Netwerk), Austria (Austria v Commission), France (Association Vent de Colère) and Germany (Germany v Commission) all unsuccessfully attempted to persuade the European judges that their feed-in tariff schemes did not engage public resources.
From a policy perspective, if this Opinion were to be upheld by the Court this would be the first (post-PreussenElektra) happy ending for the Member States in their struggle to design State aid-compliant legal mechanisms for funding the switch towards environmentally friendlier energy mixes and production processes.
From a strictly legal perspective, the reasoning of the AG in the present case deserves special attention in that it appears to point to a narrower, and arguably more accurate, interpretation of both layers of the State resources criterion. Continue reading →
On 8 September 2016, the General Court (‘GC’) handed down a seminal judgment for the pharmaceutical sector in the Lundbeck case. The judgment is of particular importance, because it is the very first ruling of the EU Courts affirming that pharma pay-for-delay agreements (or reverse payment settlement agreements) may be subject to competition law scrutiny. Pay-for-delay (‘PFD’) agreements are agreements that are intended to delay the market entry of generic manufacturers with generic drugs in exchange for payments made by original pharmaceutical producers (i.e., holders of patents for an original branded drug). The GC, upholding the European Commission’s (‘Commission’) decision of 19 June 2013, held that Lundbeck and four generic producers had infringed EU competition law by entering into such agreements.
In its judgment of 17 December 2015, Spain a.o./Commission, the General Court once again annulled a Commission decision dealing with a fiscal State aid scheme on the grounds that the Commission did not sufficiently establish that the scheme in question conferred a selective advantage to its beneficiaries.
Strikingly, the General Court’s judgment was very much inspired by two of its previous judgments – albeit in another composition – in the cases Autogrill España and Banco Santander. In those cases, the General Court found that for the condition of selectivity to be satisfied, a category of undertakings which are exclusively favoured by the measure at issue must be identified in all cases and found that “the mere finding that a derogation from the common or ‘normal’ tax regime has been provided for cannot give rise to selectivity” . This is especially the case when the measure at issue does not exclude, a priori, any category of undertakings from taking advantage of it. 
Without entering into the merits of these two judgments, against which the Commission has brought separate appeals, the General Court’s judgment in the Spanish Tax Lease (STL) case deserves special attention, for it contains also interesting developments on the links between the separate notions of advantage and selectivity, and the need for the Commission and for the EU courts to pay special attention to the identification of the correct beneficiary when dealing with State aid schemes involving multiple layers of actors. Continue reading →
In a significant, yet unusual judgment the Court of Justice of the European Union (CJEU) upheld the General Court’s decision (T-140/12; Teva Pharma v. EMA) that had affirmed the European Medicines Agency’s (EMA) rejection of Teva’s generic drug application for Glivec® (active substance-imatinib), not due to the reference product’s own orphan drug exclusivity but in view of orphan drug exclusivity of a similar medicinal product – Tasigna® (active substance-nilotinib).
The judgment is bizarre not only because it interprets the underlying orphan drug regulation in a manner incongruous with the spirit and substance of the legislation, but also for its potential to provide an unfair leg-up to the brand drug companies for extending their market monopolies indefinitely. It simply fails to fathom the underlying welfare rationale of the Regulation, which is meant to ensure the same quality of treatment for patients of rare conditions as those suffering from other diseases. The Court’s decision provides a skewed playing field where the interest of patients and generic pharmaceutical companies will be impacted by the unjustified extension of monopoly periods of brand drug products thus ensuring exploitative pricing of life-saving drugs. Continue reading →
Post Danmark II constitutes the latest signal as to the view of the CJEU with regard to the assessment of rebates granted by dominant firms. As this was the first preliminary reference in a rebates case ever, there were high expectations with regard to the judgment (see e.g. here). It was seen as a golden opportunity for the Court to provide meaningful guidance, unconstrained by the limitations of judicial review in a truly fascinating and heavily disputed field of EU competition law. Indeed, this is the area where the European Commission made the most significant efforts to alter the current state of the law (see paras 37-45 of the Commission’s Enforcement Priorities Paper), albeit unsuccessfully (see judgments in Intel and Tomra). Hence, the key issue was whether the CJEU would ultimately yield to the increasing pressure to move to a more economically inspired approach to rebates under Article 102 TFEU. Overall, the ruling is valuable in that it clarifies the standard applicable to rebates granted by dominant undertakings. Continue reading →
Competition law judgments are notorious for their length. An extreme example is the 5134 paragraph judgment in Cement. In most cases the appeal judgment is significantly shorter, as with the 391 paragraphs in the appeal in Cement. AC-Treuhand is no exception to that rule, but it takes it to the extreme by reducing the Court’s reasoning to a single paragraph. This single paragraph supports the finding that cartel facilitators are also liable under Article 101 TFEU. The issue whether a company that is not active on the affected market should also be brought under the scope of article 101, is a difficult matter. However, the Court finds it ‘surprisingly’ easy to solve this matter, which raises practical points as well as some fundamental questions. We will discuss and comment on this one paragraph below, as well as on some of the fluff that surrounds it, but we will start with the facts. Continue reading →
In Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp & ZTE Deutschland GmbH, (Judgment of the 5th Chamber, CJEU, 16 July 2015)the CJEU was asked to rule for the first time on whether seeking an injunction and other associated remedies by the owner of a Standard Essential Patent (SEP) against a company in breach of the patent (but one willing to become a licensee) can amount to an abuse of a dominant position in breach of EU competition law (Article 102 TFEU). It concluded that an injunction or an action to recall products can amount to an abuse of dominance in certain circumstances.
In this post, I first provide a primer on Standards and Standard Essential Patents (‘SEPs’) before summarizing the Court’s reasoning and setting out some initial observations on the judgment’s significance.
Situated between the market and the state, the notion, concept and characteristics of public services are often multifaceted and difficult to grasp. The EU layer of public service regulation further adds to this complexity as it interacts in many different ways with the national legal frameworks in this field: EU law may structure national legal norms, coordinate the provision of services between the Member States, bring about minimal or maximal standards (e.g. pertaining to quality, ubiquity or affordability of the services provided), comprise detailed regulation or even set prices for the provision of public services as in the case of mobile roaming tariffs. At the same time the law on public services is under the influence of a whole range of EU law provisions and regimes: namely the rules on free movement, competition law and state aid, general and sector-specific primary law provisions, horizontal rules of secondary law, as well as a large body of sector-specific secondary EU law, which has increased substantially over the past few years. With his book Public Services in EU Law Wolf Sauter undertakes a challenging attempt to elucidate the complexity of EU law in the field of public services. Continue reading →
Most state aid cases seem relatively straightforward, with the most notable exception being tax cases which had their fair share of attention recently. When I read a summary of the Eventech case (C-518/13), at first glance it seemed to fall in the straightforward category. However, as one may recall from tax state aid cases, often the most difficult aspects of these cases are the criteria of selectivity and the involvement of state resources. And it just so happens that these criteria are the main issues at stake before the CJEU in Eventech, which makes it a judgment worthy of some further discussion.
Anyone who has ever been to London knows the distinctive Black Cabs which are probably as much a British symbol as their well-known bigger sisters, the red double-deckers. What you may not know (at least I didn’t) is that there are also other kinds of taxis in London called minicabs.
In C-413/13 FNV Kunsten Informatie en Media, the Court decided that competition law does not apply to arrangements among freelance substitute orchestra musicians that aim to improving their working conditions if they can be qualifed as ‘workers’. In so doing, the Court significantly expanded the scope for taking social interests into account within competition law analysis and rejected the more narrow and liberal approach taken by the Dutch National Competition Authority (NCA), the Dutch government and—not surprisingly—the European Commission. This is a significant case, not only because the Court for the first time had to deal with the increasingly more common phenomenon of the ‘false self-employed’ when interpreting competition law, but also because the Court once again demonstrated its willingness to take public interests other than economic efficiency into account when applying competition law (a holistic approach that, I argue, is fundamentally more in line with the EU treaties).
Sometimes a book wins you over, and José Luís Da Cruz Vilaça’s EU Law and Integration: Twenty Years of Judicial Application of EU Law (Oxford/Portland, Hart 2014), is such a book.
I must admit that I had some reservations at first over the concept of the book, which is in essence an overview of the legal career – both as a legal scholar and a judge – of José Luís Da Cruz Vilaça, on the basis of a series of articles on different topics written over the course of two decades. Books like this only stand out if they can avoid three traps. Continue reading →
The Court has recently decided on the appeals in two seminal cases: MasterCard MIF (MasterCard) and Groupement des Cartes Bancaires (CB). Both cases result from Commission decisions that found Article 101 TFEU to have been infringed by the decisions taken within those schemes with regard to fees that form part of the working of these payment systems. To understand both cases it is necessary to first set out the background to the MasterCard and CB systems. After that we will examine the procedure and finally the judgments themselves. This will reveal essentially three interesting issues:
In October 2012 I wrote an entry about the General Court judgment that annulled the Commission decision in the Greek Lignite-saga, concerning the Greek state-owned electricity company DEI that benefitted from the exclusive right to mine for lignite (brown coal) which, according to the Commission, distorted competition. In a nutshell I found that the judgment did little to clarify the obscure clarity or clear obscurity of Article 106 TFEU, but it was certainly good news for DEI, the state-owned electricity company that benefitted from the exclusive right to mine for lignite. In that blog I wrote that the Commission should appeal so that the Court could clarify its own case law (instead of the General Court second-guessing what the Court could have meant). Well, the Commission did appeal, but I’m not sure whether the Court clarified its own case law. One thing that is for sure it that Article 106 TFEU may well have been given a new lease of life. This turns on the question whether actual abuse by the public undertaking must be shown in Article 106 TFEU-cases. This follows from the fact that Article 106 TFEU is addressed to the Member States, but is an empty norm that only gets substance when it is read in conjunction with another Treaty provision. In this regard Article 102 TFEU is by far the most popular norm to be mated to Article 106 TFEU as the exclusive right mentioned in Article 106 TFEU is easily equated to a statutory monopoly for the public undertaking and thus dominance within the meaning of that provision.