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.
On 3 April 2014 the CJEU confirmed the General Court’s judgment of 2 March 2012 in the State aid dispute between the European Commission and the Kingdom of the Netherlands, ING Groep NV and the Dutch Central Bank (De Nederlandsche Bank NV). All six grounds of appeal brought by the Commission in this case were dismissed by the Court. Most notable are the Court’s considerations on the applicability of the private investor test. The Court confirmed that the Commission cannot evade its obligation to assess the economic rationality of a given measure in the light of the private investor test solely on the basis that the measure is connected to a measure which itself already constitutes State aid. Centrally, the decision raises the question as to why the Court sticks to the private investor test in the particular circumstances of the given case. Is the private investor test to be applied by default? Or are there good reasons for the applicability of this test, no matter what?
On June 5 the Court has handed down the eagerly awaited judgment in the Kone case. This is one of the several cases that result from the Commission’s decision finding a cartel in the elevators and escalators sector. The decision concerned a bid rigging cartel involving four well-known firms (Kone, Schindler, Otis and ThyssenKrupp) active in the market for the production, installation and servicing of elevators and escalators. Bid rigging is a practice by which the participants in a tender procedure coordinate their bids in order to determine who wins the tender at what price. They will typically determine the cartel member intended to win and ensure that the other bidders put in a higher price. As most of these products are bought by professional buyers that tend to hang on to their purchasing records, civil damages claims resulted from the Commission’s finding that there was cartel. This means that the customers of the companies involved in the cartel seek to claim the supracompetitive part of the price they paid (the cartel mark-up). In keeping with the need for more damages claims fervently voiced by then Competition Commissioner Neelie Kroes, the Court has had to deal with quite a few cases on this issue already, but many more are to be expected. Kone deals with the question to what extent the cartelists are required to compensate the higher price charged not just by the members of the cartel, but also by other companies in the market (the umbrella effect). Continue reading →
In the landmark cases Kendrion, Gascogne and Gascogne Germany the CJEU clarified some important procedural issues related to infringements of the reasonable time requirement. The most important legal question that the CJEU tackled is what is the appropriate remedy for infringements of the right to have the case adjudicated within a reasonable time. The CJEU had two options: the first one was to follow the Baustahlgewebe judgment in which the CJEU had concluded that the proceedings were excessively lengthy and subsequently reduced the fine the Commission had imposed upon the undertakings. The second was to follow the Der Grüne Punkt judgment where the CJEU also concluded that there had been an infringement, but required instead a separate action for damages to be lodged before the General Court. Following this path would, however, mean that the General Court itself would have to assess whether, and to what extent, the parties suffered any harm due to the excessive length of proceedings. In the present cases, the CJEU has opted for the second solution.
This post concerns a bit of a Dutch thing, namely the ‘position’ of the Dutch National Competition Authority ACM on an agreement by electricity producers active on the Dutch market, but it is interesting more generally for those who are interested in the relation between (EU) competition law and other issues like sustainability. The trigger for this position by the ACM is a plan in the national Energieakkoord which is an agreement between organisations representing employers, employees, environmental NGO’s, companies and other social actors that aims to benefit the transition to a more sustainable energy policy and sustainable economic development in the Netherlands. Part of this Akkoord is the deal between four electricity producers to close down five older coal fired power plants (all constructed in the 1980s) in a coordinated manner. This get-together of four competitors to reduce production capacity has obvious competition law implications, so the Netherlands Competition Authority (ACM) was consulted on the compatibility of this plan with Article 101 TFEU and the Netherlands equivalent, Article 6 of the Competition Act. As the title suggests, the ACM considered the plan incompatible with competition law in a very preliminary and barely reasoned finding.
Ink in cartridges for printers is often called ‘black gold’, or qualified as the ‘most expensive liquid in the world’. Manufacturers of printers sell their ink cartridges at (relatively) high prices, whereas they offer their printers for (relatively) low prices. The ‘cheap-appliance-expensive-consumable’-business model is used widely: coffee machines and pods, consoles and games, cars and spare-parts, etc. As a consequence of the relatively high prices on the aftermarket, independent suppliers try to enter such a lucrative aftermarket by offering generic products which are compatible with the machinery offered on the up-stream market. Not surprisingly, this leads to conflicts between those independents and manufacturers of appliances, because of the intellectual property rights over the machinery and consumables (e.g. generic producers offering coffee pads compatible with Nespresso– and Senseo-coffee machines and contesting the IP-rights in question, or – in the alternative – claiming that the refusal to license the IP-right is an abuse of a dominant position) and associated litigation (e.g. the Toshiba/Katun-case over advertisement of generic consumables which referred to the brand of the machinery).
In the EFIM-case, producers of generic ink cartridges (independent suppliers) – associated in the European Federation of Ink and Ink Cartridge Manufacturers (EFIM) – complained to the Commission, mainly because they were denied access to the intellectual property rights by the four, so-called ‘original equipment manufacturers’ (OEMs) of printers: Hewlett‑Packard, Lexmark, Canon and Epson. Without access to those intellectual property rights, producers of generic ink cartridges argued that they could not effectively compete with the OEMs on the (after)market for ink cartridges. EFIM considered that behaviour to foreclose the market for ink cartridges and therefore an abuse of a dominant position, which is prohibited under Art. 102 TFEU.
Infringements of antitrust law can cause serious harm to consumers and businesses in the European Union. Under EU law the victims of infringements of antitrust law can claim compensation for the actual loss, for loss of profit and payment of interest accruing from the moment of time the harm occurred until the moment compensation is paid. Actions for damages for an infringement of national and EU antitrust law are governed by the national law of the Member States. To ensure the effectiveness of the right of the victims to claim damages the European Commission presented on 11 June 2013 a proposal for a directive on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (COM (2013) 404 final). Continue reading →
In some American movies prison dialogues often go like this: Question: ‘What are you in for?’ Answer ‘Lawyer screwed me, I’m innocent!’ In C-681/11 Schenker & Co and others this was more or less the defence a couple of Austrian transport companies came up with after being fined for infringing competition rules. Those companies had received some dubious legal advice which effectively gave them the green light for a price fixing agreement. The case contains some pretty interesting questions on whether undertakings can be fined if they have not culpably infringed competition law. In other words, if companies have taken the necessary precautions to assure themselves that their conduct was legal, can they still be fined because the authorities made a different assessment? The particularly noteworthy feature of this case are the different approaches taken by the CJEU (focussing more on what people should know about the law) and the AG (focussing more on what people can expect from legal experts and authorities).
Two separate insurance companies Allianz and Generali concluded a number of contracts with autorepair shops on the prices and other conditions that would apply for cars insured by these companies repaired by those shops. Moreover, Allianz and Generali also concluded similar contracts with the dealers who operated car repair shops. Finally, they concluded similar agreements with the association of car dealers. In this category of agreement, the prices for car repairs would increase with the number of insurances sold by the dealers. Allianz and Generali, therefore sought to link the number of insurances sold by the dealers to the remuneration for car repairs. This is obviously designed to increase or at least consolidate the market share of Allianz and Generali on the market for car insurances. Apart from this business strategy, the idea behind these agreements was that auto repair shops could start repairing immediately on the basis of the predetermined tariffs, something that is clearly a practical solution to get people back on the road as quickly as possible.
The Hungarian Competition Authority (referred to in the judgment as GVH; HCA hereafter), however, considered these agreements to restrict competition by object on the market for car insurance contracts and the market for car repair services within the meaning of the Hungarian equivalent of Article 101 TFEU. As it happens, this provision closely mimics Article 101 TFEU, in line with the trend towards a spontaneous harmonisation of competition law throughout the EU (see the preamble and explanatory memorandum to the Hungarian competition act referred to in paragraphs 3 and 5 of the judgement). Because the HCA considered that there was no effect on trade, Article 101 TFEU was not applied by the national competition authority. The prohibition decision issued by the HCA was challenged by Allianz, in particular on the grounds that the agreement did not restrict competition by object. the decision by the HCA was partially reversed and then restored upon appeal, against which Allianz appealed to the Hungarian Supreme Court. The Supreme Court then made a preliminary reference essentially asking whether the agreements at hand fall within the object category.
In an interesting case decided today the CJEU held that a number of Slovak banks could not exclude a competitor even if that competitor was allegedly operating illegally on the Slovak market. It’s a notable case, as it tells us something about how the CJEU assesses a situation where competitors are not playing by the rules of the game.
Is EU competition law ‘special’? Should it be insulated from other EU policies? Should we Europeans follow the neoliberal teachings of Chicago scholars like Bork who claim that American antitrust policy ‘cannot properly be guided any goal other than consumer welfare’ and that ‘distribution of (…) wealth or the accomplishment of noneconomic goals are the proper subjects of other laws’? These questions are particularly relevant to EU environmental policy, where we have seen an increase in reliance on market based instruments (the emissions trading scheme for instance). The central argument of Suzanne Kingston’s new book ‘Greening EU Competition Law and Policy’ is that EU competition law is not special and that it should take greater account of EU environmental policy and goals.
On November 6th, the Grand Chamber of the CJEU issued a ruling in Case C-199/11 (Europese Gemeenschap v Otis NV and Others). The case concerns the principle of effective judicial protection (laid down in Article 47 of EUCFR) and the private enforcement of competition law. The Brussels Commercial Court referred the issue for a preliminary ruling in the course of a dispute between Otis and the other businesses and the EU, represented by the Commission.
The main controversy in the case was whether the principle of effective judicial protection was adequately safeguarded. The Commission, in this case, played a double role: first as the public enforcer of the EU competition law, and second as the victim of the anticompetitive practices. This meant, in a nutshell, that the Commission was asking for damages in a private suit on the basis of its own previous findings of anticompetitive behavior.
The Evropaïki Dynamiki (ESP-ISEP) Judgment has been issued on the basis of Article 100(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1) (‘the Financial Regulation’). However, a ‘twin’ provision can be found in Article 41 of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114) (‘Directive 2004/18’). Consequently, the Judgment is of relevance in all areas of public procurement, and not only to that of the EU Institutions.