ISSN 1025-2266 COMPETITION POLICY NEWSLETTER EC COMPETITION POLICY NEWSLETTER Editors: 2008 Æ NUMBER 3 Inge Bernaerts Kevin Coates Published three times a year by the Thomas Deisenhofer Competition Directorate-General of the European Commission Address: European Commission, Also available online: J-70, 04/136 http://ec.europa.eu/competition/publications/cpn/ Brussel B-1049 Bruxelles E-mail: [email protected] World Wide Web: http://ec.europa.eu/ competition/index_en.html I N S I D E : • The design of competition policy institutions for the 21st century by Philip Lowe • The new State aid General Block Exemption Regulation • The new Guidelines on the application of Article 81 of the EC Treaty to the maritime sector • The new settlement procedure in selected cartel cases • The CISAC decision • The Hellenic Shipyards decision: Limits to the application of Article 296 and indemnification provision in privatisation contracts MAIN DEVELOPMENTS ON • Antitrust — Cartels — Merger control — State aid control EUROPEAN COMMISSION Contents Articles 1 The design of competition policy institutions for the 21st century — the experience of the European Commission and DG Competition by Philip LOWE 12 The General Block Exemption Regulation (GBER): bigger, simpler and more economic by Harold NYSSENS 19 Rolling back regulation in the telecoms sector: a practical example by Ágnes SZARKA 25 The new Guidelines on the application of Article 81 of the EC Treaty to the maritime sector by Carsten BERMIG and Cyril RITTER 30 The new settlement procedure in selected cartel cases by María Luisa TIERNO CENTELLA Opinions and comments 37 The importance of access to fuels for competition in the electricity sector: the case of lignite in Greece by Philippe CHAUVE and Polyvios PANAYIDES 41 Approved guarantee methods for regional aid or de-minimis aid — the German and the Hungarian example by Rolf TUCHHARDT, András TARI and Christophe GALAND 48 Economic analysis in vertical mergers by Raphaël DE CONINCK Antitrust 53 The CISAC decision — creating competition between collecting societies for music rights by Alain ANDRIES and Bruno JULIEN-MALVY Cartels 57 Recent cartel cases — Sodium Chlorate and Aluminium Fluoride by Anna TISSOT-FAVRE, Andrej KRÁLIK, Tiina PITKÄNEN and Petr ŠOCHMAN Merger control 61 Mergers: Main developments between 1 May and 31 August 2008 by Mary LOUGHRAN and John GATTI 70 Digital maps go vertical: TomTom/Tele Atlas and Nokia/NAVTEQ by Carles ESTEVA MOSSO, Michal MOTTL, Raphaël DE CONINCK and Franck DUPONT 75 Rewe/Adeg — Food for thought — Austrian markets for daily consumer goods by Michael KÖNIG, Yvonne SIMON, Emmanuel TERRASSE and Sandra KIJEWSKI State aid 81 Funding of public service broadcasting and State aid rules — two recent cases in Belgium and Ireland by Nóra TOSICS, Ronald VAN DE VEN and Alexander RIEDL 85 The principle of incentive effect applied to training aid — Some recent cases by Loredana VON BUTTLAR and Salim MEDGHOUL 89 The Hellenic Shipyards decision: Limits to the application of Article 296 and indemnification provision in privatisation contracts by Christophe GALAND 95 Information section © European Communities, 2008 Reproduction is authorised, except for commercial purposes, provided the source is acknowledged. Requests for commercial reproduction should be sent to: Office for Official Publications of the European Communities. Author Services Unit, ‘Licences & Copyright’ 2, rue Mercier. L-2985 Luxembourg. Fax: (352) 29 29 42755. E-mail: [email protected] The content of this publication does not necessarily reflect the official position of the European Commission. Responsibility for the information and views expressed lies entirely with the authors. Competition Policy Newsletter The design of competition policy institutions for the 21st century — ARTICLES the experience of the European Commission and DG Competition (1) by Philip LOWE (2) I. Introduction () () the European Union. It is this College of Commis- sioners that, on a proposal of the Commissioner for All competition policy and enforcement systems Competition, adopts final decisions in individual consist of essentially two components: the legal competition cases as well as on policy documents instruments (‘rules’) governing both substance, such as guidelines and notices, and legislative pro- competences and procedure, and the adminis- posals to the Council. On the basis of a delegation trative structures and processes through which of powers from the College (so-called empower- the legal instruments are implemented. Each of ment), the Commissioner for Competition can these is necessary for the success of the system as herself directly adopt certain preparatory or inter- a whole. Good rules remain a dead letter if there is mediary acts such as a Statement of Objections, no efficiently run organisation with the processes as well as final decisions in less important cases, to implement them. Conversely an efficiently man- such as a merger dealt with under ‘simplified’ pro- aged authority cannot compensate for fundamen- cedure. The decisions taken by the College and tal flaws in the rules which it is to implement. the Commissioner are prepared and implemented The analysis and design of these components by one of the departments of the Commission, in are also interdependent. The management of the case of competition, the Directorate General the processes within the organisation has to be for Competition, which currently has around 800 adapted to the rules which it has to apply. And the staff. rules must be shaped in a way that they can be I do not intend in the remaining sections of this implemented within the real world constraints to article to give further attention to the classical which the organisation is subject — such as lim- institutional issue of the degree of independence ited resources. of a competition authority, and in particular of Academic attention focuses mainly on the legal the Commission as a competition authority. How- instruments and not so much on the organisa- ever some remarks on our general approach to tional side. One reason for this is probably that this question may be useful. competition policy and enforcement is still mainly The European Commission finds itself in a sub- a subject for lawyers. Another reason could be stantially different position to a national author- that it is not easy for outsiders to obtain detailed ity. In the first place, its institutional independ- and comprehensive information about the inte- ence should not be in question. As reflected in the rior workings of a competition authority. Finally, EU treaties, its independence from national and it is perhaps assumed that the management of a political interests is fundamental to its mission of competition authority does not pose any different promoting the ‘common interest’ of the European challenge than the management of other public Union as a whole. or private institutions with a comparable mission and size. Secondly, the Commission has delegated fully its powers to investigate a case, and manage the due Before starting I need to make a preliminary point process, to DG Competition. The Commissioner that will be obvious to many, but which is none for Competition is in addition empowered to take the less important. The competition authority in decisions on cases and problems which raise no the European Union is not DG Competition, but significant policy issue. These arrangements offer the European Commission. The European Com- a solid guarantee of the integrity and impartial- mission is a collegiate institution composed of ity of investigations and their conclusions, while 27 Commissioners from the 27 Member States of reserving all key decisions on cases and policy for the college of Commissioners as a whole. (1) This is an abridged version of an article to be published in Competition Policy in the EU: Fifty Years On from Thirdly, a competition authority certainly needs to the Treaty of Rome. Editor: Professor Xavier Vives. be independent and impartial. But it should not be Oxford University Press, Forthcoming 2009 isolated or uninformed. It needs to be fully aware (2) Director General of the Directorate-General for Compe- tition at the European Commission. The views expressed of the market and regulatory environment around are personal to the author and do not necessarily reflect competition law enforcement. And it needs to be those of the European Commission. in a position to influence legislators and regula- Number 3 — 2008 1 Articles tors, particularly when competition problems can tive powers to gather relevant data and to set be better addressed by new or amended regula- priorities and focus its use of its legal instru- tion. This only underlines the advantage for EU ments accordingly. competition policy of having the work of the Competition Commissioner and DG Competition (2) The enforcement system must be designed in fully embedded within the Commission. Finally it a way that guarantees coherence and predict- is worth underlining again that the Commission ability for business: coherence ensures equal as an institution, and not just DG Competition, treatment. Predictability allows firms to plan retains the role of Europe’s competition author- for compliance. To achieve this, ex-ante rules ity. and individual enforcement decisions should be based on a common methodology, clear II. How to design a modern and publicised enforcement objectives and an competition policy and enforcement in-depth knowledge of how markets function. Again, there is a certain trade-off between system predictability and the need to deal with each Independently of whether we speak about merger case on its merits. Based on empirical evi- control, antitrust or State aid control, a competi- dence, some structures or conducts have tion authority should ideally intervene at the right almost always produced outcomes which are time, on the right markets, in relation to the right harmful to competition and to consumers. As problems and with the correct remedies. At the a result it may be possible to establish some same time, its intervention should be predictable, clear ex-ante rules which offer a high level of correct, and have a measurable positive impact.