Dear Reader,

This is the fourteenth issue of the ECN Brief which is a publication of the European Competition Network (ECN). The ECN is a network of the Member States’ competition authorities (NCAs) and the European Commission (DG Competition). The ECN Brief aims to inform you about the activities of the ECN and its members and to reflect the richness of enforcement actions and advocacy in the Network. It focuses on news of major interest about EU competition law and policy.

The present edition reports developments from July to October 2012. It shows that next to enforcement actions, the NCAs have been active advocates of competition vis-à-vis their governments in particular in the area of pharmaceuticals, automotive aftermarkets and the liberal professions. Moreover, this issue highlights that authorities are bringing inquiries in a range of sectors including ports, e-commerce, gas, sunflower oil, fuel, banking and finance.

More news about the activities of the ECN and its members will be published mid-December 2012. In the meantime, we wish you interesting reading!

Table of contents

Enforcement & Cases

Legislation & Policy

Other issues of interest

ECN Members’ websites

ECN statistics

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ECN BriefECN Brief 04/2012

Welcome to the October 2012 issue of the

ECN Brief

DISCLAIMER:This publication is a compilation of contributions from national competition authorities of the European Union and the Competition Directorate General of the European Commission (“the Authorities”). Information provided in this publication is for information purposes only and does not constitute professional or legal advice. The content of this publication is not binding and does not reflect the official position of any Authority. Neither any Authority nor any person acting on its behalf is responsible for the use which might be made of information contained in this publication. ISSN 1831-6107 KD-AH-12-004-EN-N

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AUTHORITIES

o Belgium: Fine imposed for Abuse of Dominant Position in Magazines’ Distribution Case

o Bulgaria: Commitments Decision in Wholesale Fuel Market

o France: First Commitment Decision by Autorité de la concurrence related to Internet Neutrality

o Germany: - Fines imposed for Vertical Resale Price Maintenance in Tools Selective Distribution System - First Fines imposed in Sweets Case

o Italy: - Case against Telecom Italia closed with Commitments - Proceedings opened in Telecom Case

o Slovenia: Resale Price Maintenance in Electricity Market

o Spain: Authority fines Collecting Society for Abuse of Dominant Position

o United Kingdom: Office of Fair Trading issues Statement of Objections against on-line Travel booking Companies

COURTS o Portugal: Court of Appeal

upholds First Instance Decision on Competition Authority’s Pharmaceutical Companies Case

ENFORCEMENT & CASES

Italy: ICA fines Rail Incumbent for Abuse of dominant Position by hindering Access to Passenger Rail ServicesOn 25 July 2012, the Italian Competition Authority (ICA) found that Ferrovie dello Stato, through its subsidiaries RFI and Trenitalia, had put in place a complex and unified strategy to keep Arenaways out of the route between Milan and Turin from 2008 to 2011. A fine amounting € 300 000 was imposed on FS. Read more

Spain: CNC fines Cartel in Civil Engineering FieldThe Comisión Nacional de la Competencia (CNC) found that several undertakings active in systems to reinforce concrete structures used in numerous types of buildings and to fix structures and stabilise the ground (post-tensioning and geotechnical markets), had been sharing contracts and customers from 1996 to at least 2010. Fines totalling more than € 16 000 000 were imposed on the cartel participants. Read more

Romania: Competition Council imposes Fines on National Association of Judicial ExecutorsIn its decision, the Competition Council found that the decision of the association by means of which access to the market was limited and the members’ conduct was coordinated with respect to the tariffs charged, constitutes a decision of an association of undertakings in the meaning of Article 5(1) of the Competition Law and Article 101(1) TFEU and infringes both provisions. Read more

Germany: Higher Regional Court denies Third-Party-Access to Leniency Applications in Court ProceedingsThis decision follows the ECJ judgment in Pfleiderer according to which granting access to leniency applications to injured parties is not prohibited by EU law in principle, but subject to a balancing of the interests of the injured party on the one hand and the interest of effective cartel prosecution on the other hand. Read more

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o Bulgaria: Report on Sunflower Seeds and Sunflower Oil Sector Inquiry

o Ireland: Irish Ports Study gets underway

o France: - Results of Sector Inquiry into e-commerce - Opinion on Draft Decree about Supply of Medicinal Products for Human Use

o Lithuania: Competition Council approves Resolution on Activity Priority Setting

o The Netherlands: New Rules of Conduct for State carrying out economic Activities

o Poland: - Guidelines on Commitment Decisions - Report on Polish Gas Sector

o Portugal: Public Consultations on Guidelines and Regulations

o Spain: - Report issued on Automotive Fuel and Distribution Market in Spain - Report issued on proposed Amendments to Bylaws of Professional Colleges

o Sweden: Sector Inquiry launched into Banking and Financial Sector

o United Kingdom: - Review of Personal Current Account Market launched - Call for Information into Petrol and Diesel Prices

LEGISLATION & POLICY

Finland: Report on Provision of Pharmaceutical ProductsOn 28 August 2012, the Finnish Competition Authority published an extensive report on the provision of pharmaceutical products in Finland in which several amendments to the current regulation on the Finnish pharmacy system and provision of pharmaceutical products are proposed. These amendments aim at improving the effectiveness and productivity of the provision of pharmaceutical products and at lowering the costs imposed of their distribution. Read more

France: Autorité de la concurrence calls for progressive Lifting of Restrictions on Distribution of visible Spare PartsFollowing the launch of its sector inquiry into the automotive aftermarkets in 2011, the Autorité issued its final Opinion on 8 October 2012. The conclusions relate to the five main concerns identified during the inquiry and are intended to stimulate price competition and innovation in the supply of maintenance and repair services. Read more

Greece: Hellenic Competition Commission exercises Advocacy Powers and issues formal Opinions on Liberal Professions and other regulatory RestrictionsFree and undistorted competition is a key remedy for the Greek economy, troubled for many decades by the challenges which can arise in a small market economy and a tradition of regulatory state intervention. In that context, the Hellenic Competition Commission, while realigning its strategic objectives, focused its advocacy efforts in 2012 on two crucial sectors of the economy, the liberal professions and market regulation restrictions. Read more

United Kingdom: New Guidance on Penalties for breaching Competition LawOn 10 September 2012, the Office of Fair Trading (OFT) published new guidance on how it will set penalties for breaches of competition law. This is intended to allow the OFT to continue to set substantial penalties to deter anti-competitive activity while ensuring that penalties are proportionate in the specific circumstances of individual cases. Read more

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EVENTS

o Cyprus: Report on European Competition Day on 2 October 2012

o Lithuania: Competition Council commemorates 20th Anniversary of Law on Competition

o Poland: - Report on II International Competition Law Forum on 27 September 2012 - Debate on State of Competition in Polish Gas Sector

o Portugal: Report on Conference on recently approved Competition Law

o European Commission signs Memorandum of Understanding with China

CONTACTS

ECN STATISTICS

Access to Commission Cases

Training of National Judges in EU Competition Law

OTHER ISSUES OF INTEREST

© European Union, 2012. Reproduction is authorised provided the source is acknowledged. This publication may contain links to other websites. Linked information is subject to use conditions, disclaimers, copyright and any other conditions and limitations governing linked websites or otherwise applicable.

Czech Republic: 6th St Martin Conference on 13/14 November 2012The conference will take place at the premises of the Office for the Protection of Competition in Brno and will focus on recent trends and developments in competition law and policy in the EU and the Czech Republic, as well as on practical issues of competition enforcement. Read more

France: Autorité de la concurrence hosts first ICN Adovcacy Workshop on 26/27 October 2012The workshop will take place in Paris and will cover substantial policy issues, such as advocacy towards governments, the role of competition authorities in advocacy and the contribution of the ICN as a whole towards advocacy. Participants of the workshop will be ICN members as well as Non-Governmental Advisers.Read more

Latvia: Competition Council hosts 9th Annual Regional Competition Conference on 18/19 October 2012The conference is organised annually by one of the three Baltic states’ competition authorities. Its purpose is to offer a platform to share information on competition policy, on the implementation of competition legislation and the most important tendencies in the markets of Baltic States. It also intends to strengthen cooperation and information exchange among Baltic competition authorities in order to ensure the effective implementation of competition legislation and the carrying-out of sector inquiries. Read more

ECN members’ websites

Number of envisaged decisions by national competition authority; types of envisaged decisions etc.: http://ec.europa.eu/competition/ecn/statistics.html

Case search

Award Decision in Call for Proposals 2012 adopted

Personalia

• Hungary: New Member of the GVH Decision-making Body

Annual Reports 2011 published:

• Czech Republic

• Lithuania

• Poland

Link to the Annual Reports of all ECN Members

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ENFORCEMENT & CASES

AUTHORITIES

• Italy: The Italian Competition Authority fines Rail Incumbent FS for Abuse of dominant Position by hindering Access to Passenger Rail ServicesOn 25 July 2012, the Italian Competition Authority (ICA) sanctioned the State-owned group Ferrovie dello Stato (FS) for a violation of Article 102 TFEU and imposed a fine amounting to € 300 000, following a complaint by Arenaways S.p.A. (Arenaways), a competitor of FS active on the passenger rail transport markets, and two Consumers associations.

FS Group is the Italian rail incumbent. Its subsidiary RFI manages the national rail network, where it enjoys a legal monopoly position (under the concession given by D.M. October 31, 2000 n. 138 / T), and its subsidiary Trenitalia is the main railway company in Italy, also holding a position of de facto monopoly in the passenger rail transport markets (regional and medium-long distance services), where it has obtained almost all the Regions’ service contracts. Up to the entry of Arenaways on the local rail transport market, the rail transport services - both local and over medium-long distances (subsidized or not) - were, with rare exceptions, carried out only by Trenitalia.

In particular, the ICA found in its decision that FS, through its subsidiaries RFI and Trenitalia, had put in place a complex and unified strategy to keep Arenaways, the incumbent’s first competitor on the passenger rail transport market at regional level and which is bankrupted at the time of the decision, out of the profitable route between Milan and Turin from 2008 to 2011. The ICA concluded that the conduct of FS amounted to an abuse of dominant position aimed at hindering the entry of Arenaways along the 343 km network linking the ring Turin-Milan-Turin-Alessandria.

The markets concerned by RFI’s and Trenitalia’s conducts are respectively the access to the railway infrastructure and the railway passenger services at regional level (Piemonte being the relevant Region) and on both of them, FS Group was found dominant.

The ICA sanctioned two main anticompetitive practices by FS and its subsidiaries.

As regards the first abusive practice of FS Group, i.e. RFI’s dilatory conduct, the ICA ascertained that, when receiving the first train path allocation request by Arenaways on 11 April 2008, RFI did not process the request, arguing that it could not answer before being sure that the economic equilibrium of the public service contracts (PSCs) would not be compromised. According to the Italian regulation on rail, the infrastructure manager (RFI) should grant train paths to the extent that they do not endanger the economic equilibrium of the (PSCs). The access to the train paths was thereafter delayed by RFI for over 18 months, i.e. until 13 May 2010, when RFI finally asked the Regulator to start the procedure aimed at evaluating the impact of Arenaways’ train paths on the economic equilibrium of the PSCs on the basis of cost accounting provided by the same FS Group.

The ICA ascertained another exclusionary practice of the rail incumbent FS linked to the provision of cost accounting provided by the FS Group, consisting in its subsidiary Trenitalia (the passenger railway company of the Group), giving misleading representation of its own costs for regulatory purposes. Particularly, the ICA considered that Trenitalia had provided the Regulator with information at the single line level (Torino-Milano-Alessandria), whereas both the EU Directive (Directive 2007/58/CE) and the national law (Law n. 99/2009) require the assessment to be done at the total contract level. Moreover Trenitalia did not make explicit to the Regulator that the data concerning the costs were provided according to a new methodology (the so-called “Catalogue” methodology). The Regulator, therefore, declared that the equilibrium would have been compromised had Arenaways provided passenger rail transport services on the ring Torino-Milano-Alessandria in both directions with stops, even if Arenaways’ entry could only have affected a very small number of passengers. To preserve the economic equilibrium of the PSCs,

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Arenaways was then allowed to provide services from Torino to Milano only without stops, with a travel time longer than Trenitalia’s on the same track with all stops. However, had Trenitalia made explicit to the Regulator the specificities of the methodology which it had used, the opposite conclusion about the impact of Arenaways’ access on PSCs’ profit would have been drawn and Arenaways could have been allowed to offer its new services at a competitive condition (i.e. with all the stops and the same time as Trentialia).

By hindering the entry of Arenaways on the Torino-Milano-Alessandria, the ICA found that FS had deprived the Italian consumers of the benefits of competition in the form of higher choice of transport services and lower prices. The FS Group’s exclusionary strategy has produced a clear damage to consumers, represented by the absence of the only possible alternative to Trenitalia’s trains, consisting of a commercial presence credible, able to offer an innovative service on routes characterized by high traffic flows, in relation to which users have often expressed dissatisfaction with the current quality and quantity of the services offered.

See ICA decision (in Italian) and press release (in English)

• Spain: The Comisión Nacional de la Competencia fines Cartel in Civil Engineering FieldOn 31 July 2012, the CNC Council has adopted a resolution finding that several undertakings active in the post-tensioning and geotechnical systems have been sharing contracts and customers between themselves. In particular, the CNC has established the existence of the following practices:

(i) on the post-tensioning systems markets, agreements to share out contracts for post-tensioning systems – including various large projects – and supply of bars; and (ii) on the geotechnical market, the existence of customer-sharing agreements. On this basis, fines totalling more than € 16 000 000 were imposed on the undertakings concerned.

This case arose out of a leniency application submitted on 23 April 2010 by the controlling shareholders of the company Dywidag Sistemas Constructivos S.A. (DSC) in respect of a breach of Article 1 of the Spanish Competition Act, consisting of the sharing out of the market for post-tensioning and geotechnical systems. According to the information provided DSC itself and the following companies BBR Pretensados y Técnicas Especiales, S.L (BBR), CTT Stronghold, S.A. (CTT); Freyssinet, S.A. (FSA), Mekano4 S.A. Técnicas del Pretensado y Servicios Auxiliares, S.L (Tecpresa) and VSL-Spam, S.A. had been implicated in these practices for at least 14 years.

On 26 July 2010, having carried out inspections, the Investigations Division of the CNC opened formal proceedings (S/0287/10) against these companies for anti-competitive practices of a kind prohibited by the Spanish Competition Act. The companies mentioned operate in the civil engineering field, offering post-tensioning and geotechnical systems. Together they are the main operators on the market and in some cases they are subsidiaries of large construction companies such as FCC (BBR) or Ferrovial Agroman (Tecpresa). The relevant market is on the one hand the market for post-tensioning systems, which are systems that permit the reinforcing of concrete structures used in numerous types of buildings, and on the other hand the market for geotechnical tensioning systems, which serve to fix the structures and stabilise the ground. The demand on these markets comes from large companies in the construction sector.

Following the investigation, the CNC Council found that these practices constitute a single and continuing breach, in the form of a cartel, of Article 1 of the Spanish Competition Act and Article 101 TFEU from at least 1996 until the date of the inspections on 17 June 2010. The cartel participants held periodic meetings amongst themselves (as often as monthly at some points) in order to proceed with the sharing out of potential contracts and the monitoring of the sharing arrangements. Quotas were defined per company, which reflected their weight on the market, and potential contracts were shared out by reference to these quotas. It was also established that agreements were reached on the price to be submitted to companies seeking the services in order to try to ensure that the contracts would be won by the company designated by the cartel in its sharing arrangements. Mechanisms were also defined for compensation between companies by reference to the quotas, particularly in the context of large projects.

The CNC Council has therefore decided to set the following penalties: BBR: € 2 640 000,

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CTT: € 2 426 000, DSC: € 5 228 000, FSA: € 2 805 000, Mekano4, S.A., a fine of € 1 420 000, Técnicas del Pretensado y Servicios Auxiliares, S.L. € 1 957 000, VSL-Spam, S.A. € 384 000. However, the CNC Council decided that DSC, which would have been jointly and severally liable for a fine together with its parent company DSI INTERNATlONAL, S.A.R.L., benefitted from immunity from the fine in accordance with the provisions of Article 65.1.a) of the Competition Act, as it provided evidence that enabled the CNC to carry out the inspections in this case.

See case proceedings (in Spanish)

• Romania: The Competition Council decides to impose Fines on the National Association of Judicial ExecutorsIn September 2012, the Romanian Competition Council (RCC) found that the National Association of Judicial Executors (the association) had infringed Article 101 TFEU and Article 5 of the national competition law.

In its decision, the RCC concluded that the decision of the association by means of which access to the market was limited and the members’ conduct was coordinated with respect to the tariffs charged constitutes a decision of an association of undertakings in the meaning of Article 5 (1) of the Competition Law and Article 101 (1) TFEU and infringes both provisions.

In 2001, the 317 judicial executors in Romania established the National Association of Judicial Executors. This association, founded pursuant to the applicable law, functions as a professional organization with legal personality which regroups all judiciary executors performing activities in Romania. In line with the consistent application of EU Law, the representatives of liberal professions which are self-employed are considered as undertakings and therefore, they must comply with the competition rules.

The investigation procedure started in 2011 following the RCC’s analysis of the information which indicated the existence of anticompetitive practices, such as: limited access to the provision of services offered by the judicial executors by setting an excessive entrance fee to access the profession, applied in a discriminatory manner; enforcement expenses (i.e. execution costs) not foreseen by the legal framework; as well as a discriminatory regime which favoured the existing members of the profession. If no pressure from potential competitors occurs on the market, competition is distorted, the quality of services may diminish and the development of the profession could be affected.

After the investigation was launched, inspections were conducted simultaneously at the premises of the National Union of Judicial Executors and the Chamber of the Judicial Executors acting within the jurisdiction of the Bucharest Court of Appeal.

During the investigation, the RCC found that the rules concerning membership of the association were in fact affecting market entry and the rules concerning the exclusion from such an organization had a restrictive effect on competition when their application resulted in the arbitrary exclusion of potential or new members.

In addition to finding the infringement, RCC imposed fines in amount of € 131 798 on the association and required the association to remove the costs of execution from the list of tariffs.

See press release (in English)

• Belgium: Fine imposed for Abuse of Dominant Position in Export and Distribution of French Magazines in BelgiumOn 30 July 2012, the Competition Council (the Council) sanctioned the French company Presstalis (Presstalis) for having abused its dominant position between 2002 and 2004 through its system of rebates. The system, which was called BSC (the BSC system), rewarded the French publishers who chose to work with Presstalis for the whole of their export of magazines destined jointly for the Belgian, the Swiss and the Canadian markets (BSC is the acronym for Belgium, Switzerland and Canada). The BSC system and the commercial conditions for export applied by Presstalis were the subject of several complaints made to the European Commission and the Belgian and French competition authorities. The complaints

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originated from, amongst others, Belgian press distributors. The European Commission and the French competition authority did not take position on the substance of such complaints.

The decision of the Competition Council establishes that Presstalis, who is also one of the biggest press distributors in France, has a dominant position on the world market for the export of French press (magazines) sold per copy, the rest of the market being shared between Export Press, a small competitor of Presstalis, and French publishers which organized the export of their own publication themselves. Belgium is an important market, representing about a third of the export of French magazines sold by copy. French magazines also represent a substantial part of magazines sold on the Belgian market.

According to the Council, a system in which rebates are given as a counterpart of the obligation of the clients (in this case, the publishers) to award the total or the majority of their publications to a dominant company may be considered abusive. This type of rebates may have fidelity effects for clients, in this case the French publishers. Specifically, under the BSC system of rebates applied by Presstalis, a French publisher who would have decided not to work with Presstalis for the whole of its export of magazines destined for Belgium, would have lost the benefit of the rebate for its export sales not only on the Belgian market, but also on the Swiss and the Canadian market.

The Council analysed henceforth the BSC system as a conditional, retroactive rebate scheme that raised exclusionary concerns in view of the protection of free competition at two levels.

First, the restriction of competition was found to exist at the level of the choice of the clients of Presstalis (publishers): the BSC system encouraged them to work only with Presstalis for the three most important export markets for French magazines. The result was that the publishers were not inclined to either export themselves and then to work directly with a local distributor, or to work with (one of the few) competitors of Presstalis on the export market.

Secondly, the decision emphasized the effects of the BSC system on the Belgian market for the distribution of French magazines sold per copy. The Council found that it was difficult for Belgian distributors, such as the complainant in this case, to offer commercial conditions to the publishers that matched the conditions offered by Presstalis under the BSC rebate scheme, whilst being economically viable for the distributors: it indeed appeared that the unit price that a Belgian distributor needed to offer to French publishers in order to be competitive with Presstalis, dropped to a level which was lower that the discounted price charged by Presstalis under the BSC rebate scheme. Moreover, the Council found that the BSC system was considered to have the effect of reinforcing the position of AMP, the biggest distributor in Belgium, with whom Presstalis had a privileged relationship. In practice, the distribution of the French magazines tended to be done quasi-automatically by AMP in Belgium once a publisher had entered into an agreement with Presstalis which awarded him the benefit of the BSC system.

The Council concluded that the BSC rebate scheme is to be considered as a restrictive practice both from the perspective of the Belgian Act on the protection of economic competition (Article 3) as well as under Article 102 TFEU. In its decision, the Council imposed a fine of € 245 530.

For the calculation of the fine, the Council took into consideration the duration of the investigation and the fact that the system was abolished in 2004. The amount of the fine is based on the commissions that Presstalis received for the sale of French magazines on the Belgian market.

This decision has been appealed by Presstalis. The appeal is pending before the Court of Appeal of Brussels.

See decision of 30 August 2012 (in Dutch)

• Bulgaria: The Commission on Protection of Competition adopts Commitment Decision concerning Wholesale Fuel MarketOn 26 July 2012, the Commission on Protection of Competition (CPC) adopted a commitment decision in the case of Lukoil Bulgaria, Nafteks Petrol and Rompetrol Bulgaria and OMV Bulgaria. The CPC found that the proposed commitments are appropriate to address the concerns identified in the statement of

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objections according to which the parties participated in a concerted practice to fix prices in breach of Article 15 of the Law on Protection of Competition (LPC) and Article 101 TFEU. Those commitments are considered to be necessary and sufficient taking into account the characteristics of the market, its trends and its functioning.

In Bulgaria, the companies active on the wholesale fuel market are Lukoil Bulgaria - the only distributor of the quantities produced by the national refinery - and a few significant importers, three of which are the other parties in the case. Lukoil Bulgaria has a market share of around 60% on the gasoline wholesale market and around 70% on the diesel wholesale market.

The competition concerns outlined by the CPC in its statement of objections comprised the following: the practice of publicly announcing wholesale prices, and the practice of using the prices published by Lukoil Bulgaria (a pricing leader on the wholesale market for gasoline and diesel) as basic price in wholesale transactions with other market players, i.e. price without taxes and discounts. The CPC considered that both practices could artificially increase transparency and facilitate collusion on a market already prone to this, and thereby contravene Article 15 of the LPC and Article 101 TFEU.

The commitments proposed by the parties to address these concerns and made binding by the CPC’s decision are as follows:

Lukoil Bulgaria, Nafteks Petrol and Rompetrol Bulgaria who announced prices publicly undertake to put an end to the practice. They commit to set up a system available on their web pages with access restricted to their wholesale customers in order to keep them informed of the basic prices applicable to their current transactions. Occasional customers, i.e. customers without supply contracts, may receive information on an especially dedicated telephone line.Lukoil Bulgaria commits to inform its customers that they have to put an end to any practice to refer to its prices as they will cease to be published. OMV Bulgaria commits to establish a (specific) mechanism to determine a “standard OMV price” taking into account the acquisition price of the fuels subsequently sold by it as a supplier. The undertaking also commits to remove from its wholesale contracts any reference to the price published by Lukoil Bulgaria.

The commitments will enter into force from the date of notification of the decision to the parties.

See decision of 26 July 2012 (in Bulgarian)

• France: First Commitment Decision related to Internet Neutrality issued by the Autorité de la concurrenceOn 20 September 2012, the Autorité de la concurrence (the Autorité) issued for the first time a commitment decision concerning competition concerns relating to certain restrictions allegedly implemented by France Telecom, the vertically integrated incumbent telecommunication operator and transit operator (operating under the commercial name “Open Transit”), vis-à-vis Cogent, a competing transit operator. The alleged restrictions concerned capacity of interconnection and access to the end-users connected to France Telecom’s network.

Three types of stakeholders operate in the Internet connectivity market:

- Internet service providers (ISPs) such as Orange (part of France Telecom), which provide internet access services to end-users;- content providers; and- transit operators, such as Cogent or France Telecom.

The Internet connectivity market comprises exchanges of Internet traffic between ISPs (including France Telecom/Orange) and between ISPs and content providers and transit operators (such as Cogent). In general, ISPs and content providers purchase transit services from one or more transit operators in order to connect to the Internet and deliver traffic to the Internet users. However, ISPs are also able to connect with each other directly, without a transit operator, via “peering” agreements that consist in traffic exchanges without payments. These peering agreements are commonly free of charge, but some peering

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agreements may involve remuneration if the traffic exchanged between the operators is not balanced.

In the case at stake, Cogent claimed, inter alia, that France Telecom compromised the sustainability of the peering system by requesting payment for opening up additional technical capacity for access to the subscribers of its ISP subsidiary, Orange.

Pursuant to France Telecom’s peering policy, which is also adopted by most other transit operators in France, and was specified in its contract with Cogent, a fee may be charged where the requested traffic capacity exceeds a determined traffic ratio.

In consideration of the high asymmetry of traffic exchanges between France Telecom and Cogent, the Autorité, in its decision, did not express concerns on the payment required by France Telecom, based on the elements known in the case at hand. However, the Autorité was concerned by the lack of transparency in the relationship between Orange as an ISP and France Telecom (“Open Transit”) as a transit operator, due to the absence of formalization of their internal exchanges. More transparency in their business relations could help to detect possible abusive margin squeeze or anticompetitive discriminatory practices in the future.

In view of the mentioned concern the Autorité obtained from France Telecom the following commitments, to:

i) define a formal internal protocol between Orange and its transit division Open Transit specifying the conditions for the provision of Internet connectivity services France, and

ii) to implement a monitoring system of the internal protocol.

Following the market test which proved positive, these commitments were made binding by the Autorité for a period of two years. The Autorité will remain vigilant during this period.

See press release (in French and English

• Germany: The Bundeskartellamt imposes Fines for Vertical Resale Price Maintenance in Tools Selective Distribution SystemOn 20 August 2012, the Bundeskartellamt (BKartA) imposed a fine totalling € 8 200 000 on TTS Tooltechnic Systems Deutschland GmbH (Tooltechnic).

This case concerns high quality tools for carpenters, painters, car sprayers and demanding private clients, distributed under the trademark “Festool”. Tooltechnic operates a selective distribution system and sells “Festool” tools only to, and through, specialized retailers.

After receiving several complaints from specialist retailers, the BKartA started its investigation. It appeared that the retailers had to strictly observe the so-called “non-binding price recommendations” issued by Tooltechnic. Indeed, Tooltechnic ensured the implementation of its vertical resale price maintenance through threats made against retailers who deviated from the recommended price. Such threats included the implementation of less advantageous supply conditions and the suspension of contracts.

The infringement of competition law pursuant to Sect. 1 ARC and Article 101 TFEU was established in a series of hearings of the retailers involved. Representatives of the retailers were questioned as witnesses and were therefore under an obligation to provide the BKartA with correct and complete answers.

Tooltechnic has agreed to have the proceedings terminated by way of settlement. The Bundeskartellamt´s decision has become final.

See press release (in English)

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• Germany: The Bundeskartellamt imposes first Fine in Sweets CaseOn 1 August 2012, the Bundeskartellamt (BKartA) has imposed fines totalling € 2 400 000 on the confectionery manufacturer Haribo GmbH & Co KG (Haribo) for having infringed Article 101 TFEU and the corresponding provision in German law (sect. 1 ARC).

The fine was imposed because of an anti-competitive exchange of information. The investigation showed that the sales managers of several confectionery manufacturers, including Haribo, met on regular occasions, during the so called “four party talks”, to exchange information on the state of their negotiations with various major retailers.

The undertakings involved in the information exchange gained knowledge about their competitors’ state of negotiations with various retailers, in particular about the rebate requested by the retailers, as well as about the actual or intended reaction of the manufacturers concerned with such demands. Usually, this type of information is treated by undertakings with the strictest confidence. The information exchanges were found to have influenced the undertakings´ own market conduct during the negotiations.

The BKartA’s proceedings were triggered by a leniency application from Mars GmbH. According to the BkartA’s leniency programme no fine was imposed against this applicant as it benefitted from immunity.

The proceedings were ended by way of settlement. When calculating the fine, the BKartA took into account the fact that Haribo fully cooperated with the authority to clarify the facts of the case.

Investigations are still on-going against two other branded confectionary producers.

See press release in English

• Italy: The Italian Competition Authority closes Case against Telecom Italia with CommitmentsOn 19 June 2012, the Italian Competition Authority (ICA) decided to accept the commitments offered by Telecom Italia S.p.A. (Telecom Italia) in an abuse of dominant position case in which Telecom Italia allegedly hampered the participation of competitors in tenders organised for the assignment of telephone services. The ICA found that the commitments offered by Telecom Italia meet its competition concerns as they provide access to the set of information needed by its competitors (the OLOs, other licensed operators) in order to be able to submit competitive bids in tenders issued by major public and private clients as well as the wholesale maintenance services to enhance their abilities to submit such bids. On this basis, the ICA closed the investigation without finding an infringement. Telecom Italia shall inform the ICA within three months after the issuance of the decision of the steps taken to comply with the commitments.

On 13 May 2010, following a complaint by one of Telecom Italia’s competitors, the ICA initiated proceedings against Telecom Italia, which owns the public switch transmission network (PSTN) in Italy and therefore provides the OLOs with wholesale telecommunications services, in order to ascertain whether there was a violation of Article 102 TFEU. The object of the investigation was to determine whether Telecom Italia had limited its competitors’ ability to participate and make competitive bids in tenders initiated by large private and public customers, by refusing to disclose to its competitors crucial technical information on network configuration and planned network developments and/or to provide them with adequate wholesale economic/technical offers. The investigation was also intended to determine whether Telecom Italia, as a vertically integrated operator, had provided such economic/technical information to its retail divisions, thus discriminating between competitors and its own divisions.

On 30 June and 26 July 2011, Telecom Italia submitted commitments in accordance with Article 14-ter of law n. 287/90. Following the market test, some observations and modifications were made to Telecom Italia’s original commitments which were published on the ICA website for a second market test.

The commitments accepted by the ICA are as follows:

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Telecom Italia has committed to provide the OLOs with information regarding:

i) the costs and feasibility of a specific access solution to be implemented in order to match customers’ requests;

ii) a complete set of details about access configuration used by Telecom Italia as former provider;

iii) the timing of the re-opening of local exchanges in which the provision of wholesale access services has been previously interrupted due to a lack of capacity.

Telecom Italia also undertakes to offer new wholesale maintenance services (so-called ‘assurance services’), to enhance the OLO’s ability to prepare competitive offers, and a new integrated assurance solution’ in which network maintenance services will be granted for any failure occurred either on Telecom Italia’s or the OLO’s access network. This ‘end-to-end’ solution aims at reducing the cost of coordination between different operators in detecting and repairing network failures.

Telecom Italia will also publish the list of specialized firms to which it may outsource maintenance services, so that the OLOs can organize their own assurance services with the same firm used by Telecom Italia and obtain the same efficiency gains of the ‘end-to-end’ solution.

Finally, Telecom Italia will offer a new Service Level Agreement (SLA) for assurance services, in addition to existing regulated SLA, specifically dedicated to tender procedure arranged by large customers.

The commitments offered by Telecom Italia will be in force as long as the company holds a dominant position in the wholesale access markets for voice and broadband services.

Telecom Italia has undertaken to provide due information about the implementation of the remedies accepted by the ICA within the term of 90 days form the final decision.

See ICA decision and press release (in English)

• Italy: The Italian Competition Authority opens Proceedings against Telecom, Vodafone and Wind for alleged restrictive AgreementOn 12 September 2012, the Italian Competition Authority (ICA), launched an investigation to determine whether Telecom Italia SpA (Telecom), Vodafone Omnitel NV (Vodafone) and Wind Telecomunicazioni SpA (Wind) – the most important operators in the Italian mobile telecommunication market – reached an agreement (or were involved in a concerted practice) that has as its object or effect the restriction of competition through the exclusion of Bip Mobile Srl (Bip Mobile) - a virtual mobile network operator - from access to distribution channels.

On 7 August 2012, Bip Mobile addressed a complaint to the ICA concerning the behaviour of the dealers with whom it concluded contracts for the distribution of its products. Bip Mobile complains that the dealers cancelled most of these contracts because of the pressure exerted by the biggest market incumbents. Indeed Bip Mobile complained that Telecom, Wind and Vodafone threatened to cancel their contracts with the dealers if these continued to distribute the new undertaking’s products.

Bip Mobile is a new operator that recently decided to enter the Italian mobile phone market with the aim of becoming the first virtual “low cost” operator. For Bip Mobile, access to multi-brand distribution is the only effective way to reach consumers.

Telecom, Vodafone and Wind together share more than 90% of the whole mobile phone market and the alleged agreement between them could have the effect of excluding from the market a potentially very competitive operator.

If confirmed by the investigation, the alleged violation of Article 101 TFEU would substantially reduce

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competition within the national market. Given the nature of the behaviour and the size of the companies involved, the concerted practices may constitute a significant restriction of competition in Italy and impede other European companies from entering the Italian market, thus affecting trade at a European level.

The proceedings are scheduled to be finalised by 30 September 2013.

See ICA decision and press release (in Italian)

• Slovenia: Resale Price Maintenance in Electricity MarketOn 14 August 2012, the Competition Protection Office of the Republic of Slovenia (CPO) issued a decision finding that Slovenia’s second largest electricity producer GEN Energija d.o.o. (GEN Energija) and the electricity retailer GEN – I d.o.o. (GEN – I) infringed Article 6 of the Slovenian Competition Protection Act and Article 101 TFEU, in the period from January 2007 till April 2010.

The CPO found that the above mentioned undertakings engaged in an umbrella electricity purchase agreement containing explicit resale price maintenance (RPM) clauses concerning the resale prices of electricity which Gen – I had to charge to its private and commercial customers. According to the agreement the energy producer GEN Energija unilaterally controlled the pricing policy of its retailer GEN – I through several provisions; amongst others, the margin to be charged to the end costumers was set in the agreement and was linked to the wholesale price. The minimum price level at which the retailer could sell electricity to its final customers was also fixed in the agreement. Finally, the agreement foresaw a special authorisation procedure if the retailer wanted to sell electricity below the set price - a specified form was to be filled and a request sent to the producer, and it was only if this approval was forthcoming that GEN – I could lower the retail price.

The relevant provisions of the agreement were removed and annulled by the contracting parties during the administrative procedure in front of the CPO.

The level of fines will be set in a minor offence procedure conducted separately from the above-mentioned administrative procedure.

• Spain: The Comisión Nacional de la Competencia fines Sociedad General de Autores y Editores (SGAE) for Abuse of Dominant PositionIn its Resolution of 3 July 2012, the Council of the Comisión Nacional de la Competencia (CNC) decided that SGAE (IP rights collecting society) had abused its dominant position in relation to authorisations for the public broadcast of musical works at wedding, baptism and communion dances or at dances which guests attended by personal invitation between 2002 and 2012, thereby infringing Article 2 of the Spanish Competition Act 15/2007 of 3 July 2007 and Article 102 TFEU. The CNC Council therefore resolved to fine SGAE € 1 766 744.

On 25 January 2010, the Investigations Division of the CNC received a written complaint against SGAE from three restaurants in relation to an alleged abuse of a dominant position with regard to the fees requested by SGAE for wedding dances. Following a confidential probe, on 29 November 2010 the Investigations Division opened formal proceedings against SGAE for possible anti-competitive practices prohibited by Article 2 of the Spanish Competition Act 15/2007 of 3rd July 2007 and Article 102 TFEU. These practices were said to consist of applying abusive fees in relation to authorisations for the public broadcast of musical works at wedding, baptism and communion dances or at dances which guests attended by personal invitation. In the market in question, the complainants own banquet venues and in order to play music, they must obtain authorisation from the composers of the musical works and pay a fee. SGAE is the only collecting society in Spain with the authority to manage such authorisations and remuneration.

The CNC Council found that that the practices examined constituted a complex infringement comprising

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two types of conduct. The infringement involved the abuse of SGAE’s dominant position since 2002 through the discriminatory and non-transparent application of discounts on the so-called “general fee” and, since 2009, through the introduction of a so-called “substitute fee”, which was found to be unfair and discriminatory. With respect to the application of the general fee to the different dance/wedding event market operators who compete with each other (restaurateurs in this industry as well as hotels with function rooms equipped for such events), the CNC Council considered it proven that SGAE, protected by its dominant position and employing a policy of opacity in the negotiations it is required to conduct under statute, applied dissimilar conditions to equivalent transactions in dealings with the different operators. Thus, whilst the members of certain associations were entitled to a 20% discount on the general fee by complying with certain conditions, individual businesses were excluded from those discounts even when they fulfilled the conditions that would give them access to such reductions, as they were not even aware of this possibility.

According to the CNC Council, competition rules do not prevent dominant operators from applying different treatment to their customers or suppliers where there is an objective justification for doing so. There is no obstacle to having arrangements in place that envisage different discounts provided that they are based on objective criteria that are also transparent and known to the parties beforehand.

The CNC Council regarded the introduction in 2009 by SGAE of a substitute fee for businesses that had not filed an advance notification (in all of its contracts, SGAE requires the other party to give advance notice of the number and capacity of events to be held the following month, and links the discounts applied to this advance notification) to be an unfair and unjustified imposition of conditions on SGAE’s customers, as it generated a significant increase in the level of the fees, it was not related to the actual use of SGAE repertory, and was disproportionate in relation to the discounts applied in SGAE’s contracts for this advance notification.

See further information on the proceedings (in Spanish)

• United Kingdom: The Office of Fair Trading issues Statement of Objections against Booking.com, Expedia and Intercontinental Hotels GroupOn 31 July 2012, the Office of Fair Trading (OFT) issued a Statement of Objections alleging that Booking.com B.V. (Booking.com), Expedia Inc (Expedia) and InterContinental Hotels Group plc (IHG) have infringed UK and EU competition law in relation to the online supply of room only hotel accommodation by online travel agents.

The Statement of Objections alleges that Booking.com and Expedia each entered into separate arrangements with IHG which restricted the online travel agent’s ability to discount the price of room only hotel accommodation.

The OFT considers that the alleged infringements are, by their nature, anti-competitive in that they could limit price competition between online travel agents and increase barriers to entry and expansion for online travel agents that may seek to gain market share by offering discounts to consumers.

The formal investigation was initiated in September 2010, following a complaint submitted by a small online travel agent, alleging that it was being prevented by various hotel chains from offering discounted sale prices for room only hotel accommodation.

The OFT limited the scope of its investigation to a small number of major companies, with a view to achieving a swift and effective outcome. However, the investigation is likely to have wider implications as the alleged practices are potentially widespread in the industry.

The parties now have the opportunity to make written and oral representations in response to the case set out by the OFT. Such representations will be considered by the OFT before any final decision is made.

See further

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• Germany: The Higher Regional Court Düsseldorf denies third-party Access to Leniency Applications in Court ProceedingsOn 22 August 2012, the Higher Regional Court Düsseldorf issued a decision rejecting a third-party claim for access to leniency applications made to the Bundeskartellamt (BKartA).

The case which is currently pending before the Higher Regional Court, concerns an appeal against the decision by the BKartA of 21 December 2009 to fine three coffee roasters a total of approx. € 160 000 000 for operating a price-fixing cartel (See ECN Brief 2/2010). The decision under appeal was based on applications for leniency made by cartel members in accordance with the BKartA’s Leniency Programme.

In the course of the court proceedings, several customers of the fined coffee roasters claimed access to the court’s files, including the leniency applications, under the provisions of the German Code of Criminal Procedure dealing with access to file for injured parties.

The Higher Regional Court rejected the claims for access, holding that the leniency applicants’ trust in the confidential treatment of their applications and documents submitted by them prevails over the information interest of the parties requesting access to the files. In the court’s view, this legitimate interest of customers who have suffered damages from a cartel can generally be adequately satisfied by the disclosure of the BKartA’s decisions imposing fines.

Regarding the BKartA’s own procedural files, the Local Court Bonn had decided already on 18 January 2012 that injured parties do not have a right to access a leniency application contained in such. The decision of the Local Court followed the ECJ judgment in Pfleiderer (Judgment of 14 June 2011, C-360/09), according to which granting access to leniency applications to injured parties is not prohibited by EU law in principle, but subject to a balancing of the interests of the injured party on the one hand and the interest of effective cartel prosecution on the other hand.

See press release (in English)

• Portugal: The Lisbon Court of Appeal upholds First Instance Decision on Competition Authority’s Pharmaceutical Companies CaseOn 10 July 2012, the Lisbon Court of Appeal (2nd instance Court) rejected the appeal lodged by Baxter– Médico Farmacêutica, Lda., and Glintt – Business Solutions, Lda., thereby confirming the decision of the Lisbon Commercial Court of 12 September 2011 (1st instance Court), which had partially upheld the decision of the Portuguese Competition Authority (see ECN Brief 04/2011).

In its decision, the PCA had concluded that the two undertakings were involved in a retail price maintenance (RPM) agreement regarding equipment used in hospital pharmacies (automated medicine dispenser), which was found to breach Articles 101 TFEU and 4 of the Portuguese Competition Act.

The Lisbon Commercial Court, albeit confirming that the agreement was anticompetitive, considered that the PCA had not sufficiently proven that the agreement affected trade between Member States, and had thus annulled the decision regarding the breach of Article 101 TFEU.

The Lisbon Court of Appeal has fully confirmed the decision of the Lisbon Commercial Court, including the amount of the fines.

Further information: http://www.concorrencia.pt

COURTS

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• Finland: Report on Provision of Pharmaceutical Products publishedThe Finnish Competition Authority (FCA) published on 28 August 2012 an extensive report on the provision of pharmaceutical products in Finland, in which several amendments to the current regulation on the Finnish pharmacy system and provision of pharmaceutical products are proposed.

The report e.g. recommends the removal of needs testing in connection with the establishment of pharmacies and of the restrictions on the number of pharmacies in Finland. Greater freedom of establishment of pharmacies is proposed so that the company form of operating a pharmacy could also be freely chosen in the future.

Another proposal is to amend the system for pricing of pharmaceutical products: the price conforming to the pharmacy mark-up scheme would serve as maximum price in the future, and pharmacies would be free to determine the price of a product below that tariff. Price competition would also be enhanced by including parallel imports products in the reference price system (which serve as basis for the reimbursement of medicines) even when the patent of the original drug is effective. For medicinal products which can be purchased without prescription, lower prices could be promoted by allowing the sale of those products in other locations than only pharmacies, if deemed safe.

These amendments proposed by the FCA aim at a major improvement in the effectiveness and productivity of the provision of pharmaceutical products and lowering of the costs imposed on the society by the distribution thereof. It is envisaged that consumers of pharmaceutical products would benefit from reforms through lower prices and improved availability.

This report has been adopted in the framework of the advocacy activities of the FCA. The results of the report have been taken into account by the Government in its programme for promoting healthy competition. The programme aims to increase competition in the domestic market and comprises several measures targeted to different sectors, one example being pharmaceutical markets. (See press release on the programme (in English)).

A copy of the report (in Finnish) is available on the FCA website.

• France: The Autorité de la concurrence calls for progressive Lifting of Restrictions on Distribution of visible Spare PartsFollowing the launch of its sector inquiry into the automotive aftermarkets in 2011 (see ECN Brief 04/2011) and an open and transparent public consultation on its provisional findings (see ECN Brief 03/2012), the Autorité issued its final Opinion on 8 October 2012.

Based on a thorough examination of the prevailing market conditions and the replies of more than 50 firms and organizations (manufacturers, repairers, consumer associations, etc.), the Autorité has adopted the conclusions of its sector inquiry with respect to the five main concerns identified during its investigation, in order to stimulate price competition and innovation in the supply of maintenance and repair services:

- The Autorité’s main recommendation regards competition on visible spare parts (hood, fenders, rear-view mirrors, lights, etc.) which are currently protected under IP rights providing original equipment manufacturers (“OEMs”), i.e. car manufacturers and, where applicable, licensed equipment manufacturers, with a monopoly on the construction and distribution of the said parts. Manufacturers hold a genuine, legal monopoly over more than 70% of the sale of parts, and a duopoly with the equipment manufacturers for the remaining 30%. Repairers are thus forced to obtain a large part of the supplies they need from manufacturers’ dealer networks. In order to stimulate competition, the Autorité suggests the implementation of a so-called “repair clause”, which is already in force de jure or de facto in 12 European countries. It would increase retail competition, to the benefit inter alia of

LEGISLATION & POLICY

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independent repairers, particularly auto body shops, and pave the way for an EU-wide market of spare parts, as national manufacturers are currently hindered from producing spare parts for other Member States in light of regulatory discrepancies.

The Autorité acknowledges the need to provide for accompanying measures to allow the automotive industry to adjust to a fully liberalized market for spare parts and recommends opening it progressively by family of products, within four to five years.

- The Autorité also put forward a recommendation to lift hurdles on access to relevant and comprehensive technical information, which impact both independent repairers and specialized intermediaries (publishers of technical information and manufacturers of diagnostic tools). It suggested setting up a monitoring mechanism, activated upon complaint, which may lead to the imposition of sanctions if the technical information is not made effectively available to repairers or intermediaries. Furthermore, it is suggested that the ongoing standardization of such technical information, under the aegis of the European Committee for Standardization (ISO 18541), should include within its scope the concrete transfer methods as well as the content to be provided, and associate specialized intermediaries in its drafting, which in fact are the main purveyors of technical information to independent repairers.

- On the last three topics of possible concerns, the Autorité made general recommendations to stakeholders, without prejudice to a case-by-case assessment in enforcement proceedings under Article 101 TFEU and Regulation 461/2010.

The first general recommendation of the Autorité concerns contractual restrictions on automotive equipment manufacturer’s general freedom to sell spare parts to authorized and/or independent repairers. Such restrictions include “tooling contracts” (whereby the equipment manufacturer must inter alia request the car manufacturer’s consent before distributing spare parts produced with the concerned tools) and clauses giving priority to car manufacturers’ requirements. The assessment is carried out with regard to Article 5 of Regulation 461/2010 and should determine whether there is a de facto or de jure restriction on the reselling of spare parts, as well possible justifications, especially in light of the effective contribution of the car manufacturer in terms of financing or product development (see paragraph 23 of the accompanying Guidelines to Regulation 461/2010 – hereafter the Guidelines). The aim is to counteract the present low availability of spare parts for newer models within the independent distribution network.

The Autorité also recalls its main criteria for assessing car manufacturers’ warranty contracts under Article 101 TFEU and point 69 of the Guidelines when they make the benefit of the warranty conditional on the performance of all maintenance work (including of the type not falling under the warranty) being carried out within the manufacturer’s network and/or the exclusive use of the manufacturer’s original parts and highlights possible restrictive effects on competition in cases where the burden of proving that the vehicle’s defect is not due to maintenance work being performed outside of the authorized network is shifted onto the consumer.

Last, the Autorité has found that suppliers’ recommended retail prices are actually applied in nearly 90% of cases by independent retailers. While such recommendations may be to some extent necessary in a market with multiple references, often sold in very small numbers, strict adherence to them adversely affects competition by aligning retail prices.

See press release (in French and English)

• Greece: The Hellenic Competition Commission exercises its Advocacy Powers and issues formal Opinions on Liberal Professions and other regulatory RestrictionsFree and undistorted competition is a key remedy for the Greek economy, troubled for many decades by the challenges which can arise in a small market economy (considerable barriers to entry, oligopolistic structures with high transparency, a collectivist business culture, strong industrial families, etc.) and a tradition of regulatory state intervention. In that context, the Hellenic Competition Commission (HCC), while realigning its strategic objectives, focused its advocacy efforts on two crucial sectors of the economy, the liberal professions and market regulation restrictions. A large number of opinions were rendered by

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the HCC in the course of 2012.

A) Liberal professions

Following the adoption of the Law 3919/2011 on the liberalisation of regulated professions which abolished the requirement of prior administrative authorisation (replacing it with a notification obligation coupled with a stand-still period of 3 months), as well as a number of restrictions with regard to access to, and exercise of, professions (including regulated minimum fees, geographic restrictions in the exercise of a profession, numerus clausus restrictions, second-establishment restrictions, etc.), the HCC was called to examine whether maintaining and/or re-instating limited prior authorisation requirements and/or certain restrictions for specific professions was necessary and proportional for the attainment of overriding policy objectives.

This prompted the most far-reaching intervention of the HCC in the area of liberal professions (and the most far-reaching intervention ever in terms of regulatory obstacles to competition). At the beginning of 2011 the HCC had already examined the impact of specific provisions of Law 3919/2011 on the liberalization of some key professions, such as lawyers, notaries, chartered accountants and engineers proposing further revisions of the respective regulatory regimes with the aim of further fostering competition in those economic activities. Applying the key methodology of the OECD Competition Toolkit and/or similar competition impact assessment techniques, the HCC reviewed laws and regulations affecting more than 64 regulated professions, ultimately issuing from January 2012 to September 2012, 11 formal Opinions. The exercise focused on i) mapping administrative authorization proceedings including any type of examination or certification requirements that may result in quantitative barriers to entry, ii) identifying restrictions resulting from the organization of professions especially through the granting of exclusive rights to associations of professionals and, iii) evaluating restrictions to access and exercise of professions. Depending on the results of such an assessment for each profession or economic activity under review, the HCC proposed:

• The abolition of prior administrative authorization where public interest reasons did not justify the maintenance of such a system (e.g. regarding the professions of actuaries, accountants and tax consultants, teachers in private or foreign language schools, home instructors or tourist guides). The opposite was the case e.g. for licensed professions related to public security due to public order and security reasons, conservators of antiquities and works of art and salesmen of antiquities due to the need to protect cultural heritage, butchers and operators of birds forage plants due to the need to protect public health, licensed economic activities related to education (establishment and operation of private primary and secondary schools, tutoring and language center, private vocational training institute, post secondary educational centers, certification training centers and liberal studies workshops) due to the need to protect education and vocational education, licensed professions and economic activities in the petroleum/gas sector regarding dilution, transport, supply, bottling and commerce as well as the operation of companies for the supply of gas due to public safety reasons and the need to protect the environment.

• The simplification of requirements regarding periodic certification (e.g. accountants and tax consultants), examination systems for access to the profession (in some cases with a view to ensuring sufficient state oversight and thus avoiding risks of quantitative barriers to entry e.g. regarding the profession of actuaries or sworn-in appraisers), conditions regarding additional licences for the provision of specific services by legal persons (e.g. accountant and tax consultant services) or requirements of prior registration with the relevant registry (e.g. infrastructures relating to health).

• The re-organisation of certain professions and the abolition of exclusive rights in the exercise of such professions (amounting to a numerus clausus restriction in some cases) granted to specific professional organizations with the aim of broadening the scope and number of professionals accepted as members of such associations so as to include natural persons and legal entities of similar qualifications/certifications (based on transparent and objective criteria), or the parallel accreditation of similar professional bodies (e.g. sworn-in appraisers).

• The abolition of additional restrictions to access to, and exercise of, the relevant professions such as i) numerus clausus provisions (e.g. sworn-in appraisers, educational services), ii) geographical restrictions (e.g. salesmen of antiquities), iii) regulated fixed fees (e.g. sworn-in appraisers), iv) nationality and freedom of establishment restrictions (e.g. educational services, licensed professions and infrastructures

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relating to health, tobacco salesmen and sworn-in appraisers), v) maximum capacity restrictions relating e.g. to health infrastructures, vi) provisions establishing the incompatibility of different activities e.g. between the profession of the salesman of antiquities and the capacity of collector of objects of art.

B) Other opinions and advocacy efforts

Following the issuance of an Opinion on the abrogation of regulatory provisions regarding the selling of infant milk on November 2011 (see ECN Brief 5/2011), the HCC reviewed, in July 2012, the “Product and Market Regulation Code” which regulates exhaustively the relationships along the supply chain. With a view to assisting the development of alternative, less restrictive policies tο improve the business environment, the HCC proposed the simplification of provisions regulating interaction between production, supply, distribution and retail companies as well as the abrogation of provisions imposing minimum prices, regulating transport fees of both persons and goods and establishing disproportionate and ineffective price monitoring mechanisms.

Already in March 2012, the HCC had proposed the abrogation of article 9 of the Ministerial Decision 7/2009 imposing on companies, based on turnover criteria, the obligation to notify to the Ministry of Development their respective wholesale price lists and any change thereof.

See further (in Greek): http://www.epant.gr/gnomodotiseis.php?Lang=gr&id=31

• United Kingdom: New Guidance on Penalties for breaching Competition LawOn 10 September 2012, the Office of Fair Trading (OFT) published new guidance on how it will set penalties for breaches of competition law. The guidance will allow the OFT to continue to set substantial penalties to deter anti-competitive activity while ensuring that penalties are proportionate in the specific circumstances of individual cases.

As required by law, the guidance has been approved by the Secretary of State. It entered into force when published.

The OFT decided to update its guidance in the light of its experience of applying penalties and recent judgments of the Competition Appeal Tribunal and the Court of Appeal. In this framework, the OFT has carried out a wide-ranging public consultation, involving lawyers, businesses and other interested parties, and drawing on international experience.

The new guidance sees the maximum starting point for penalty calculations increase to 30% of relevant turnover, from the previous 10%. This change gives the OFT the ability to set penalties which better reflect the gravity of different types of infringements, in particular for the most serious breaches of competition law, such as hardcore cartel activity and serious abuses of a dominant position. It brings the OFT in line with the approach of the European Commission and many European competition authorities.

The guidance also introduces a new step in the calculation of penalties. The OFT will consider specifically whether a penalty is proportionate ‘in the round’. Previously, proportionality was considered when applying the other steps of the calculation. This change is intended to ensure that, overall, penalties are not disproportionate or excessive in the particular circumstances of the case.

Other changes to the guidance clarify or provide additional transparency about how penalties are calculated, including:

• Clarification that the turnover used for calculating the penalty starting point will be based on the last business year before the infringement ended.

• A new formal step at which leniency and settlement discounts are applied.

• Additional detail on the OFT’s approach to awarding discounts for companies taking appropriate steps to comply with competition law. For example, in line with the suite of materials the OFT has published to assist businesses’ efforts to comply with competition law, the guidance now notes that evidence of appropriate compliance activities both before and after an infringement could in principle warrant a modest reduction in penalty, depending on the facts of the case.

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• Further detail on the OFT’s approach to recidivism as an aggravating factor, providing that where an undertaking continues or repeats the same or a similar infringement up to 15 years after a UK competition authority or the European Commission has made an infringement decision finding a UK impact, the fine may be increased by up to 100% for each prior infringement decision.

Link to new Guidance

• Bulgaria: The Commission on Protection of Competition adopts Report on Sunflower Seeds and Sunflower Oil Sector InquiryOn 22 June 2012, the Commission on Protection of Competition (CPC) adopted a decision establishing the findings of the sector inquiry into the market for production and sale of sunflower seeds and sunflower oil. This inquiry had been initiated in February 2011 (see ECN Brief 2/2011), following a sharp increase in prices between August and October 2011.

The analysed period is 2009 - 2011 and the CPC based its findings on information provided by the undertakings in the sector, public institutions and a market research undertaking (information on prices).

The CPC analysed price correlations between sunflower seed prices and wholesale and retail sunflower oil prices. It found that price variations of the raw material are not immediately reflected in wholesale prices and subsequently in retail prices. According to the report, the established asymmetry in price variations could be explained by the structural characteristics of the markets through the chain “production – processing – distribution”. The sunflower seeds production market has a fragmentary structure with the presence of many small and medium-sized undertakings. Different market players, mainly intermediaries, are involved in buying up transactions and in the storage of seeds. As to the sunflower oil production market, it is highly concentrated with the presence of only 10 undertakings that have a considerable bargaining power upstream as well as downstream; five of them having together a market share of around 75 % in 2011. Sunflower oil is first distributed at the wholesale level. Only a very small proportion of the production is sold directly to final customers (up to 10 %). The sunflower oil wholesale distribution market is moderately concentrated with the presence of five undertakings with market shares of more than 5 % and nine undertakings with market shares of less than 5 %.

The CPC’s analysis of the contractual relationships between the sunflower oil producers and their wholesale distributors revealed competition concerns regarding some of the clauses included in the contracts.

Based on the results of the sector inquiry, the CPC has initiated proceedings against the three main producers of sunflower oil – Biser Oliva, Zvezda, Kaliarka for alleged prohibited agreements and/or concerted practices.

See decision (in Bulgarian)

• Ireland: Irish Ports Study gets underwayThe Competition Authority has begun a study of the Irish Ports sector. As an island, Ireland is heavily dependent on its ports for trade. Therefore it is crucial for the country’s economic revival that the gateways for Irish exports operate competitively.

The Irish Competition Act 2002 grants the Minister for Jobs, Enterprise & Innovation the power to request the Authority to carry out market studies relating to competition. The request was made on 15 June 2012 and work began on the study immediately. The study takes place in the context of the government’s Action Plan for Jobs, which has called for the identification of any sheltered sectors of the economy where competition is restricted. The terms of reference for the study are as follows:

• Examine the level of competition between ports in the State and the effect of specialisation;

• Examine the impact of competition from ports in Northern Ireland;

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• Examine how competition works within the State’s major ports;

• Identify international experience of competition and efficiency in port services;

• Assess the impact on competition of developments in other transport modes in Ireland and development in shipping internationally;

• Examine whether changes in port ownership and structures should enhance competition in port services;

• Identify any actions the State could take to promote the competitiveness of Ireland’s ports including potential benefits to the economy.

To date, the study has included reviews of economic literature, stakeholder meetings and visits to ports. A public consultation is due to take place later this year with the publication of the completed study in 2013.

Further details of the study are available here.

• France: The Autorité de la concurrence publishes Results of Sector Inquiry into e-commerceOn 18 September 2012, the Autorité de la concurrence (the Autorité) published the findings of its inquiry into e-commerce which 30 million French people have used in 2011.

Focus was put on electrical domestic products (such as TVs, sound systems, washing machines, computers, cameras), cosmetic and personal care products, and luxury perfumes and beauty products as the Autorité has already issued decisions on e-commerce in these fields.

For electronic domestic products and cosmetic and personal care products, on-line prices are substantially lower than off-line prices (the difference may be up to 13.2% for camcorders, excluding shipping), while no significant gap has been detected for luxury perfumes and beauty products.

New Internet players, such as price comparison websites, marketplaces (such as ebay, Amazon, Price Minister) and pure player retailers (especially in the electrical domestic products sector, where they bear lower costs) have contributed to significant competitive pressure on prices.

The Autorité recalls that contractual terms and conditions should respect two limits. On the one hand, the terms and conditions set in selective distribution networks should not restrict the development of e-commerce, especially by pure player retailers, without objective justification and they should not set a general and absolute ban on selling online. On the other hand, manufacturers should remain free to protect the high-end image of their product through quality standards criteria in view of the product’s technical characteristics. Manufacturers can also apply different terms of purchase if those reflect, for example, different volumes ordered or different services, or, more generally, if this is the result of different bargaining power, provided that it does not lead to foreclosure of the online distribution channel.

The Autorité, which was one of the first competition authorities in Europe to issue decisions in the e-commerce sector, considers that competition on and through the Internet is of a crucial interest for the economy and will continue to keep a close eye on its development.

See press release (in English)

• France: The Autorité de la concurrence issues Opinion on Draft Decree regarding Supply of Medicinal Products for Human UseOn 20 July 2012, the Autorité de la concurrence (the Autorité) published an opinion upon request of the

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French Minister of Social Affairs and Health on a draft Decree regarding the supply of medicinal products for human use (the draft Decree). The draft Decree introduces a set of measures to respond to supply shortages of medicinal products for human use of major therapeutic interest.

The French medicine distribution channel is regularly affected by problems that generate supply shortages, particularly of medicinal products regarded as essential for patients. Such shortages regularly affect pharmacies in France since the urban medicinal supply chain is constantly working on a just-in time-basis.

Shortages can arise as a result of the behavior of various players in the distribution channel: pharmaceutical companies, wholesale distributors (who are bound by public service obligations, when they are not ‘pure players’ (i.e. wholesalers who are not engaged in distribution activities in France but focus exclusively on parallel trade)), and export wholesalers.

Export wholesalers mainly obtain their supplies from wholesale distributors. Although the latter must primarily fulfill a public service supply mission in France, they may also export their medicinal products, which can be economically advantageous for them (due to the potential difference between the regulated price in France and the non-controlled export price): this is known as “parallel exporting”. It can contribute to supply shortages by taking medicinal products subject to quotas out of the national distribution system.

The draft Decree foresees a set of measures to respond to supply shortages of medicinal products for human use of major therapeutic interest. In particular, the current version contains provisions seeking to restrict or effectively restrict parallel exports of any drug, particularly to avoid shortages occurring as a result of exports by wholesale distributors. In this respect the draft Decree specifies that when a medicinal product cannot be delivered within 72 hours, it would be considered as a product shortage and may no longer be exported. It further organizes a monitoring system, in which pharmaceutical companies play a key role, thus raising questions of neutrality.

The Autorité considers that the restrictions provided by the draft Decree have to be proportionate in practice to the pursued public health objective.

Accordingly, the Autorité proposes four main amendments.

Firstly, restrictions on parallel exports must be restricted solely to medicinal products of major therapeutic interest.

Secondly, the Autorité asks for the mitigation of the conditions governing the list of medicinal products in short supply and thus which are prohibited from being exported.

Thirdly, the Autorité suggests that the final Decree restricts the obligations incumbent upon wholesale distributors to inform pharmaceutical companies of medicinal product exports to what it strictly necessary in order to avoid anticompetitive exchanges of information (in particular prices).

Last, regarding the centralization of information about shortages via emergency call centers and regional health agencies, the Autorité recommends that this task be fulfilled directly by the public authorities – which will pass on the information to the pharmaceutical companies –, rather than by the pharmaceutical companies themselves so as to prevent exchange of strategic information between competitors.

On 28 September 2012, following a consultation of the French Supreme Court, the Decree was adopted by the Government and entered into force on 1 October 2012 after its publication in the French Official Journal.

See press release (in English)

• Lithuania: The Competition Council approves Resolution on Activity Priority SettingOn 2 July 2012, the Competition Council approved, pursuant to the provisions of the Law on Competition,

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a ‘Resolution on the Competition Council’s Activity Priority Setting’ (the Resolution). Article 18(2)(3) of the Law on Competition, introduced in March 2012, enables the Competition Council to set its activity priorities and to publish them on its website.

Following this provision, the Competition Council decided by its Resolution to set one priority which is to conduct investigations or otherwise intervene in the market when such intervention would significantly contribute to the effective protection of competition and thus ensures consumer welfare. The priority allows to rationally allocating the institution’s resources, and makes it possible to waive minor investigations.

By adopting this Resolution, the Competition Council also approved the principles of implementation of priority setting for its activities. In deciding whether the investigation complies with the activity priority setting Resolution, the Competition Council will assess the following criteria: 1) the potential impact of the activity on effective competition and consumer welfare, 2) its strategic importance, and 3) the rational use of resources. The first principle usually covers the assessment of the nature and extent of a possible infringement and the assessment of the value of the goods related to the possible infringement. The second principle includes the evaluation of the preventive effect of the investigation, the novelty of the possible infringement by its nature, the possibilities of other institutions to effectively solve the problems related to the possible infringement, as well as other circumstances showing the strategic importance of the investigation. The third one provides that the Competition Council will seek to perform investigations in cases where the expected results are deemed to be proportionate to the resources allocated to the particular investigation.

See press release (in Lithuanian)

• The Netherlands: New Rules of Conduct for the State when carrying out Economic ActivitiesOn 1 July 2012, new legislation came into force in the Netherlands outlining the rules of conduct for the State (national and local governments) when it engages in economic activities and competes with private undertakings.

These rules have been laid down in the new Dutch Act on Government and Free Market of 1 July 2012, which is an amendment to the Dutch Competition Act.

It is a given that the State carries out economic activities next to its public duties. These new rules aim to prevent the State, when carrying out such economic activities, from enjoying unfair competitive advantages over private competitors. That is why the State is now statutorily required to comply with a number of rules of conduct when engaging in economic activities. The most important rules foresee that the State, when engaging in an economic activity, is required to include at least all costs in its prices it charges for its services or products (for example, when leasing government-owned property the rents should include all related costs, or, a municipal parks department that also maintains private gardens should fully charge those individuals for those maintenance activities). The rules also prohibit giving preferential treatment to companies in which the State has a majority control (so-called state-owned companies).

The rules of conduct are meant to be additional to the already existing rules concerning fair competition. There is some potential overlap with the EU rules on state aid, which are governed by the European Commission: in case of state aid, EU rules will apply. The rules of conduct do however apply in cases of de minimis aid.

See press release (in English)

Press spokesperson: Barbara van der Rest-Roest at +31-70-330-3362 or +31-6-22793063 (outside office hours). Alternatively, you can send an email to the NMa press office at pers@nmanet.nl

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• Poland: New Guidelines concerning Commitment DecisionsOn 26 July 2012, the Polish Office of Competition and Consumer Protection (UOKiK) published Guidelines on commitment decisions in antitrust cases and in cases of practices infringing collective consumer interests (the Guidelines).

The Guidelines address procedural and substantive aspects relating to the issuance of commitment decisions. They set out the conditions which undertakings need to fulfil in their application to submit commitments and the rules for the adoption of commitment decisions. The main objective of the Guidelines is to explain clearly to undertakings the process which takes place during the preparation of commitment decisions in view of increasing the level of transparency about the activities of the UOKiK and to present market participants with a set of uniform procedural rules.

Pursuant to the provisions of the Act of 16 February 2007 on Competition and Consumer Protection, if in the course of the proceedings it appears plausible that an undertaking has infringed Polish and/or EU Competition rules or has violated collective consumer interests, the President of the UOKiK may, by way of a decision, render the commitments proposed by the undertaking binding.

In 2011, one out of three decisions of the President of UOKiK was a commitment decision. Commitment decisions allow for a swifter closure of proceedings and result in an efficient elimination of the anticompetitive practice. From the perspective of the entrepreneurs, this kind of decision offers substantial advantages, since proceedings are typically shorter and companies avoid the possible imposition of a fine.

The Guidelines are not a binding legal instrument. However, the President of UOKiK will apply them in order to ensure the clear and uniform enforcement of the competition rules as well as of the rules on consumer protection.

See press release (in Polish) and Guidelines (in Polish)

• Poland: The UOKiK publishes Report on Polish Gas MarketThe Polish gas sector is a market where the pace of liberalization has been slow in comparison with other network industries. Therefore, the Office of Competition and Consumer Protection (UOKiK) decided to examine this market, and consequently drew up on 10 September 2012, a Report entitled ‘Directions for the development of competition and consumer protection on the gas market in Poland’.

The Report includes not only a description of the market conditions, but also suggestions by UOKiK concerning the potential further stages of the liberalization process.

The results of the analysis confirm that the Polish gas market is dominated, at its upstream and downstream level, by the gas incumbent PGNiG and its related companies. According to UOKiK, making it impossible for the dominant undertaking to transfer its market power from its initial gas supply area to lower levels of trade provides the basis for the effective functioning of gas market. A serious threat to effective competition may be margin squeeze which could lead to the elimination of down-stream competition. Financial and accounting unbundling within PGNiG consisting in separating the wholesale from retail activities, may prevent such an event, and be the first step in benefiting independent gas sellers.

Another step which could safeguard the functioning of alternative gas retailers, should be to establish the conditions for the emergence of a competitive gas wholesale market, and most of all, establishing the wholesale market price of gas, which is necessary for the functioning of a competitive retail market. It seems to UOKiK that the best way would be to oblige PGNiG to offer, via a system of exchange auctions, a part of the gas the company supplies to other entities.

The final point of UOKiK’s proposals concerns the progressive release of gas prices for entrepreneurs. This process should happen gradually, as sudden and uncontrolled release of prices which are not subject to competition, could result in negative consequences for the market and also finally for consumers. In the

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long run, gas sources should be diversified through the development of cross-border infrastructure and storage facilities, as well as through search of alternative gas sources.

See press release (in English)

• Portugal: The Competition Authority consults Public on new Guidelines and RegulationsFollowing the entry into force of the new Portuguese Competition Act, Law No. 19/2012 of 8 May 2012 (see ECN Brief 2/2012), the Portuguese Competition Authority (PCA) launched a public consultation on two draft regulations and four draft guidelines on antitrust and merger issues. Comments of the stakeholders were welcome until 30 September.

As to the antitrust topics, the relevant draft documents are:

(i) Guidelines on priority setting in antitrust procedures;

(ii) Regulation on reduction or immunity from fines (leniency) and explanatory note;

(iii) Guidelines on case-handling in antitrust proceedings; and

(iv) Guidelines on the setting of fines.

The Regulations and Guidelines will be applicable to procedures both under national law and Articles 101 and 102 TFEU.

Concerning merger control, the draft documents published for consultation were:

(i) Regulation on notification forms for merger control; and

(ii) Guidelines on prior appraisal of mergers.

Further information: http://www.concorrencia.pt/vPT/Paginas/HomeAdC.aspx

• Spain: The Comisión Nacional de la Competencia releases Report monitoring Automotive Fuel Distribution Market in SpainPursuant to its competition advocacy function, Spain’s antitrust authority, the Comisión Nacional de la Competencia (CNC), has released on 4 July 2012 a new Report monitoring the Automotive Fuel Distribution Market in Spain (the Report) in which it vigorously reinforces the conclusions of previous reports on the low level of effective competition in that market. The Report urges that the recommendations made by the CNC in 2009 be implemented.

The Report is the fruit of the commitment assumed by the CNC in its Follow-up Report on the CNC’s Automotive Fuel Report of 9 March 2011 to carry out a more in-depth analysis of certain aspects of the Spanish automotive fuel market and, in particular, to determine if the increase in international prices for automotive fuel are passed on to prices at the pump more quickly and intensely than the reductions in those international prices (that is, if there are positive asymmetries in the transfer of prices or whether prices ‘’rise like rockets and fall like feathers’). The Report is also in fulfilment of the task assigned to the CNC on 30 September 2011 by the Government Executive Committee for Economic Affairs, through the State Secretary for Energy, to analyse the distribution margins for petrol and automotive diesel, along with the recent evolution of the market.

The new Report carries out a detailed statistical and econometric analysis of the trend seen from 2005 to 2012 in the market for automotive fuels in Spain, both at the national and provincial levels, and draws the following conclusions in relation to the operation of the market.

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First, the CNC finds that during 2011, pre-tax prices and margins in Spain continued to be amongst the highest in the EU and above those recorded in comparably sized economies. According to the CNC, this finding is compatible with a level of competition throughout the entire marketing chain which is lower than in comparably sized economies.

Second, the analysis at the provincial level shows there is a direct relation between retail supply-side concentration (service stations) and the average pre-tax prices in the province.

Third, the analysis performed corroborates the fact that the short-term behaviour of margins is influenced by rigidities in the adjustment of national pre-tax retail prices in response to variations in international fuel prices. It is the opinion of the CNC that this is hardly compatible with proper competitive processes and may be indicative of the existence of structural problems and/or problematic conduct in the market.

Fourth, the Report includes an econometric study on the existence of asymmetries in the transfer of international fuel prices to retail pump prices for Spain during the period 2005-2011 that confirms the existence of positive asymmetries in the velocity at which pre-tax retail prices adjust to variations in international prices of fuels, quite clearly for 95 octane petrol and more weakly for diesel A. These asymmetries, colloquially referred to as “rockets and feathers”, indicate that pre-tax retail prices react faster to increases in international prices (“rockets”) than to declines in those prices (“feathers”), with consequent harm to the end consumer.

Fifth, according to the CNC, collusion, whether tacit or explicit, is one possible explanation of this phenomenon, though not the only one. The existence of asymmetries in the adjustment of national retail prices does not on its own imply that operators are engaging in conduct contrary to competition law. Some of the explanations found in economic theory for the rockets and feathers problem apply to the Spanish case and to the results obtained in the analysis. In any event, these explanations are associated with markets in which competition is weak and consumers are consequently worse off than it would be expected in a more competitive environment: this justifies the search for actions aimed at removing elements that act as barriers for introducing competition in this sector.

Last, the Report emphasises the urgency of implementing the recommendations made by the CNC in its March 2009 report, which were aimed at enhancing competition in this sector by reducing barriers to entry and expansion by oil operators.

• Spain: The CNC publishes Reports on proposed Amendments to Bylaws of several Professional CollegesFollowing the publication in April 2012 of its Report on Professional Colleges after the transposition of the Services Directive (see ECN Brief 3/2012), the Comisión Nacional de la Competencia (CNC) has examined three draft royal decrees in this area (essentially prepared before the publication of the 2012 Report on Professional Colleges) which approve respectively the General Bylaws of the Official Colleges of Agronomists (Colegios Oficiales de Ingenieros Agrónomos) and of their General Council, the Bylaws of the Official College of Geologists (Colegio Oficial de Geólogos), and the General Bylaws of the Official Colleges of Spanish Agricultural Engineers and Agricultural Experts (Colegios Oficiales de Ingenieros Técnicos Agrícolas y Peritos Agrícolas de España) and of their General Council respectively. On this basis, the CNC has adopted three reports which have been published in June 2012.

The CNC notes that the above mentioned draft legislations contain a considerable number of the most significant competition restrictions identified in its 2012 Report on Professional Colleges which provided a comprehensive rundown of the different categories of competition restrictions as well as recommendations to encourage competition and respect the law.

In particular, the CNC found that:

- The draft texts provide for compulsory membership in order to pursue professional activities. The CNC is of the opinion that compulsory membership and the powers of Colleges emerging from it are considered as very serious restrictions of competition. The draft texts overstep the boundaries of the current rules established by the Omnibus Act (2009), which adapts specific sectorial regulations to the Services Directive. The Act establishes that a new national law is to be passed determining those professions where compulsory membership will continue to exist, but until its approval the current obligations remain in force. In light of this situation, the CNC recalls that there is a pressing need for a national professional

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services Act to be passed which, after the appropriate analysis of need and proportionality, lays down provisions on compulsory membership in order to pursue professional activities.

- The draft texts contain mechanisms that could interfere with the setting of conditions in which professional services are provided. Accordingly, the CNC notes the existence of requirements of authorisations by the Colleges for professionals to appear before the courts. Furthermore, certain Colleges are granted the status of market operator. Provisions also exist on the distribution of professional work by using rotational assignment systems or even on the need to apply for consent in order to replace a professional in the relevant sector. In addition, certain colleges are authorised to set specific professional duties over and above the organisation of the profession. Lastly, the CNC notes the establishment of reserved areas of activity and obligations not to interfere with other professions. The CNC believes that all such provisions constitute serious restrictions of competition and must be abolished.

- The drafts texts introduce mechanisms and incentives to harmonise prices and professional services. The CNC is of the opinion that there is a need for a more detailed definition of (i) the cases where Colleges can require professionals to undertake services on their behalf, (ii) the rules regulating the collection of professional fees, (iii) the provision of services through or by Colleges, and (iv) the establishment of standard engagement letters, general clauses, standard forms or models.

- Other aspects previously flagged by the CNC in its 2012 Report on Professional Colleges are also recalled in the reports on the draft legislations. In particular, these reports refer to the modification of the rules in order to meet the requirements of statutes and regulations in force in the area of College approvals known as “visas”; to possible instances of discrimination between the individual and company-based pursuit of professional activities; and to the duties of colleges to tackle encroachment and unfair competition.

The CNC underlines that the process of adapting the legislation on Professional Colleges should lead to the elimination of those rules which are unjustified and disproportionate, while promoting competition between service providers and maintaining the quality of professional services.

The CNC will continue to keep under strict surveillance the area of Professional Colleges and will ensure that the passage of the amendments to the Bylaws of the above mentioned Official Colleges and their General Councils is conducted in a way that encourages competition. The amendment procedure should also be carried out in a consistent manner, in line with the letter and the spirit of all provisions transposing the Services Directive into the Spanish law.

See Reports (in Spanish)

• Sweden: The Swedish Competition Authority initiates Inquiry into Swedish Banking and Financial SectorOn 20 June 2012, the Swedish Competition Authority initiated a sector inquiry by sending out a questionnaire to banks and fund management companies.

Competition in the Swedish banking market has been a hot political topic during the last years, largely due to the fact that the cost of mortgages constitutes a large proportion of the total budget of households. Another topic that has been debated is the fees for different kinds of funds, especially the fees for administration and other expenses which include, but are not limited to, client administration, accounting, custody, and transfer agency fees.

The part of the sector inquiry which concerns the banking sector focuses on the interest rates for housing loans charged by banks, the banks’ costs for providing housing loans and the savings rates offered by the banks. The questionnaire has been sent out to the largest banks in Sweden that provide housing loans, but also to a number of smaller banks that provide savings accounts.

The other part of the sector inquiry focuses on the fees for different kinds of funds. The questionnaire has been sent out to eight fund management companies.

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The results of the sector inquiry will be presented in a report, which is intended to be finalized by mid-2013.

• United Kingdom: The OFT launches Review of Personal Current Account MarketOn 13 July 2012, the Office of Fair Trading (OFT) launched a review of the personal current account market in the UK and outlined a longer term programme of work aimed at addressing competition concerns and a lack of customer focus across the wider retail banking market.

The personal current account review will seek to establish how the market has evolved since the OFT’s market study in 2008. It will look at whether initiatives agreed by the OFT with banks have been successful at improving the switching process, increasing the transparency of personal current account charges and allowing people to manage their accounts more effectively.

The review forms part of a wider programme of work designed to achieve a more competitive and customer focused retail banking sector. As well as reviewing progress on current accounts, the OFT also intends over the next two years to consider the operation of payments systems and the banking market for small and medium-sized enterprises. It is also planning to look in more detail at the way in which consumers make decisions and engage with retail banking services, including through applying behavioural economics.

See further

• United Kingdom: The OFT issues Call for Information into Petrol and Diesel PricesOn 5 September 2012, the Office of Fair Trading (OFT) issued a call for information on the UK petrol and diesel sector.

The UK retail road fuels sector is estimated to be worth around £ 32 000 000 000 (€ 40 385 000 000). Petrol prices rose by 38% between June 2007 and June 2012, and diesel prices by 43% over the same period.

In light of continuing public concern about pump prices, the OFT wants to identify whether or not there are competition problems that it can tackle in the sector. It is inviting the industry, motoring groups and consumer bodies to submit information.

The OFT will explore a number of claims about how the road fuels sector in the UK is functioning, including:

• whether reductions in the price of crude oil are being reflected in falling pump prices;

• whether supermarkets’ and major oil companies’ practices may be making it more difficult for independent retailers to compete with them;

• whether there is a lack of competition between fuel retailers in some remote communities in the UK, and

• whether concerns about price co-ordination and the structure of road fuels markets identified by other national competition authorities are relevant in the UK.

The OFT will be gathering information over a six week period, and plans to publish its findings in January 2013.

See further

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• Czech Republic: The Office for the Protection of Competition hosts 6th St. Martin Conference in Brno in November 2012On 13 and 14 November 2012, the Office for the Protection of Competition of the Czech Republic (the Office) will hold the sixth annual St. Martin Conference, during which it will introduce and emphasize the most important aspects of the Office´s work during the last year.

The conference will take place at the premises of the Office in Brno and will focus on recent trends and developments in competition law and policy in the EU and the Czech Republic, as well as on some practical issues of competition enforcement.

In particular, the agenda will include seminars and discussions related to the supervision of public authorities and competition in healthcare. Special emphasis will be put on the economic approach to competition law and to competitors.

The Office will be honored to host several competition experts from the EU and ICN member states as well as leading competition practitioners and delegates from competition authorities.

The Czech Competition Authority is delighted to invite the ECN Brief readers to attend the conference.

More information will be available soon on the websites of the Office: www.compet.cz. You may also contact: michala.holinkova@compet.cz

• France: The Autorité de la concurrence hosts the first ICN Advocacy WorkshopThe first ICN Advocacy Workshop will take place in Paris on 26-27 October 2012.

The conference seeks to cover substantial policy issues - most notably regarding advocacy to Government -, with its plenary session on ‘Competition impact assessment of draft legislation’ and a discussion on ‘Advocacy and institutional reform’.

During the session on ‘Market studies v. competition enforcement’, agencies will share their experience and explain their approach in conducting market studies.

The conference will also be keen to advance ongoing ICN projects and to take an in-depth look at how ICN members can contribute to furthering the cause of competition. To this end, breakout sessions will be held on ‘The Benefits of Competition’ and ‘Competition Culture’ Advocacy Working Group projects, as well as the project on ‘Working with Courts and Judges’. The role of Non-Governmental Advisers of the ICN in competition advocacy will also be addressed.

Furthermore, discussions will be held on subjects of special interest to younger and more mature agencies with sessions on ‘The ABCs of advocacy’ as well as on ‘Advocacy and economics’.

The Advocacy Working Group is co-chaired by the Autorité de la Concurrence, the Portuguese Competition Authority and the Competition Commission of Mauritius.

See further information on the ICN Advocacy Workshop 2012 (in English)

• Latvia: The Competition Council hosts 9th Annual Regional Competition ConferenceThe 9th Annual Regional Competition Conference will take place in Riga on 18–19 October 2012 and will gather entrepreneurs, legal practitioners and representatives of the Baltic competition authorities.

OTHER ISSUES OF INTEREST

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The conference is organised annually by one of the three Baltic states’ competition authorities. The purpose of the conference is to share information on competition policy, on the implementation of competition legislation and the most important tendencies in the markets of Baltic States, as well as to strengthen cooperation and information exchange among Baltic competition authorities in order to ensure the effective implementation of competition legislation and the carrying-out of sector inquiries.

The panel discussions on the first day will be devoted to recent competition developments in the Baltic states, as well as to the leniency programmes of the participating authorities and their application in practice. The panel discussions will also be open to entrepreneurs and legal practitioners.

The activities of the second day will be organized in working groups, thus providing an opportunity for the representatives of the participating competition authorities to discuss topical issues of competition policy and its enforcement.

For more information please contact Ms Inita Kabanova at Inita.Kabanova@kp.gov.lv.

• Cyprus: Report on the European Competition Day in CyprusThe Commission for the Protection of Competition, under the Cyprus Presidency of the Council of the European Union, held a Conference for the European Competition Day on 2 October 2012 in Nicosia. The subject of the Conference was the Effective Enforcement of Competition Rules in the EU.

Among the conference participants were the Minister of Finance and the Minister of Commerce, Industry and Tourism of the Republic of Cyprus, judges from the European Courts and the UK Competition Appeal Tribunal, the Director General and representatives from the Directorate General of Competition of the European Commission, representatives of EU competition authorities and consumer protection agencies, experts specializing in the field of competition law from international organizations, lawyers, economists, academics, as well as representatives from the business world of Cyprus.

In her welcoming speech, Ms Christodoulou, the Chairperson of the Commission for the Protection of Competition in Cyprus, underlined the importance of effective enforcement of competition rules and the central role it plays in the process towards economic recovery.

In his opening speech, Commissioner Almunia, Vice-President of the European Commission, emphasized the importance and outlined the benefits of effective enforcement of Competition Rules in the EU. Vice-President Almunia placed particular emphasis on the role that competition authorities play in the market economy of the EU and pointed out that the work of EU competition authorities has broader implications that will help to overcome the recession, return to growth at sustainable pace and further the progress of integration.

The first panel discussed ‘Actions for Damages’: recent developments in the Member States and the forthcoming EU proposal. The need to establish an effective system of private enforcement was emphasized by all speakers and a number of concerns were identified. These concentrated on issues of standing, the passing-on defense used by cartelists, the characterization of damages, the difficulties arising from the quantification of damages and the binding effect of decisions of national competition authorities. Moreover, following the Pfleiderer case of the ECJ, concerns were raised in relation to the access to the file of competition authorities by victims of cartels. It was stressed that a balance is to be found between on the one hand the protection of leniency programmes and on the other hand the disclosure of evidence to allow victims of cartels to obtain compensation of the harm suffered. In this panel, the distinguished speakers were Dr. S. Papasavvas, Judge at the General Court of the EU, as moderator; Sir G. Barling, President of the Competition Appeal Tribunal and High Court judge from the United Kingdom; Mr. E. De Smijter, Deputy Head of Unit A6, DG Competition; and Dr. A. Komninos, Lawyer at White &Case LLP, research fellow UCL.

The second panel’s topic for discussion was ‘Effective Competition in Food Sector and Retail Markets’. Food Sector and Retail Markets are under scrutiny by most competition authorities. It was pointed out that there is an increasing need, especially taking into consideration the severe economic conditions of most Member States, to keep these markets competitive for the benefits of consumers. It emerged that

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retail markets in general and the food sector more specifically, are very important as they interact with other sectors of the economy, play a significant role in Europe’s economies and have a direct impact on the welfare of society. Examples of intervention were given relating to the Greek, French, German and UK retail markets and food sector. Speakers considered that there must be a strong bond between enforcement and advocacy and that competition authorities should use both tools. Also buyer power was raised as an issue that is further looked into by competition authorities. In this panel, the distinguished speakers were Dr. A. Italianer, Director-General of DG Competition, who was the moderator, Mr. A. Mundt, President of the Bundeskartellamt, Mr. B. Lasserre, President of the Autorité de la Concurrence, Mr. P. Collins, Chair of the OFT and Mr. D. Loukas, Vice-Chairman of the Hellenic Competition Commission.

The topic of discussion in the third panel was ‘Enforcement of competition rules in Member States: Opportunities and Challenges for National Competition Authorities - Cooperation and ECN Coordination’. There was a common understanding between speakers that cooperation and ECN coordination have contributed positively to the effective enforcement of competition rules amongst Member States. Nonetheless, and despite the usefulness and importance of these tools, all speakers in this panel have outlined a number of challenges. In essence, the main challenges raised by panelists were the effective implementation of the leniency programme, the need to carry out market research on a regular basis that will provide accurate results on the subject matter of each case, the need to establish appropriate procedures and the need for more clarity in court decisions. In this final panel, the distinguished speakers were Ms. D. Dalheimer, Deputy Head of the ECN Unit, DG Competition who was the moderator; Ms. C. Guzman, General Director, Investigations Directorate, National Competition Commission in Spain; Mr. J. Steenbergen, Director General of the Belgian Competition Authority; Dr. T. Thanner, Director General of the Federal Competition Authority in Austria; and Ms. C. Sideri, Director of the Service of the Commission of the Protection of Competition of the Republic of Cyprus.

The materials of the Conference can be downloaded from the official website of the CPC.

• Lithuania: The Competition Council commemorates the 20th Anniversary of the Law on Competition of the Republic of LithuaniaOn 25 September 2012, the Competition Council held a press conference to commemorate the 20th anniversary of the first Law on Competition of the Republic of Lithuania which was adopted by the Parliament on 15 September 1992. During the press conference, Šarūnas Keserauskas, Chairman of the Authority, and Elonas Šatas, Member of the Competition Council, presented to the audience the development of Lithuanian competition law including the challenges encountered and the achievements obtained, with a view to successful enforcement.

See press release (in Lithuanian)

• Poland: The UOKIK hosts II International Competition Law Forum in WarsawOn 27 September 2012, the Office of Competition and Consumer Protection (UOKiK) hosted the II International Competition Law Forum, in cooperation with the Warsaw School of Economics.

This international event was organized by UOKiK for the second time. Representatives of the antimonopoly authorities, international organizations, as well as lawyers, entrepreneurs and members of the business community touched upon the subject of the development and application of competition law and the necessity to seek the best legal and institutional instruments in counteracting prohibited agreements, to the benefit of all market participants.

The main topics raised during the Forum were: How to detect cartels efficiently and respect the rights of undertakings at the same time? What are the latest trends of competition protection authorities in fining policy? How to efficiently present cases in the court proceedings in antimonopoly decisions?

The conference was opened by Mrs Małgorzata Krasnodębska-Tomkiel, President of UOKiK, who highlighted the relevance of the issues which would be discussed during the event, especially in the context of the ongoing works on the amendment of the Polish Competition Law. Subsequently, Mr Joaquin Almunia,

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Vice-President of the European Commission and Commissioner for Competition underlined in his speech the importance of international cooperation, especially in the era of globalization. He emphasized that in current times, the European Union must cooperate, so as to create one well functioning market. Moreover, Vice-President Almunia stressed that the decisions made by national authorities have a great impact on the EU market. National competition authorities should therefore act as leaders in this process of competition enforcement, as it is their duty to eliminate prohibited conducts of undertakings which may affect the Single Market. Furthermore, during the official welcome, Mr Eduardo Perez Motta, President of the Mexican Federal Competition Commission and Chair of the International Competition Network, offered his views on what Competition Agencies and the International Competition Network can do to promote competition in the context of the global financial crisis.

The first panel focused on procedural fairness and its observance by competition authorities. Participants took into consideration the principles concerning the protection of the interests of undertakings in the course of inspections aimed at detecting and eliminating competition infringements. During the second session, the speakers and the guests debated the nature and the deterrent effect of fines. The issue under discussion in the third panel was effective cooperation between competition authorities and representatives of the judiciary, which is also a part of a project being carried out by UOKiK within the International Competition Network.

All materials, including the agenda of the event, the list of the speakers, the presentations and the video of the conference are available here. See also press release (in English).

• Poland: Debate on State of Competition on Polish Gas MarketOn 11 September 2012, the Office of Competition and Consumer Protection (UOKiK) organized, in cooperation with the newspaper ‘Gazeta Wyborcza’, a debate on the process of liberalization of the gas market - one of the most important economic challenges faced by Poland. The debate took place at the premises of UOKiK.

On 10 September 2012, UOKiK published a Report entitled ‘Directions for the development of competition and consumer protection on the gas market in Poland’. (see ECN Brief 4/2012) The report depicted the functioning of the Polish gas market and presented possible solutions for its progressive liberalization. The analysis of this Report and the postulates of the Office were the core issue of the debate.

The speakers included a member of the Polish Parliament, the Director of the Department of Fuel and Gas at the Ministry of the Economy, as well as a representative of the dominant entity PGNiG and other members of the business community.

The debate focused on the structure of the Polish gas market, still dominated by the undertaking PGNiG and the prospective means of its liberalization. The participants discussed many aspects of this process, inter alia the future release of prices.

The debate was considered a big success and received a high level of media coverage.

See press release (in Polish)

• Portugal: The Competition Authority hosts Conference on recently approved Competition LawFollowing the publication of the new Portuguese Competition Act, Law No. 19/2012 of 8 May 2012, the Portuguese Competition Authority hosted a conference in Lisbon on 13 July 2012.

The opening session of the conference included keynote speeches from Commissioner Joaquin Almunia, Vice-President of the European Commission, and Manuel Sebastião, President of the Portuguese Competition Authority, and was presided by Álvaro Santos Pereira, Minister for the Economy and Employment of Portugal. The closing session was chaired by Carlos Moedas, the Portuguese Secretary of State to the Prime Minister.

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• Hungary: New Member appointed to Decision-making Body of GVHOn 1 September 2012 János Áder, President of the Hungarian Republic, appointed Dr Izabella Szoboszlai as the new member of the Competition Council of the Gazdasági Versenyhivatal (GVH - Hungarian Competition Authority). The appointment is valid for a period of six years.

Izabella Szoboszlai graduated from the Faculty of Economics at Corvinus University of Budapest in 1997. After graduating from university, she began working for the GVH in September 1998 in the Competition Policy Section. Over the last 14 years she has worked for several sections of the GVH in several positions, while also graduating from the Faculty of Law at Eötvös Loránd University. From 2011 until the date of her appointment, she was responsible for leading the newly-emerged Costumer Service Section of the GVH. She speaks fluent English and Polish, in addition to her mother tongue Hungarian.

See press release (in English)

PERSONALIA

The conference served as a platform for discussion and debate on the new Competition Act and the new aspects it brings to the promotion and defence of competition in Portugal. Speakers came from the Portuguese legal community, the judiciary, and the Authority itself, as well as from international organisations and other jurisdictions, bringing an international perspective to the conference. The sessions tackled a wide range of areas of competition policy and enforcement, including restrictive practices and merger control, as well as market studies and judicial control. Discussions focused on the major changes introduced by the new Competition Act, including the context of the reform, new leniency programme, merger control, new powers for market studies and the pros and cons of specialised courts for competition matters, among others.

See further information and conference papers in Portuguese)

• European Commission signs Memorandum of Understanding on Cooperation with Chinese Antitrust Authorities, the National Development and Reform Commission (NDRC) and the State Administration of Industry and Commerce (SAIC)On 20 September 2012, the European Commission (Directorate-General for Competition), signed a Memorandum of Understanding (MoU) on cooperation in the area of antitrust policy and enforcement with NDRC and SAIC.

The MoU creates a dedicated framework to strengthen cooperation and coordination between the Commission and the two Chinese authorities that are responsible for the enforcement of the antitrust provisions of the Chinese Anti-Monopoly Law.

The conclusion of a MoU sends a positive signal for an intensified cooperation on competition matters between the EU and China, the second most important trading partner of the EU. The Memorandum covers legislation, enforcement and technical cooperation regarding cartels, other restrictive agreements and the abuse of dominant market positions. Under the new framework, the parties may engage in discussions on competition legislation and share non-confidential information on competition investigations. The MoU, which is not legally binding for either of the Sides has effect from the date of its signature.

A similar MoU was concluded with Russia on 10 March 2011.

See Memorandum of Unterstanding and other information on relations with ChinaSee Memorandum of Understanding and other information on relations with Russia

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• Czech Republic: The Office for the Protection of Competition publishes its Annual Report 2011The Office for the Protection of Competition (the Office), a central body with powers in the area of competition, state aid and public procurement has published the English version of its Annual Report for the year 2011 (the Report) in August 2011.

Firstly, the Report describes the Office’s activity with regard to legislative changes. At the end of October 2011, it submitted a draft amendment to the Act on the Protection of Competition that would newly include, among others, leniency and settlement procedures into the Act. Before that, it was possible to apply for these procedures only on the basis of soft law.

Secondly, the Report summarizes the latest statistical data on the activities and functioning of the Office. For a number of important cases, such as price cartels in the area of detergents and TV screens, final decisions were adopted. Last but not least, the agenda for the following year is included which sets out the focus of activities of the Office for 2012, namely detection of cartels, particularly in relation to bid rigging and the application of amendment to the Act on Public Procurement.

To conclude, the Report mentions the celebration of the 20th anniversary of the establishment of the Office which took place within the ‘5th St. Martin Conference on Twenty Years of the Czech Competition Law’ and which was the most important event in 2011.

See Annual Report 2011

• Lithuania: The Competition Council publishes its 2011 Annual ReportIn August 2012, the Competition Council (CC) published the English version of its Annual Report 2011.

Like every year, the Annual Report presents the activities carried out by the institution. The main part of the Report is devoted to the description of the enforcement of the national Law on Competition as well as the application of Articles 101 and 102 TFEU. The best example of how the intervention of the CC in the functioning of the market can achieve benefits for consumers was the disclosure of the cartel of producers of orthopaedic technical articles in 2011. In 2012, the CC looked at what is happening in the market and found that after the cartel had been broken up, prices of orthopaedic technical articles have decreased by 10-50 %.

The other parts of the Report describe the enforcement of the Law on Advertising, case law, legislative activities (several amendments to the Law on Competition, a draft new edition of the Law on Competition, a draft new procedure for determining the amount of fines, etc.), state aid, international cooperation (participation in the activities of ECN, OECD, ICN, ECA, and other international events) and advocacy activities. In 2011, the CC was actively engaged in competition advocacy to a targeted audience using different possible means: international and local conferences, seminars, trainings, round table discussions, etc. One of the events worth mentioning here is a Regional Competition Conference hosted in Vilnius last year by the CC jointly with the Law Faculty of Vilnius University - the oldest and largest Lithuanian higher education institution. Speakers from the competition authorities of Estonia, Latvia, Poland, Finland, Sweden and the United Kingdom presented their views on topical issues of competition enforcement, namely, prioritization of cases, personal liability of managers in cartel and abuse cases, and advocacy activities.

The Report also highlights the main achievements and events of 2011 and provides statistical data on the CC’s activities. For example, the results of the first ever Impact Assessment of Activity of the CC were publicly announced. The results showed that direct benefits provided by the CC to consumers during the period from 2008 to 2010 amounted on average to approximately LTL 155 000 000 (€ 44 891 103) per year, and this exceeded the average annual budget of the CC during that period by more than forty times.

See 2011 Annual Report (in English)

ANNUAL REPORTS

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• Poland: The Office of Competition and Consumer Protection publishes 2011 Activity ReportOn 16 July 2012, the Office of Competition and Consumer Protection (UOKiK) published its Annual Report for the year 2011.

The Report shows that the President of UOKiK conducted 129 antitrust proceedings. Among them, 92 concerned alleged abuses of a dominant market position and 37 were related to alleged anticompetitive agreements. 102 proceedings were completed and resulted in the issuance of a decision by the President of UOKiK: 73 decisions concerned practices of abuse of dominance and 29 were related to anticompetitive agreements.

The most significant antitrust decisions concerned a cartel of mobile phone operators and a market sharing conduct between the insurer PZU and Maximus Broker.

The year 2011 was also the year of the campaign “Mergers under control”. Merger control was the subject of a series of TV and radio broadcasts, as well as press releases. In line with this initiative, UOKiK carried out 206 investigations concerning mergers and acquisitions. 172 decisions were issued including two prohibition decisions and three conditional consents to takeover.

International cooperation at the European level was intense due in particular to the Polish Presidency in the Council of the EU from 1 July to 31 December. Within this framework, the UOKiK hosted the European Competition and Consumer Day (November 2011) which was dedicated to the role of consumer welfare in the enforcement of competition policy.

See the UOKiK’s Actvitiy Report 2011 (in English)

TRAINING OF JUDGES

The Call for Proposals 2012 for training of national judges has been successfully completed and the award decision has been officially adopted on 12 September 2012.

The list of beneficiaries will be made available in due course on http://ec.europa.eu/competition/court/training.html

Proposals received

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Awarded contracts per country