On 28 May 2013, the European Commission released its annual Report on Competition Policy for 2012. The Commission relies on its Report to illustrate that without an effective European competition policy, the internal market cannot deliver its full economic potential. Private barriers to competition and trade would risk replacing the public barriers to free movement that have been dismantled. Subsidy races would distort competition between companies established in different Member States by risking wasting important budgetary resources. According to Joaquín Almunia, Vice President of the European Commission and Commissioner for Competition, "[the Commission's] enforcement action, together with the regulatory work carried out by the Commission, delivered choice and lower prices to consumers when they were most needed".
The Commission's action plan in 2012 primarily focused on sectors of systemic and cross-cutting importance to the EU economy. These included financial services, key network industries such as energy and telecoms, as well as knowledge-intensive markets such as smartphones, e-books and pharmaceuticals. In these sectors, EU competition enforcement complements Single Market regulation.
State aid control is also a significant feature of the Single Market. In 2012, the first decisions applying the new framework on state aid for services of general economic interest (SGEIs) were adopted. Also, in May 2012, the Commission launched an ambitious reform agenda with the State Aid Modernisation (SAM) initiative in order "to help Member States make the most of scarce public funds", said Commissioner Almunia.
The Commission also remained active in 2012 in the fight against cartels. It fined seven international groups of companies almost € 1.5 billion for colluding to increase the prices of tubes used in computer and TV screens.
In the financial sector, the Commission continuously applied state aid rules in order to ensure that banks receiving aid were either resolved in an orderly fashion or were thoroughly restructured in order to return to long-term viability. According to Commissioner Almunia, "in 2012, the continued application of state aid rules for banks in distress was our main contribution for a fairer and more transparent financial sector". In cases where banks were beyond restructuring, state aid control was still employed as a de facto resolution mechanism in anticipation of more comprehensive Single Market legislation. In addition, merger and antitrust rules were used to ensure that the Single Market was underpinned by a competitive and transparent financial sector. In relation to some of the German Landesbanken (NordLB and BayernLB), the Spanish banks, CAM and UNNIM, and the Latvian mortgage bank, decisions involving cost-cutting, divestments and focusing on core activities were taken.
As part of the economic adjustment programmes for Greece, Ireland and Portugal, state aid control was used to contribute to the restructuring of these countries' banking sectors. This was part of a wider effort involving the Commission, the European Central Bank and in most instances the International Monetary Fund. Ensuring the integrity of the Single Market in a context of massive public financial support was a key concern to the Commission. In line with the Spanish financial sector programme, agreed in July 2012 by the Eurogroup, the entire Spanish financial system was fully capitalised by the end of 2012 in accordance with state aid rules. The Commission deems that the process was extremely efficient as restructuring plans were approved after just a few months and before the programme aid was disbursed.
In antitrust matters, the Commission continued to investigate a number of antitrust cases concerning the Libor, Euribor and Tibor benchmark rates involving a number of banks and brokers. The Commission pursued two antitrust investigations in the Credit Default Swaps market which were opened in 2011. The Commission also continued its antitrust enforcement action against anticompetitive behaviour concerning multicultural interchange fees charged by credit card companies, particularly Visa and Mastercard. According to Commissioner Almunia "this is a developing domain. Last month we opened formal investigations regarding Mastercard and two weeks ago VISA Europe offered to cut its MIFs for credit cards and make cross-border competition easier".
In addition, on 1 February 2012, the Commission prohibited the proposed merger between New York Stock Exchange Euronext and Deutsche Börse. The Commission views its decision as the use of merger control tools to ensure competitive prices for companies who manage their risks by investing in derivatives in the EU.
EU competition policy cannot on its own integrate the EU gas and electricity markets, ensure competitive prices and security of supply. A third legislative package on gas and electricity was therefore adopted in 2011 and is currently in the process of implementation with a view to creating an EU-wide Single Energy Market by 2014. Commissioner Almunia stated that "again, our action in energy markets goes hand-in-hand with the regulatory action of other Commission departments and EU institutions. The creation of a genuine Single Market for energy for 2014 has been reaffirmed by the European Council last week".
In 2012, the antitrust enforcement actions regarding the gas and electricity sectors focused on central and eastern European gas networks which are less interconnected across borders than western European networks. Most importantly, the Commission opened formal antitrust proceedings against Gazprom in 2012 in relation to a possible abuse of its dominant position in various central and eastern European gas markets.
The Commission has been accompanying the development of Single-Market legislation in the telecoms market also. In such markets, ex-monopolists still maintain strong market positions by virtue of their ownership of the fixed networks they established during the monopoly era. The Commission pursued various enforcement actions concerning alleged abuses and collusion by such telecoms incumbents. The Commission sanctioned an agreement between Portugal Telecom and Telefónica not to compete with one another on the Iberian telecommunications markets. In December 2012, the Commission also approved the Broadband Guidelines in addition to the acquisition by Hutchinson 3G Austria of its competitor Orange.
According to Commissioner Almunia, "the re-launch of Europe's economy will depend to a great extent on efficient, competitive and innovative markets in the digital industries". In such an industry, lock-in and network effects can create entrenched market positions which could be used to exclude new entrants or competitors. Potential misuse of standard-essential patents in patent wars between smartphone manufacturers were a particular focus during the year. The Commission considered the issue of standard essential patents under the EU merger regulation in its approval of the acquisition of Motorola by Google. It also opened three proceedings concerning Samsung's and Motorola's possible abuses of their standard essential patents. These investigations will provide more clarity in the EU antitrust field where the Commission has received several complaints.
In its decisions on the sale of e-books, the Commission accepted the commitments offered by Apple and four leading publishers. In the music industry, which is increasingly part of the digital economy, the Commission agreed to the merger between Universal and EMI subject to conditions aimed at preserving both innovation and cultural diversity in a context where consumers increasingly use digital platforms to listen to music.
Pharmaceuticals are another field where knowledge, ideas, and inventions and the intellectual property rights they embody are of significant importance. Pharmaceutical companies may enter into anticompetitive agreements delaying the entry of cheaper generic medicines, with the risk of harming both public budgets and patients. In 2012, the Commission issued several statements of objections to more than 14 companies in 2 major cases concerning potentially anticompetitive agreements and conduct in this area.
The Commission's Report on Competition Policy and Staff Working Paper for 2012 are available at: http://ec.europa.eu/competition/publications/annual_report/index.html
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