The European, Middle Eastern and African Antitrust Review 2017

EU: Directorate General for Competition

Director General for Competition

A few figures can give a measure of the output of DG Competition in 2015. In the course of the year, the Commission took 318 merger decisions, 20 of which were subject to commitments. No prohibition decisions were taken, but in two cases the parties withdrew from their proposed deals. In state aid, we took 691 state aid decisions and member states were asked to recover €6.1 million in illegal aid. Five cartel decisions were also taken and six Statements of Objections (also known as ‘charge sheets’ outside the EU system) were sent. Fines for a total of €365 million were imposed on companies that were found in breach of EU competition rules. Finally, in antitrust proper we took two commitment decisions and sent eight Statements of Objections.

On the policy development side, three initiatives stand out:

  • an antitrust sector inquiry to find out whether contractual restrictions hamper the growth of cross-border transactions in e-commerce;
  • the first ever sector inquiry under state aid rules to study the measures that EU countries take to guarantee electricity supply (‘capacity mechanisms’); and
  • the ECN+ initiative to help national competition authorities in all EU countries become more effective enforcers.

Links with international partners in multilateral fora, such as the International Competition Network and the OECD, as well as in bilateral relations continued to be reinforced and expanded. One highlight of the latter in 2015 is the first meeting on the implementation of the competition chapter of the EU–Korea Free Trade Agreement.

The picture that emerges from these figures is one of sustained and robust enforcement, which is an accurate but decidedly partial reflection of DG Competition activity during the year. In competition enforcement quantitative indicators of output should be complemented with hard-to-quantify qualitative features, such as the technical accuracy, relevance and impact of the investigations carried out, decisions taken and policy work. These traditional features of competition enforcement in the EU were maintained and strengthened in 2015. The European Commission and DG Competition spared no efforts to keep the Single Market as a level and open business environment and to defend and protect the interests of European consumers.

Enforcement highlights

As an indication that the EU is probably leaving the long economic recession behind, last year’s mergers activity saw an increase of 9 per cent over 2014 and of 23 per cent over 2013, bringing the total number of cases close to pre-crisis levels. DG Competition reviewed proposed deals across the whole gamut of industries and some transactions were very complex. One notable case involved the telecom operators Telenor and TeliaSonera. In-depth investigations in the companies’ plan to merge their respective business units in Denmark were opened in April. Subsequent analysis of the deal revealed serious competition concerns that discussions with the parties were not able to fully address. Eventually the parties dropped their plans in September.

In state aid control we recorded a lower number of complaints and notifications, which was one of the intended effects of the recently introduced reform programme known as state aid modernisation. Member states used the new opportunities offered by the reforms to make sure domestically that the aid they grant does not distort competition in the Single Market. The aid that passes muster need not be notified to the Commission. The shift allowed DG Competition to focus on the more problematic and complex measures, as shown by the increase in ex officio cases opened in 2015.

State aid activity included the continued control of public funds used to stabilise the banking sectors in Greece, Portugal, Ireland, Austria and Italy. In addition, the investigations into whether the agreements between the tax authorities of certain EU countries and multinational businesses involved selective advantages to certain operators – part of the Commission’s and global drive to bring aggressive corporate tax planning under control – reached a new stage. The first two decisions were taken in 2015, ordering the Netherlands to recover illegal fiscal aid in the region of €20 to 30 million from Starbucks, and Luxembourg to recover the same amount from Fiat Finance and Trade.

In antitrust, four prominent cases can be recalled: the fine meted out to the financial broker ICAP for participating in several cartels in yen interest rate derivatives, the antitrust commitment decision involving Bulgarian Energy Holding, the Statement of Objections served to Google for abuse of dominant position in its shopping comparison services, and the parallel formal opening of investigation involving the same company as regards the mobile operating system Android.

These cases point to three priority areas of activity – financial services, energy and the digital industries – which illustrate that competition policy and enforcement address the strategic orientations put forward by President Juncker and his Commission. However, it should be pointed out that only about 20 per cent of the resources of DG Competition are devoted to these three priority areas. In fact, the work of established competition authorities such as DG Competition naturally spreads across all economic sectors.

Looking ahead

The remainder of 2016 and 2017 will be a time of ever enhanced enforcement and strategic forward planning. After several years of legal and structural evolution the capabilities of the European Commission’s competition agency have been strengthened and have become more stable. DG Competition is well positioned to deliver; enforcing EU competition law across all industries, helping to consolidate the Single Market, fostering the progressive integration of national economies, and sustaining growth and innovation in Europe.

The focus on enforcement will imply the relentless monitoring of potentially anticompetitive business practices and government measures across all sectors of the economy. In doing so, DG Competition will not first and foremost look at the visibility and size of a competition case but at its impact on practices and sectors, the timeliness of remedies and the precedent value for the economy as a whole. It will pay continued attention to the standards of investigative work and the ability to bring investigations to solid, factual and well-argued decisions without undue delay.

This strategic shift of focus towards enforcement is meant to facilitate the smooth restructuring of markets that will be required as Europe’s economy adapts to the challenges brought by the rise of new international players and the need to do business in today’s global supply chains. The Single Market is one of Europe’s main assets in this context and a distinctive competitive advantage over our international partners. The joint efforts of regulators and enforcers to deepen the Single Market, expand it to new sectors – above all, the digital industries – and keep it a level playing field has never been more important.

A new emphasis on enforcement is also meant to enhance consumer welfare across the EU. Competition policy and enforcement is an endeavour of the European Commission that can make a difference in people’s lives. To quote Competition Commissioner Margrethe Vestager: ‘Competition policy isn’t there to defend the competitors of a powerful company. It isn’t there to help one company, and hold back another. It’s there to defend consumers’.1 European citizens can touch first-hand the benefits of lower prices and broader choice. At a time when citizens in several member states show declining levels of confidence in the European project, it will be more important than ever to advocate these benefits and show the people what the EU can do for them.

Notes

  1. ‘Competition is a Consumer Issue’. Speech given at BEUC’s General Assembly, 13 May 2016. Full text available at http://ec.europa.eu/commission/2014-2019/vestager/announcements/competition-consumer-issue_en.

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