REVISTA DO MINISTÉRIO PÚBLICO Nº110

2006 Annual Report on Competition Policy, a contribution to a European economic policy for growth and jobs

The European Commission has adopted its 2006 Annual Report on Competition Policy, which gives an overview of the main developments in competition policy in 2006. It summarises changes to competition rules and policy and shows, through specific examples, how the instruments of competition policy were used to build a stronger European economy and to benefit consumers and businesses alike.

Competition Commissioner Neelie Kroes said “Competition policy continues to work for European consumers and businesses. Safeguarding and creating the conditions for undistorted competition is an integral part of delivering the Single Market. The Annual Report illustrates how this was done in practice in 2006. This overview of the fight against cartels, abuses of dominant positions and illegal state aid shows the concrete results competition policy delivered to make markets perform better for all European citizens."

Antitrust
In 2006 the Commission adopted decisions against 7 cartels, fining 41 undertakings a total of €1 846 million. Bringing these 7 cartels to an end will dramatically improve the functioning of the markets concerned, often providing customers with genuine choice and price competition for the first time in years. In order to increase the deterrence of its fines, the Commission adopted new Guidelines on the method of setting fines (see IP/06/857). The Leniency Notice was revised to provide more guidance to whistle-blowers (see IP/06/1705) and to destabilise cartels yet further. Further steps were taken to sanction abuses of dominance: cases were opened against Telefónica and Distrigaz (see MEMO/06/91 and MEMO/06/197) and one final decision was adopted imposing a fine of €24 million on the Tomra group (see IP/06/398). The commitment decisions in the FA Premier League REPSOL and Cannes Extension Agreement cases (see IP/06/356, IP/06/495 and IP/06/1311) show that commitments continue to be an effective means of addressing competition problems. A periodic penalty payment of €280.5 million was imposed on Microsoft for non-compliance with its obligations under a previous decision from 2004 (see IP/06/979).

Mergers
The number of mergers notified to the Commission in 2006 reached a record level of 356. In-depth investigations were opened in 13 cases, two concentrations were abandoned by the notifying parties during the in-depth investigation and there were no prohibition decisions. 13 transactions were cleared subject to conditions ensuring that the concentration did not significantly impede competition. For example, remedies obtained by the Commission in the T-Mobile Austria/tele.ring case allow Austrian consumers to continue to benefit from favourable mobile telephony offers (see IP/06/535).

State aid
In the area of state aid, the Commission delivered important progress on the reforms launched with the 2005 State Aid Action Plan (see IP/05/680 and MEMO/05/195). A new block exemption Regulation simplified the approval of regional investment aid (see IP/06/1453). A new state aid framework for Research, Development and Innovation was put in place (see IP/06/1600). New Risk Capital Guidelines were adopted. These two sets of rules mark a qualitative step forward to targeting public subsidies on proven market failures in order to help promote the conditions for economic growth and jobs in Europe. The new 'de minimis' Regulation exempts more small subsidies from the obligation to be cleared by the Commission in advance (see IP/06/1765). In parallel to these reforms there was a significant increase in the state aid control workload, with 921 new cases registered.

The Report also discusses how the mix of competition policy and other instruments was used in selected priority sectors such as energy, financial services and telecommunications to improve the functioning of these markets which affect the daily lives of consumers across Europe. Tackling barriers to competition in these sectors promotes economic growth and increased employment not just in the sectors themselves, but across all industrial sectors which use these vital inputs.A Commission Staff Working Document annexed to the Report provides substantial additional information. The full texts of the Report and the Commission Staff Working Document are available at:
http://ec.europa.eu/comm/competition/annual_reports/