Post published by Chantal Lavoie on 1 March 2017
The Directorate General for Competition (DGComp) published on 15 February 2017 its management plan for 2017. It reveals the key objectives and areas of focus of DGComp for 2017. We highlight below items of particular interest:
Priority economic sectors in 2017
- DGComp priority sectors for 2017: energy; digital; capital markets union; deeper and fairer internal market.
The list of priority sectors comes as no surprise as they are part of the wider European Commission strategic plan. In the energy sector, the European Commission will continue its investigations into ethanol price benchmarks, Gazprom , possible foreclosure by BEH of the gas markets in Bulgaria and concessions for exploiting hydropower in France, as well as waste management and state aid cases (e.g. capacity mechanisms; support measures to promote renewable energy).
In the digital sector, the Google cases will be the focus of attention. In addition to the ongoing investigations into Google AdSense and Google Android, the Google Search investigation could be decided upon this year. Qualcomm (practices in baseband chipset) and Amazon (practices in the publishing sector) also figure prominently in DGComp’s Management Plan on the list of priority cases in the digital sector.
In the financial services sector, DGComp announced that it may ‘engage in’ a study to consider potential competition issues stemming from loan syndication. DGComp appears to have concerns regarding the structure of loan syndication and the potential for coordination among banks. Specific reference is made to loan syndication in ‘over-the-counter’ settings. This is the first time to my knowledge that DGComp mentions such a concern. This may be a good opportunity for banks to review their practices in the area of loan syndication and, if needed, tighten up their compliance policies.
As regards the internal market, DGComp will continue to monitor and investigate practices in sectors such as financial services, agri-food sector, pharma, transport and manufacturing. In particular, DG Comp will continue its investigations into interbank fees and monitoring of the OTC derivatives market and of payment systems. Monitoring in the OTC derivatives market stems from the commitments decisions adopted in 2016 in relation to ISDA and HIS Markit. DGComp intends to monitor concerns of coordination and entry barriers in the OTC derivatives market. DGComp also carried out an extensive review of the payments market in 2016 in the context of its conditional approval of Worldonline’s acquisition of Equens. Monitoring of the payment systems market will focus on whether traditional payments systems are trying to maintain their gatekeeper position or, conversely, whether new entrants may be leveraging their dominant position in neighbouring markets to take on a gatekeeper position.
Competition enforcement priorities in 2017
- Continued focus on cartels in 2017 as the key area of DGComp’s enforcement activity
An improved methodology will continue to be used by DGComp to allow it to gather digital data more efficiently during dawn raids. DGComp also remains committed to using the settlement procedure in ‘suitable’ cases.
- Keeping an eye on mergers in the telecoms sector and communications and IT sector
- Enforcement focus on anti-competitive foreclosure in the digital sector
- DGComp to continue its practice of granting fine reduction for cooperation in prohibition decisions under Regulation 1/2003 (anti-competitive arrangements and abuse of dominant position).
A fine reduction was granted for the first time last year to ARA in return for its cooperation in an abuse of dominance investigation.
- In addition to focusing on state aid schemes in the energy and broadband sectors, state aid investigations into the granting by member states of selective fiscal advantages will remain a priority
Ongoing state aid cases include formal investigations into tax rulings by Luxemburg in favour of Amazon, McDonald’s and Engie. DGComp will also be pursuing its investigation into corporate tax exemptions for ports’ economic activities in Belgium and France.
Legislative and policy initiatives for 2017
- Adopting a proposal for EU legislation to reinforce the enforcement powers of the EU’s national competition authorities (NCAs).
DGComp launched a public consultation in November 2015 on how to empower NCAs to be more efficient enforcers. Results of the public consultation were disclosed in April 2016. Since then, the European Commission has been assessing possible options for reinforcing NCAs’powers, ranging from legislative and non-legislative options. Although unspecified in the management plan, the legislative route is expected to take the form of a proposal for a directive setting out minimum rules. EU member states will then be free to adopt stricter national rules. A proposal is expected in Q2 2017.
Four areas of concern are being targeted by legislative and/or non-legislative action:
1. granting NCAs the minimum tools to be efficient enforcers e.g. ability to gather digital evidence;
2. guaranteeing the independence of NCAs, notably institutional, operational and financial independence;
3. addressing differences in fining policies across member states; and
4. issues around parallel leniency programmes and the absence of a one-stop-shop for leniency in the EU.
- DGComp to issue guidelines for national courts to assist with quantifying passing-on effects in antitrust damages actions.
- DGComp to review technical aspects of the merger procedures as well as continue its evaluation of the merger control regulation (including considering the addition of a threshold based on transaction value).
- Adoption of Commission proposal to extend the General Block Exemption Regulation to cover investments in ports (target Q1 2017).
Inquiries/Studies in 2017
- DGComp may ‘engage’ in a study to consider potential competition issues stemming from loan syndication. (see above)
- Final report into the e-commerce inquiry to be published in 2017. In the meantime, DGComp has already announced the opening of three investigations in the area of e-commerce.