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European Competition Forum 2014

European Competition Forum 2014

Brussels, 11 February 2014

The internal market and beyond, challenges facing modern competition policy.

Programme   Download pdf


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Opening address: Fighting for the single market

Fighting for the single market

Vice President of the Commission Joaquín Almunia opened the third European Competition Forum.
Reaching out to a broad audience, Almunia hoped to show that competition "can make a real difference" in the lives of citizens, by "keeping the Single Market open and turning it into a driver of innovation and growth in Europe."

Almunia discussed competition enforcement in several sectors, notably Telecoms and Energy. Growth in Telecoms is very high, and "Europe's competitiveness would greatly benefit if dynamic and innovative players could operate in a truly EU-wide market."

He noted, however, that there "there is no such thing as an integrated market for telecommunications." Though there is a frequent call for creating large European players, merger deals mainly affect national markets, rather than cross border ones. "Creating larger players within national markets just reinforces market power at this level."

Almunia also called for a "a real Single Market for energy" which "would bring down costs across Europe; reduce our present concerns about intermittence and security of supply; and encourage much-needed investment in infrastructure"

Almunia further discussed taxation. Thanks to gaps in national tax laws, "many of the largest multinational companies pay very low taxes." He described this as "socially untenable" and "contrary to the principles of the Single Market."

"In those cases where national laws or tax-administration decisions permit or encourage these practices, there might be a State aid component involved and I intend to go to the bottom of it."

Almunia ended by referring to the European elections. He called voter dissatisfaction with Europe a "real challenge" that should be tackled "with great determination". The way forward, he stated, "is more integration, not a beggar-thy-neighbour attitude."

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Keynote speech

Vince Cable: Keynote speech
Dr Vince Cable - UK Secretary of State for Business, Innovation and Skills – opened his keynote address with noting that periods of crisis increase pressure on governments to break or circumvent competition law. For this very reason, Secretary Cable added, robust competition control at EU level is needed more than ever and he pledged the full support of the British government. EU competition policy has worked well since 1957, and it has shown that it could evolve with the times.

Over the past few years, we have witnessed a profound crisis of capitalism. Confidence is destroyed; people are poorer and angry; and they take their anger against a variety of targets – including the EU. Dr Cable asked what to do to restore trust in capitalism. Supporting competition policy is one of the many things that could be done, because it shows that markets can be made to work.

Dr Cable went on to explain that his government has strengthened the competition system, including by introducing new means to crack open network monopolies. He then added that much of competition control must take place in a European framework. For instance, this is where State aid control and significant cases such as those involving Google and Gazprom belong.

In closing, Dr Cable recalled that, in the history of competition policy, profound crises have been followed by big advances. This time may not be different. Stronger competition rules can rebuild trust in the system.




Taxation and Competition Policy

Panel 1: Taxation and Competition Policy
International cooperation to tackle tax evasion, tax fraud and aggressive tax planning is gaining momentum. The G20/OECD Action Plan on Base Erosion and Profit Shifting (BEPS) is a recent example. The Commission adopted an Action Plan on the fight against fraud and tax evasion, followed by the creation of a Platform for Tax Good Governance. The European Council has given the mandate to accelerate work in this area. What is the role of competition policy and its instruments, in particular State aid investigations, in tackling these problems?

Gert Jan Koopman – Deputy Director-General at DG Competition – chaired the first panel discussion of the day on Taxation and Competition Policy.

The first speaker – Ángel Gurría, Secretary-General of the OECD – illustrated his organisation's current work in the field of taxation, especially on tax-information exchanges. He also illustrated the work of the OECD's Base Erosion and Profit Shifting project, which – he said – is not about enforcing the law, but changing it.

Commissioner Algirdas Šemeta – responsible for taxation and customs – noted better co-operation on taxation among EU countries recently. He also said that the requirement of unanimity for EU tax decisions often curtails the pace of progress. In closing, Commissioner Šemeta said that "EU tax and competition policy complement each other [...] to ensure a level playing field for countries and for companies, and to remove distortions in our Single Market".

According to José Manuel Lara García – Managing Director of Grupo Planeta – the debate should shift from 'taxing more' to 'taxing better'. For instance, he wondered why VAT for physical books in Spain is 4% but rises to 21% for digital books. In addition, he noted that non-EU players can choose where to establish in the EU to pay very little tax.

"Taxation underpins democracy", argued MEP Philippe Lamberts. Mr Lamberts warned of rising anger in society and not only among the bottom 5%. He also said that he supported Commissioner Almunia's initiative to look into corporate tax systems. Finally he noted that countries have only formal sovereignty over taxes. Today, real tax sovereignty has shifted from governments to large companies.

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Telecoms in the EU at a cross road: competition challenges in the Single market

In the context of the on-going consolidation in the telecommunications sector (in particular mobile), this panel will look at the wider debate about the single market for telecommunications and the – real or imagined? – conflict between low prices and long-term investment needs. Should the EU take inspiration from the US model?

Panel 2: Telecoms in the EU at a cross road: competition  challenges in the Single market

Massimo Motta, Chief Economist at the Directorate-General of Competition, illustrated the lack of a single market in telecoms with a personal example. "I am Italian, my wife is German, I share my life between Spain and Italy and have four Sim cards."

He asked the panellists to explain why there is no single market, what is needed to guarantee investment, whether there is a trade-off between investment and competition, and what their view is on future developments in telecoms.

According to Reinhilde Veugelers, senior fellow at the Bruegel think-tank, "the digital revolution has created a disruption for the traditional telecoms model". While European companies are very strong in the physical infrastructure, American companies are dominating the actual use of networks through software and applications, "which is where most innovation takes place."

"Ambiguity is a bad thing" said CEO of Deutsche Telekom Timotheus Höttges. "This business is full of ambiguities. People ask for a single market, but local regulators have their own spectrum auctions to reduce indebtedness of national budgets. We are asked to lower consumer prices, but at the same time are asked to invest in infrastructure."

Next speaker was Jacques Bonifay (CEO of Transatel and president of the European Association of Full Mobile Virtual Network Operators (MVNOs). He does business in several European countries but finds further expansion difficult due to national differences. "Taxes are not the same. The rules of the games are not the same. It is difficult to strike deals in all countries".

"Why is there no European market? It would help me."

Member of the European Parliament Catherine Trautmann is discussing telecoms proposals in Parliament. "From the 2009 proposals, network neutrality and broadband spectrum remain intact." She joked: "We review so few pieces of hard legislation, we could not afford to let this one slide."

She pointed to the importance of physical infrastructure. "Without a physical network, an iPhone is a glorified watch."


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Competition enforcement in the next decade

- A US perspective: Public and private enforcement in the U.S. federal system

William J. Baer: A US perspective: Public and private enforcement in the U.S. federal system

William J. Baer, Assistant Attorney General for the Antitrust Division of the US Department of Justice outlined the principles that underpin antitrust legislation and enforcement in the U.S. In particular, he analysed the links between federal, state and private levels. He also recalled that US States can take an active part in Merger enforcement, too.

One example of the cooperation between these two levels of government is the e-book case involving Apple and several publishers, which was also investigated by the European Commission. Mr Baer extolled the good cooperation with European competition authorities. "The scale and success of that cooperation has made multinational investigations much more effective", he concluded.

- Ten years of competition enforcement under Regulation 1/2003: looking forward to the next decade

Panel 3: Ten years of competition enforcement under Regulation 1/2003: looking forward to the next decade

The last panel of the day, chaired by Luc Gyselen of Arnold & Porter, a law firm, looked back at the first ten years since the modernisation of antitrust rules.

Alexander Italianer – Director-General of DG Competition – believes that the system that emerged from Regulation 1/2003 is a big success. Cooperation among EU competition authorities extends to merger control, where the one-stop-shop system set up over the years works smoothly and shows a high degree of convergence in substantive analysis. The next big step forward will be the adoption of the Commission's proposal on private damages. The main point will be keeping private enforcement complementary to public enforcement.

"The ECN lives in an environment we did not think would be possible ten years ago", says Andreas Mundt, President of the Bundeskartellamt and Chair of the International Competition Network. As to the areas of improvement in cartels, Mr Mundt pointed out that there are still disparities in the levels and systems of fines, which can be addressed through jurisprudence, soft law and legislation. "We need something like Regulation 1/2003 mark II on sanctions and procedures", he said.

The viewpoint of judges was provided by Jacqueline Riffault-Silk, of the Commercial Chamber of France's Cour de Cassation, and Peter Freeman, Chairman of the UK Competition Appeal Tribunal.

The former believes that "Regulation 1/2003 has been an exceptional step forward in the application of competition law" and that it has worked "in the European way". No criminal system was ever introduced. Rather, protecting the interests of the Community has always been the point. She also noted the continuous and on-going movement of reform in national legislations Regulation 1/2003 has triggered throughout the years.

Mr Freeman stated that "Regulation 1/2003 has been an outstanding success" in implementation. On the other hand, he added, every good policy has a flip side. "Regulation 1 propelled the legal community into a self-assessment world" to the detriment of jurisprudence. As a judge, "I would like to see more jurisprudence, not less", he said. In closing, Mr Freeman shared his views on the future of competition policy when private enforcement becomes operational.

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Closing address

Alexander Italianer - Director-General, DG Competition, European Commission