Competition weekly news summary
Friday, January 28, 2011

Conferences and Speeches

  • Aegean Airlines / Olympic decision
    Introductory remarks at press conference, Brussels, Joaquín Almunia
    26 January 2011
    "Our control on mergers does not – and will not – prevent the emergence of strong companies with a global reach. But we have a duty to prohibit mergers that would significantly reduce competition and make consumers worse off."
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Antitrust

  • Commission probes co-operation between Telefónica and Portugal Telecom on Iberian markets
    24 January 2011
    The Commission has opened a formal investigation to ascertain whether the Spanish and Portuguese telecoms incumbents Telefónica S.A. and Portugal Telecom SGPS S.A. have breached EU antitrust rules by agreeing not to compete with each other in their respective home markets. The agreement was concluded last year when Telefónica acquired sole control over their Brazilian joint venture Vivo. The Commission will also investigate whether the non-compete agreement pre-dates the Vivo transaction.
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Mergers

  • Commission blocks proposed merger between Aegean Airlines and Olympic Air
    26 January 2011
    The Commission has prohibited the proposed merger between Aegean Airlines and Olympic Air, because it would have resulted in a quasi-monopoly on the Greek air transport market. Together the two carriers control more than 90% of the Greek domestic air transport market and the Commission's investigation showed no realistic prospects that a new airline of a sufficient size would enter the routes and restrain the merged entity's pricing.
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  • Commission clears Intel's proposed acquisition of McAfee, subject to conditions
    26 January 2011
    The Commission approved the proposed acquisition of McAfee, a vendor of information technology security, by Intel, both of the US. The approval is conditional upon a set of commitments ensuring fair competition between the parties and their competitors in the field of computer security. The Commission was concerned that rival IT security products might be excluded from the marketplace given Intel's strong presence in the world markets for computer chips and chipsets. To alleviate those concerns, Intel committed to ensuring the interoperability of the merged entity's products with those of competitors.
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  • Commission approves proposed acquisition of International Power by GDF Suez, subject to conditions
    26 January 2011
    The Commission has cleared the proposed acquisition of International Power of the UK by GDF Suez of France, both active in the energy sector. The clearance is conditional on the divestment of International Power's shareholding in T-Power, the owner of a Belgian power plant due to start production in 2011, and the transfer to third parties of the operation and maintenance agreement of the T-Power plant. The commitments offered by the parties addressed the Commission's concerns that the transaction might have enabled GDF Suez to restrict competition and raise prices in the Belgian wholesale market.
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State aid

  • Commission finds German loss-carry-forward rules for ailing companies incompatible with EU state aid rules
    26 January 2011
    After an in-depth investigation, the Commission found that a provision of the German corporate tax law, that enables an ailing company to offset losses in a given year against profits in future years despite changes in its shareholder structure, is incompatible with EU state aid rules. As the corporate tax law does not generally allow for losses to be offset when there has been a significant change in the ownership structure, this provision procures a clear financial advantage to ailing firms and possibly their acquirers.
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  • Commission rules against unequal treatment resulting from certain insurance policies in France
    26 January 2011
    The Commission found that a French plan to grant tax aid to insurers for managing certain supplementary sickness insurance policies ("contrats solidaires" and "contrats responsables") is incompatible with the EU state aid rules. Without calling into question the social objective of the proposed measures, the Commission’s investigation has shown that they were not of a kind to guarantee that benefits would actually be passed on to the final consumer. The measures also risked creating discrimination in favour of the incumbents.
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  • Commission clears Spanish €37.4 million R&D support to AERNNOVA
    26 January 2011
    The Commission has authorised Spain to grant an interest-free reimbursable loan of €129 million to AERNNOVA for the development of the next-generation horizontal tail plane (HTP) of the future Airbus A350 XWB. The subsidy in the form of the foregone interest rate is estimated at €37.4 million. The Commission found the measure compatible with EU state aid rules, because the positive effects of the project outweigh any distortion of competition that the aid may bring about.
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  • Commission approves €26 million French aid for district heating network in Paris
    26 January 2011
    The Commission has authorised France to provide a €26 million direct grant for the construction of a district heating network in the North-East of Paris. The aid will be granted to CPCU, a subsidiary of GDF Suez and the current holder of the district heating concession in Paris. The Commission concluded that the aid is in line with EU state aid rules, because on balance, the positive effects of the measure outweigh the potential distortions of competition that the aid may bring about.
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  • Commission approves Swedish €55 million aid for «Domsjö» R&D project
    26 January 2011
    The Commission authorised a support of around €54.6 million that Sweden intends to grant to the Domsjö research and development project. The Swedish pulp producer Domsjö will develop a demonstration plant for the production of bio-methanol and other biofuels from pulp mill residue material. If successful, these second-generation biofuels will replace traditional fuel in the transport sector. The Commission found the project to be in line with EU state aid rules, because the aid aims at tackling a market failure and generates positive effects for the EU, notably increased research activities and environmental protection.
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Published by the Competition Directorate General of the European Commission. The content of this publication does not necessarily reflect the official position of the European Commission. Neither the Commission nor any person acting on its behalf is responsible for the use which might be made of the above information.

European Union, 2010. Reproduction is authorised provided the source is acknowledged.

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