Category Archives: Competition

Guest Blogger Ana Yankova: The Court Confirmed the Scope of Legal Professional Privilege in the Field of EU Competition Law

I am glad to introduce the first post by a guest blogger on this blog. Ana Yankova has graduated from the European Studies Department of the Sofia University “St. Kliment Ohridski” and has genuine interest in ECJ case law.

By its judgment from 14.09.2010 the Court dismissed the appeal of Akzo Nobel and Akcros against the 2007 judgment of the Court of First Instance (now ‘ the General Court’) and confirmed the constant case law which excludes internal company communications with in-house lawyers from the scope of legal professional privilege.

The appellants based the grounds of appeal on two main arguments.

First, according to Akzo Nobel and Akcros the Court of First Instance incorrectly interpreted the principle of legal professional privilege, declared by the Court of Justice of the European Communities in AM & S/Commission. The Court held that the confidentiality of written communications between lawyers and clients should be protected by Community law and stated that that protection was subject to two cumulative conditions: (1) such communications are made for the purposes and in the interests of the client’s rights of defence and (2) the documents emanate from independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment.

Taking into account the arguments of the appellants the Court came to the conclusion that “an in-house lawyer, despite his enrolment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client”. The main reasons put forward are the in-house lawyer’s economic dependence and the close ties with the employer that render professional independence comparable to that of an external lawyer impossible.

The second main argument of Akzo Nobel and Akcros is an alleged evolution of the national legal systems. According to the appellants, “notwithstanding the lack of a uniform tendency at national level, European Union law could set legal standards for the protection of the rights of defence which are higher than those set in certain national legal orders”. Akzo Nobel and Akcros claimed that the significant recent developments in the legal landscape necessitated broadening of the scope of legal professional privilege in the field of EU Competition law.

By this argument the appellants summarize the long-lasting criticisms of the judgment in AM & S/Commission. In its findings the Court refers to the comparative examination conducted by the Court of First Instance which shows that a considerable number of Member States still exclude correspondence with in-house lawyers from protection under legal professional privilege and do not allow in-house lawyers to be admitted to a Bar or Law Society. That is the reason why the Court held that “no predominant trend towards protection under legal professional privilege of communications within a company or group with in-house lawyers may be discerned”. In the Court’s view the evolution which took place during the years following the judgment in AM & S/Commission is not capable of justifying a change in the case-law and recognition for in-house lawyers of the benefit of legal professional privilege.

Regretfully, in this case there was no opportunity for the appellants to draw the attention of the Court to another important issue in regards to the scope of legal professional privilege – the European Union law does not protect communications between a client and a lawyer registered in a third country. Some commentators underline that this limitation is applicable to lawyers from the States affording analogous protection to EU lawyers.

Is the Emissions Trading Scheme Working? Report Says No

The European Emissions Trading Scheme (ETS) is the flagship initiative for curbing carbon emissions in the European Union. A new report says that the ETS is in danger not only of failing the objective for which it was set up – to secure reductions in emissions, but that it could become an environmental hindrance.

The environmental campaigning organization, Sandbag, claims that Phase II of the ETS will result in only 0,3% of reduced carbon emissions. The report blames the poor results on the free awarding of a billion surplus permits to industry and to combustion plant involved in manufacturing. According to the report the largest share of the industrial surpluses accrued to the cement and steel industries, the two sectors which have lobbied most aggressively to weaken the ambition of the scheme and to be afforded special protections from carbon prices which might harm their competitiveness. The report claims that there were distortions of competition on sectoral level: Heidelberg Cement has had a fivefold allocation advantage over its European competitors in the cement industry, while Salzgitter has had fourfold advantage against its European steel competitors. The most important recommendation of the report is to adjust Phase III caps to reflect historic emissions and to avoid contaminating the next phase with the over-allocation of the current one.

35 Years Old Phosphates Cartel Busted

The Commission has busted a market-sharing and price-fixing cartel covering most of the EU that lasted from March 1969 until February 2004. The cartel involved the major producers of animal feed phosphates.

The hybrid procedure for cartels was used for the first time. Two decisions were adopted: a streamlined settlement decision for those undertakings which have agreed to settle and admitted their participation in the cartel and, on the other hand, a standard decision for one company which decided not to settle and for which the ordinary procedure was followed.

New Restrictive Decisions of the ECJ on Access to Documents

There are two new decisions of the Court of Justice of the European Union that deal with the Access to Documents Regulation. Both decisions repeal earlier decisions of the General Court (former Court of First Instance), and are more restrictive in their understanding of the right of access to documents.

The first decision – on Case T-194/04 Bavarian Lager v Commission, deals with personal data. The Court points out that where a request based on the Access to Documents Regulation seeks to obtain access to documents including personal data, the provisions of the Data Protection Regulation become applicable in their entirety. This means that the recipient of personal data has to establish the need for the disclosure of the personal data, and the subject in question has the right to object at any time, on compelling legitimate grounds relating to his or her particular situation, to the processing of data relating to him or her.

In the second decision – on Case T-237/02 Technische Glaswerke Ilmenau v Commission, the Court examines the specifics of the state aid procedure. According to the Court interested parties other than the Member State responsible for granting the aid do not have a right under those procedures to consult the documents on the Commission’s administrative file.

The Report of the Reflection Group for the Future of the EU

The European Council in December 2007 decided to establish a ‘reflection group’ of no more than nine people, selected from across the Union on the basis of merit, to identify the key issues which the European Union is likely to face in the future and how these might be addressed.

Now the group, led by Felipe González, has issued its report “PROJECT EUROPE 2030: Challenges and Opportunities” (via Ralph Grahn).

There are some concrete proposals that I find interesting:

Economy:

  • Further developing the internal market, e.g. in the area of services;
  • Social security rights should, once and for all, be readily transportable between Member States;
  • Extension of the availability of e-infrastructure to houses, schools and businesses;
  • Development of healthcare, well-being and age-related industries and services;
  • Giving leadership for economic coordination to the European Council;
  • Reinforcing procedures for supervision of national budgets to ensure transparency as well as the sustainability of public finances.

Education and Innovation:

  • Developing flexible and open curricula capable of nurturing curiosity and creativity among children;
  • Building a network of top-level higher education establishments able to rival the best in the world;
  • Ensuring that universities have greater exposure to the real economy in Europe and the rest of the world;
  • More funding is needed for applied research that would benefit SMEs.

Demographic Challenges:

  • Family-friendly policies aimed at stabilising or increasing fertility levels should be put in place;
  • Provide the conditions in which people, in particular women with young children, and older workers, can remain in the workforce;
  • Removing the legal, administrative and cultural barriers to promote greater intra-EU labour mobility;
  • Retirement should become an option for individuals rather than an obligation;
  • A common immigration policy for the EU should set out a specific medium- to long-term strategy for targeting skilled immigrants;
  • A common approach to irregular immigrants.

Energy Security and Climate Change:

  • The headline target for energy efficiency should be raised to 50 per cent by 2030, from the currently agreed 20 per cent by 2020;
  • Move away from oil as the primary source of fuel for transport by encouraging bio-fuel standards and electric and hybrid vehicles;
  • Develop intelligent energy networks (smart grids);
  • Recourse to nuclear energy;
  • Develop unconventional energy sources such as tight gas and shale oil.
  • Internal and External Security:
  • Increasing the powers of existing agencies and instruments, such as Europol, Eurojust, the Situation Centre, Frontex and the Counter-Terrorism Coordinator;
  • Create a European civil reserve team of specially trained units ready to be deployed at short notice;
  • Develop a more integrated external border management system;
  • Agree on a workable strategic concept for the EU defence.

Foreign Relations and Enlargement:

  • Build a global economic strategy that takes into account the euro as the world’s second reserve currency;
  • Stay open to potential new members from Europe;
  • Develop an enhanced role in stabilising its immediate surroundings by building on the existing ‘European Neighbourhood Policy’, ‘Eastern Partnership’ and ‘Union for the Mediterranean’;
  • Manage a strategic co-existence, modernisation and region-building policy with Russia;
  • Pull the EU’s diplomatic, military, trade, and development policies together with the external dimensions of its common economic policies;
  • Develop an EU approach to global governance reform.

The European Citizens:

  • More transparency and accuracy in the way we communicate EU policy-making;
  • Avoid rhetoric and explain in plain language how EU adds value to its citizens’ lives;
  • Encouraging Member States to grant voting rights in national elections to nationals of other Member States after a certain period of residence and tax payments;
  • “Europeanising” European Parliament elections through the introduction of cross-border lists;
  • Create a specific administrative instrument that would provide proof of European citizenship for individuals to use on a voluntary basis in order to access residence, employment and social security rights;
  • Establish a system for evaluating the impact of EU law.

New Regulation on Vertical Agreements

The new Regulation (EU) No 330/2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices is published in the Official Journal. It repeals the old Regulation (EC) No 2790/1999.

The regulation determines the category of agreements which can be regarded as normally satisfying the conditions laid down in Article 101(3) TFEU (old article 81 TEC). These agreements include vertical agreements for the purchase or sale of goods or services where those agreements are concluded between non-competing undertakings, between certain competitors or by certain associations of retailers of goods. It also includes vertical agreements containing ancillary provisions on the assignment or use of intellectual property rights.

Is Germany to Blame for the Crisis of the Eurozone?

I’ve heard this many times before, and it has come from all sorts of directions. But now two people that I respect – Martin Wolf and Peter Zeihan both say that Germany has in fact a lot to do with the current financial crisis of the eurozone.

Martin Wolf talks about the strategy of “Chermany” – that is, China and Germany, to encourage deflation in countries with trade deficit during the current economic crisis. Mr. Wolf criticizes the proposals of the German finance minister Wolfgang Schaüble that include combining emergency aid for countries running excessive fiscal deficits with fierce penalties; suspending voting rights of badly behaving members within the eurogroup; and allowing a member to exit the monetary union. Mr. Wolf believes this will weaken the entire eurozone economy because of the necessary deflation in trade deficit countries. He also says that trade surplus countries (and Germany in particular) refuse to accept that their reliance on export surpluses must rebound upon their internal markets.

Peter Zeihan goes much further. He bluntly says that the Germans crafted the euro to rewire the European Union for their own purposes. He points out that European states are borrowing money (mostly from Germany) in order to purchase imported goods (mostly from Germany) because their own workers cannot compete on price (mostly because of Germany). Mr. Zeihan concludes that the European Union is becoming a kind of a Mitteleuropa.

I am not an economist and therefore I cannot evaluate in substance the arguments of the authors. I am worried, however, about the repercussions of such a line of thought.