EUROPEAN COMMISSION
Brussels, 7.7.2021
COM(2021) 373 final
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS
Report on Competition Policy 2020
{SWD(2021) 177 final}
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS
Report on Competition Policy 2020
1. Introduction
This report is the first account of the competition policy developments under the Commission led by President von der Leyen. Covering the developments in EU competition policy in 2020, it also is the 50th report addressed by the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions.
The legitimacy of EU competition policy is grounded in the Treaties that have entrusted the Union with an exclusive competence in this area as a necessary tool to support the functioning of the internal market. For more than 60 years, EU competition enforcement has been paramount to preserve and foster the European economy based on European values such as fairness, rule of law and trust. Competition policy also evolves in tandem with societal, economic and regulatory changes. Today – when the EU faces one of its biggest crises ever – a robust competition policy in the EU is more important than ever to contribute to economic dynamism, essential for a faster recovery.
Throughout the first year of the Von der Leyen Commission, EU competition policy played a key role in the Commission’s efforts to respond to and overcome the health and economic crisis caused by the COVID-19 outbreak. Competition policy also was paramount to facilitate the path to recovery while bearing in mind the green and digital transitions of the EU economy. In line with the mission letter addressed by President von der Leyen to Executive Vice-President Vestager, the Commission continued to ensure that competition rules remain fit for the modern economy, vigorously enforced and contribute to a strong European industry, both within the EU and on the global stage.
In 2020, the competition policy toolkit proved to be relevant, agile and rapidly adjustable to the exceptional circumstances of the health and economic crisis. By responding and adjusting quickly, the Commission’s competition policy helped to meet the needs of EU industry and citizens while preserving competitive markets. This became particularly prominent in a series of actions which allowed for quick support from public sources to flow to the real economy or were part of the broader policy agenda aiming at restoring sustainable growth, while avoiding unnecessary market distortions.
On 13 March 2020, the Commission set out in its Communication on a coordinated economic response to the COVID-19 outbreak the various options available to Member States outside the scope of the EU State aid control and which they could put in place without the involvement of the Commission. These included measures applicable to all undertakings regarding wage subsidies, suspension of payments of corporate and value added taxes or social welfare contributions, or financial support directly to consumers for cancelled services or tickets not reimbursed by the operators concerned.
On 19 March 2020, the Commission adopted a Temporary Framework for State aid measures to support the economy and revised it several times as the COVID-19 crisis progressed. Moreover, on 8 April 2020, the Commission adopted a
Temporary Framework Communication
, setting out the main criteria that the Commission will follow when assessing cooperation projects aimed at addressing a shortage of supply of essential products and services during the Coronavirus outbreak. At the same time, the Commission put in place a number of measures to ensure business continuity and continued to ensure the implementation of the EU merger rules, to avoid market power growing on the back of the crisis.
To ensure that competition rules remain fit for purpose and fully able to deal with challenges such as structural problems in digital markets and foreign subsidies distorting competition in EU markets, the Commission took major policy initiatives in 2020. For example, it tabled a proposal for a Digital Markets Act and published a White Paper on foreign subsidies, to kick start the reflection on how to address the distortive effects on the Internal Market that foreign subsidies may have.
The Commission showed its readiness to use competition policy to contribute to the preparation of the implementation of the Recovery and Resilience Facility. The Commission has assisted the Member States preparing Recovery and Resilience Plans, including from a competition policy point of view, and has published a number of
guiding templates
to assist Member States in the design of their national Recovery and Resilience Plans to ensure that they are in line with EU State aid rules.
While addressing the immediate challenges posed by the pandemic, EU competition enforcement in 2020 contributed to the longer term objectives of the 2019-2024 Commission such as “A Europe fit for the digital age”, “A European Green Deal”, and “An economy that works for people”. The Commission proposal for the Multiannual Financial Framework 2021-2027 included an important change in including a dedicated component for competition policy within the Single Market Programme. This will provide stable financing of measures enhancing the Commission’s enforcement capacity, for instance the development of advanced intelligence and investigative methodologies. The funding will also allow the Commission to strengthen its cooperation with public administrations in the EU and elsewhere.
2. EU Competition policy mobilised to alleviate the impact of the COVID-19 pandemic
2.1. State aid policy facilitated COVID-19 support by the Member States
In 2020, with the rapid spread of the COVID-19 pandemic and its profound adverse impact on the EU economy, national and EU policymakers were forced to react quickly and on various fronts to address this unprecedented threat. Decisive action included notably the EUR 750 billion NextGenerationEU recovery instrument, the activation of the general escape clause of the Stability and Growth Pact, and the joint procurement of different medical devices, such as ventilators, masks, and, finally, of vaccines.
In this context, the EU competition policy became an important component of the crisis response stabilising the economy. This applied in particular to State aid policy. Well-targeted public support was crucial to counter the damage inflicted on healthy undertakings and to preserve the continuity of economic activity. At the same time, the Commission ensured that public support could reach companies in need and that harmful subsidy races were avoided.
The Temporary Framework adopted at the beginning of the crisis set out the conditions the Commission would apply to declare aid compatible with Article 107(3)(b) TFEU (aid to “remedy a serious disturbance in the economy of a Member State”). The Temporary Framework was amended several times in 2020, demonstrating the Commission’s ability to adapt the rules to the changing nature of the crisis.
In April 2020, it was extended to cover support to companies that develop, test and manufacture much needed products to fight the Coronavirus such as vaccines, medicines, medical devices, disinfectants and protective equipment, as well as wage support and tax deferral schemes. The second amendment adopted in May 2020 set out the criteria how Member States could carry out recapitalisations and provide subordinated debt to companies in need. A third amendment in June 2020 extended the Temporary Framework to enable Member States to provide public support to all micro and small companies, even if they were already in financial difficulty on 31 December 2019. A fourth amendment was adopted in October 2020, prolonging the scope of the
Temporary Framework
by six months until 30 June 2021 and enabling recapitalisation support until 30 September 2021.In view of the second wave of the COVID-19 outbreak and the longer than initially expected duration of the crisis, the fifth amendment in January 2021 prolonged all measures set out in the Temporary Framework, including recapitalisation measures, until 31 December 2021 and expanded the scope of the Temporary Framework by increasing the ceilings set out in it, and by allowing the conversion of certain repayable instruments into direct grants until the end of 2021.
In a very short time, the Commission adopted a large number of State aid decisions under the Temporary Framework allowing Member States to adopt measures alleviating the economic effects of the COVID-19 pandemic. In 2020, the Commission adopted 598 COVID-19 related State aid decisions. In this period, the Commission authorised State aid that can be estimated to EUR 3.08 trillion. A number of these aid measures have been co-financed by cohesion policy, notably thanks to the two emergency response packages proposed by the Commission, and approved by the European Parliament and the European Council in 2020: the Coronavirus Response Investment Initiative (CRII) and the Coronavirus Response Investment Initiative Plus (CRII+).
Several Member States notified “umbrella schemes” covering different sectors of the economy through different types of aid, including support targeted at small and medium-sized enterprises (SMEs). For example, France notified a EUR 7 billion umbrella scheme supporting SMEs in particular. The scheme included several types of support, such as direct grants, loans with favorable interest rates and state guarantees for loans
. A number of Member States, including Denmark, Bulgaria, Greece, Italy, Romania, Belgium and Slovakia, notified aid specifically in support of SMEs. Aid to SMEs was provided in various forms such as tax deferrals (Denmark), public guarantee schemes (Bulgaria) and grants covering interest on existing debt obligations (Greece)
.
Several Member States notified aid to support research, development, testing infrastructures and production of Coronavirus-related products. For example, Germany notified an umbrella scheme to support research, development, testing and production of Coronavirus-relevant products
.
The transport sector was severely hit by the global pandemic. In 2020, the Commission adopted 42 decisions allowing State aid to airlines, airports and ground handling companies to address their liquidity and capital needs caused by the COVID-19 pandemic. A number of airlines benefitted from aid approved under the Temporary Framework (Article 107(3)(b) TFEU), including Air France, Lufthansa, SAS, Austrian Airlines, airBaltic, Blue Air, KLM, Nordica, Alitalia and Brussels Airlines
. Aid to airlines was also authorised under Article 107(3)(c) TFEU and the Guidelines on rescue and restructuring aid. For example, the Commission approved State aid to French airline Corsair. The airline’s existing financial difficulties were aggravated by the Coronavirus outbreak. Therefore, the State aid consisted of two separate measures; EUR 106.7 million in restructuring aid and EUR 30.2 million to compensate Corsair for damage caused by the Coronavirus outbreak. Portuguese airline TAP did not qualify for aid under the Temporary Framework because the company was already in financial difficulty before 31 December 2019. The Commission approved a EUR 1.2 billion rescue loan to TAP. The Commission also approved schemes to compensate regional and local public transport companies for the damage suffered as a result of lockdowns and other measures
. In addition to transport, the Commission approved under Article 107(3)(b) TFEU measures adopted by Member States for undertakings particularly hit by the outbreak, for example in the tourism, culture, hospitality and retail sectors. The Commission also adopted a number of decisions under Article 107(2)(b) TFEU (aid to make good the damage caused by natural disasters or exceptional occurrences), for example to compensate damages to the self-employed, to subsidise companies’ fixed costs and to compensate losses due to the cancellation of sports events.
The Commission also approved under Article 107(3)(b) TFEU a range of State aid measures destined for specific areas of Member States. Germany, for instance, notified a EUR 46 billion fund (‘BayernFonds’) in the forms of guarantees, recapitalisation instruments and subsidised debt instruments for Bavaria to provide liquidity and capital support to enterprises
. State aid measures were also approved for Wallonia and Brussels regions of Belgium and the regions of Friuli Venezia Giulia and the South of Italy
.
As regards the amounts approved by the Commission, there were very large differences between Member States. These differences are partially explained by the diverging sizes of the Member States’ economies.
More specifically, around 51.5% of State aid approved was notified by Germany. Italy notified measures that represent around 14.7% of the entire amount of State aid approved, while the aid notified by France represented 13.9% of this amount. The aid notified by Spain represented 4.8% of the entire amount of State aid approved, while the aid notified by Poland and Belgium corresponded to around 2% and 1.8% respectively. Aid notified by other Member States is estimated to be between 0.01% and 1.5% of the total estimated amount of EUR 3.08 trillion. The actual economic impact of the State aid measures depends on their implementation, not on budgets. This is why the Commission is monitoring the implementation of COVID-19 related State aid measures and adapting its State aid strategy to the evolution of the situation on the internal market.
Based on the replies of all 27 Member States to two consecutive surveys carried out by the European Commission, in the period between mid-March and end of December 2020, EUR 2.96 trillion in aid approved by then, around 544 billion euros was actually spent. In absolute terms, according to the preliminary data sent by Member States, France has granted more than a fourth of the total aid paid out (EUR 155.36 billion), followed by Italy with 19.8% of the total aid paid out (EUR 107.9 billion), Germany with 19.1% of the total aid paid out (EUR 104.25 billion) and Spain at 16.7% (EUR 90.8 billion). In relative terms, according to the preliminary data sent by Member States, Spain is the country that has disbursed the most as compared to its own GDP (7.3%), followed by France (6.4%), Italy (6.0%), Greece (4.4%), Malta (3.9%), Hungary (3.7%), Portugal (3.6%), Poland (3.6%) and Cyprus (3.5%). At EU 27 level, the Coronavirus related State aid spending corresponds to around 3.9% of EU GDP.
Beyond aid notified under the Temporary Framework, Member States are entitled to adopt measures that fall outside the scope of EU State aid control. State aid considered less distortive, for example aid based on the de minimis regulations
or under certain block exemption regulations
can be adopted without prior approval of the Commission. These included notably measures such as wage subsidies, payment suspensions of corporate taxes and VAT and social welfare contributions.
2.2. Guidance to market participants in antitrust and merger control
Preserving market discipline to secure the functioning of the Single Market becomes even more important in times of crisis. At the same time, it is necessary to facilitate cooperation between companies when needed to fight the effects of the pandemic.
In the area of antitrust, the Commission swiftly adopted a series of measures covering various areas.
The Commission provided guidance to market participants in a Communication and in an ad-hoc comfort letter, setting out the main criteria it uses when assessing cooperation projects aimed at addressing supply shortages of products and services essential during the COVID-19 outbreak, such as medicines and medical equipment. Moreover, the Commission engaged with companies, for instance in the automotive sector, providing informal guidance for the types of cooperation that are likely to be unproblematic, and identified the necessary safeguards for such cooperation.
On 30 April 2020, the Commission issued three implementing regulations temporarily relaxing the scope of competition law rules in three agricultural sectors severely affected by the COVID-19 pandemic
. The Implementing Regulations allowed farmers and recognised Inter-Branch Organisations to take temporary collective actions to stabilise certain sectors.
In addition, the European Competition Network (ECN) issued a
joint statement on the application of the antitrust rules during the COVID-19 crisis
and cooperated closely on COVID-19 related competition issues. In the Joint Statement
, the members of the ECN expressed their understanding that the extraordinary situation may trigger the need for companies to cooperate to ensure the supply and fair distribution of scarce products to all consumers. They stated that they would not actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply. At the same time, it was of utmost importance to ensure that products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitising gel) remain available at competitive prices. The ECN stated that it would therefore not hesitate to take action against companies taking advantage of the current situation by cartelising or abusing their dominant position. Following the joint statement, the Commission and the national competition authorities have worked together to ensure that the supply of essential goods and services during the pandemic is not disrupted and that competition rules are applied coherently, both in the case of enforcement and in guiding companies’ cooperation initiatives during the crisis. Thanks to the close cooperation and coordination of COVID-19 related antitrust cases and guidance, the ECN was able to speak with one voice to companies seeking to design antitrust compliant initiatives.
In merger control, the Commission was able to continue its activities while fully respecting its legal obligations and deadlines
. Despite the pandemic, 361 transactions were notified to the Commission in 2020. Like in previous years, most notified mergers did not raise competition concerns and could be processed speedily. The Commission adopted 352 merger decisions and intervened in 18 cases. In the latter category, 13 mergers were cleared subject to commitments in first phase, three were cleared with remedies after a second phase investigation and one merger was cleared unconditionally in second phase. The simplified procedure was used in 76% of all notified transactions in 2020.
2.3. Preparing for the recovery and the exit from the crisis
With funds of EUR 672.5 billion, the Recovery and Resilience Facility (RRF)
accounts for the largest part by far of the EUR 750 billion NextGenerationEU recovery package. The RRF will support public investments and reforms in Member States, helping them to address the economic and social impact of the COVID-19 pandemic as well as to facilitate the green and digital transitions.
Review of the Recovery and Resilience Plans of the Member States
To receive grants and low-interest loans under the RRF, Member States must submit Recovery and Resilience Plans (RRPs) to be vetted by the Commission before disbursement of any funds. All projects in the RRPs must be assessed under the State aid rules. In the autumn of 2020, a number of Member States submitted draft RRPs to the Commission and DG Competition assisted in reviewing and advising on the draft RRPs. Moreover, DG Competition together with other Commission services assisted Member States preparing the RRPs in compliance with the State aid rules. To this end the Commission published a set of guiding templates in December 2020. The templates were updated in January 2021
.
3. Ensuring that Competition Rules Remain Fit for Purpose – An Extensive Policy Agenda
In 2020, the Commission continued its comprehensive review of the competition rules to make them fit for a changing market environment, including the accelerating digitalisation of the economy. The review also follows from the input provided by the three independent Special Advisers in their report of April 2019 on digitisation and competition law.
In particular, the Commission advanced on its review agenda encompassing a large number of its key block exemption regulations, guidelines and notices as well as moved forward with a number of ongoing initiatives to ensure fair competition in the Single Market, such as the proposal on the Digital Markets Act and the foreign subsidies initiative. The Commission also finalised in 2020 its “fitness check” of the 2014 State Aid Modernisation package.
3.1. New policy initiative to strengthen the competition policy toolbox
As a center-piece of the European Digital Strategy
, presented by the Commission in February 2020, the Commission put forward two legislative proposals aimed at creating a safer digital space for all users where their fundamental rights are protected and creating competitive conditions allowing innovative digital businesses to grow within the Single Market and compete globally.
In 2020, the Commission adopted a proposal for a Digital Markets Act for contestable and fair digital markets
. The proposed regulation aims at addressing structural problems in digital markets, in particular large digital platforms acting as “gatekeepers”, that is to say platforms having an intermediation position linking a large user base to a large number of businesses. As part of the digital package, the Commission also tabled a proposal for a Digital Services Act
. Both Commission proposals are subject to the ordinary legislative procedure and will be discussed in Parliament and Council during 2021.
Digital Markets Act
The Digital Markets Act – proposed regulation to be adopted under Article 114 TFEU – would aim at preventing gatekeepers from imposing unfair conditions on businesses and consumers. Examples of such unfair conditions include prohibiting businesses from accessing their own data, locking users into a particular service and limiting switching to alternative services. Companies would be designated as gatekeepers under the act if three cumulative quantitative criteria are fulfilled
. Designated gatekeepers would be subject to a number of obligations and prohibitions to ensure an open online environment that is fair for businesses and consumers, and open to innovation by all. To ensure the effectiveness of the new rules, the possibility of sanctions for non-compliance with the prohibitions and obligations in the Digital Markets Act is foreseen.
3.2. Updating merger and antitrust rules and guidance
3.2.1. Progress in merger evaluation
In 2020, the Commission progressed to the final stages of its evaluation of selected procedural and jurisdictional aspects of EU merger control. A Staff Working Document summarising the main findings of the evaluation was published on 26 March 2021. Following the results of the evaluation, the Commission adopted a communication providing guidance on the application of the referral mechanism between Member States set out in Article 22 of the Merger Regulation, and launched an impact assessment on exploring policy options for further targeting and simplification of merger procedures.
3.2.2. Review of rules on vertical supply and horizontal cooperation
With the publication of a Staff Working Document in September 2020, the Commission concluded its evaluation of the Vertical Block Exemption Regulation (“VBER”) and the Vertical Guidelines. The evaluation assessed to what extent the current regime had achieved its objective of providing a safe harbour for vertical agreements that are on balance efficiency enhancing, creating legal certainty and reducing compliance costs. The aim of the evaluation was also to decide whether these rules should be allowed to lapse, be renewed in their current form or be revised.
The evaluation showed that the VBER and the Vertical Guidelines remain useful tools that facilitate self-assessment by businesses. However, markets have developed and the evaluation identified a number of issues that need to be addressed. The Commission has launched a review with the aim to have revised rules in place by 31 May 2022 when the current rules will expire.
In 2020, the Commission continued its evaluation of the Research & Development Block Exemption Regulation (R&D BER) and the Specialisation Block Exemption Regulation (Specialisation BER), together referred to as the Horizontal block exemption regulations (HBERs). The Commission Guidelines on horizontal cooperation agreements (HGL) provide guidance for the interpretation of the HBERs and for the application of Article 101 TFEU on other horizontal agreements. The HBERs will expire on 31 December 2022. The purpose of these rules is to make it easier for undertakings to cooperate in ways that are economically desirable and without adverse effect from the point of view of competition policy. The evaluation gathers evidence on their functioning and will allow the Commission to determine whether it should let the Horizontal Block Exemption Regulations and the Guidelines lapse, prolong their duration or revise them. A Staff Working Document is foreseen in 2021.
In 2020, the Commission continued the evaluation of the Motor Vehicle Block Exemption Regulation (MVBER) adopted in 2010
. The purpose of the evaluation is to gather facts and evidence on the functioning of the motor vehicle block exemption regulation, along with the corresponding Guidelines, notably by verifying the extent to which its objectives are fulfilled. The MVBER expires in May 2023 and requires the Commission to submit an evaluation report to the Parliament and the Council in 2021.
3.2.3 Evaluation of the Market Definition Notice
In 2020, the Commission also initiated an evaluation of the Market Definition Notice. The Notice provides guidance on the principles and best practices of how the Commission applies the concept of relevant product and geographic market in its enforcement of EU competition law. The objective of the evaluation is to assess whether the notice is still fit for purpose, notably in light of recent market developments across different sectors, including digital markets. The results of the evaluation will be published in 2021.
3.2.4. Collective bargaining for the self-employed
Digital platforms have affected the way people work. They provide access to work and greater flexibility but they can also lead to greater vulnerability for some workers. Those providing services through digital platforms do not always fit into traditional employment categories, and it is not always clear whether EU competition rules act as a barrier to collective bargaining for those that need it. In June 2020, the Commission launched a process to assess whether there is a need for measures at EU level by providing increased legal certainty about the applicability of EU competition law to collective bargaining by self-employed. An initial information gathering process was conducted as part of the consultation on the Digital Services Act. In parallel, DG Competition engaged closely with stakeholders including platforms and social partners. In January 2021, the Commission published an inception impact assessment setting out the initial options for future action
.
3.2.5. Private Enforcement – Implementation report on Damages Directive and Communication on protection of confidential information by national courts
The Damages Directive
sets out rules to ensure that anyone who has suffered harm caused by an infringement of competition law by an undertaking or by an association of undertakings can effectively exercise the right to claim full compensation for that harm from that undertaking or association of undertakings before national courts. In December 2020, the Commission submitted an Implementation Report to the Parliament and the Council as required in the Directive.
The report takes stock of the implementation of some of the core rules of the Directive, such as the right to full compensation, disclosure of evidence, evidentiary value of infringement decisions, limitation periods, passing on of overcharges and estimation of harm. Since the adoption of the Directive in 2014, the number of damages actions before national courts has significantly increased and damages actions have become much more widespread in the EU. The cumulative number of cases, by date of first judgment, was approximately 50 at the beginning of 2014 and, after a sharp increase, amounted to 239 in 2019. These 239 cases came from thirteen Member States. The Commission concluded that the Damages Directive is likely to have enhanced the awareness of victims of EU competition law infringements of their right to effectively claim damages for the harm suffered.
Moreover, the Commission adopted a non-binding Communication on the protection of confidential information by national courts in proceedings for the private enforcement of EU competition law
. The Communication provides guidance on measures that national courts can impose to protect confidential information throughout and after the closing of proceedings. Examples of such measures are redactions, confidentiality rings, use of experts and hearings.
3.3. Review of the State aid rules
3.3.1. Fitness check of State aid rules concluded
In 2020, the Commission concluded the fitness check, started in 2019, of the State aid rules adopted as part of the State Aid Modernisation (SAM) package. The Railway Guidelines and the Short-term export credit Communication (STEC) were also included in the fitness check. The Commission looked into whether the rules are still fit for purpose, also in the light of the European Green Deal, the New Industrial Strategy and the Digital Strategy
of the Commission.
The results of the fitness check were published in October 2020. The Commission concluded that the rules under evaluation remain largely fit for purpose. However, certain provisions need revisions, including clarifications, further streamlining and simplification, as well as adjustments to reflect recent legislative developments, current priorities, changes in markets and technology developments. To allow sufficient time to amend the rules, the Commission has prolonged
the validity of these State aid rules until 31 December 2021. The rules would otherwise have expired at the end of 2020.
3.3.2. Review of State aid rules supporting the European Green Deal
The State aid rules are a vital part of the green transition. In line with the Commission Communication on the European Green Deal and the principles of the fitness check, the State aid guidelines relevant for the European Green Deal currently undergo a targeted revision to be finished by the end of 2021. These include the Regional aid Guidelines, IPCEI Communication, RDI Framework, Risk Finance Guidelines, Environmental and Energy Guidelines (EEAG) and relevant provisions of GBER. The revised ETS Guidelines were adopted in 2020
.
The amended ETS guidelines entered into force on 1 January 2021 with the start of the new ETS trading period. The ETS guidelines enable Member States to compensate companies in at-risk sectors for part of the higher electricity prices resulting from the carbon price signals created by the ETS (so-called indirect emission costs).
In November 2020, the Commission invited comments from stakeholders on certain aspects of the
Guidelines on State aid for environmental protection and energy
, in view of their planned revision. The Guidelines, whose validity was
prolonged
until 31 December 2021, were evaluated as part of the
fitness check
. The evaluation showed that the Guidelines have facilitated a more effective and less distortive deployment of State resources to improve environmental protection and achieve the objectives of the Energy Union. However, they need to be adjusted in light of new technologies and novel support types, as well as recent environmental and energy legislation and policy.
In 2020, the Commission finalised the evaluation of the 2014 Communication on Important Projects of Common European Interest (IPCEI), as part of the fitness check. The results showed that the IPCEI rules are broadly fit for purpose but that some targeted modifications may be warranted in light of the practical experience gained from IPCEI cases (on microelectronics and batteries) and to ensure that the IPCEI rules fully support the Commission priorities, in particular the European Green Deal and the Digital Strategy, and facilitate participation by SMEs. The consultation on a revised IPCEI Communication was launched in February 2021.
3.3.3. Stakeholder consultation on the Broadband State aid guidelines
In September 2020, the Commission launched a
public consultation
inviting Member States and other stakeholders to provide their views and comments on the existing EU State aid rules on public support for the deployment of broadband networks. The
2013 Broadband State aid Guidelines
enable Member States to provide support for the deployment of broadband networks, subject to certain conditions. The public consultation is part of an overall evaluation with a view to assess whether the guidelines are still fit for purpose or whether they will need to be updated in light of recent technological and market developments.
3.3.4. Evaluation of the SGEI package continued
In 2020, the Commission continued its evaluation of the package for Services of General Economic Interest (SGEI) adopted in 2012. The evaluation, initiated in 2019, covers the SGEI Communication, SGEI Decision, SGEI Framework and SGEI de minimis Regulation, insofar as they are applicable to health and social services (except the evaluation of the SGEI de minimis Regulation which covers a wider range of sectors). The overall objective of the package is to support Member States’ funding of SGEI of key importance to citizens and the society as a whole, while preserving the key aspects of State aid control. The goal of the evaluation is to verify if the SGEI rules applicable to health and social services are still appropriate and still provide EU added value. The results of the evaluation will be published in 2021.
3.3.5. Review of agricultural and fisheries State aid rules
In 2020, the Commission continued its review of the agricultural and fisheries State aid rules. The review comprises the Agricultural Block Exemption Regulation (ABER)
, the State aid Guidelines for agriculture, forestry and rural areas
, the Fisheries Block Exemption Regulation (FIBER)
, the Regulation on de minimis aid in the fishery and aquaculture sector
and the State aid Guidelines for fishery and aquaculture
. Those instruments were prolonged in 2020, will expire now at the end of 2022 and are currently under evaluation. The evaluations should be finalised in 2021 and followed by impact assessments, in line with Better Regulation requirements. The Commission carries out its revision with the objective to establish new sets of agricultural and fisheries State aid rules, which should start to apply in 2023.
4. EU competition policy contribution to digital transition and reinforcing the Single Market
Through the headline ambition “A Europe fit for the digital age”, President Von der Leyen defined the digital area as one of her top priorities for the Commission mandate. In competitive markets firms must innovate and become more efficient to prosper. This applies in particular to innovation-driven and fast-moving digital markets. Effective enforcement of the EU competition rules and regulatory reforms are of vital importance in the digital transformation of the EU economy contributing to a resilient recovery in the EU. By enforcing the EU competition rules, the Commission continues to tear down remaining barriers to the Single Market.
4.1. Enforcement in antitrust contributed to the digital transition and strengthening of the Single Market
In the markets for systems-on-chips (SoCs), the Commission imposed interim measures on Broadcom
, the world’s leading supplier of chipsets used for TV set-top boxes and modems, for having – in the Commission’s preliminary view – abused its dominant position in the markets of SoCs for (i) TV set-top boxes, (ii) fibre modems, and (iii) xDSL modems by entering into agreements with manufacturers of TV set-top boxes and modems that contained exclusivity-inducing provisions. In October 2020, the Commission decided to make legally binding a number of commitments offered by Broadcom
. Broadcom committed to suspend existing exclusivity or quasi-exclusivity arrangements and leveraging provisions concerning SoCs for TV set-top boxes and Internet modems contained in agreements with original equipment manufacturers. Broadcom agreed not to enter into similar agreements in the future.
The Commission concluded the final probe in relation to the sale of licensed merchandise in January 2020. The Commission fined several companies belonging to Comcast Corporation, including NBCUniversal, EUR 14.3 million for breaching EU antitrust rules. NBCUniversal included clauses in licensing agreements for film merchandise prohibiting licensees from selling online, selling outside specific territories or to other than specified customers. These clauses partitioned the Single Market to the detriment of consumers.
In February 2020, in the hotel accommodation services sector, the Spanish hotel group Meliá was fined EUR 6.7 million for including clauses in its agreements with tour operators according to which those contracts were valid only for reservations of consumers who were resident in specified countries. The Commission found that this partitioned the Single Market by restricting the ability of the tour operators to sell freely the hotel accommodation in all EEA countries and to respond to direct requests from consumers who were residents outside the defined countries.
In 2020, the Commission made progress in its investigations in ongoing cases and launched several major antitrust investigations in the digital sphere.
In November 2020, the Commission issued a Statement of Objections to Amazon provisionally finding that Amazon had abused its dominant position in breach of EU antitrust rules. Amazon acts as a retailer on its own marketplace and at the same time allows third-party sellers to sell via that same platform. Amazon has access to important non-public data of those third party sellers. Amazon feeds this data into its retail business algorithms and uses it to calibrate Amazon’s own retail offers to the detriment of the other sellers on the marketplace. In the Commission’s preliminary view, this behaviour allows Amazon to leverage its dominance in the market for the provision of marketplaces services in France and Germany.
Also in November 2020, the Commission opened a second formal antitrust investigation into Amazon’s business practices
. The investigation concerns potential self-preferencing and discriminatory practices on the marketplace run by Amazon. The Commission suspects that Amazon may favour its own retail offers on the Amazon marketplace as well as offers made by sellers that use Amazon’s logistics and delivery services (so-called fulfilment by Amazon sellers). In particular, the Commission is investigating the criteria that Amazon sets to select the winner of the “Buy box” on its marketplace. The Commission is also looking into the selection criteria that enable sellers to offer products to customers that use Amazon Prime, the company’s loyalty programme. These criteria may also lead to preferential treatment of Amazon’s retail business or of FBA sellers. For sellers to generate sales on the Amazon marketplace, it is crucial to win the Buy box and to reach Amazon Prime customers.
In June 2020, the Commission opened four formal investigations against Apple. The Commission investigates whether Apple’s terms, conditions and other measures for integrating Apple Pay in merchant apps and websites on iPhones and iPads breach EU antitrust rules. The Commission is also investigating Apple’s limitation of access to the Near Field Communication (NFC) functionality (tap and go) on iPhones for payments in stores and alleged refusals of access to Apple Pay
.
In addition, two investigations follow up on separate complaints by Spotify and by an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books/audiobooks. In these probes the Commission investigates whether Apple’s rules for app developers on the distribution of apps via the App Store violate EU competition rules. The investigations concern in particular the mandatory use of Apple’s own proprietary in-app purchase system (which involves Apple charging app developers a 30% commission on subscription fees) and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps. The conduct in question may also dis-intermediate developers of competing apps from important customer data, while Apple may obtain valuable data about the activities and offers of its competitors.
To allow the Commission to gain a more comprehensive understanding of competition issues, market dynamics and business challenges in the consumer-oriented “Internet of Things” sector, the Commission launched a sector inquiry into the Internet of Things in July 2020
. The Commission will examine conduct that could restrict or distort competition and which could merit early intervention. The final report will be issued in 2022.
In July 2020, the Commission fined three energy suppliers (Orbia, Clariant and Celanese) a total of EUR 260 million for colluding to buy ethylene at the lowest possible price to the detriment of ethylene sellers
. Ethylene is a flammable chemical, primarily used to make polyethylene, the most common plastic in use today. All companies admitted their involvement, assisted the Commission with its investigation and agreed to settle the case. A fourth cartelist, Westlake, was not fined because it revealed the cartel to the Commission.
The Commission concluded another two car parts cartel investigations in September 2020. It fined manufacturers Brose and Kiekert EUR 18 million in total. Magna and Brose took part in a bilateral cartel concerning door modules and window regulators, while Magna and Kiekert colluded in relation to latches and strikers. In both cartels, the companies fixed prices and exchanged commercially sensitive information. Magna was not fined because the company revealed both cartels to the Commission.
The Teva-Cephalon pay-for-delay agreement
In November 2020, the Commission fined
the pharmaceutical companies Teva and Cephalon EUR 60.5 million for agreeing to delay for several years the market entry of a less expensive generic version of Cephalon’s drug for sleep disorders, modafinil, after Cephalon’s main patents had expired. The agreement was concluded well before Cephalon was acquired by Teva. The agreement violated EU antitrust rules and caused substantial harm to EU patients and healthcare systems by artificially keeping prices high for modafinil.
The decision concerns a patent settlement agreement whereby Cephalon induced Teva not to enter the market with a generic version of modafinil, in exchange for a package of commercial transactions that were beneficial to Teva and some cash payments. Teva held its own patents relating to modafinil’s production process and was ready to enter the modafinil market with its own generic version, which it had already started selling in the United Kingdom. Then, it agreed with Cephalon to withdraw from the market and not to challenge Cephalon’s patents. The Commission’s investigation found that for several years, this “pay-for-delay” agreement had the object and the effect of eliminating Teva as a competitor and allowing Cephalon to continue charging high prices even if its main modafinil patents had long expired.
4.2. Merger control contributed to the digital transition and reinforced the Single Market
In May 2020, the General Court annulled the 2016 Commission decision prohibiting the merger between Hutchinson 3G and Telefonica UK. The Commission had found that the four-to-three merger would have led to an increase in prices and restriction of choice for consumers in the mobile telephony market in the United Kingdom. The General Court confirmed that the Commission can prohibit concentrations which do not create or strengthen a dominant position, but only if the merger would be liable to affect competition to an extent equivalent to the effect of dominance. The General Court found that the Commission had failed to demonstrate that the concentration would eliminate an important competitive constraint, thus giving rise to a significant impediment to effective competition. The Commission has appealed the judgment to the Court of Justice.
In November 2020, the Commission approved, subject to commitments, the proposed acquisition of Covage by SFR FTTH, a company jointly controlled by Altice, Allianz and Omers. SFR FTTH and Covage are major fibre network operators in France. Covage sells fibre network accesses at the wholesale level while Altice is active both at the wholesale and retail levels. The Commission found that the transaction would have given the merged firms a very strong position in the market for wholesale FTTO (fibre-to-the-office) services. As a result, alternative retailers would have fewer alternative suppliers. Since Covage would become vertically integrated in SFR’s retail activities, the merged entity would have both the ability and the incentive to prevent retail competitors from accessing Covage’s fibre capacity at wholesale level. SFR offered to divest 95% of Covage’s FTTO business and offered to conclude a transitional service agreement to enable the divested business to become fully independent.
The Commission conditionally approved the acquisition of Fitbit by Google in December 2020. Fitbit develops, manufactures and distributes smartwatches and fitness trackers. The Commission had concerns that Google could use Fitbit’s databases to increase the already vast amount of data Google possesses to personalise ads. Google would also be able to restrict competitors’ access to the Fitbit Web Application Programming Interface (API) and put competing manufacturers of wrist-worn devices at a disadvantage by degrading their interoperability with Android smartphones. To obtain clearance, Google committed not to use Fitbit data for Google ads and to maintain such data separate in data silos. Google also committed to continue allowing relevant third parties to obtain access to users’ health and fitness data to software applications through the Fitbit Web API without charges and subject to user consent. The company also committed to continue allowing interoperability with Android smartphones to competing wrist-worn devices. Finally, the commitments include a fast track dispute resolution mechanism that can be invoked by third parties.
In the supply of motor fuels and related products, the European Commission conditionally approved in July 2020 the acquisition of Grupa Lotos by PKN Orlen, two large Polish integrated oil and gas companies. The Commission had concerns that the transaction, as initially notified, would have harmed competition for motor fuels in Poland, jet fuel in Poland and Czechia and related products such as different types of bitumen in Poland. PKN Orlen offered a package of divestments and other commitments. The package included divestments of a stake in a refinery, storage depots, retail fuel stations and bitumen production facilities. The Commission concluded that these remedies would allow competitors to compete effectively with the merged entity.
In the rail transportation sector, the Commission conditionally approved Alstom’s acquisition of Bombardier Transportation, in July 2020. Alstom and Bombardier are global leaders in rail transportation and compete in the manufacturing and supply of very high speed trains (‘very high speed rolling stock’) and railway signaling solutions. The Commission concluded that the transaction would have raised serious competition concerns. Alstom would have become the undisputed market leader in very high speed rolling stock and mainline rolling stock as well as in mainline signaling. The Commission accepted a comprehensive commitments package offered by the merging firms, divesting train platforms and production facilities for very high speed rolling stock and mainline rolling stock. Alstom and Bombardier also offered to supply to signaling competitors legacy on-board-units, necessary interfacing information and support.
The Fiat Chrysler / Peugeot merger
In the automotive sector, the Commission approved, following an in-depth investigation and subject to conditions, the merger between Fiat Chrysler Automobiles (FCA) and Peugeot SA (PSA). The transaction created the world’s fourth largest automotive group, named Stellantis. The Commission concluded that the merger would have harmed competition in the market for small light commercial vehicles (LCVs) in several Member States. The merging firms committed to extend the current cooperation agreement between PSA and Toyota for small LCVs. PSA produces Toyota vehicles for sale in the EU. The extended agreement will increase the production capacity available for Toyota and transfer prices will be reduced for vehicles and associated spare parts and accessories. These measures allow Toyota to compete effectively with Stellantis and expand in the EU market for small LCVs. Moreover, FCA and PSA agreed to amend repair and maintenance agreements concluded with their repairer networks. Access to the repairer networks will be facilitated, allowing competitors and new entrants to compete in the market for small LCVs.
4.3. State aid facilitated the digital transition and safeguarding the Single Market
Broadband infrastructure that meets the needs for very high digital speeds, capacities, and quality is key to meeting the EU 2025 connectivity objectives set out in the Digital Strategy. State aid contributes to the rollout of high performance broadband networks in the EU in addressing market failures, that is to say situations and areas where there is no incentive for commercial operators to provide sufficient broadband coverage.
In August 2020, the Commission approved a EUR 200 million voucher scheme to help low-income families in Italy access high-speed broadband services. The State aid scheme will reduce the digital divide in Italy while limiting possible distortions of competition. The Commission also approved in December 2020 a EUR 20 million voucher scheme to help students in Greece access broadband services and benefit from remote online learning.
The Commission approved, under EU State aid rules, a German scheme to support the deployment of very high capacity broadband networks in Germany. The scheme aims at developing a new, publicly financed very high capacity connectivity infrastructure that will deliver a faster internet for households, companies and public institutions in Germany. Germany will prioritise households that have access to speeds of less than 100 Megabit per second to contribute to reduce the digital divide between rural and urban areas in Germany. Under the scheme, Germany aims to make Gigabit networks available for all citizens by the end of 2025.
5. EU competition policy contribution to green transition
In this context, the Commission issued, in October 2020, a call for contributions on how competition rules and sustainability policies work together. The Commission invited various stakeholders, including competition experts, academia, industry, environmental groups and consumer organisations to provide their views and input on how antitrust policy, merger policy and State aid policy work together with environmental and climate policies. The contributions fed into a conference held in February 2021. A report on reflections from the consultation process is scheduled for mid-2021.
5.1. State aid facilitating green transition
In the area of State aid control, the Commission assessed and authorised State measures promoting the deployment of renewables, improving energy efficiency, supporting where necessary the rollout of zero/low emission mobility infrastructure, stimulating demand for zero/low emission vehicles for public and private transport, and reducing CO2 and other emissions (including decarbonisation measures) or improving circularity.
In July 2020, the Commission approved a scheme to support electricity production from renewable sources in Ireland, the Renewable Electricity Support Scheme (RESS). The RESS will help Ireland reach its national target to transition away from fossil fuels and reach a share of 70% of renewables in its electricity mix by 2030. The Commission found that the aid is necessary, has an incentive effect and is proportionate and limited to the minimum necessary, as the amount of aid will be set through competitive auctions. The case also shows how to support projects developed by renewable energy communities and for communities that host projects supported by the RESS in line with State aid rules.
The Commission concluded in May 2020 that the compensation of EUR 52.5 million granted by the Netherlands for early closure of the coal power plant Hemweg was in line with EU State aid rules. The measure will contribute to reducing CO2 without unduly distorting competition in the Single Market. The Commission reached a similar decision in relation to compensations for early closures of coal-fired plants in Germany.
In November 2020, the Commission approved a Romanian scheme to support the construction and/or upgrade of district heating systems, based exclusively on renewable energy sources. The measure will enable a switch from fossil fuel energy production to heat production from renewable energy sources. The State aid rules allow Member States to support district heating generation and distribution, subject to certain conditions set out in the Commission’s Guidelines on State aid for environmental protection and energy. T
he European Green Deal Investment Plan
published by the Commission in January 2020 allow Member States to increase the maximum support amount for generating district heating.
In December 2020, the Commission approved a EUR 30 billion Dutch scheme to support projects reducing greenhouse gas emissions in the Netherlands. The scheme (Stimulering Duurzame Energieproductie (SDE++)) will contribute to the EU environmental objectives without unduly distorting competition. This innovative scheme will be open to projects based on various technologies (renewable electricity, gas and heat, the use of industrial waste heat and heat pumps, the electrification of industrial heat processes and electrification of hydrogen production, and carbon capture and storage for industrial processes, including hydrogen production and waste incineration), which will bid for support on the basis of tons of CO2 emissions abated compared to a baseline.
Second important project of common European interest (IPCEI) on batteries
Throughout 2020 discussions took place between 12 Member States and the Commission for a second IPCEI on the battery value chain. In December 2020, Austria, Belgium, Croatia, Finland, France, Germany, Greece, Italy, Poland, Slovakia, Spain and Sweden jointly notified the second IPCEI on batteries for e-mobility and energy storage. The project, called European Battery Innovation, will support research and innovation in the battery value chain. The twelve Member States will provide up to EUR 2.9 billion in funding in the coming years. The public funding is expected to unlock an additional EUR 9 billion in private investments. The project complements the first IPCEI in the battery value chain that the Commission approved in December 2019. The project is consistent with the Commission’s policies to shift from the use of environmentally harmful fossil fuels to alternative fuel technologies and the twin transition of the EU economy under the European Green Deal and the Digital Strategy
. In January 2021 the Commission adopted a decision authorising this IPCEI
.
During 2020 discussions continued between the Commission, Member States and industry for possible new IPCEIs in the areas of hydrogen technologies, low carbon industries microelectronics and batteries.
5.2. Antitrust enforcement and merger control contribute to the green transition
Antitrust enforcement can target not only company behaviour potentially aimed at restricting competition in the development of clean technologies but also deter conduct aimed at foreclosing access to essential infrastructures or to the free flow of resources that are necessary for the circular economy and the European Green Deal’s objectives.
In 2020, the Commission continued its investigation against BMW, Daimler and VW (Volkswagen, Audi, and Porsche) for a suspected restriction of competition on emission cleaning technology.
Antitrust enforcement action can also play a role in supporting the European Green Deal objective of developing a competitive and attractive passenger rail transport sector. In that context, the Commission continued its ongoing investigations. In the Czech Rail case, the incumbent railway operator České dráhy (ČD) is suspected of predatory pricing on the Prague-Ostrava passenger railway route, the backbone of the Czech rail network. In October 2020, the Commission sent a Statement of Objections to České dráhy.
6. An Economy that works for people – EU competition policy contribution to a deeper and fairer economic and monetary union
The social market economy is a foundation the EU is built upon and EU competition policy underpins it. Individuals and businesses thrive when the economy works for them. In 2020, the Commission supported this Commission headline ambition by promoting a pro-competition, level playing field and digital narrative in actions aimed at implementing the recovery package in the context of the European Semester, the Capital Markets Union, the Banking Union, and effective taxation.
6.1. Ensuring sustainability in the banking sector
In 2020, there were no new individual cases of State aid to financial institutions. Nevertheless, the Commission authorised the prolongation of already existing schemes under which Member States can assist, should the need arise in a concrete case, the orderly market exit of very small financial institutions or credit unions in distress. The Commission approved such schemes in Poland, Italy and Ireland
. The Commission also approved liquidity support schemes for viable banks with temporary liquidity issues, should the need arise in a concrete case, in Greece and Italy
.
Member States continued to promote the creation or expansion of development banks. From a State aid perspective, publicly funded development banks can be active within a well-defined remit that addresses market failures and provided that they do not crowd out commercial financial institutions. In 2020, the Commission approved funding for Invest International, a new development finance institution in the Netherlands
. The Commission also authorised funding for the setup of the Scottish National Investment Bank
. Finally, the Commission approved the setting up of a new national development bank in Portugal, Banco Português de Fomento
. During the year 2020, no-aid schemes continued to apply in Italy (“GACS”) and Greece (“Hercules”), which have been introduced to address the legacy issue of high levels of non-performing loans (NPLs). These schemes represent successful examples of how Member States can help banks clean up their balance sheets without granting aid or distorting competition.
6.2. Taking action against selective tax advantages
The fight against tax evasion and tax avoidance is high on the Commission’s agenda. In 2020, the Commission continued the investigation of alleged State aid granted by the Netherlands to Inter IKEA, to Starbucks and to Nike; on alleged aid granted by Luxembourg to Huhtamäki; and on alleged aid granted by Belgium to 39 individual aid beneficiaires of the Belgian excess profit scheme.
In July 2020, the General Court annulled the Commission’s decision of 2016, where the Commission found that two Irish tax rulings in favour of Apple, constituted incompatible State aid. The General Court held that the Commission did not show to the requisite legal standard that Apple had been granted a selective economic advantage. The General Court considered that the Commission did not prove that the contested tax rulings were the result of discretion exercised by the Irish tax authorities. Moreover, the General Court considered that the Commission did not succeed in demonstrating methodological errors in the contested tax rulings which would have led to a reduction in Apple’s chargeable profits in Ireland. The Commission has appealed the judgment to the Court of Justice.
7. Joining forces in fostering a European and global competition culture
7.1. Cooperation with national competition authorities within the European Competition Network
In 2020, the Commission and the national competition authorities in all EU Member States continued to cooperate and ensure the coherent application of Articles 101 and 102 TFEU through the European Competition Network (ECN). The objective of the ECN is to build an effective legal framework to enforce EU competition law against companies who engage in cross-border business practices which restrict competition.
In 2020, 139 new investigations were launched within the network and 97 envisaged decisions were submitted. These figures include Commission investigations and decisions, respectively. On top of these cooperation mechanisms set out in Regulation 1/2003, other ECN cooperation work streams also ensure a coherent enforcement of the EU competition rules. The network met regularly to discuss cases at early stages, policy issues, as well as matters of strategic importance. In 2020, 24 meetings across horizontal working groups and sector-specific sub-groups were organised, where officials from EU competition authorities exchanged views. As described in Section 2.2. above, the ECN issued a joint statement on the application of the antitrust rules during the COVID-19 crisis and cooperated closely on COVID-19 related competition issues.
In 2020, the Commission monitored and assisted Member States in their efforts in incorporating the ECN+ Directive into national law by 4 February 2021
. The Directive will ensure that when applying the same legal provisions – the EU antitrust rules – national competition authorities have the effective enforcement tools and the resources necessary to detect and sanction companies that infringe Articles 101 and 102 TFEU. It will also ensure that they can take their decisions in full independence, based on the facts and the law.
7.2. New policy initiative to strengthen the Commission toolbox in the global context
Europe’s economy is open and closely interlinked with the rest of the world. For it to remain a strength, the EU needs the right tools to ensure a fair business environment in the Single Market. Subsidies given by Member States have always been subject to strict EU State aid rules. Subsidies granted by non-EU governments to companies active in the EU, however, seem to have an increasingly distortive impact on the internal market, but fall outside EU State aid control.
To launch a debate on new tools to address this regulatory gap, the Commission adopted a White Paper on foreign subsidies
in June 2020. An extensive consultation of stakeholders was carried out in 2020. The Commission will present a legislative proposal on levelling the playing field for foreign subsidies in 2021.
White Paper on levelling the playing field as regards foreign subsidies
The White Paper puts forward several complementary options to address the existing regulatory gap:
Module 1 proposes the establishment of a general market scrutiny instrument to capture all possible market situations in which foreign subsidies may cause distortions in the Single Market. The proposed supervisory authority could act upon any indication or information that a company active in the EU benefits from a foreign subsidy and impose measures to remedy the likely distortive impact, such as redressive payments and structural or behavioural remedies. It could also consider that the subsidised activity or investment has a positive impact, which outweighs the distortion and not pursue the investigation further (the “EU Interest Test”).
Module 2, aims at ensuring that foreign subsidies do not confer an unfair benefit on their recipients when acquiring (stakes in) EU companies. Companies benefitting from financial support of a non-EU government would need to notify their acquisitions of EU companies above a given threshold to the competent supervisory authority. It could either accept commitments by the notifying party that effectively remedy the distortion or prohibit the acquisition.
Module 3 The White Paper proposes a mechanism where tenderers in public procurement procedures would have to notify financial contributions received from non-EU countries. The competent authorities would then assess whether there is a foreign subsidy and whether it distorts the awarding of the public procurement. In such a case, the tenderer could be excluded from the procurement procedure.
7.3. Multilateral and bilateral cooperation across the world
The Commission continued to maintain active international cooperation
in the competition field, both on the multilateral and bilateral levels, despite the constraints of the pandemic.
The EU believes firmly in the strength and value of cooperating and also reforming international organisations, like the World Trade Organisation (WTO) and other multilateral organisations to make them fit for today’s world. Reforming the subsidy rules is one of the EU’s main priorities for the modernisation of WTO trade rules. To this effect, the EU, the US and Japan agreed in a common statement in January 2020 to strengthen the existing rules on industrial subsidies
. In 2020, the Commission continued its active engagement in competition-related international fora such as the OECD Competition Committee, the International Competition Network (ICN), the World Bank, and United Nations Conference on Trade and Development (UNCTAD).
In 2020, the Withdrawal Agreement between the European Union and the United Kingdom
was applicable, including the provisions for State aid and competition cases. The Commission issued guidance concerning the application of the Withdrawal Agreement in competition matters
. In December 2020, the negotiations on the EU-UK Trade and Cooperation Agreement (TCA)
were finalised. The agreement provisionally applies from 1 January 2021. It includes comprehensive competition and subsidies chapters ensuring that competition between the EU and the UK is not distorted after the UK has left the EU.
In December 2020, the EU and China concluded in principle the negotiations for a Comprehensive Agreement on Investment (CAI)
. China committed to a greater level of market access for EU investors, including some new important market openings. China also made commitments to ensure fair treatment for EU companies, so they can compete on a better level playing field in China, including in terms of disciplines for state owned enterprises, transparency of subsidies and rules against the forced transfer of technologies.
When negotiating Free Trade Agreements (FTAs), the Commission endeavours to include comprehensive chapters on competition policy and State aid control. In 2020, the Commission continued FTA negotiations with Australia, Azerbaijan, Chile, Indonesia, New Zealand and Uzbekistan.
In 2020, the Commission continued its technical cooperation on competition policy and enforcement with the EU’s main trading partners. The Commission also continued assisting EU candidate countries and potential candidates to fulfil the necessary requirements in the competition field for a future accession to the EU.
7.4. Upholding a regular and constructive inter-institutional dialogue
The European Parliament, the Council the Economic and Social Committee and the Committee of the Regions, with their specific roles vis-à-vis European citizens and stakeholders, are key partners in the dialogue on competition policy. Despite the pandemic, this dialogue successfully continued throughout 2020 through modern means of communication.
In September 2020, in response to the Parliament’s resolution of 18 June 2020 on the Commission’s Report on Competition Policy 2018 (rapporteur Ms. Yon-Courtin (Renew/FR)), the Commission highlighted, among other things, the adoption of the White Paper on foreign subsidies, reflections to increase the use of the merger referral system to capture transactions currently not falling within the EU’s jurisdiction, and the need for a comprehensive policy response for digital platforms through continued vigorous enforcement of the competition rules, including the possible ex ante regulation of digital platforms. In 2020, Executive Vice-President Vestager made several appearances in the other institutions, including the Parliament, the Council and the Economic and Social Committee.