Ref. Ares(2015) /07/2015. Management Plan DG Competition

Transcription

1 Ref. Ares(2015) /07/2015 Management Plan 2015 DG Competition

2 Contents Part 1.Mission statement 4 Part 2. This year's challenges Sector Priorities Priorities for Policy Activities Statement on the DG's efforts to ensure capacity to deliver on the priorities Key Performance Indicators 9 Part 3. General objectives of the policy To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition To promote competition culture in the EU and worldwide 16 Part 4. Specific objectives for operational ABB activities ABB Activity "Control of State aid" Better targeted growth-enhancing aid Prevention and recovery of incompatible aid ABB activity "Cartels, antitrust and liberalisation" Cartels Other anti-competitive agreements and practices ABB activity "Merger control" ABB activity "Policy coordination, European Competition Network (ECN) and international cooperation" Competition policy Coherent application of EU competition law by national competition authorities and courts Coherent private enforcement of EU competition law Ensure compensation for victims of EU competition law infringements International cooperation and convergence 52 2

3 Part 5. Horizontal activities Policy strategy and coordination Strategy: delivering results Competition advocacy and transparency Internal and external communication Highest standards in the enforcement of competition policy Management of the DG Specific efforts to improve economy and efficiency of financial an non-financial activities Staff allocation Access to file 71 Annex 1. Indicative plan of evaluations and studies 72 Annex 2. Communication strategy 78 3

4 PART 1.MISSION STATEMENT The mission of the Directorate-General for Competition is to enable the Commission to make markets deliver more benefits to consumers, businesses and the society as a whole, by protecting competition on the market and fostering a competition culture. DG Competition does this by enforcing competition rules and through actions aimed at ensuring that regulation takes competition duly into account among other public policy interests. Competition is not an end in itself. It is an indispensable element of a functioning internal market guaranteeing a level playing field. It contributes to an efficient use of society's scarce resources, technological development and innovation, a better choice of products and services, lower prices, higher quality and greater productivity in the economy as a whole. Therefore, competition policy contributes to the wider Commission objectives 1, in particular to boosting jobs, growth and investment, a connected Digital Single Market, a resilient Energy Union with a forward looking climate change policy, a deeper and fairer Internal Market with a strengthened industrial base and a deeper and fairer Economic and Monetary Union. The European Union is the world's largest economic and trading area. The EU's unique asset and distinct comparative advantage on the global scene is its internal market, which encompasses over half a billion consumers and more than 20 million companies. Since its inception, the ongoing process of improving and expanding the Single Market has gone hand in hand with the development of EU competition policy. The European Commission, together 2 with the national competition authorities, enforces EU competition rules, based on Articles of the Treaty on the Functioning of the EU (TFEU), to make EU markets work better, by ensuring that all companies compete equally and fairly on their merits in the internal market. This benefits consumers, businesses and the European economy as a whole. Within the Commission, the Directorate-General for Competition is primarily responsible for these direct enforcement powers. DG Competition carries out its mission mainly by taking direct enforcement action against companies or Member States when it finds evidence of unlawful behaviour be it anticompetitive agreements between firms, abusive behaviour by dominant companies or attempts by government to distort competition in the internal market by providing some companies undue advantages over others 3. At the same time, EU competition policy encourages granting of better targeted aid that addresses market failure or equity objectives 4. Such aid has a beneficial impact on competitiveness, employment and growth, and thus on the welfare of society as a whole Political Guidelines for the new European Commission as presented by President Juncker of 15 July 2014, Article 101 and 102 TFEU. Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, , p Council Regulation (EU) No 733/2013, of 22 July 2013 amending Regulation (EC) No 994/98 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid, OJ L 204, , p ; See also for the State aid Modernisation. 4

5 Finally, EU merger control 5 aims to prevent the emergence of market structures which impede effective competition or result in the deterioration of market structures where competition is already less effective. DG Competition channels its limited resources on the most harmful practices in key sectors, and works in partnerships with other policies to support the delivery of other policy objectives in a pro-competitive way at EU and national level. It works in close partnership with national competition authorities and national courts to ensure an effective and coherent application of EU competition law, thereby contributing to a level playing field in the internal market. DG Competition provides guidance about the competition rules and their enforcement to improve legal certainty for stakeholders. It also strives to ensure transparency, due process and predictability for its stakeholders and private enforcement of EU competition law. In the international context, DG Competition strives to shape global economic governance by strengthening international cooperation in enforcement activities and making steps towards increased convergence of competition policy instruments across different jurisdictions. DG Competition aims at maintaining and strengthening the Commission s reputation world-wide and promoting international cooperation in this area. 5 Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation), OJ L 24, , p

6 PART 2. THIS YEAR'S CHALLENGES 2015 marks the first full year of the new Commission whose mandate was outlined on 15 July 2014 in the President's Political Guidelines 6. The Political Guidelines sets a new Agenda for Jobs, Growth, Fairness and Democratic Change. The ten top priority areas include among others a Growth, Jobs and Investment Package, an Energy Union, a Digital Single Market and a fairer internal market with a strengthened industrial base. To this end, more collaborative and integrated working methods 7 have been put in place. Accordingly, competition policy where the Commission exercises exclusive competences - is also expected to support the Commission's action in top priority policy areas listed in the Political Guidelines 8. Every effort will therefore be made to ensure that EU competition policy makes markets work as well as possible, delivering concrete benefits to consumers and businesses. In so doing, EU competition policy also promotes efficiency and innovation, to the benefit of growth and the society as a whole. Competition policy supports several other major EU policies such as the digital agenda, energy policy, financial service policy, industrial and internal market policy as well as the fight against tax evasion. It does so mainly through enforcement activity, i.e. fighting and preventing cartels, abuses of dominant positions and anticompetitive mergers as well as by facilitating better targeted growth-enhancing State aid. By mobilising its knowledge of key markets it can also share its expertise with other Commission's services in support of the top priorities outlined in the Political Guidelines Sector Priorities In 2015, DG Competition enforcement action will target sectors and areas that are the most relevant for the Commission's priorities as outlined in the Political Guidelines. The Energy Union Energy is one of the sectors in which completing the Single Market will bring significant benefits to Europe s consumers and businesses. Building an Energy Union based on energy efficiency, security of supply and sustainability requires investment in and development of energy infrastructure. For such action to bring the maximum benefits, it must be pursued in full respect of and through consistent enforcement of the EU's internal market and competition rules. This may require the assessment of a large number of complex transactions involving State aid as well as the need to provide guidance. Indeed, most of the national mechanisms for supporting renewables, generation capacity and infrastructure investment involve State aid. The new Energy and Environmental Aid Guidelines will help better targeting public support to renewable energy Political Guidelines for the new European Commission as presented by President Juncker on 15 July 2014, The Working Methods of the European Commission , Communication from the President to the Commission C(2014) 9004 of 11 November Mission letter to the Commissioner of Competition Vestager by President Juncker 1 November

7 sources while promoting the use of subsidies to improve interconnections and cross-border networks. Antitrust enforcement can also help to ensure fair and non-discriminatory access to energy infrastructure, remove obstacles to market integration and foster competition between and within Member States. Competition enforcement ensures that companies would not maintain or reinstate barriers to competition; current investigations are looking into potential abuses of dominance in eastern and central European markets. Competition policy is thus a significant tool to ensure competitive energy prices on a sustainable basis and one of the pillars required to build a genuine Energy Union. A Connected Digital Single Market Creating a connected Digital Single Market aims to make Europe a world leader in information and communication technology, areas which increasingly occupy DG Competition and engage its staff in continuously keeping up with rapid developments in these fields. The more the integration of the Digital Single Market progresses, the greater the need for EU competition rules to ensure a fair level-playing field for all companies offering their goods and services on-line and in digital form across the EU. Through recent and substantial cases, DG Competition has gained valuable expertise that it can contribute to the Digital Single Market priority set out in the Political Guidelines. While the Commission has already approved a number of significant mergers between European network providers, telecom market consolidation is expected to continue in the new mandate, requiring vigilance and robust enforcement by DG Competition also in the future. A characteristic of such fast-moving markets is that dominant positions can develop quickly. In particular, network effects can tip the market in favour of a particular player resulting in a near-monopoly level of dominance. In the knowledge-based sectors DG Competition will continue its Google antitrust case, establishing all relevant facts needed for concluding this complex investigation on competition grounds. Financial Services Financial services are an area in which competition policy has made a significant positive contribution over the past years. Due to its systemic importance and its role in providing access to finance to the real economy, DG Competition will remain active in the financial services sector. By 2015, the Banking Resolution structures will have become operational. Nevertheless, where necessary, DG Competition will continue to play a role in the restructuring of banks. DG Competition will continue with its investigations into potentially anti-competitive behaviour, such as the possible manipulation of reference benchmarks, the alleged collusion between certain banks to protect their CDS market making business by foreclosing exchanges as well as alleged infringements in the area of payments. To facilitate access to finance, investment and growth, DG Competition also intends to contribute to the creation of a well-regulated and integrated Capital Markets Union, as envisaged in the Political Guidelines. This Capital Markets Unions, which is under way, is scheduled to encompass all Member States by

8 The Investment Package The Jobs, Growth and Investment Package has recently been adopted 9. Competition policy, and in particular the new State aid control rules recently implemented in the framework of the State Aid Modernisation, can contribute towards the target of EUR 315 billion investment over the next three years. For instance, the Broadband State Aid Guidelines encourages the deployment of broadband infrastructure; research and innovation will benefit from the increased possibilities of public support offered by the R&D&I State aid Framework and the Risk Finance Guidelines; several hundreds of major projects within the EU cohesion policy, most of which related to different forms of infrastructure, will involve State aid and will require DG Competition's scrutiny to ensure that the spending is cost-effective and in line with overall EU objectives. Tax Planning The fight against tax evasion and avoidance is a further significant priority of the new Commission. This issue already is, and will continue to be, a priority for DG Competition. DG Competition has established a dedicated Task Force to investigate specific tax planning practices by multinationals and to verify that Member States ensure a level playing field respecting State aid rules when they design corporate tax systems. More specifically, the recently opened investigations aim at ensuring that Member States do not circumvent State aid rules to help multinational enterprises avoid paying their fair burden of tax. The Task Force Tax Planning will continue to work on such cases in Priorities for Policy Activities The policy initiatives that DG Competition intends to pursue in 2015 include the following: Ensure an effective implementation of the State aid Modernisation package via a new partnership with Member States, including adoption of a Commission Communication on the notion of State aid; Guidelines on the application of the specific rules laid down in Articles 169, 170 and 171 of the CMO Regulation for the olive oil, beef and veal and arable crops sectors, which aim to provide concrete explanations and technical parameters for the undertakings and ensure that the National Competition Authorities and courts apply the new rules consistently; Finalise the bulk of the Impact Assessment for the report to the Parliament and Council on the functioning and future of the Insurance Block Exemption Regulation; 9 Political Guidelines for the new European Commission as presented by President Juncker of 15 July Package adopted on 26 November 2014, see 8

9 Monitor the implementation of the Damages Directive 10 In view of maintaining EU competition law instruments aligned with market realities and contemporary economic and legal thinking, DG Competition will hold Regulation 1/2003 and EU Merger Regulation under continued review Statement on the DG's efforts to ensure capacity to deliver on the priorities The ability to maintain the highest standards in competition policy enforcement in 2015 strongly depends on the ability to keep attracting, motivating and retaining high-quality staff. This forms the core of our HR objectives. DG Competition's project-based and legally obligatory activities with strict deadlines, combined with growing case complexity require constant attention to efficiency improvements. Therefore, DG Competition continues to: I. Operate an organisational model based on flexible use of resources across the organisation whereby projects and cases go through a priority assessment and staffing decisions take into account workload measurement, as well as necessary competences and skills; II. Invest substantially in increasing the efficiency of its operations, especially through IT development in areas such as rationalisation of case management systems and procedures, forensic IT, e-discovery, Genis and mobile indexing Key Performance Indicators Four of our five key performance indicators measure the performance of the main competition policy instruments: Antitrust and Cartels, Mergers and State aid. While these indicators do not pretend to deliver an exhaustive account of DG Competition's work or its impact on markets, they constitute the core quantifiable indicators of our work. To understand our impact on the market each year, DG Competition is monitoring (1) the benchmark for (observable) customer benefits resulting from cartel prohibition decisions and (2) the benchmark for (observable) customer benefits resulting from horizontal merger interventions. The aim is to keep these two indicators stable over time. The key performance indicators for State aid control are (3) the percentage of State aid granted by Member States for horizontal objectives of common interest and (4) the overall cumulative level of crisis aid to the financial sector actually used by Member States, expressed as percentage of GDP. While the aim for the third indicator is to increase, the fourth indicator should stop increasing once economic recovery progresses Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 2013/0185 (COD) of 26 November 2014, see See Section and

10 The final key performance indicator, (5) implementation of case management rationalisation, represents DG Competition's horizontal activities. It measures the progress of the DG- Competition-lead ICT project to develop a new Case Management system for the participating DGs and thus contribute to the modernisation and rationalisation of case and document management in the Commission. 10

11 PART 3. GENERAL OBJECTIVES OF THE POLICY The general objectives of DG Competition are i) to enhance consumer welfare and efficiently functioning markets in the EU by protecting competition and ii) to promote competition culture in the EU and worldwide. Through pursuing these general objectives, competition policy will for its part contribute to the improvement of the functioning of the Single Market, a key lever for competiveness and growth. Efficiently functioning markets in the EU will bring economic opportunities, improve productivity, drive down costs and boost competitiveness for companies of all sizes. Undistorted competition also fosters competitiveness in a global context: a competitive Single Market prepares European companies to do business on global markets and to succeed. This is key to creating growth and jobs in Europe. DG Competition engages in competition advocacy in relation to other Commission services, other EU institutions and at national and international levels, with the aim of shaping the regulatory framework and policy initiatives in a competition-friendly way. Competition-friendly regulation and competition culture create favourable conditions for investments and innovation, which enhances consumer welfare and efficiently functioning markets, enables growth and contributes towards more convergence. The increased convergence of competition regimes worldwide is a prerequisite for the effectiveness and success of EU competition policy in a globalised economy. DG Competition continues to promote international convergence both bilaterally and in international venues such as the International Competition Network, the OECD or UNCTAD, and will continue to closely cooperate with the competition authorities of the Member States, gathered in the European Competition Network (ECN). State aid policy: encouraging growthenhancing public spending and ensuring a level playing field Merger control: keeping markets open and efficient Competition-friendly regulation and advocacy in relation to other Commission services and Member States Antitrust/cartel enforcement: pushing for lower (input) prices, promoting innovation and preventing market foreclosure jobs, growth, investment and competitiveness International cooperation: tackling the challenges of globalization However, while being direct, the causal link between EU competition policy and wider Commission objectives, including economic growth, is not exclusive, since the latter is dependent on a number of external factors outside the control of EU competition policy (general economic environment, business strategies, Member States' policies etc.). The same is true for the 11

12 contribution that competition policy brings to achieving several European Union's other key objectives and headline targets 12. Therefore, while the contribution of competition policy cannot be directly inferred from a series of indicators, structural policies, of which competition policy is one, contribute towards reaching these objectives To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition The added value of EU competition policy The objective at the heart of EU competition policy is to enhance consumer welfare and efficiently functioning markets by protecting competition from market distortions whether originating from Member States (distortive State aids) or market players including public undertakings with special or exclusive rights (distortive unilateral or coordinated behaviour), or mergers that would significantly impede effective competition. Undistorted competition on the market enhances consumer welfare and promotes productivity and growth through allocative efficiency (entry of more efficient firms and exit of less efficient firms), productive efficiency (incentives for a firm to become more efficient) and dynamic efficiency (innovation moving the technological frontier). DG Competition prioritises its actions to maximise the impact on the functioning of markets. Enhancing market efficiency also requires a focus on sectors with the greatest relevance for the competitiveness of EU economy and the greatest direct or indirect effect on consumers. Therefore, tackling anti-competitive practices in key sectors such, ICT, telecommunications, energy, and financial services, where increased competition will also have beneficial spill-over effects on many other downstream sectors, aims at maximising the contribution of competition policy towards the EU's overall objectives. Competition enforcement thus contributes 13 to the Commission's strategic priorities 14 and efforts aimed at exploiting the full potential of the Single Market. Enhancing consumer welfare also means that priority must be given to the most serious competition infringements such as cartels, especially in sectors close to final consumers The more harmful anti-competitive practices are, the greater the need there is for competition policy to intervene. Cartels belong to the most harmful restrictions of competition and therefore high priority continues to be given to the effective detection, prosecution and deterrence of cartels. For the same reasons, other anticompetitive agreements, abuses of dominant positions and mergers that would significantly impede effective competition must also continue to be targeted by enforcement action. Furthermore, by keeping markets open, EU competition policy ensures that the benefits of globalisation are passed through to European consumers. EU competition policy also protects European consumers against the potentially harmful aspects of Europe 2020 targets. See Mission letter to the Commissioner of Competition Vestager by President Juncker 1 November Political Guidelines for the new European Commission as presented by President Juncker 15 July 2014, 12

13 globalisation by targeting international cartels, mergers and abusive practices of firms of any nationality that harm European consumers. While State aid is in general harmful, as it distorts incentives in markets, it may enhance consumer welfare by addressing a market failure or an equity concern. The Treaty recognises this dichotomy and State aid control aims to prevent Member States from issuing aid unless the proper conditions are met. Aid to research and development, aid that protects the environment, aid to facilitate access to finance for SMEs and aid that attracts investment to weaker regions are all examples of growth-enhancing policies and "good aid". At the same time, aid that reduces growth, such as aid to keep failing companies on the market, should be avoided. Measuring the added value of EU competition policy For the purposes of an annual review of its cartel and merger enforcement, DG Competition provides for a quantitative assessment of the results achieved by the Commission in protecting competition. The benchmark for the (observable) customer benefits resulting from Commission decisions attempts to estimate the benefits to consumers from cartel prohibition decisions and horizontal merger interventions 15. Based on this benchmarking exercise, the observable customer benefits from cartel decisions adopted in 2013 were in the range of EUR billion 16. The observable customer benefits following the Commission s decisions in 2013 prohibiting a horizontal merger or clearing such a merger subject to remedies, were between EUR 0.3 and 0.7 billion 17. It should be emphasised that this benchmark does not include any benefits stemming from better quality or wider choice, other effects of competition policy, such as productivity gains or impact on jobs, any possible pass-on to final consumers in the case of intermediary goods or services, or deterrent effect 18. It also is important to note that the above estimates cover only a part of the enforcement activities of DG Competition, cartels and horizontal mergers, and therefore underestimate the actual impact of EU competition enforcement on consumers 19. As regards the quality of its enforcement actions, the success rate before the European Courts in competition cases (antitrust/cartels, mergers and State aid) provides an important annual The benchmarking exercise is based on a number of assumptions, which are further explained in footnotes 26 and 27 below and represent one method (among other potential approaches, none of which can be considered comprehensive or absolute) to arrive at a quantitative estimate. The approach followed to benchmark the observable customer benefits from terminating a cartel is explained in footnote 26. The figure for the customer benefits relating to cartel decisions adopted in 2014 will be provided in the Annual Activity Report The methodology for benchmarking the observable customer benefits deriving from the Commission's horizontal merger decisions is explained in footnote 27. The figure for the customer benefits relating to horizontal merger decisions adopted in 2014 will be provided in the Annual Activity Report For the deterrent effect of fines and impact of antitrust rules, see further ABB activity Cartels, antitrust and liberalisation under section 4.2. Enforcement action against abuses of dominant positions and other anti-competitive agreements as well as liberalisation and State aid control also engender substantial consumer benefits but for these types of practices, no single generalised benchmark is available due to the great heterogeneity of cases. Therefore, DG Competition rather carries out selected individual ex-post case studies. The same applies to DG Competition's activities concerning policy coordination, European Competition Network and international cooperation activities. 13

14 indicator of the Commission's performance in this respect. In 2015, DG Competition aims to achieve a success rate of at least 70% at the European Courts. In addition, DG Competition measures and compares its performance in a number of fields related to the quality and impact of its work. In 2014, it conducted for the second time Eurobarometer Standard Qualitative Study 20 whereby professional stakeholders 21 provided their views on some key quality parameters 22 related to DG Competition's work. The Study also contributes to more targeted and dynamic communication and interaction with DG Competition's professional stakeholders. The Study finds, for instance, a consensus across stakeholder groups on the priority sectors 23 that DG Competition should focus on, which correspond also to sectors where European citizens 24 identify competition concerns. There was also widespread agreement that DG Competition s work generally promotes competition, raises awareness and acts as deterrent 25. DG Competition aims to continuously increase its level of performance in this respect and plans to conduct these surveys again in 2019 to obtain updated information Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014) to be published in 2015, Professional stakeholders included companies, lawyers, economic consultancies, business and consumer associations, national competition authorities and ministries involved in DG Competition's work in These parameters include i) Soundness of legal and economic analysis (clarity and comprehensibility of decisions, predictability of decisions, predictability of fines imposed, understanding the markets and quality of economic analysis) ii) Transparency and procedural fairness (level of transparency of DG Competition's work, listening and informing in a timely manner, publication of non-confidential versions of decisions, stakeholder consultations on new rules, observance of procedural rules and burden on businesses and organisations), iii) Economic effectiveness (effectiveness of detection policy, deterrent effect of fines, impact of existing antitrust rules on planned business transactions, timeliness of decisions, focus on the right sectors, adaptation to the technological changes and globalisation, Impact on the markets, use of settlements in cartel cases and commitment decisions in antitrust cases, enforcement of decisions and contribution to the EU's economic growth) and iv) Communication and promotion of competition culture (clarity and comprehensibility of external communication, choice of communication and media channels and promotion of competition culture and policy convergence at the international level). Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 42, to be published in 2015, Flash Eurobarometer 403 Citizens Perception about Competition Policy (2014) to be published in 2015 p. 7, According to the survey, across the EU as a whole, problems resulting from a lack of competition are most likely to have occurred in the energy sector (28%), followed by transport services (23%) and pharmaceutical products (21%). Lower numbers are identified in the telecommunications and Internet sector (18%), food distribution (14%) and financial services (12%). Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 44, to be published in 2015, 14

15 General objective 1: To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition programme-based (please name the related spending programme) Non programme-based Impact indicator 1: Benchmark for the observable customer benefits resulting from Commission decisions prohibiting cartels and from corrective horizontal merger decisions. Rationale: Quantitative indicator to ensure positive impact of competition enforcement on consumer welfare Source: DG Competition calculation Baseline (2013) Target (2015) Cartel prohibition decisions 26 : EUR bn Horizontal merger decisions 27 : EUR bn Stable level The approach followed to benchmark the observable customer benefits from discontinuing a cartel (prevented harm) consists in multiplying the assumed increased price brought about by the cartel (called the overcharge ) by the value of the affected products or markets and then by the likely duration of the cartel had it remained undetected. A 10% to 15% overcharge is assumed. This is conservative when compared to the findings of recent empirical literature which report considerably higher median price overcharges for cartels. In order to estimate what the likely duration of the cartel would have been if it had continued undetected, a case-by-case analysis was carried out. This analysis focussed on the particular circumstances of each case and an assessment of important quantitative indicators, including the specific market conditions, the lifespan of the cartel, the ease of reaching and renewing cartel agreements as well as the potential reactions of outsiders (such as new entrants). The cartels are classified into three categories: "unsustainable", "fairly sustainable" "very sustainable". It is assumed that the cartels in the first category would have lasted one extra year in the absence of the Commission's intervention, the cartels in the second category 3 years, and the cartels in the third group 6 years. The assumptions concerning the likely duration of the cartels are made prudently to establish a lower limit rather than to estimate the most likely values. Finally, the estimates obtained are also conservative because other consumer benefits, such as innovation, quality and choice are not taken into account. Financial services: The consumer benefit calculation for the cartels is based upon the termination of the cartels in their entirety. Moreover, the methodology for the calculation of the consumer benefits in financial services was adjusted to reflect the specificities of the financial markets, namely the calculation of overcharge. This adjustment led to a substantial decrease in the consumer benefits compared to the calculation with the default parameters used for non-financial industries. See DG Competition Annual Activity Report 2013, p The approach followed to benchmark the observable customer benefits from the Commission s intervention in the form of a prohibition of a horizontal merger or a clearance of such a merger subject to remedies consisted in predicting the change in consumer surplus. The prevention of anticompetitive effects such as the negative impacts on innovation and choice, even though some cases are also largely based on non-price effects, especially effects on innovation, are not taken into account. In practical terms, the calculation of the predicted change in consumer surplus arising from the Commission's intervention in each product market is based on three factors: (i) the total size (by value) of the product market concerned, (ii) the likely price increase avoided and (iii) the length of time that this market would have taken to self-correct either by the arrival of a new entrant or by the expansion of existing competitors. The expected price increase is set at 3-5%, a value in line with current academic literature, albeit a conservative estimate. The lower boundary of the estimate is based upon a 3% price increase lasting for two years, the higher boundary upon a 5% price increase for a duration depending on the barriers to entry of the affected market. The stable target is a planning assumption. As the merger control activity is driven by notifications, it is not possible to provide a clear target for this indicator. 15

16 Impact indicator 2: Success rate before the European Courts in competition cases Rationale: Indicator for the quality of enforcement decisions following the review by the European Courts Source: Legal Service statistics as reported annually to the Global Competition Review 28 Baseline (2012) Target (2015) 79% (State aid); 70% 90% (antitrust and mergers) Impact indicator 3: Impact of competition policy and enforcement on the markets Rationale: Qualitative indicator to estimate long-term market impact of competition enforcement Source: DG Competition Stakeholder Survey 29 Baseline (2014) Target (Next survey foreseen in 2019) 4.8 (scale 1-7) Increasing trend Impact indicator 4: Impact of competition enforcement on economic growth Rationale: Qualitative indicator to indicate the long-term impact of competition enforcement as an accelerator of economic growth Source: DG Competition Stakeholder Survey 30 Baseline (2014) Target (Next survey foreseen in 2019) 3.6 (scale 1-5) Increasing trend 3.2. To promote competition culture in the EU and worldwide DG Competition engages in advocacy activities and promotes competition culture in the EU and world-wide. This section outlines the main types of activities DG Competition carries out to foster competition culture. Maintaining and strengthening the Commission s reputation world-wide and promoting international cooperation in this area is also defined as a priority for the new Commission in the field of competition policy 31. Contributing to competition-friendly EU legislation DG Competition uses its sector and market knowledge to contribute to other Commission policy initiatives and regulation. The main purpose is to shape the regulatory framework and policy initiatives in a competition-friendly way. Fostering convergence and cooperation between competition authorities across the globe The multiplication of jurisdictions with competition legislation and enforcement mechanisms has been on one hand a positive development and evidence of the global recognition of the As reported in Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 44, to be published in 2015, Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 48, to be published in 2015, Mission letter to the Commissioner of Competition Vestager by President Juncker 1 November

17 importance and benefits of healthy competition. On the other hand, diverging competition regimes present a challenge to international businesses. The Commission seeks to reinforce the role of competition policy in international economic cooperation and cooperates with competition agencies globally. Such regulatory and enforcement cooperation helps to ensure a level playing field for European companies on global markets. At bilateral level, the Commission engages in a wide range of cooperation activities with competition authorities in third countries on the basis of bilateral agreements or Memoranda of Understanding. The Commission is also active in international competition-related fora such as the Competition Committee of the OECD, the International Competition Network (ICN), the WTO and UNCTAD raising the awareness of European competition policy priorities. Explaining competition policy and its benefits Knowledge of the benefits of competition is essential for citizens to exploit their opportunities as consumers, for businesses to compete on the merits and for policy makers to bring initiatives that support smart, sustainable and inclusive growth as well as to be efficient and non-distortive market operators. Better understanding of the advantages of competition helps consumers make informed choices between products and services offered. It encourages businesses to refrain from anti-competitive agreements and behaviour. It makes public administrations better understand how competition can contribute to addressing wider economic problems. Explaining competition policy and demonstrating its benefits to citizens and stakeholders at all levels is also defined as a priority for the new Commission in the field of competition policy 32. To examine EU citizens perceptions of competition and possible lack of competition in certain sectors and knowledge about, and sources of information on, competition policies and decisions, DG Competition launched in 2014 Flash Eurobarometer Citizens Perception about Competition Policy 33. According to the results of the survey, more than 80% of EU citizens believe that competition between companies can lead to better prices, more choice, innovation and economic growth. On the question used as an indicator, 74% of EU citizens respond that effective competition has a positive impact on them as a consumer. The citizens form their opinion based on information from multiple sources, mostly television and newspapers (over 60% according to the same survey), which also sets the framework for the Commission's communication efforts in this context 34. DG Competition plans to share the results of the survey with national competition authorities in the European Competition Network (ECN) for the benefit of competition advocacy efforts by the Commission and the national competition authorities Mission letter to the Commissioner of Competition Vestager by President Juncker 1 November Flash Eurobarometer 403 Citizens Perception about Competition Policy (2014) to be published in 2015, See also Flash EB 264 EU citizens perceptions about competition policy (2009), Mission letter to the Commissioner of Competition Vestager by President Juncker 1 November

18 General objective 2: To promote competition culture in the EU and worldwide programme-based (please name the related spending programme) Non programme-based Impact indicator 1: Promotion of competition culture Rationale: Qualitative indicator to estimate the success of DG Competition's advocacy activities Source: DG Competition Stakeholder Survey 35 Baseline (2014) Target (Next survey foreseen in 2019) 4.9 (scale 1-7) Increasing trend Impact indicator 2: Percentage of positive replies in surveys conducted among citizens agreeing that effective competition has a positive impact on them as consumers Rationale: Indicator to measure citizens' view of competition Source: Eurobarometer Citizens' Survey 36 Baseline (2014) Target (Next survey foreseen in 2019) 74% Increasing trend Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 53, to be published in 2015, Flash Eurobarometer 403 Citizens Perception about Competition Policy (2014), p. 6, to be published in 2015, 18

19 PART 4. SPECIFIC OBJECTIVES FOR OPERATIONAL ABB ACTIVITIES DG Competition has the following operational activities: Control of State aid; Cartels, antitrust and liberalisation; Merger control; Policy coordination, European Competition Network and international cooperation. DG Competition has a two-dimensional instrument-sector matrix organisation. DG Competition is comprised of ten Directorates (A to H, R and the Chief Economist's team). Five of the ten Directorates (the so-called Markets and Cases Directorates, i.e. Directorates B to F) have a sectoral focus on: energy and environment (Directorate B), information, communication and media (Directorate C), financial services (Directorate D), basic industries, manufacturing and agriculture (Directorate E) and health, transport, post and other services (Directorate F). Each of these sectoral Directorates is comprised of units specializing in the application of the main competition enforcement instruments (antitrust, merger control and State aid control, respectively) to the given sector. Directorate E also includes a Task Force, which investigates the food supply chain and food prices in more detail. A separate Directorate (Directorate G) is dedicated to cartel enforcement. Directorate H is responsible for applying most of the horizontal (i.e. non-sector specific) State aid rules, such as those relating to regional aid, R&D&I aid, risk finance aid and fiscal aid. It is also in charge of enforcing recovery decisions and coordinating monitoring. The Directorate also includes a Task Force on Tax Planning Practices. Directorate A is in charge of policy for all competition enforcement instruments, in addition to the European Competition Network, international relations and private enforcement. Directorate R is in charge of document management, human resources management, financial management, IT, logistics and buildings and the management of issues related to security, ethics and business continuity ABB Activity "Control of State aid" State aid control is an integral part of EU competition policy and a necessary safeguard to preserve effective competition and free trade in the Single Market. The Treaty establishes the principle that State aid which distorts or threatens to distort competition is prohibited in so far as it affects trade between Member States (Art. 107(1)) 37. However, State aid, which contributes to well-defined objectives of common European interest without unduly distorting competition between undertakings and trade between Member States, may be considered compatible with the internal market (under Art. 107(3)). In principle, any new aid that Member States intend to introduce has to be notified to and approved by the Commission before it can be implemented. 37 In addition, subsidies granted by EU Member States may also be subject to international agreements, such as the WTO subsidies agreement. 19

20 In principle, Member States need to notify aid measures and wait for Commission approval before implementing them. However, the procedural rules allow Member States also to notify aid schemes. Once cleared by the Commission, individual aid can be disbursed without prior notification under such schemes. In addition, the Commission has adopted Block Exemption Regulations (BER) allowing Member States to implement aid schemes without prior notification. Today, in volume terms close to 90% of aid awards are not individually examined by the Commission, but are granted on the basis of previously approved aid schemes or BER. In addition to notification-based ex ante control, the Commission also monitors and reviews existing aid schemes (Art. 108(1)), i.e. aid schemes approved in the past and block-exempted schemes, to ensure compliance and to adapt them to market developments. When Member States grant State aid without prior notification, and such unlawful aid also turns out to be incompatible with the internal market, the Commission must order the Member State concerned to recover the aid from the beneficiaries. In 2014, a major overhaul of EU State aid control was completed, and entailed inter alia a revision of almost all compatibility rules, the procedural regulation and the general block exemption regulation. In the broader context of the EU's agenda to foster growth, State aid policy facilitates well-designed aid targeted at market failures and objectives of common European interest. The Commission can now focus its enforcement activities on cases with the biggest impact on the internal market, streamlining rules and accelerating decisions. The objectives of DG Competition's control of State aid activity are to: i) ensure that aid is growth-enhancing, efficient and effective, and better targeted in times of budgetary constraints and where aid is granted, it does not restrict competition but addresses market failures to the benefit of society as a whole and ii) effectively prevent and recover incompatible State aid Better targeted growth-enhancing aid State aid can distort competition by giving some companies undue advantages over others. Therefore, the Commission will continue to apply increased scrutiny in order to tackle cases of "bad" aid. That is, public interventions that are not in line with State aid rules and which are considered not to contribute to common interest objectives and economic growth. Where aid is granted, DG Competition seeks to ensure that it addresses market failures or equity objectives that have a beneficial impact on competitiveness, employment and growth, and thus on the welfare of society as a whole. Accordingly, DG Competition aims at ensuring that the aid is targeted at horizontal objectives of Community interest, such as regional development, employment, environmental protection, promotion of research and development and innovation, risk capital and development of SMEs. This is in line with the Europe 2020 Strategy, according to which "State aid policy can actively contribute to the Europe 2020 objectives leading to a more sustainable, productive and growth oriented economy, by promoting and 20

21 supporting initiatives for more innovative, efficient and greener technologies, while facilitating access to public support for investment, risk capital and funding for research and development." 38 The State aid Modernisation initiative aims at enhancing economic efficiency and the effectiveness of public spending and spurring growth on the Internal Market. It allows the Commission's State aid policy to focus on "good" aid, in line with the Commission's wider objectives. It also contributes to focus State aid scrutiny on the most distortive cases by, in particular, enlarging the scope of application of the General Block Exemption Regulation (GBER) which removes the notification obligation for Member States. Energy and environment State aid control in the areas of energy and environment is an important part of competition policy, as it contributes to creating conditions for sustainable use of resources and thereby to fulfilling the Europe 2020 goals. As part of the State aid modernisation package, the new Energy and Environmental Aid Guidelines (EEAG) entered into force on 1 July 2014 to reflect the Commission's knowledge in the field and the latest technological and market developments. The new EEAG have brought the assessment criteria in line with the common principles underlying other State aid guidelines. EEAG also simplified and revised the assessment of several existing aid categories, notably aiming at making RES support schemes more market oriented. Finally, EEAG have introduced new aid categories, enlarging their scope to energy infrastructure, capacity mechanisms and aid for energy intensive users compensating them for the financing RES costs. The new EEAG thus reflect the closer link between environmental and energy policies and have therefore been renamed to also include energy. During 2014, Member States continued to extensively promote renewable energy sources (RES) to achieve the national RES and CO2 reduction targets by 2020 and beyond. Based on the provisions of the 2008 Environmental Aid Guidelines (EAG) and, since mid-2014, of the new Energy and Environmental Aid Guidelines (EEAG), the Commission adopted a high number of decisions in this area. Those Commission decisions aim at avoiding over-compensation and competitive distortions through the RES schemes. Furthermore, in line with the EU's energy and climate change objectives, the Commission has positively assessed a number of Member States' interventions aimed at energy efficiency, better infrastructure including the modernisation of district heating and aid to high efficiency co-generation installations. The Commission has also taken its first decision on a capacity mechanism which concerns the United Kingdom. To enhance competition and ensure a level playing field in the energy sector, the Commission also closed several in-depth investigations 39. In 2015, the Commission will continue to assess Member States' EUROPE 2020 A European strategy for smart, sustainable and inclusive growth, p. 19, %20Europe%202020%20-%20EN%20version.pdf Decisions concerned the granting of aid for the construction of the nuclear power plant at Hinkley Point in the United Kingdom and the German Renewable Energy Act (EEG) including relief of energy intensive users from the RES financing. 21

22 interventions with the horizontal objectives of promoting the internal energy market and environmental protection. The focus will be on reforming RES support schemes in line with the new EEAG provisions, on investigating existing and planned capacity mechanisms and on assessing fossil fuel subsidies. Telecoms sector State aid also contributes to the Commission's objectives on the Digital Single Market. The Commission State aid decisions complement private investments in areas which are not profitable on commercial terms and are necessary to achieve those objectives, when it is established that the measures are pro-competitive. As regards the market for broadband, telecoms and related markets, DG Competition is actively pursuing a number of investigations, in order to ensure that aid is targeted and meets the criteria to foster an optimal infrastructure market in the EU. In 2015, the Commission will continue to ensure compliance of its 2013 and 2014 decisions concerning less-populated areas in all Spanish regions, enforcing the principle of technological neutrality. The Commission will continue its pending investigation regarding alleged compensation to private broadcasters for the liberation of the first digital dividend in Spain as well as the investigation regarding the presumed aid to Numéricable in France allegedly benefitting from a telecoms infrastructure for free. Regarding the audio-visual sector, the Commission will pursue the formal investigation opened in 2014 into a German aid scheme for the benefit of video on demand distribution which is financed by parafiscal levies charged on domestic but also foreign video on demand distributors. Finally, the Commission will pursue the ongoing investigation of existing aid to the Polish broadcaster TVP on the basis of new legislation and new public service remits that are being designed in order to comply fully with the requirements of the Broadcasting Communication. Financial sector Since the crisis started, the European Union used State aid rules as a substitute for the lacking resolution tools in the EU, a shortcoming that will be solved by the establishment of the Single Resolution Board on 1 January 2015 (see below in section ). Up to 30 September 2014, the Commission oversaw the restructuring of 111 banks equivalent to around one quarter of Europe s banking sector in terms of assets out of which 33 had to be liquidated. The task is not finished, with 12 ongoing cases at present. In 2014, the situation in the financial markets improved as banks were able to raise significant amounts of capital through various means. Nevertheless, additional effort is still needed to consolidate the positive signs of recovery. The activity of DG Competition in the area of State aid control ensured a consistent policy response to the financial crisis throughout the EU, and significantly contributed to limiting distortions of competition between beneficiary financial institutions within the internal market, while at the same time limiting the use of taxpayers' money to the minimum necessary. Of particular relevance was the activity in the context of the programs in Greece, Ireland, Portugal, Spain and Cyprus. Also, the emergency decisions adopted 22

23 for some Bulgarian Banks and the Portuguese Banco Espirito Santo as well as the restructuring decisions for major Greek Banks should be noted. Significant activity was also devoted to monitoring the correct implementation of the over 66 restructuring decisions adopted since the beginning of the crisis. In addition, DG Competition was intensely involved in numerous transversal tasks relating to the future establishment of the Single Resolution Board, the implementation by Member States of burden sharing as required under the State aid rules, and the negotiations of the Banking Recovery and Resolution Directive, Deposit Guarantee Schemes Directive and the Single Resolution Mechanism regulation for their State aid related aspects. In 2015, the levels of activity are likely to remain very high in countries undergoing an adjustment program, but also across the Union more broadly, the outcome of the comprehensive assessment exercise published on 26 October 2014, and the work resulting from the cooperation with the Single Resolution Board that will become operational as from 1 January Transport In the field of air transport and airports, the Commission will ensure in 2015 a proper implementation of the guidelines on State aid to airports and airlines 40 which entered into force on 4 April In particular, the Commission will analyse the notifications regarding operating aid to regional airports and will verify that the phasing out of such aid is correctly implemented. As regards maritime transport, the Commission will advance ongoing investigations notably concerning Malta and Greece. In the field of rail transport, the Commission will in 2015 continue investigations to check that incumbent companies do not benefit from unjustified financial advantages constituting barriers to entry for new competitors. The Commission will verify that rail companies do not benefit from overcompensation when operating services of general economic interest. Taxation In the context of the current economic crisis and the fiscal issues faced by EU Member States, and against the background that around one trillion euros is lost to tax evasion and avoidance every year in the EU 41, fighting tax fraud, tax evasion and tax avoidance has been recognized as one of the major priorities of President Juncker for the years to come. Tax evasion and tax avoidance can be the result of aggressive tax planning, which is a means of reducing tax liability by shifting profits to jurisdiction where they are not or only to a limited extent subject to tax. Aggressive tax planning can amongst others be pursued by making use of preferential tax schemes, for example coordination centres 42 or by individual tax rulings. They all have in common that they result in a loss of tax revenue in the Member State where economic value is created but not taxed, and in Europe as a whole because the tax eventually paid is less than it would be at the place where the economic value is created. This presents a social equity OJ C 99 of , p See for instance Commission Decision 2003/757/EC of 17 February 2003, Belgian Coordination centres, (OJ L 282, ). The Commission announced in 2014 its intention to replace the guidelines in the consolidated notion of aid communication. 23

24 issue, as the revenues foregone from untaxed multinationals need to be compensated, which normally increases the burden on less mobile income of SMEs and from labour. Furthermore, from the perspective of the dislocation of activities, aggressive tax planning can present a threat to the sustainable growth of the internal market if some Member States were to offer exit points for the entirety of European profits of multinationals in exchange for the creation of some jobs on their territory and a limited tax payment. On this basis the focus of the Commission's State aid investigations in 2015 will remain on direct business taxation (corporate tax) measures that provide a selective advantage to individual undertakings or specific sectors, such as lower taxation levels accepted by Member States for individual companies by way of tax rulings, tax exemptions for state owned companies, of lower tax levels or tax breaks for certain sectors or activities. In 2014 the Commission opened four cases on tax rulings regarding Apple (Ireland), Fiat Finance & Trade and Amazon (Luxembourg) and Starbucks (Netherlands) and it will continue these investigations in In parallel, work on potential tax avoidance will continue in a number of areas, regarding individual cases and schemes, in line with the priorities of the agenda set by Commission President Juncker 43. The Commission has also recently extended information enquiry on tax rulings practice to all Member States to get a full picture of the tax rulings practices in the EU to identify if and where competition in the Single Market is being distorted through selective tax advantages. Regional aid Regional aid is an important instrument in the EU's toolbox to promote greater economic and social cohesion. With the adoption of the GBER and the approval of the new regional aid maps for the 28 Member States in the course of 2014, the framework for regional State aid in the period is complete. Although the scope of the new GBER has been further widened in the area of State aid, there are still a range of regional aid measures that will need to be notified to and assessed by the Commission (sectoral aid schemes, aid to large investment projects, aid to investment in new products and new process innovations, aid to investment by companies that have closed down or intend to close down the same or similar activities elsewhere in the EEA, notification of evaluation plans). Based on past experience, DG Competition expects Member States to start submitting such new notifications from 2015 onwards. In addition, DG Competition is deeply involved in the analysis of the competition aspects (mainly State aid aspects) of the partnership agreements and the operational programmes submitted by Member States in the context of the new programming period for the European Structural and Investment (ESI) Funds. DG Competition will also be co-operating closely with the ESI Fund related Commission services to build up know-how on State aid policy in the managing authorities of the Member States to ensure that co-financed operations are implemented in

25 compliance with State aid rules. A special effort will be needed to provide clear guidance on the State aid aspects of large infrastructure projects co-financed by the ESI Funds. R&D&I One of the headline targets of Europe 2020 strategy is for R&D&I investments in the EU to reach 3% of GDP. Smart and sustainable growth also depends on the potential to innovate. State aid rules are designed to activate the EU's potential to invest in more and better R&D&I. With this in view, the Commission has adopted a new R&D&I Framework and new provisions for R&D&I aid under the GBER, both of which entered into force on 1 July The objective of this reform is to pave the way for Member States to support R&D&I more frequently and efficiently, to mobilise additional private investment, and to promote collaboration between academia and industry as well as carry out public procurement of R&D, including pre-commercial procurement, without uncertainty about the presence of any indirect aid to industry. The new rules are designed to go hand in hand with other EU initiatives aimed at promoting R&D&I activities, such as Horizon In parallel to this policy reform, the Commission has continued to deal, during 2014, with a significant number of notifications concerning both horizontal schemes and large individual aid measures. As regards the latter, seven important decisions have been adopted in 2014 authorising R&D&I aid in strategic sectors such as ITC, aerospace, energy and key enabling technologies (KETs). Some of these decisions required significant changes to the originally notified measures with a view to ensuring well-designed and proportionate aid, while minimising its potential negative effects on competition. Following the entry into force of the new rules, it is to be expected that a larger number of measures will fall under the GBER. Risk Finance Following extensive consultations with Member States and stakeholders, the Commission has set up a simpler, more flexible and generous State aid framework for the provision of risk finance to SMEs and mid-caps. The new rules are contained both in the new Risk Finance Guidelines and in the new GBER, both of which entered into force on 1 July Their aim is to attract and channel private financing to support the public policy goals of economic growth and job creation, which is particularly important in times of economic crisis. By enhancing the incentives of private sector investors - including institutional ones to invest and increase their funding activities in this critical area of SME financing, the new rules mirror other EU initiatives designed to promote wider use of financial instruments in the context of new support programmes such as Horizon 2020 or COSME. Moreover, in 2014, the Commission continued to apply the existing rules on risk capital aid, as well as in the area of urban regeneration, by adopting some 15 decisions including one complex case which could be cleared only after the opening of formal proceedings. The entry into force of the new rules, which have substantially enlarged the scope of the block exemption, will enable the Commission to focus its attention on measures that may seriously harm competition or fragment the internal market. 25

26 Other sectors Work will continue on State aid enforcement in the area of sports, including on the ongoing investigations into alleged aid to several professional football clubs in The Netherlands and Spain. Other aid schemes and ad hoc interventions in the sports sector, which were not notified but have been brought to the Commission's attention by other means, will be taken up with the Member States for further assessment. In the health care sector, the Commission will continue the formal investigation procedure, initiated in October 2014, into the financing of the public hospitals of the IRIS network in the Brussels-Capital region. In the postal services sector, the trend of privatisations of incumbent operators could continue as projects exist in Romania, Greece and Italy to privatise part of the national incumbent operator. The Commission will also continue the formal investigation initiated in August 2014 regarding a compensation fund mechanism to finance the Universal Postal Service provided by ELTA in Greece for the years Such funds, put in place in several Member States, would in general amount to State aid and have the potential to excessively distort competition if they impose disproportionate and/or discriminatory contributions on competitors of the universal service providers. In the current transition period related to the State Aid Modernisation package, including new transparency rules applicable to Member States, DG Competition reflects on potential new result indicators for this ABB activity and continues to report on the activity by using existing indicators. Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition Specific objective 1: Better targeted growth-enhancing aid programme-based (please name the related spending programme) Non programme-based Result indicator 1: Overall level of non-crisis State aid granted by Member States to industry and services; expressed by percentage of GDP Rationale: Indicator to benchmark the level of State aid 44 in the EU economy Source of data: State Aid Scoreboard and DG Competition calculation Link: Baseline (2013) Target 0.45% Decrease Notified State aid. Due to overall changes implemented as part of State Aid Modernisation (SAM), as well as Renewable Energy Sources (RES) and fiscal related state aid programs, the previous benchmarks will not be fully comparable. After the transition period of SAM implementation has ended, the indicators, baselines and targets will be reviewed and updated. 26

27 Result indicator 2: Overall level of crisis aid to the financial sector actually used by Member States, expressed as percentage of 2013 EU 28 GDP Rationale: Indicator to measure the gradual phasing out of crisis aid measures of temporary nature and the linked risk of competition distortion in the financial services. Source of data: State Aid Scoreboard and DG Competition calculation Link: Baseline (2013) Target 8.1% 46 Phasing out as soon as economic recovery allows Result indicator 3: Percentage of State aid granted by Member States for horizontal objectives of common interest. Rationale: Indicator to ensure that state aid is targeted at horizontal objectives of Community interest, such as regional development, employment, environmental protection, promotion of research and development and innovation, risk capital and development of SMEs. Source of data: State Aid Scoreboard - The information is based on the annual reports provided by Member States pursuant to Article 6(1) of Commission Regulation (EC) 794/2004 and comprises expenditure granted by Member States through existing aid measures which fall into scope of Article 107(1) TFEU. Link: Baseline (2013) Target 85.1% Increase 47 Output Indicator 1: Number of opening decisions Rationale: Indicator to demonstrate level of enforcement activity also for deterrence purpose Source of data: DG Competition case management system (ISIS) Baseline (2013) Target 45 No target Prevention and recovery of incompatible aid DG Competition's State aid control activity also aims at ensuring effective prevention and recovery of incompatible State aid in order to prevent that Member States re-create artificial barriers to intra-community trade This consists of the following two components (calculated as % of EU GDP 2013): total recapitalisation and asset relief measures : EUR billion (5.1 %); outstanding guarantees and liquidity measures for 2013: EUR billion (3.0 %). State Aid Modernisation (SAM) has changed the scope of sectorial aid and, consequently, the previous benchmarks will not be fully comparable. After the transition period of SAM implementation has ended, the indicators, baselines and targets will be reviewed and updated. As far as merger and State aid enforcement is concerned, DG Competition's activities are largely driven by notifications by companies and Member States. It is therefore not meaningful to identify a target. As far as antitrust and cartel enforcement is concerned, it would not be possible to formulate a numerical target as such target would depend on the number of infringements (which could be lower than the target) and the willingness of parties or market players involved to disclose these through the Leniency Programme, whistleblowing or complaints or the availability of information to the Commission to detect infringements ex officio. 27

28 Monitoring In order to ensure that aid granted under existing aid schemes (without being individually notified and examined by the Commission) effectively complies with State aid rules, DG Competition performs since 2006 a systematic, sample based, ex-post control (so-called "monitoring exercise"). Initially, DG Competition reviewed each year a sample of schemes. To further improve the effectiveness of this control, the scope of the monitoring exercise has been systematically enlarged from 2010 onwards and covered 75 block-exempted or approved schemes in The exercise covers all Member States, all main types of aid and, since 2014, one third of Member States expenditure under existing schemes over a period of 3 exercises. In 2015, DG Competition will continue and even increase its monitoring efforts in particular in the areas where the implementation of State aid rules seems to raise more issues. Recovery When unlawful aid is declared incompatible, the Commission is obliged to ask for its recovery by the Member State who granted it in order to restore the situation in the market prior to the granting of the aid. The purpose is to re-establish the situation that existed on the market prior to the granting of the aid in order to ensure that the level-playing field in the internal market is maintained. Further progress was made in 2014, to ensure that recovery decisions are enforced effectively and immediately. By 31 December 2014, the amount of illegal and incompatible aid recovered from beneficiaries had increased to EUR 9.6 billion 49, from EUR 7.3 billion in December This means that the percentage of illegal and incompatible aid still to be recovered fell from 75% at the end of 2004 to around 51% at the end of In 2014, the Commission adopted 17 new recovery decisions and ensured the recovery of about EUR 300 million by the Member States. At the end of 2014, the Commission had 59 pending active recovery cases (compared to 94 cases at the end of 2004). As the guardian of the Treaties, the Commission may use all legal means at its disposal to ensure that Member States implement their recovery obligations, including launching infringement procedures. During 2014, the Court of Justice condemned two Member States pursuant to Article 108(2) TFEU and imposed a lump-sum payment of EUR 30 million on one Member State pursuant to Article 260 TFEU. In 2015, DG Competition aims to make further progress towards effective and rapid enforcement of recovery decisions Reference is the period from 1 January 2000 until 31 December Reference is the period from 1 January 2000 until 31 December

29 Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition Specific objective 2: Effective prevention and recovery of incompatible aid programme-based (please name the related spending programme) Non programme-based Result indicator 1: "bad" 51 -type of State aid as percentage of GDP Rationale: Indicator tracks the level of public interventions, which are not in line with State aid rules and, are considered not to contribute to common interest objectives or economic growth. Source of data: State Aid Scoreboard and DG Competition calculation Link: Baseline (2014) Target 0.07% Decrease 52 Result indicator 2: Percentage of incompatible aid recovered Rationale: Indicator tracks the amount of public interventions declared incompatible with State aid rules that has been recovered. Source of data: State Aid Scoreboard and DG Competition calculation Link: Baseline ( ) Target 76.3% Increase 53 Output indicator 1: Percentage of cases closed or brought to Court within two years Rationale: Qualitative indicator on the effectiveness and enforcement of recovery decisions Source of data: DG Competition case management system (ISIS) Baseline ( ) Target 48% Increase Output indicator 2: Scope of aid schemes investigated as part of ex-post monitoring of Member State schemes Rationale: Indicator to measure the coverage of ex-post monitoring Source of data: DG Competition calculation Baseline (2014) Target 75 aid schemes investigated Maintain monitoring efforts, monitor at least 75 cases Rescue and restructuring aid. Due to overall changes implemented as part of State Aid Modernisation (SAM), as well as Renewable Energy Sources (RES) and fiscal related state aid programs, the previous benchmarks will not be fully comparable. After the transition period of SAM implementation is over, the indicators, baselines and targets will be reviewed and updated. The indicator may however decrease in function of new decisions adopted in a given year ordering recovery of incompatible aid. Nevertheless, over time the target is to arrive at an increase of the recovery rate. 29

30 ABB activity 03/02: Control of State aid Financial resources (EUR) in commitment appropriations Operational expenditure Administrative expenditure (managed by the service) (1) (2) (1)Heading 5 appropriations managed by the DG (global envelope) XX (2) BA lines (XX 01 04) and, when relevant XX and XX ABB activity "Cartels, antitrust and liberalisation" This activity involves the application of Articles 101, 102 and 106 of the TFEU and derived legislation, and its objective is to detect, sanction, deter and remedy of the most harmful anticompetitive practices by companies and/or Member States with a view to protecting consumer welfare. As antitrust investigations may take several years to conclude, the enforcement actions referred to in this section for which proceedings were opened and/or subsequent procedural steps were taken in 2014 largely determine the Commission's enforcement agenda for 2015 in line with the Commission's wider priorities. More generally the sectors referred to in the following subsections will continue to be accorded priority attention in Cartels Total Human resources Establishment plan posts Estimates of external personnel (in FTEs) Total Article 101 TFEU prohibits anti-competitive agreements in the internal market and cartels constitute one of the most serious infringements thereof. Cartels are secret arrangements by which (generally) competing firms limit or eliminate competition between them with a view to raising prices and profits, without producing any objective countervailing benefits. Cartels typically involve agreements to fix prices, limit output, share markets, allocation of customers and/or territories among firms, bid-rigging or a combination of any of these. In so doing cartels hinder the normal functioning of competition in markets, increase production costs and thereby reduce the competitiveness of the users of the products concerned, reduce the incentives to innovate, delay the necessary restructuring in certain sectors and ultimately have a negative impact on growth. In 2015, DG Competition will continue to give priority to cartel enforcement activity. This relates both to sectors where decisions were adopted in such as car parts, financial services and the food sector, but also other sectors where proceedings were opened and Statements of Objections were sent such as optical disc drives, retail food packaging and trucks. In addition to drawing on the efficiency of the leniency programme, DG Competition will also pursue ex officio detection of cartels, aim to reduce the average duration of cartel investigations, ensure efficiency Unit DDG.3.03 personnel accounted for 70%:30% between SA enforcement and policy. In 2014 ten cartel decisions, a record number, were adopted, imposing fines of EUR billion. 30

31 and uniformity when settling cases and continue to set fines at a level that acts as a real deterrent. The leniency policy of the Commission has proved successful in the past years. Also in 2014, majority of the cartels decisions adopted by the Commission originates from leniency applications. In 2015, the Commission continues to work together with other authorities within Europe (exchanging best practices and discussion implementation of the Leniency Programme within the ECN) and beyond (advocacy in International Competition Network) to ensure that the instrument is successfully used to end international cartels. With respect to cartel proceedings, the cartels settlement procedure, introduced in 2008, has become more widely used 56. It gives companies a 10% reduction in the fine if they accept liability for the infringement and do not contest the Commission s findings. The settlement procedure contributes to increasing the deterrent effect of the Commission's action against cartels since it allows the Commission to focus resources on the detection and fight against other cartels. In 2014, settlements allowed the Commission to reduce the investigative period by approximately two years. In 2015, the Commission will continue to apply the settlement procedure in cases considered suitable for this procedure. DG Competition also ensures that its investigative tools remain adapted to technological changes. In 2014, the Commission continued to apply an improved methodology to gather digital evidence during inspections allowing it to deal more efficiently with the ever increasing quantity of digital data. The methodology was used in all inspections into alleged cartels in 2014, inter alia in the exhaust systems sector, and will continue to be used in Other anti-competitive agreements and practices In addition to cartels, other agreements between companies can give rise to competition concerns and can also have very negative effects on consumers. Such agreements harm European consumer welfare, if they affect trade between Member States and do not have countervailing benefits of efficiency and consumer benefit (Article 101 TFEU). Anti-competitive practices also include situations where a dominant company abusively prevents new entry or squeezes competitors out of the market (Article 102 TFEU). Such practices hamper competition and negatively affect incentives to innovation and growth, as well as consumer welfare. Finally, Article 106 TFEU enables the Commission to protect competition in the internal market by prohibiting Member State measures that induce public or privileged 57 undertakings to abuse a dominant position or to conclude anti-competitive agreements. Anti-competitive agreements and practices in key input sectors, such as ICT and other network industries (e.g. energy and transport) affect the related input costs and hence the competitiveness of various related services In 2014, the settlement route was pursued for eight out of the ten adopted decisions bringing up to 17 the total number of settlement cases adopted since the procedure was introduced in Art. 106 prevents Member States from enacting or maintaining in force any measures contrary to the Treaty rules regarding public undertakings and undertakings to which Member States grant special or exclusive rights (privileged undertakings). 31

32 Energy In its Political Guidelines, the Commission President called for a reform of EU energy policy into a new European Energy Union 58. Competition is an important part of the policy mix that can address this challenge. Competition enforcement notably ensures that companies do not maintain or reinstate barriers to competition that have been removed by legislation liberalising the sector and stops dominant companies from excluding competitors and exploiting their dominance to the detriment of consumers. In 2015, DG Competition will continue its antitrust enforcement activity in relation to anticompetitive behaviour in the energy sector pursuant to Article 101 and 102 TFEU, supporting the Commission's objective of achieving a European Energy Union. Antitrust enforcement can ensure fair access to indispensable energy infrastructure, remove obstacles to market integration and foster competition between and within Member States, helping to keep energy prices in check. Following its enforcement actions under Article 101 and 102 TFEU in , DG Competition will continue in 2015 its investigation 60 into potential distortions of price reporting in relation to oil and biofuels products price benchmarks established by a Price Reporting Agency. On-going cases under Article 102 TFEU also concern the potential abuse by Gazprom of its dominant position in the supply of natural gas in Central and Eastern Europe 61, the possible foreclosure of gas markets in Bulgaria 62 by the Bulgarian incumbent BEH and possible territorial restrictions by BEH 63 on the resale of electricity which could partition electricity markets. DG Competition is also active in the environmental sector, in particular waste management. On-going enforcement action in this area includes the potential abuse by ARA 64 of its dominant position on the markets for the management of packaging waste in Austria. In relation to the application of Article 106 TFEU in conjunction with Article 102 TFEU to State measures, 2014 saw the Court of Justice render its judgment in the Greek lignite case (cases C-553/12P and C-554/12P Commission v DEI), which confirms the Commission's powers to apply Articles 106 and 102 TFEU to State measures which have anti-competitive consequences Political Guidelines for the new European Commission as presented by President Juncker of 15 July 2014, In 2014, the Commission adopted a decision fining two electricity power exchanges for agreeing not to compete with each other and allocating European territories amongst themselves in case AT Power Exchanges. The Commission also adopted a decision finding that the Romanian power exchange OPCOM had infringed competition rules by discriminating against foreign traders Case AT OPCOM/Romanian Power Exchange. Inspections were carried out in 2013 and Case AT Upstream gas supplies in Central and Eastern Europe. Case AT BEH gas. Case AT BEH Electricity. Case AT ARA foreclosure. 32

33 Information, communication and media Competition policy will also continue contributing to creating a connected Digital Single Market, as set out in the Political Guidelines. DG Competition, as in the past, will be particularly vigilant in the ICT and digital economy sector, an area in which markets are especially prone to dominance. Network effects can tip the market in favour of a particular player which becomes dominant and can even obtain a near-monopoly position, to the detriment of European consumers. In the knowledge-based sectors, vibrant competition is essential to stimulate innovation and allow more and more citizens to benefit from technological development. In addition, competition has been a major driver of investment and job creation in the telecom sector in the EU. It is crucial for European competiveness and growth to protect the competitive process in the telecommunications sector. Following its enforcement actions in 2014 on telecoms companies under 101 and 102 TFEU 65, the Commission continues to monitor the sector closely. On-going investigations under Article 102 TFEU include the potential alleged abusive practices on the part of Qualcomm, a leading developer of wireless technology products and services. The products concerned are communication chipsets used in mobile handsets and mobile broadband devices. Network and spectrum sharing are becoming ever more common in mobile markets within the EU. Such agreements can reduce operators' costs and may, in some cases, have pro-competitive effects. However, they may also reduce the intensity of competition between the operators concerned as well as their incentives to invest in infrastructure. Several national authorities are monitoring mobile network sharing and in 2014 the Commission also received a complaint which it is examining. In 2015, as in previous years, DG Competition, together with DG Communications Networks, Content & Technology, may monitor the criteria and procedures used by Member States for granting digital TV broadcasting frequencies, including those in Italy, Bulgaria and France. In 2015, the Commission will continue its on-going antitrust investigation relating to Google 66, where it has expressed concerns that Google may be engaged in an abuse of a dominant position under Article 102 TFEU in four areas, namely that Google is potentially: (1) in its horizontal search results, prominently displaying links to its own vertical search services as compared to those of competitors; (2) copying and using in its vertical search services the content of third party web sites without their approval; (3) on websites where Google delivers search advertisements, entering into agreements with partners which result in de facto exclusivity, thereby requiring these partners to obtain all or most of their search advertisement requirements from Google; and (4) limiting the portability and management of online search advertising campaigns across competing search advertising platforms through contractual restrictions on software developers In 2014, the Commission adopted a prohibition decision on Slovak Telekom and its parent company, Deutsche Telekom. The Commission concluded that Slovak Telekom refused to supply unbundled access to its local loops to competitors and imposed a margin squeeze on alternative operators. In 2014, the Commission further announced that it was closing its investigation into internet connectivity practices, which followed inspections in July 2013, as it had not found evidence of an infringement. Case AT Google. 33

34 The Commission is also investigating certain practices of Google in the mobile space that potentially infringe Articles 101 or 102 TFEU. With a view to the importance of achieving an integrated Single Digital Market, the Commission will also have an increased focus in 2015 on restrictions to the on-line distribution of goods and services. E-commerce has become very important in the digital economy. The 2010 Commission Guidelines on Vertical Restraints introduced significant clarifications to the application of competition rules relating to e-commerce restrictions and enforcement may be necessary to ensure that EU competition rules are applied uniformly across the EU and that contractual barriers to online trade are removed. As one of the main priorities under the President's Political Guidelines, the new Commission should "ensure that consumers can access services, music, movies and sports events on their electronic devices wherever they are in Europe and regardless of borders". The access to content issues is also connected to the modernisation of the copyright rules in the light of the digital revolution and changed consumer behaviour as mentioned in the Political guidelines of President Juncker 67. Following the fact-finding investigation to examine whether licensing agreements for pay-tv content contain restrictive absolute territorial protection clauses, the Commission opened formal proceedings against a number of major US film studios and European pay-tv broadcasters in January In these proceedings, the Commission is examining whether the alleged absolute territorial protection clauses concerning satellite pay-tv broadcasting and online pay-tv services are in breach of Article 101 TFEU, hinder the completion of the Single Market and prevent consumers from cross-border access to pay-tv content. The investigation will continue in In 2015, the Commission continues to closely monitor the development of the EU e-book market following its two Article 9 decisions of 2012 and 2013 respectively in the E-book case 68. The monitoring includes the review of new agreements entered into by major publishers and e-book distributors in the EEA. Knowledge economy The interplay between patent law, competition law and standardisation in the IT sector will remain an important enforcement priority for the Commission in The Commission observes a trend to file more and more patent applications and use patent litigation as a tool against competitors. A fortiori, patents which are essential for the implementation of a standard ("standard essential patents" or "SEPs") may represent an important tool in this "patent war". In 2014, the Commission adopted two antitrust decisions limiting the use of injunctions by the holders of SEPs that have committed to license their SEPs to implementers on fair, reasonable and non-discriminatory (FRAND) terms: a prohibition decision Political Guidelines for the new European Commission as presented by President Juncker of 15 July 2014, Case AT E-books. 34

35 against Motorola Mobility 69, and a commitment decision with regard to Samsung 70. With those decisions, the Commission provided guidance to stakeholders as to the interpretation of EU antitrust rules in the area of the interplay between patent law, competition law and standardisation, and ensures that the benefits of standardisation are maximised at the same time as ensuring fair reward for intellectual property holders. In 2015, competition concerns regarding the enforcement of SEPs will remain a priority for the Commission. The Commission further observes that a phenomenon coming with the proliferation of IT patents and patent litigations is the emergence of so called non-practising entities (NPEs). These are companies which are not involved in R&D activities or in the manufacturing or sale of goods or services, but whose business is limited to the acquisition and enforcement of patents and patent portfolios. In Europe, it is expected that NPEs will become more active with the installation of the new unitary European patent and the new unified patent court which will allow for Europeanwide enforcement of patents. Competition law obligations with regard to patents, and in particular SEPs, apply in the same way to NPEs as to any other company. Financial services Competition rules and competition enforcement are key pillars for achieving a deeper and fairer internal market, which is identified by the Commission President as Europe's best asset in times of increasing globalization. In particular, DG Competition will continue to be vigilant in the area of financial services, to ensure that a stable and fairer financial sector goes back to its core function of lending to the real economy. In addition, the Single Resolution Mechanism foreseen in the Banking Union will shortly enter into effect; in order to ensure a level playing field, the interventions of the Single Resolution Fund will be subject to State aid control. In 2015, there will also be continued attention to possible anti-competitive agreements in financial markets, whether horizontal or vertical, which may cause harm to consumers and undermine the achievement of the internal market. As regards competition in the payments market, it is expected that an important step will be taken in 2015 with the anticipated adoption by the European legislator of the Interchange Fee Regulation and Payment Services Directive and the entry into force already in the same year of the first legislative act. These two elements of the Payments Package are likely to create clarity on acceptable business models, allow market entry also by non-banks in internet payments and bring about a level playing field that facilitates competition and innovation in an integrated EU market. Nevertheless, on-going competition law enforcement against the international schemes will continue 71. The market for Credit Default Swaps (CDS) will also continue to be under scrutiny by DG Competition. DG Competition will continue investigations in the wholesale markets such as CDS Case AT Motorola Enforcement of GPRS standard essential patents. Case AT Samsung Enforcement of UMTS standard essential patents. In 2013 proceedings were opened against MasterCard regarding interchange fees for inter-regional transactions and rules hindering cross border acquiring services. In 2012 and 2013 the Commission issued a Supplementary Statement of Objections to Visa Europe and Visa Inc. After the settlement with Visa Europe reflected in a Commitment Decision of February 2014 the proceedings against Visa Inc continued concerning interchange fees for inter-regional transactions. 35

36 trading where 13 of the most important international banks allegedly colluded to prevent access, by exchanges to the CDS markets thereby increasing financing costs for the real economy and overall systemic risks 72. Transport In 2015, DG Competition envisages continued enforcement action in the aviation and maritime transport sectors. In the aviation sector, the Commission continues its investigation of the alleged anticompetitive conduct in relation to the joint venture between Air France KLM, Delta and Alitalia on transatlantic flights following commitments 73 submitted by the parties to meet the competition concerns expressed by the Commission. The Commission will also continue its investigation into code-share practices 74. In the maritime sector, the Commission continues to investigate the container shipping sector where proceedings have been initiated against more than ten firms in November The Commission will also continue its investigation into the Lithuanian rail market 76 to consider whether the Lithuanian rail incumbent would have abused its dominant position with a view to foreclose entry from competitors. The Commission will also monitor the commitments made binding upon Deutsche Bahn by the Commission decision 77 adopted in December Other sectors Basic and manufacturing industries as well as consumer goods continue to represent a significant share of EU GDP and DG Competition's enforcement practice. In 2015, DG Competition will further consolidate its lines of action (including individual case work, market survey, projects and advocacy) in these sectors with a particular focus on possible anticompetitive conduct as regards aftermarkets and commodities. In 2015, the Commission will continue its investigation 78 into the market for refrigerants used in air conditioning systems in cars. In this case, the Commission informed Honeywell International Inc. (Honeywell) and E.I. du Pont de Nemours and Company (DuPont) in October 2014 of its preliminary view that the cooperation they entered into in 2010, based on several agreements on the production of a new refrigerant for use in car air-conditioning systems (R-1234yf 79 ), may have limited its availability and technical development, in breach of EU antitrust rules. The health services, pharmaceutical and medical devices industries represent a large share of European GDP. The level of competition in these markets therefore has a significant impact on well-being of EU-citizens, on innovation and on public spending (notably at times of increased Case AT CDS Information market. OJ C 376 of , p. 12. In particular, case AT Brussels Airlines/TAP Portugal. Case AT Container Shipping. Case AT Baltic rail transport. Case AT.39678/AT Deutsche Bahn I/II. Case AT Refrigerants. R-1234yf is currently the sole commercially available refrigerant complying with the requirements of Directive 2006/40/EC on harmful emissions from air conditioning systems in motor vehicles. 36

37 pressure on budgets). For these reasons, these sectors have been and remain focal points of competition policy at European and Member States levels. DG Competition will continue its scrutiny, inter alia, of possible pay-for-delay conducts in the pharmaceutical sector. In the food sector, following the adoption of new competition rules in the agriculture sector by the Parliament and Council in 2013, DG Competition will prepare guidelines for the application of those rules. The rules concern joint-selling by producers in certain agricultural sectors. DG Competition will also follow-up on the results of the study on The economic impact of modern retail on choice and innovation in the EU food sector 80. In this respect, advocacy will be particularly relevant for the debate on what should be done at EU level on so-called Unfair Trading Practices in the food supply chain. ABB activity 03/01: Cartels, antitrust and liberalisation Financial resources Human resources (EUR) in commitment appropriations Operational expenditure Administrative expenditure (managed by the service) Total Establishment plan posts (1) (2) Estimates of external personnel (in FTEs) Total The economic impact of modern retail on choice and innovation in the EU food sector (2014), published 2 October 2014, see see press release 37

38 Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition Specific objective 1: Detection, sanctioning, deterrence and remedying of the most harmful anti-competitive practices with a view to protecting consumer welfare programme-based (please name the related spending programme) Non programme-based Impact indicator 1: Benchmark for the observable customer benefits resulting from Commission decisions prohibiting cartels. Rationale: Quantitative indicator to ensure positive impact of competition enforcement on consumer welfare Source: DG Competition calculation Baseline (2013) Target (2015) Cartel prohibition decisions: EUR Stable level bn 81 Result indicator 1: Impact of existing EU antitrust rules on planned business transactions. Rationale: Indicating compliance with EU antitrust rules without Commission intervention. Source of data: DG Competition Stakeholder Survey Baseline (2014) Target >50% (of those with relevant experience) 82 Maintain Result Indicator 2: Deterrent effect of the Commission's fines Rationale: The Commission can impose fines on companies to punish infringements of antitrust rules and to deter future infringements. Source of data: DG Competition Stakeholder Survey Baseline (2014) Target: Maintain > 50% 83 Output Indicator 1: Intervention rate 84 Rationale: Most competition enforcement agencies publish the number of decisions to give a benchmark for the level of activity and output per instrument also for deterrence purpose. Source of data: DG Competition case management system (Natasha) Baseline (2013) Target: No target See footnote 26 above. Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report, p. 38, to be published in 2015, according to which most participants with relevant experience said that EU antitrust rules had a strong impact on company plans. Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 37, to be published in 2015, Settlement, prohibition, commitment and procedural decisions for See footnote 48 above. 38

39 4.3. ABB activity "Merger control" The purpose of EU merger control is to ensure that market structures remain competitive while facilitating smooth restructuring of the industry, not only as regards EU-based companies, but any company active on the EU markets. Industry restructuring is an important way of fostering efficient allocation of production assets. But, there are also situations where industry consolidation can give rise to harmful effects on competition, taking into account the merging companies' degree of market power and other market features. EU merger control ensures that changes in the market structure which lead to significant impediment to effective competition do not occur. There is a division of work between the Commission and the Member States' NCAs, taking the relative size of the transactions into account. The Commission's merger control deals exclusively with those proposed transactions that exceed the thresholds of the EU Merger Regulation. Below these thresholds, Member States are in principle competent to deal with the transaction under their national legislation. Yearly, approximately 300 notified acquisitions are scrutinised by the Commission and up to 3000 mergers by the national competition authorities within the EU pursuant to national merger control rules. The reviews of mergers at national level is without prejudice to the existing referral mechanisms whereby concentrations that are not of EU dimension may be referred to the Commission at the initiative of Member States' authorities or the undertakings concerned. The existence of a so-called one stop shop for reviewing concentrations of EU dimension allows companies trading in different EU Member States to obtain clearance for their mergers in one go. Similarly, Member States or the companies involved may ask for the case to be referred from the Commission to Member States, if a merger exceeding the EU thresholds displays strong national features and it is established that a national authority would be better placed to review the merger. The Commission retains some discretion in the referral of cases. Over the past decade, the cross-border nature of mergers notified to the Commission has increased. Merger control by the Commission guarantees efficient control involving a rapid assessment and clearance of non-problematic mergers. The Commission approves the vast majority of cases notified, most of them without the need to open an in-depth investigation. Since the EU Merger Regulation came into force in 1990, the Commission has cleared more than 5500 transactions. Most concerns about the possible effects of a merger are resolved through remedies 87. In 2015, the Commission will continue to pay attention to energy, ICT & media, and pharmaceuticals. Merger control will also continue to ensure that cross-border mergers are not blocked by Member States on grounds other than competition policy. Similarly, the Commission will continue to ensure that the commitments made by companies as a condition for obtaining a clearance decision in earlier merger cases are effectively complied with and enforced. Such strict enforcement is critical as otherwise the anti-competitive effects that these earlier decisions sought to avoid could nonetheless occur. 87 For example, in 2014, concentrations were approved subject to remedies in 14 cases, 5 of which following an in-depth investigation (end of November 2014). 39

40 Energy In the energy sector, the Commission is currently reviewing the acquisition by the State Oil Company of the Azerbaijan Republic (SOCAR) of the Greek Gas Transmission System Operator, DESFA. The Commission opened an in-depth investigation in November 2014 with the view to ensuring that upstream wholesale gas competitors will continue to have access to the Greek transmission network. ICT In 2015, the consolidation of European mobile operators is expected to continue, following also the Commission's conditional clearance of two mobile mergers in Ireland (Hutchinson 3G UK/Telefónica Ireland 88 and Germany (Telefónica Deutschland/E-Plus 89 ) in In reviewing transactions under the EU Merger Regulation in this sector, the Commission will aim to make sure that post-merger consumers will continue to be able to choose between different mobile telephony providers and enjoy competitive prices and innovative services. In 2015, the Commission will also continue to investigate a concentration in the Belgian media sector with respect to which the Commission opened an in-depth investigation in September The case involves the acquisition by Liberty Global, the world's largest cable company and owner of the cable infrastructure in Flanders and parts of Brussels, of a 50% stake in De Vijver Media, a Belgian media company and broadcaster of two Flemish TV channels. Pharmaceuticals The scrutiny of the pharmaceutical sector will go on in 2015 as a number of important and complex cases were notified in Among them, the Commission is currently investigating the planned acquisition of Biomet Inc. (Biomet) by Zimmer Holdings Inc. (Zimmer). The transaction would combine two leading designers and manufacturers of orthopaedic implants and related surgical products, with significant market power in a large number of the Member States of the European Economic Area (EEA). The Commission opened an in-depth investigation in October 2014 to ascertain whether the proposed acquisition would substantially lessen competition in the markets for hip, knee, elbow and shoulder implants, as well as for other products, such as bone cement, bone cement accessories and a surgical tool called pulse lavage. Transport In 2015 continued attention will have to be paid to corporate restructuring in the airline sector, where a number of important and complex cases were notified in recent years. Some of these cases led to prohibition decisions, in one instance only the failing firm defence made a clearance possible. Many others were cleared subject to commitments. Consequently, in 2015 the Commission will continue to ensure that the commitments made by airlines as a condition for obtaining a clearance decision in earlier merger cases are effectively complied with and enforced Case M.6992 Hutchinson 3G UK/Telefónica Ireland. Case M.7018 Telefónica Deutschland/E-Plus. 40

41 Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition Specific objective 1: Prevention of anti-competitive effects of mergers with a view to protecting consumer welfare programme-based (please name the related spending programme) Non programme-based Impact indicator 1: Benchmark for the observable customer benefits resulting from corrective horizontal merger decisions. Rationale: Quantitative indicator to ensure positive impact of competition enforcement on consumer welfare Source: DG Competition calculation Baseline (2013) Target (2015) Horizontal merger decisions : EUR bn 90 Stable level Output Indicator 1: Intervention rate 91 Rationale: Most competition enforcement agencies publish the number of decisions to give a benchmark for the level of activity and output per instrument. Source of data: DG Competition case management system (CMS) Baseline (2013) Target No target 93 ABB activity 03/03: Merger control Financial resources (EUR) in commitment appropriations Operational expenditure Administrative expenditure (managed by the service) (1) (2) Total Human resources Establishment plan posts Estimates of external personnel (in FTEs) Total ABB activity "Policy coordination, European Competition Network (ECN) and international cooperation" The objectives that DG Competition pursues under this activity comprise i) maintaining EU competition law instruments aligned with market realities and contemporary economic and legal thinking, ii) ensuring coherent application of EU competition law by national competition authorities and courts, iii) ensuring coherent private enforcement of EU competition law and compensation for victims, and iv) strengthened international cooperation in enforcement activities, increased convergence of competition policy instruments across different jurisdictions and well-functioning competition regimes in (potential) candidate countries See footnote 27 above. Prohibition decisions, decisions with remedies (in phase 1 and phase 2), withdrawals in phase 2 Average for : See footnote 48 above. 41

42 Competition policy In order to meet the above-mentioned general and specific objectives, it is important to constantly adapt competition policy to new market developments and contemporary economic and legal thinking. Consequently, DG Competition regularly reviews the competition rules on substance and procedures, notably through Commission Regulations and "soft law" such as Guidelines, Communications and Notices. In addition to providing legal certainty and transparency for all stakeholders, these instruments play an important role in preventing and deterring restrictions of competition that harm consumers by informing companies and governments about the criteria the Commission uses in assessing anti-competitive agreements, abuses of dominant positions, mergers and State aid. Throughout the last decade, these instruments have also led to a considerable reduction of regulatory burden, especially for companies, including SMEs, lacking market power State aid policy Completing and successfully implementing the State aid modernisation (SAM) In 2014, the Commission nearly completed its ambitious State aid Modernisation (SAM) reform, aiming at promoting good aid that supports growth while contributing to Member States' efforts towards budgetary consolidation. Only one building block of SAM still needs to be put in place, namely a Commission's guidance on the notion of State aid, following important evolutions in case law and enforcement practice. Figure 1 Overview of the SAM package The reform has already begun to transform the way in which State aid control is carried out and is expected to deliver greater benefits in the course of the new Commission mandate. SAM provides for more efficient decision making and procedures for granting growth-supporting aid that is not distortive to market functioning in the EU. The expanded GBER brings a substantial number of measures within its scope that would previously have required prior notification, thus leading to a reduction in the number of notifications being dealt with by DG Competition. New rules on the admissibility of complaints should have a similar effect in terms of the number of complaints. Thus, as a result of the reform, a significantly larger number of smaller and unproblematic measures should be exempted from prior notification, in exchange for strengthened controls at Member State level, greater transparency and better evaluation of the 42

43 impact of aid. If the reform bears fruit, State aid control will become less notification and complaints-driven, and provide the Commission with more discretion to choose its own enforcement priorities. Obtaining these results will not happen automatically, but requires significant efforts by the Commission and Member States alike during 2015 and the years to follow. As a result, the foremost priority for State aid control going forward should be the successful implementation of SAM, notably with a view to ensure that Member States use the revised GBER to the greatest possible extent. Moreover, the new transparency and evaluation requirements have to be operationalised. Ensuring that the new State aid architecture works and is accepted will also require a significant advocacy programme. In order to disseminate knowledge, the Commission will inter alia work closely with Member States, through a new partnership with Member States (see next section). In addition, greater focus will be put on convincing and user-friendly communication overall. A new partnership with Member States in State aid control SAM also implies a greater role for Member States in State aid control, including in designing State aid measures to fit the rules (particularly the GBER), taking responsibility for compliance of the aid they grant, and making the transparency and evaluation requirements work. To facilitate a more strategic discussion on these responsibilities, the Commission has set up a High Level Group (HLG) with Member States as well as some dedicated working groups. The HLG looks at best practices in ensuring compliance and common challenges with regard to SAM implementation. Significant progress has already been made at working group level. For 2015, the tasks of this new network include the identification of common compliance problems and agreeing on concrete methods to address those problems, the implementation of the transparency and evaluation obligations and the identification of best practices on integration of State aid considerations into the policy design process. Alongside this process and to facilitate the work of the central authorities in Member States, DG Competition's newly created State aid country co-ordinators network helps to address systemic issues in State aid enforcement at Member State level, works to help Member States prioritise their portfolio of cases and assists with providing training and guidance. Over time, also with a view to enhancing predictability and speed, this function could be further strengthened. More ex-post, less ex-ante control: stepping up discretionary enforcement activities Assuming that SAM will indeed lead to a significant reduction in notifications and complaints based cases, and thereby reduces the role of the Commission in the ex-ante control of State, the Commission could increasingly focus its enforcement activities pro-actively on significant State measures that hold back economic growth in the EU, in line with the priorities of the Commission. State aid control can make a key contribution to the Commission's growth agenda by promoting policies that make markets function better by removing or adapting State measures that distort competition and hold back market entry. In doing so, it can deliver clear benefits to consumers, business and society as a whole. State aid control is also essential from the perspective of impact and value for money of public policies, which is a key challenge for all Member States. 43

44 For it to be a success, market monitoring will be stepped up and the basis will be put for a revamp of the scoreboard to gather more solid and comprehensive evidence on public subsidies. The new transparency obligations, monitoring and evaluation will also be essential tools to ensure that the reduced scope of the Commission's ex ante review of State aid does not lead to greater competition distortions. The Commission will therefore have to step up its existing monitoring activities and cooperate with Member States in the preparation of evaluation plans and in the assessment of the evaluation reports. Monitoring and reviewing the existing rules A number of guidance documents on State aid rules fell outside the scope of the SAM programme, including in particular the rules on services of general economic interest (SGEI) and the guidelines on State aid in the context of the EU Emissions Trading Scheme (ETS), both of which came into force in Regarding the rules on SGEI, Member States have now submitted first reports on their application and functioning. Consequently, these reports and the functioning of the package itself need to be analysed and the results will feed into future work on SGEI policy. Finally, the Commission may also start a review of other existing State aid rules, such as the Commission communication on the method for setting the reference and discount rates and the notice on the application of the State aid rules to guarantees. Supporting Multiannual Financial Framework - Joint work with other DGs DG Competition will also work to ensure that State aid policy supports key developments in other policy areas in a way that prevents possible distortions of competition from arising. Particularly important in 2015 will be the completion of the Banking Union, especially the entry into force of the Single Resolution Mechanism on 1 January 2015, the effective transposition by Member States of multiple Directives (of which the Bank Recovery and Resolution Directive) and their potential implications on the State aid control framework. DG Competition will also play a role in the implementation of key instruments in the new Multiannual Financial Framework, including the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) and the Horizon 2020 programme. With regard to the new structural funds programming period, DG Competition will work, together with DG Regional Policy, to ensure that Member States' partnership agreements and operational programmes comply with State aid rules and that the new rules on ex ante conditionality in the State aid field are fully and effectively reflected in Member States' set-up and practice. 44

45 Supporting the implementation of the Banking Union Joint work with other DGs Since its launch in June 2013, the project to achieve a Banking Union is a top priority of Europe s agenda 94. While still incomplete to date, it is progressing fast on different fronts. Since 4 November 2014, a Single Supervisory Mechanism (SSM) for euro-area banks is operational. The European Central Bank became the single banking supervisor for the euro countries and for all those that decide to join the Banking Union. A new European directive on Banking Recovery and Resolution (BRRD) that provides a common toolbox for resolving banks in difficulties is being transposed by Member States. This legislation aims at better protecting taxpayers from having to bail-out banks in distress. Mirroring the SSM, the Single Resolution Mechanism, applicable to the euro area and to other countries willing to join, will enter into force on 1 January State aid rules remain applicable both outside and within resolution, including to the use of the national resolution funds and the future Single Resolution Funds in financing resolution, in order to ensure equal treatment and level playing field in internal market. To prepare for these changes, the European Commission reviewed its State aid banking guidelines 95 in 2013, updating the crisis framework put in place five years before. This update of the State aid crisis rules intends to ensure that future State interventions are consistent with the principles of the Banking Union. The Commission will assess the necessity to adapt its crisis State aid rules to prevailing macro-financial environment. After the adoption in 2014 of the majority of the legislative initiatives foreseen in the EU Financial Regulation Agenda which aims at reforming the EU financial sector and deliver on the G20 commitments to tackle the less regulated parts of the financial system, DG Competition will have to continue keeping its intense cooperation with DG Financial Services for the shaping and drafting of the still pending Level 2 measures (delegated acts and implementing acts) that have to be decided before the relevant provisions in the regulations enter into application, most of them over 2015, some in The Level 2 measures will define how the principles established in the relevant regulations are implemented in practice. A substantial number of them needs to be assessed thoroughly from the competition viewpoint to achieve fair competition in trading/post trading. Particular support and input will be provided for the Level 2 measures required under the Market in Financial Instruments Directive and Regulation (MIFID II/MIFIR). In particular the review of the Binding Technical Standards proposed by the European Securities and Markets Authority (ESMA), as well as the drafting of the Implementing Guidelines the Commission has to produce in sensitive areas such as access to financial markets infrastructure (trading venues, central counterparties and trading platforms) and benchmarks; regulation of high frequency trading (including minimum tick size); reasonable commercial terms for the marketing of data; and consolidated tape for data In his annual State of the Union speech to the European Parliament on 11 September 2013, President Barroso described it as the first and most urgent phase on the way to deepen our economic and monetary union". Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis. 45

46 Antitrust policy Access to file and complaints under Regulation 1/2003 In 2014 DG Competition started to evaluate in partnership with external consultants whether the antitrust procedural rules on access to file and on complaints still correspond to the needs that they are supposed to address and whether they do so in an efficient manner. With regard to access to file, this evaluation aims to provide DG Competition with better information on the respective costs and benefits of the traditional access to file method set out in the Notice on the rules for access to the Commission file and the alternative access to file methods set out in the Notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU, namely data rooms and confidentiality rings. With regard to complaints, the evaluation aims to assess whether the current system of antitrust complaints, including the procedure for rejecting such complaints, meets the needs of complainants and DG Competition. The evaluation is expected to be completed by mid The results may feed into the preparation of a possible future Commission initiative in this area. Review of the Insurance Block Exemption Regulation (IBER) The insurance sector is one of three sectors (apart from maritime liner shipping and motor vehicle distribution) that still benefits from a Block Exemption Regulation. The IBER exempts from the prohibition of restrictive business practices (Article 101 TFEU) certain cooperation agreements between insurers, in particular: the exchanges of statistical information for the calculation of risk premiums, and the creation of insurance pools, subject to certain conditions. The Commission must submit to the Parliament and Council a report on the future of the IBER by March The current IBER will expire in March The IBER exists since 1992 and has been assessed at regular intervals (in 2003 and 2010). The review of the IBER has started and is subject to an Impact Assessment Procedure. In August 2014 DG Competition started the third review process by launching a public consultation through a questionnaire to stakeholders. After the assessment of the answers, bilateral discussions with stakeholders, including insurers, insured undertakings, consumer associations and sectoral federations, will follow. The Impact Assessment work to be undertaken over 2015 must determine how the IBER is being used in the EU insurance markets and whether the conditions that originally justified it continue to exist. If the Commission decides to renew/revise the IBER, the Commission will in due course have to consult stakeholders on the draft new regulation. 46

47 Guidelines on the application of Articles 169, 170 and 171 of Regulation (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products In 2015, the Commission also aims to adopt antitrust guidelines for the joint commercialisation by producers in the sectors of olive oil, beef and veal and arable crops. This follows the new specific rules laid down in Articles 169, 170 and 171 of the CMO Regulation for the olive oil, beef and veal and arable crops sectors. The guidelines aim to provide concrete explanations and technical parameters for the undertakings and ensure that the National Competition Authorities and courts apply the new rules consistently Merger policy In 2013, the Commission adopted a package to simplify its procedures for reviewing concentrations under the EU Merger Regulation. The package widens the scope of the simplified procedure to review unproblematic mergers. The Commission also reduced the amount of information required for notifying transactions in all cases, whether simplified procedure or not. Applicable since 1 January 2014, the simplification package has brought up significant benefits for businesses and advisers in terms of preparatory work and related costs as the total ratio of cases treated under this procedure is already close to the expected 70%. At the same time, DG Competition has been able to focus its resources even more on problematic merger cases. In July 2014, the Commission launched a public consultation on proposals to improve merger control at EU level outlined in a White Paper "Towards More Effective EU Merger Control". The key proposals of the White paper are the following: (i) a light and tailor-made review of acquisitions of non-controlling minority shareholdings these do not currently fall under the EU Merger Regulation but can cause significant harm to competition and consumers; (ii) making case referrals between Member States and the Commission more business-friendly and effective; (iii) making procedures simpler this can be achieved for example by excluding certain nonproblematic transactions from the scope of the Commission's merger review, such as the creation of joint ventures that will operate outside the European Economic Area (EEA) and have no impact on European markets; and (iv) fostering coherence and convergence the White Paper takes stock of the use of current EU merger control rules and proposes to reflect on ways to foster convergence between Member States with a view to enhance cooperation and to avoid divergent decisions in parallel merger reviews conducted by the competition authorities of several Member States. In 2015, DG Competition will continue working on each of these issues. 96 See Roadmap at 47

48 Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition and to promote competition culture in the EU and worldwide Specific objective 1: Maintain EU competition law instruments programme-based aligned with market realities and contemporary economic and (please name the related legal thinking spending programme) Non programme-based Output Indicator 1: Number of legislative or non-legislative instruments to be adopted in 2015 Source of data: Commission Work Programme 2015 Baseline Milestone (please introduce as many columns as the number of milestones) Target: (year) (year) (year) 6 (2013) Main outputs in 2015: Description Indicator Target (year) Commission/final output - - Planned evaluations: Antitrust: Ex-post evaluation of key procedural aspects of Regulation 1/2003 access to file and complaints Coherent application of EU competition law by national competition authorities and courts This activity comprises DG Competition's contribution to the effective and coherent application of European competition law in the EU, via the European Competition Network (ECN) and through cooperation with national courts. Effective and coherent enforcement action by the Member States' competition authorities and courts has an important role to play in achieving the general objectives of increased consumer welfare and improved competitiveness. It also contributes to ensuring a level playing field in the internal market. In 2015, DG Competition will continue working with NCAs on individual cases with a view to ensure coherent and effective application of Articles 101/102 TFEU, inter alia by scrutinising envisaged decisions submitted to the Commission in accordance with Regulation 1/2003. It will also further organise and animate multilateral work in the ECN at different levels with a view to contribute to these objectives. The strategic steer comes from the regular bi-annual meetings of the heads of the NCAs with the Director General of DG Competition. Technical work is carried out in the ECN Plenary and in a range of ECN working groups and sectorial subgroups. In addition to work in different sectors (by sectorial subgroups) and areas (cartels and forensic IT), the horizontal ECN activities in 2015 will focus on enhancing the functioning and convergence of the enforcement frameworks in the Member States, in particular with respect to institutional issues and enforcement powers of NCAs. 48

49 In July 2014, the European Commission adopted a Communication on 'Ten Years of antitrust enforcement under Regulation 1/2003' 97. This Communication took stock of the enforcement record by the Commission and the NCAs. Furthermore, it calls upon creation of a truly common competition enforcement area in the EU, building on the current achievements. It identifies the need for appropriate initiatives in a number of areas: to further guarantee the independence of NCAs in the exercise of their tasks and that they have sufficient resources; to ensure that NCAs have a complete set of effective investigative and decision-making powers at their disposal; to ensure that powers to impose effective and proportionate fines and well-designed leniency programmes are in place in all Member States and to consider measures to avoid disincentives for corporate leniency applicants. In 2015, DG Competition will continue working on these issues. Following the amended Procedural Regulation by Council Regulation No 734/2013 of 22 July 2013, a new form of cooperation has been put into place, and DG Competition can now also express its views, out of its own motion, on an individual case pending before a national court (so called 'amicus curiae' observations). In addition, DG Competition will continue to strengthen its cooperation with national courts, previously dealt with only under the Enforcement Notice. DG Competition is committed to providing support to national courts in individual cases pending before them, by providing information and opinions concerning the application of the State aid rules. DG Competition also intends to reflect the procedural innovations introduced by Regulation 734/2013 in the Enforcement Notice. Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition and to promote competition culture in the EU and worldwide Specific objective 2: Coherent application of EU competition law by national competition authorities and courts Output Indicator 1: Number of cases signalled to the European Competition Network Rationale: Provides a benchmark for the level of ECN activity to ensure coherent application of EU competition law Source of data: ECN case system Baseline (2014) Target: ca. 180 No target Output Indicator 2: Number of envisaged enforcement decisions and similar case consultations in the European Competition Network Rationale: Provides a benchmark for the level of ECN activity to ensure coherent application of EU competition law Baseline (2014) Target approx. 110 No target

50 Coherent private enforcement of EU competition law In 2015, DG Competition will continue its efforts to ensure a coherent application of EU competition law by national courts. Among others 98, it will do so through: the financing of training programmes for national judicial staff; case-specific cooperation with national judges. Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition and to promote competition culture in the EU and worldwide Specific objective 3: Ensure coherent private enforcement of EU competition law programme-based (Justice Programme ) Non programme-based Result indicator 1: Number of judicial staff trained per year to make sure EU competition rules are applied in line with EU law. Rationale: Provides a benchmark for the level of the training activity to ensure coherent private enforcement of EU competition law Source of data: DG Competition statistics on the basis of the final reports of funded projects Baseline: Milestone Target: 0 (A new 7-year programming period has started in 2014) 700 people trained by the end of 2015 Considering the variance in the applications for funding and in the success rate of the calls for proposals, the target for the period is 5000 people. The target is based on the 4769 people trained during previous 7-year programming period Result indicator 2: Geographical coverage: nationalities of judicial staff trained per year to make sure EU competition rules are applied coherently in all Member States. Rationale: Provides a benchmark for the reach of the training activity to ensure coherent private enforcement of EU competition law Source of data: DG Competition statistics Baseline (2013) Target: 27 Member States 100 The target for the period is all EU nationalities every year. Planned evaluations: For 2015, DG Competition has commissioned a study on judges training needs in the field of competition law. The study will re-assess the objectives of the Training of Judges Programme taking into consideration the current training and networking needs of judges across Europe and the results of past activities In 2015, the Commission will also keep monitoring the implementation of its 2013 Recommendation on collective redress; pursue non-case related cooperation with organisations of national competition law judges; follow the adoption process of amendments to Commission Regulation 773/2004 on its conduct in antitrust proceedings and Commission Notices on access to the file, leniency, settlements and cooperation of national courts to put them in line with the Directive on actions for damages. Data for are provisional as DG Competition is currently checking the final reports of the training projects funded under the 2013 call. Data for 2013 are provisional as DG Competition is currently checking the final reports of the training projects under the 2013 call. 50

51 Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition and to promote competition culture in the EU and worldwide Specific objective 3: Ensure coherent private enforcement of EU competition law programme-based (please name the related spending programme) Non programme-based Result indicator 1: Compliance rate of national judgments with Commission replies to requests for opinions (Art 15(1) of Regulation 1/2003) 101. Rationale: Provides a benchmark for coherence of the activities by the courts and the Commission to ensure coherent private enforcement of EU competition law Source of data: DG Competition statistics on the basis of national judgments transmitted Baseline: 17/17: 100% compliance rate ( ) 102 Target: Keeping the 100% compliance rate in the long term to ensure the coherent application of EU competition rules. Result indicator 2: Compliance rate of national judgements with Commission 'amicus curiae' briefs (Art 15(3) of Regulation 1/2003) 103. Rationale: Provides a benchmark for coherence of the activities by the courts and the Commission to ensure coherent private enforcement of EU competition law Source of data: DG Competition statistics on the basis of national judgments transmitted Baseline: 10/10: 100% compliance rate ( ) 104 Target: Keeping the 100% compliance rate in the long term to ensure the coherent application of EU competition rules. Main outputs in 2015: Description Indicator Target Commission output: replies to requests for an opinions and submission of 'amicus curiae' briefs when the coherent application of EU competition rules is at stake. Compliance rate by national courts with requested opinions and 'amicus curiae' briefs. 100% compliance rate in 2015 to ensure the coherent application of EU competition rules Ensure compensation for victims of EU competition law infringements Directive 2014/104/EU on antitrust damages actions was published in the Official Journal of the European Union on 5 December Member States need to implement the Directive in their legal systems by 27 December The opinion of the Commission is not binding on national courts. Please note that the reference year is the year Commission's opinions have been submitted. The timespan considered is 2004-October Pending cases (6) and cases where no national judgment has yet been received (5) have not been considered. The brief of the Commission is not binding on national courts. Please note that the reference year is the year Commission's 'amicus curiae' briefs have been submitted. The time-span considered is 2004-October Pending cases (3) and cases decided on grounds other than the merit of the case (2) have not been considered. 51

52 The Commission will support the Member States' implementation efforts by facilitating information exchange and cooperation. It will closely monitor policy, legislative and case-law developments at national level to evaluate the results of the implementation of the new rules for citizens and businesses. The Commission will focus its efforts in acquiring deeper country-specific knowledge to provide tailored guidance to Member States. Relevant general objective(s): To enhance consumer welfare in the EU and efficiently functioning markets by protecting competition and to promote competition culture in the EU and worldwide Specific objective 4: Ensure compensation for victims of EU competition law infringements programme-based (please name the related spending programme) Non programme-based Result indicator 1: Number of Member States having fully implemented the Directive ensuring the right for victims of EU competition law infringements to obtain compensation through national courts. Rationale: The aim of the Damages Directive is to give victims of competition law infringements equal opportunities to get compensation in all Member States Source of data: Evaluation Baseline: Entry into force of the Damages Directive (27 December 2014). Main outputs in 2015: Description Indicator Target Commission output: support to Member States for the transposition of the Directive through multilateral and bilateral contacts. Swift and comprehensive support for the transposition of the Directive. Target: Implementation of the Damages Directive by all Member States (27 December 2016). Full support to Member States in 2015 to ease the transposition of the Directive. Planned evaluations: Article 20 of the Directive requires the Commission to present a report on its application to the European Parliament and the Council 6 years after its entry into force by 27 December International cooperation and convergence DG Competition aims at promoting international convergence of competition policy and contributes actively towards this objective, in particular by creating effective tools for bilateral and multilateral co-operation with the Union's main trading partners and with other thirdcountry competition agencies. One important field of activity of DG Competition at the international level are the negotiations on Free Trade Agreements (FTAs) aiming to include competition and State aid provisions in those agreements in order to ensure a level playing field for European and foreign companies. Negotiations with the US on a Transatlantic Trade and Investment Partnership Agreement (TTIP) were launched in These negotiations were one of the priorities for DG Competition in See 52

53 and will continue to be so in Another important agreement being negotiated since 2013 is the FTA with Japan. In the course of 2015, further trade negotiations are expected to be launched with Mexico, Tunisia and Jordan and the European Commission will continue negotiating Free Trade Agreements with a large number of third countries which all include competition chapters (Morocco, Vietnam, Thailand etc.). Another important field of activity of DG Competition at the international level is the technical cooperation with the main trading partners which are developing their competition policy and enforcement regime and with which DG Competition has signed Memoranda of Understanding on Cooperation (MoUs). DG Competition has signed MoUs with most BRICS countries in recent years and has engaged in technical cooperation with these countries to varying degrees. DG Competition's technical cooperation activities with the Chinese competition authorities are most notable and will continue under the on-going cooperation programme (EUCTP II). A significant programme for technical cooperation with the Indian competition authorities, CITD, took off in 2014 and will run until DG Competition will also provide technical assistance as a follow-up to recently concluded FTAs. Moldova and Ukraine for example engaged to take over the EU State aid acquis and assistance will be provided to implement this commitment. The Cooperation Agreement with Switzerland in competition matters was signed in May An innovative feature of this agreement is that it will enable both competition agencies to exchange evidence they have obtained in their respective investigations. In 2014, both sides completed their internal approval processes; the last step in the EU procedure was the Council decision of 21 October 2014 to conclude the Agreement. The Agreement has entered into force on 1 December Negotiations with Canada are ongoing to include provisions into the existing EU-Canada Cooperation Agreement which would likewise allow the exchange of evidence. As to the accession negotiations with candidate countries, the main policy objective, in addition to fostering a competition culture, is to further assist the candidate countries and potential candidate countries to build up a proper legislative framework, well-functioning competition authorities and an efficient enforcement practice in order for them to meet the conditions for EU accession in the competition policy field. DG Competition will put a particular emphasis on achieving tangible results in relation to Turkey, Serbia, Montenegro and FYROM. In 2014, the screening of the Serbian legislation took place and opening benchmarks for negotiations of the competition chapter will be set in In 2014, DG Competition assisted Montenegro to fulfil the opening benchmarks of the Competition negotiations. The negotiations for a Stabilisation and Association Agreement with Kosovo were successfully concluded 106. In 2015, DG Competition will also continue to participate actively in international fora such as the Competition Committee of OECD, International Competition Network and UNCTAD in the years ahead. In OECD it will maintain its leading role in setting the agenda of the OECD Competition Committee, and contribute to achievement of its long term strategic OECD projects on evaluation and international cooperation. In addition, DG Competition will continue to submit written submissions for OECD Roundtable discussions on a wide variety of competition related issues and 106 The Agreement was initialled by the Chief Negotiators in July

54 actively participate in OECD discussions on other competition related or multidisciplinary topics. In relation to ICN, it will continue co-chairing the Mergers Working Group of ICN and one of the Sub-Groups of the Cartel Working Group. DG Competition is a project leader (together with US FTC) for the Steering Group project on investigative processes in competition enforcement activities and on the Merger Working Group International Merger Enforcement Cooperation Project. In 2015, DG Competition will continue to play a prominent role in these multilateral competition policy fora and it also envisages hosting a Merger working Group Workshop in Brussels. In UNCTAD DG Competition will continue to participate actively in the competition related activities by sharing its experience with other delegates (by means of written contributions and its participation in oral discussions) and by being actively involved in country peer reviews. ABB activity 03/04: Policy coordination, European Competition Network (ECN) and international cooperation Financial resources Human resources (EUR) in commitment appropriations Operational expenditure Total Establishment plan posts Administrative expenditure (managed by the service) (1) (2) Estimates of external personnel (in FTEs) Total

55 Relevant general objective(s): To promote competition culture in the EU and worldwide Specific objective 1: Strengthened international cooperation in enforcement activities and increased convergence of competition policy instruments across different jurisdictions; establishment of well-functioning competition regimes in candidate countries and potential candidate countries programme-based (please name the related spending programme) Non programme-based Result indicator 1: Promotion of competition culture and policy convergence at the international level Rationale: The National Competition Authorities of the Member States are involved in international competition policy fora, such as OECD, ICN and UNCTAD, based on which they can share their perception of role of the European Commission at international level Source of data: DG Competition Stakeholder Survey, Report on the views held by National Competition Authorities of the EU Member States 107 Baseline: (2014) Target: 5.7 (scale 1-7) Increasing trend (next survey foreseen 2019) Output Indicator 1: Number 2nd generation competition agreements that EU has with third countries Rationale: Provides a benchmark for the most advanced type of co-operation with the competition authorities of third countries Source of data: DG Competition's statistics Baseline: Target 1 new agreement during 2014 (Switzerland) 1 new agreement during Output Indicator 2: Number of free trade agreements containing competition/state aid clauses that EU has with third countries Rationale: Provides a benchmark for the increased level of convergence with third countries' competition authorities Source of data: DG Competition's statistics Baseline: Target: 10 agreements in place by new agreements during Output Indicator 3: Number of contributions to OECD, ICN and UNCTAD Rationale: Provides a benchmark for the activity of the Commission in contributing to increased international convergence of competition policy on multilateral fora Source of data: DG Competition's statistics Baseline: (2014) Target: ( ) 13 (OECD), 5 (ICN), 3 (UNCTAD) 11 (OECD), 12 (ICN), 3 (UNCTAD) Output Indicator 4: Number of technical assistance workshops organised with third countries Rationale: Provides a benchmark for the activity of the Commission in contributing to increased international convergence of competition policy bilaterally Source of data: DG Competition's statistics Baseline (2014) Target (2015) China (8) India (2), Brazil (1) China (8) India (2), Brazil (1) 107 Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), National Competition Authorities' Report, to be published in 2015, 55

56 PART 5. HORIZONTAL ACTIVITIES DG Competition is committed to devise and implement a strategy aimed at ensuring that its above-mentioned operational activities have the biggest effect on the functioning of the markets and through its competition advocacy, regulatory and other initiatives undertaken at the EU level and Member State level contribute to a more competitive market environment in Europe Policy strategy and coordination Strategy: delivering results DG Competition prioritises its actions in order to maximise its impact on the functioning of markets. In order to ensure timely and effective resolution of opened proceedings, DG Competition follows progress in each enforcement case, monitors workload, outputs, and working time, and allocates resources and cases accordingly. Also, DG Competition constantly assesses its performance, structures and processes to make sure that it is effectively delivering its objectives. Strategic planning within DG Competition, in accordance with the Commission Strategic Planning and Programming cycle, ensures that its policy proposals and enforcement acts pass efficiently through the Commission decision making system. The Commission's "smart regulation" rules require that Commission services perform (ex-ante) impact assessments for the most important Commission initiatives and those which will have the most far-reaching impacts. The only on-going impact assessment of DG Competition, which will continue in 2015, concerns the review of the Insurance Block Exemption Regulation (antitrust). Preparatory work for two further initiatives might start in the course of DG Competition is also contributing to the revision of the Commission's Impact Assessment guidelines, together with the Evaluation guidelines and the Consultation guidelines. The evaluation function of DG Competition became fully operational in It coordinates a five-year rolling evaluation plan, strengthened the link between evaluations, impact assessments and public consultations, organises trainings to build up further capacity and supported the teams performing pilot evaluations with practical advice on procedural and methodological aspects in In 2015, DG Competition will continue two pilot evaluations about key procedural aspects of Regulation 1/2003 and about the impact of the Commission's State aid decisions on the viability of firms in financial difficulties. Further evaluations and evaluationrelated projects are in the pipeline. In 2014 DG Competition launched a small number of ex-post evaluation studies that will facilitate later evaluations or will provide a good evidence base for the problem definition of future impact assessments, including in particular a study on the economic impact of competition policy enforcement in the energy sector. For 2015, further evaluation studies are in the pipeline Competition advocacy and transparency DG Competition through its enforcement activities and/or sector inquiries acquires extensive market knowledge that can contribute to regulatory initiatives taken at EU level. DG Competition 56

57 often contributes to finding more far-reaching and durable regulatory solutions. In this way, DG Competition actively contributed to and participated in the policy debate on the Digital Single Market and the related measures. Also, DG Competition continues to bring a substantial contribution to the gradual opening up of the EU energy markets for instance, and its enforcement activities complement regulatory action under the 3rd liberalisation package. By engaging in competition advocacy DG Competition continues to ensure in 2015 that regulatory and other initiatives at the EU level and Member State level do not contain or lead to unnecessary restrictions of competition and that they promote competition to the benefit of consumers. In 2015, DG Competition will continue to contribute to the Commission's wider economic policy and economic governance agenda; for example, by providing input with a view to Country Specific Recommendations in the context of Europe Likewise, DG Competition will provide input in the wider context of conditionality and structural reform, such as in the case of reforms aimed at strengthening the competition enforcement systems and competition enhancing structural reforms in specific sectors and regarding certain services as part of the conditionality relating to the adjustment programmes agreed in respect of Greece, and Cyprus. In 2015, DG Competition will continue to work together with other services of the Commission and with other institutions, in particular the European Parliament, the Council and the ECB. Notably, DG Competition will continue to provide input to future regulatory actions concerning the Digital Single Market, Energy Union, financial services sectors, industrial policy and fight against tax evasion and will closely work together with other Commission services. Competition advocacy entails communicating effectively the benefits of competition and the scope and impact of our activities on citizens, businesses and policy makers in order to foster a competition culture, to facilitate compliance and to legitimise public resources spent. In 2014, DG Competition conducted a stakeholder survey and obtained comparable information on some key quality parameters of its performance. DG Competition produces a detailed report on its activities in its Annual Competition Report 108 to the European Parliament, the Council, the European Economic and Social Committee and Committee of Regions, and engages in a structured dialogue with other institutions. DG Competition engages with the European Parliament, in particular the Economic and Monetary Affairs Committee (ECON), on a multitude of topics and strives to provide timely and effective replies to parliamentary questions. DG Competition engages with the Council on various issues and in various fora. DG Competition is strongly committed to the respect of the principle of transparency. The public communication of information from the files requires a balance between the need of the public to understand the main findings of an investigation and the need to protect the fundamental rights of the investigated parties, such as the rights of defence and the professional secrecy. This principle has been upheld in several case laws. In 2015 further judgments from the European

58 Court are expected which DG Competition will incorporate into its access to documents policy, improving templates, the horizontal guidance and the sharing of experience for the handling of requests. DG Competition will also cooperate closely with the Secretariat-General and the Legal Service to the possible negotiations of the review of Regulation 1049/2001 on public access to documents, as well as with regard to the setting up of an enhanced Transparency Register. Specific training on access to documents is provided in the framework of the Training cycles in each instrument and adapted to the latest case law. DG Competition provides guidance about the competition rules and their enforcement to improve legal certainty for stakeholders Internal and external communication DG Competition's external communication strategy aims at demonstrating the benefits of competition to citizens and stakeholders and explaining to businesses and Member States the economic and legal approach used by DG Competition when taking its decisions. This contributes to increase legal certainty and compliance in the areas of antitrust and cartels, mergers and State aid. In parallel, DG Competition makes continuous efforts to improve the internal communication. To this end an Internal Communication Strategy and Action plan for is established that focuses on four objectives that will ensure fluid information flow at all levels (top-down, bottomup and horizontal), improve staff's understanding of Commission and DG Competition's policy strategy and priorities and help them see the connection between their job and those priorities Highest standards in the enforcement of competition policy Finally, the above general and operational objectives are all served by ensuring competition policy enforcement of the highest of standards. A fair, impartial, efficient and transparent enforcement of competition policy strengthens the ability to deliver results with respect to consumer welfare, efficient markets, growth and advocacy. An efficient, well-functioning and transparent enforcement system also increases compliance with competition rules and allows market players to obtain relief and compensation where needed. The staff of DG Competition is committed to adhere to the highest standards of professionalism, intellectual rigour and integrity so as to ensure the highest standards in the enforcement of competition policy. DG Competition also strives to ensure transparency, due process and predictability for its stakeholders and private enforcement of EU competition law. Maintaining and strengthening the Commission s reputation world-wide is also defined as a priority for the new Commission in the field of competition policy 109. In its annual ranking of competition authorities around the world in 2014, the Global Competition Review (GCR) awarded the Commission a maximum five-star rating for the fourth consecutive year and stated that: DG 109 Mission letter to the Commissioner of Competition Vestager by President Juncker 1 November

59 Competition has a harder job than most enforcers because it polices such a large market, and deals with national authorities and regulators as well as other European institutions 110. DG Competition measures and compares its performance in terms of quality of its work 111 and conducted for the second time Eurobarometer Standard Qualitative Study 112 in The Study contributes to more targeted and dynamic communication and interaction with DG Competition's professional stakeholders. DG Competition aims to continuously increase its level of performance in this respect and plans to conduct the survey again in 2019 to obtain updated information. ABB activity: part of ABB activity 03/04: Policy coordination, European Competition Network (ECN) and international cooperation Financial resources Human resources (EUR) in commitment appropriations Operational expenditure Total Establishment plan posts Total Administrative expenditure (managed by the service) Estimates of external personnel (in FTEs) Specific objective 1: Implement the Commission planning and programming so that Director General delivers its policy objectives, contributing to the overall Commission strategy in an effective, timely, efficient and accountable manner Output Indicator 1: Timely preparation and delivery of the various elements of the Strategic Planning and Programming cycle (CWP, MP and AAR) Source: Baseline (2013) Target (2015) 100% All documents within the deadline for of 30 May These parameters relate to DG Competition's performance as regards its i) Soundness of legal and economic analysis (clarity and comprehensibility of decisions, predictability of decisions, predictability of fines imposed, understanding the markets and quality of economic analysis) ii) Transparency and procedural fairness (level of transparency of DG Competition's work, listening and informing in a timely manner, publication of non-confidential versions of decisions, stakeholder consultations on new rules, observance of procedural rules and burden on businesses and organisations), iii) Economic effectiveness (effectiveness of detection policy, deterrent effect of fines, impact of existing antitrust rules on planned business transactions, timeliness of decisions, focus on the right sectors, adaptation to the technological changes and globalisation, Impact on the markets, use of settlements in cartel cases and commitment decisions in antitrust cases, enforcement of decisions and contribution to the EU's economic growth) and iv) Communication and promotion of competition culture (clarity and comprehensibility of external communication, choice of communication and media channels and promotion of competition culture and policy convergence at the international level). Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014) to be published in 2015, 59

60 Output Indicator 2: Delivery rate (adoption by the College) of initiatives included in the Commission Work Programme and in the Catalogue Source: Baseline (2013) Target (2015) 58% % for the Commission Work Programme Output Indicator 3: Opinion of the Impact Assessment Board Source: Baseline (2013) Target (2015) 71% 100% positive opinions, resubmission rate below Commission average Specific objective 2: Competition advocacy contributing to a pro-competitive regulatory framework at EU and national level (ISC/European Semester) Result Indicator 1: Readiness to engage and to contribute with high quality input to other DGs' policy projects Source: Commission-internal survey about the perceived quality of our interactions with other DGs and input to Commission policy making Baseline (2014) Target: Next survey foreseen in (scale 1-7) Increasing trend Result Indicator 2: Relevance of input to other DGs' policy projects Source: Commission-internal survey about the perceived quality of our interactions with other Commission services and input to Commission policy making Baseline (2014) Target: Next survey foreseen in (scale 1-7) Increasing trend Output Indicator 1: Number of substantial replies to Commission inter-service consultations 114 Source: DG Competition calculations based on CIS-NET statistics Baseline (2013) Target: Stable level Output Indicator 2: Number of country specific recommendations promoted and co-monitored by DG Competition. Source: Baseline (2014) Target: Continuous input provision and monitoring of SCRs The 2013 CWP announced the GBER (adopted), Merger simplification (adopted), State Aid modernisation (two out of six identified elements adopted, four out of six items are expected for 2014), TTBER (not adopted). Replies in which DG Competition, either gives a negative reply or a positive reply under the condition that its reservations are taken into account. The country-specific recommendations include many recommendations that concern competition as well as a sector (banking, energy, etc.). These are all included here: AT:2, BE:1, BG:1, CZ:1, DE:3, DK:1, EE:1, ES: 4, FI:1, FR: 3, HR:1, HU: 3,IE:1, IT:3, LT:2, LV:2, PL:1, PT:4, RO:1, SE:1, SI:4, SK:1, UK:1 (Note: the programme countries have not been reviewed under the EU2020 process and do not have any CSRs). 60

61 Specific objective 3 (external communication): Help understanding of EU competition rules by stakeholders Result Indicator 1: Number of subscribers who receive DG Competition's publications Source: CPI unit in DG Competition Baseline (2014) Target: 2015 In 2014, DG Competition's printed publications were sent to 6000 subscribers/readers and the digital publications to Keep or increase the number of subscribers Specific objective 4 (internal communication): information flows effectively both top-down and bottom-up and that staff understand Commission and DG Competition's objectives and how their individual work relates to these objectives. Result Indicator 1: Understanding by the staff of the DG Competition's priorities. Source: DG Competition Internal Communication Survey. Baseline (2013) Target: 2015 In 2013, 63% of DG Competition's respondents think that DG Competition priorities are well communicated. Improve the level of staff understanding of DG Competition's priorities. Result Indicator 2: Understanding by the DG Competition's staff of their objectives and tasks Source: DG Competition IC Survey 2013 Baseline (2013) Target: Next survey is foreseen for % of the respondents said that clearly knew their objectives and tasks Keep stable or improve the level of staff's understanding of their objectives and tasks 61

62 Specific objective 5: Ensuring the highest standards in the enforcement of competition policy Result Indicator 1: Legal soundness of Commission decisions in competition cases Source: DG Competition Stakeholder Survey Baseline (2014) Target: Next survey foreseen in (scale 1-7) 116 Increasing trend Result Indicator 2: Quality of economic analysis Source: DG Competition Stakeholder Survey Baseline (2014) Target: Next survey foreseen in (scale 1-7) 117 Increasing trend Result Indicator 3: Market knowledge Source: DG Competition Stakeholder Survey Baseline (2014) Target: Next survey foreseen in (scale 1-7) 118 Increasing trend Result Indicator 4: Timeliness of decisions Source: DG Competition Stakeholder Survey Baseline (2014) Target: Next survey foreseen in (scale 1-7) 119 Increasing trend Result Indicator 5: Informing in a timely manner Source: DG Competition Stakeholder Survey Baseline (2014) Target: Next survey foreseen in (scale 1-7) 120 Increasing trend Result Indicator 6: Stakeholder consultation on new rules Source: DG Competition Stakeholder Survey Baseline (2014) Target: Next survey foreseen in (scale 1-7) 121 Increasing trend 5.2. Management of the DG Under this heading come a number of horizontal activities in DG Competition. These include the following: Human resources management: this activity consists of recruiting, training, assessing, monitoring, motivating and retaining highly qualified staff so that effective and efficient operation of DG Competition, as well as promotion of equal opportunities within the DG are ensured. Financial management: this activity consists of planning, performing, executing, monitoring and reporting on the spending of financial resources so that sound financial management is ensured throughout the DG Competition's activities Eurobarometer Standard Qualitative Study DG Competition Stakeholder Survey (2014), Aggregate Report p. 14, to be published in 2015, See footnote 116, p. 21 of the Aggregate Report. See footnote 116, p. 19 of the Aggregate Report. See footnote 116, p. 39 of the Aggregate Report. See footnote , p. 26 of the Aggregate Report. See footnote 116, p. 29 of the Aggregate Report. 62

63 Management of ICT: this activity consists of defining, planning, setting up, maintaining and developing high quality Information and Communication Technology (ICT) infrastructures, tools and services so that staff is adequately supported in its operations. Document management: this activity consists of putting in place and maintaining an effective document management system so that any document connected with the DG Competition's official functions can be electronically filed, stored and retrieved in any moment irrespective of its original form and document management system in place. Internal audit 122, control and risk management: this activity consists of assessing the compliance, efficiency and effectiveness of the control system in place by assisting the Director General and management in controlling risks and monitoring compliance, providing an independent and objective opinion on the quality of management and internal control system and making recommendations in order to improve the efficiency and effectiveness of operations and to ensure economy in the use of resources. Ethics, security, business continuity and EMAS: this activity consists of ensuring within DG Competition that staff and premises meet the highest possible ethical and security standards (including the fight against fraud), that business continuity is effectively ensured and that environmental performance is improved. Communication strategy: this activity aims at explaining and demonstrating the benefits of competition to citizens and stakeholders. In parallel DG Competition focus on internal communication ensuring that the information flows effectively both top-down and bottomup and that staff understands Commission and DG Competition's objectives and how their individual work relates to those objectives. ABB activity: Administrative support for the Directorate-General for Competition Financial resources (EUR) in commitment appropriations Operational expenditure Administrative expenditure (managed by the service) Total Establishment plan posts Human resources Estimates of external personnel (in FTEs) Total From 2015 onwards the Internal audit function will cease in DG Competition itself and will be exercised by the IAS. 63

64 Human resources management As set out in its mission statement, people are the greatest asset of DG Competition. In its highskill knowledge-intensive work environment, the success of DG Competition is the success of the people and the synergy of their expertise, experience and skills. A key issue is how to use the talent in DG Competition even better and how to make it attractive for its most talented colleagues to develop their potential within DG Competition. The following strategic HR objectives focus on quality and sustainability of the DG Competition's workforce to ensure that the right people are in the right place at the right time: Selected Strategic HR Objectives 1. Attract and retain highquality staff 2. Continue building a "balanced workplace" 3. Ensure a solid learning and development agenda for executive and non-executive staff 4. Strengthen internal communication on HRM Corresponding HR challenges Build and maintain a solid and sustainable workforce Enhance staff retention Increase the number of colleagues attracted from other DGs Raise staff satisfaction, engagement and motivation Enhance staff retention Raise staff satisfaction, engagement and motivation Maintain a healthy workforce Ensure equality of opportunities to all staff Build the right set of skills needed to reach the DG Competition's objectives Build a workforce that is agile, responsive and credible Advance the management culture Enhance staff retention Raise staff satisfaction, engagement and motivation Raise the impact and effectiveness of HRM policies Enhance the partnership between HRM, line managers, and staff Enhance staff retention Raise staff satisfaction, engagement and motivation Corresponding business objectives Contribute substantially to the new jobs and growth agenda Monitor market developments and conduct own investigations Enforce competition rules in an effective and timely manner Increase the authority, visibility and expertise of DG Competition in international affairs Make highquality policy proposals 64

65 The real challenge of our HR management is how to use the talent in DG Competition even better and how to make it attractive for its most talented colleagues to develop their potential within DG Competition: Specific objective 1: Recruit, train, motivate and retain highly qualified staff and promote equal opportunities within DG Competition Result Indicator 1: Average vacancy rate Source: Sysper Baseline (2013) Target: 2015 and after, agreed by internal discussion and presented to senior management. 8.7% Equal to the Commission average. Result Indicator 2: Turnover (% of statutory staff leaving DG Competition before three years in DG Competition). Source: Sysper Baseline (2013) 4% Less than 4%. Result Indicator 3: Equal opportunities Source: Sysper Baseline(mid-2014) % female senior managers % female middle managers Result Indicator 4: Job satisfaction index Source: Commission staff Survey 2014 Baseline (2013) Target: 2015 and after, agreed by internal discussion and presented to senior management. Target: 2015 and after, agreed by internal discussion and presented to senior management. 40% female senior and middle managers Target: End 2014 and after, agreed by internal discussion and presented to senior management 24 th /53 position (2013 staff survey) 123 Position the DG higher in the ranking Financial management In light of the multiannual financial framework (MFF) adopted in 2013, DG Competition will continue to show administrative restraint in The aim of reaching a nominal freeze at the 2014 level of all non-salary related expenditure, including expenditure subject to indexation, should be attained by DG Competition on most budget lines. 123 Link: 65

66 Specific objective: Implement and maintain an effective internal control system, ensure sound financial management and guarantee the legality and regularity of the underlying transactions. Result Indicator 1: Execution rate of the global envelope Source: European Commission, ABAC Baseline (2013) Target: 2015, best practice DG BUDG % >90% Result Indicator 2: Payments executed within contractual delays Source: European Commission, ABAC Baseline (2013) 124 Target: 2015, best practice DG BUDG % >90% Result Indicator 3: Error rate on financial transactions. Source: European Commission, Financial Transaction Review performed by Internal Audit Capability/IAS audits from 2015 onwards Baseline (2013) Target: 2015, Commission target 0% 2% Management of ICT & Document management Competition enforcement is evidence based and evidence is found increasingly in electronic documents. Information systems which contribute to an efficient management of Competition activities as well as document management itself constitute essential support functions for DG Competition's daily operations. Since 2013, in collaboration with DGs TRADE, OLAF, AGRI and MARE, DG Competition is leading the development of a new Case Management system to contribute to the modernisation and rationalisation of case and document management in the Commission. In addition to reinforcing further the security of DG Competition's sensitive case data, this new system will importantly improve ICT and Document Management support to case teams, among others because it will be more adapted for handling (very) voluminous case files. In 2015, the IT and Document Management units will work very closely not only so as to assure continued support services to DG Competition's investigative units based on the existing IT solutions. Even more importantly, they will pursue on-going work on the design and construction of the future systems supporting DG Competition activities in general. 124 Our average for payment execution within contractual limits is traditionally 98%. However, in 2013, there was a general lack of payment appropriations throughout the Commission, which meant that many payments were delayed and paid after the contractual limit. 66

67 Specific objective 1: IT rationalisation in sub-domain for Case Management Systems (led by DG Competition). Result Indicator 1: Implementation of a common Case Management System for the Commission services participating in the Case Management Rationalisation project. Source: reports to the Inter-service Steering Committee of the project Baseline Milestone Target: 2017 According to the planned project execution as agreed in the Inter-service Steering Committee Baseline (2014): 40% Identification and analysis of common business requirements for the participating DGs, Security Plan and Hosting Strategy Output Indicator 1: Market Study 125 Baseline (September 2014) : 60% Selection and purchase of the common Case Management System : 80%: Pilot implementation, integration with DG specific systems Target: 100% Completed implementation of the new common Case Management System Target: Agreed in the Steering Committee, contractual deadlines for the execution of the study. 0% completed and approved by the project Steering Committee by March 2015 Output Indicator 2: Internal Study (existing building blocks). Baseline (2014) Target: Agreed in the Steering Committee 0% completed and approved by the project Steering Committee by March 2015 Output Indicator 3: Purchase of the common Case Management System. Baseline (2014) Target: Agreed in the Steering Committee 0% contract signed by December The market study is to assess market solutions from software vendors, which meet the needs of participating DGs in the Case Management Rationalisation project. 67

68 Specific objective 2: IT support for State aid Modernisation Result Indicator 1: Implement new functionalities to support the State aid Modernisation Package (enhanced collaboration with Member States, reporting and transparency, investigative tools). Baseline (2014) Milestone (2015) Target (2016) 15% New notification forms in production (SANI2) 65% Business requirements analysis completed. Pilot systems 100% New functionalities in production Output Indicator 1: State aid recovery calculator 126 Baseline (2014) Target: 2015, in accordance with the project plan. 0% in production by September 2015 Output Indicator 2: Business Requirements Analysis 127 Baseline (2014) Target: 2015, in accordance with the project plan. 0% Targets: - Enhanced collaboration (June 2015) - Reporting and transparency (June 2015) - Investigative tools (December 2015) Specific objective 3: Timely and effective handling of requests for information under Regulation 1049/2001. Output Indicator 1: Respect of the time-limits for replies. Source: GESTDEM corporate application managing access to document requests Baseline (2013) Target: Annual Target. According to the regulation, it is mandatory to reply within the deadline. 85% % Specific objective 4: Enhance paperless document exchanges (e-commission) with 3rd parties. Result Indicator 1: Incrementing paperless exchanges with Member States and external stakeholders. Source: DG Competition's document management and electronic communication systems Baseline (end October 2014) Target: Electronic communication tools are being improved, 95/5% is an estimation of the maximum achievable electronic/paper ratio). 85% 95% The State aid calculator is a web based application for Member States to be able to calculate the amount of incompatible aid that is to be recovered from the beneficiaries following a negative decision. The business requirements analysis is a key intermediate deliverable of the IT project. This sets out the requirements which the future solution should meet. With respect to transparency, DG Competition aims to handle all requests for access to documents efficiently and within the time-limits set by Regulation 1049/2001. In 2013 DG Competition managed fewer but more complex requests (281 (until mid-november) compared to 408 in 2012) while ensuring an increasing transparency through explanations provided by the refusals letters. 68

69 Specific objective 5: Provide an effective and comprehensive document management tool integrated with DG Competition case-management applications and offering the specific functionalities required by competition case-handling. Result Indicator 1: Integration into DG Competition's document management system of the new corporate (SG) archiving rules for electronic documents. Source: DG Competition's document management systems Baseline (2014) Target: A (compulsory) corporate electronic archiving system is currently being designed by the Secretariat-General. Identification and analysis of the new rules implementation of a technical solution allowing to archive DG Competition's electronic documents according to the corporate rules Internal audit, control and risk management This activity consists of assessing the compliance, efficiency and effectiveness of the control system in place by assisting the Director General and management in controlling risks and monitoring compliance, providing an independent and objective opinion on the quality of management and internal control system and making recommendations in order to improve the efficiency and effectiveness of operations and to ensure economy in the use of resources. Specific objective 1: Effective assessment of the compliance, efficiency and effectiveness of the control systems in place Result Indicator 1: Time to address pending critical/very important recommendations after acceptance. Source: DG Competition statistics Baseline: 2 months (2013) Target: No critical/very important recommendations left pending without an action plan for more than 1 month after acceptance. Ethics, security, business continuity and environmental management In 2014, DG Competition started to implement its Anti-Fraud Strategy, reviewed its Security Guidelines and drafted a new Business Impact Analysis. In 2015, DG Competition intends to review its Anti-Fraud Strategy, implement the new Security Guidelines and adopt a new Business Continuity Plan. It will also continue to organise specific training sessions to newcomers on ethics, security and business continuity. Specific objective 1: Knowledge and respect by staff of DG Competition's Code on Ethics and Anti-Fraud Strategy. Result Indicator 1: Number of ethical and fraud incidents (sanctions by IDOC or OLAF). Source: IDOC or OLAF Baseline (2013) Target: 2015 and after. Agreed by internal discussions and approved by senior management. No incident No incident 69

70 Specific objective 2: Knowledge and respect by staff of DG Competition's security rules and incident reporting procedures. Result Indicator 1: Number of inadvertent disclosures of confidential information by staff. Source: Internal Baseline (2013) Target: 2015 and after. Agreed by internal discussions and approved by senior management. 9 reported incidents Reduction of inadvertent disclosures of confidential information Specific objective 3: Effective management of business continuity based on a fully implemented and tested Business Continuity Plan. Output Indicator 1: Business continuity assessment tool (% of compliance with requirements). Source: Secretariat-General Baseline (2013) Target: 2015 and after. Agreed by internal discussions and approved by senior management. 87.5% Close to 100% Specific objective 4: Improvement of DG Competition's environmental performance. Result Indicator 1: Green office supplies. Source: OIB and internal Baseline (2013) 55% of office supplies 65% of office supplies Target: 2015 and after. Agreed by internal discussions and approved by senior management Specific efforts to improve economy and efficiency of financial an non-financial activities Staff allocation In order to efficiently manage its available resources, DG Competition has set up a permanent body acting as a support, coordination and advisory function in the area of staff allocation. The role of this Staffing Advisory Group (SAG) is to ensure that staff allocation decisions are taken in a coherent and efficient way. The SAG will focus to ensure and deliver efficient management of the available resources in DG Competition in Amongst other tasks, the SAG makes a regular (at least every six months) review of the overall allocation of staff across instruments and sectors in relation to priorities, planning and workload. It also examines and makes proposals for the absorption and distribution of staff reductions resulting from the progressive reduction of Commission staff by 5% in the period and the annual contribution to the Commission's redeployment pool. The SAG is in charge of preparing requests for additional staff, in particular in the framework of the Commission s regular redeployment exercise and makes proposals for the distribution of additional staff recuperated from the Commission s redeployment pool. 70

71 Comparing the workload of units within its instrument networks as well as within the DG, also allows DG Competition to efficiently re-allocate staff to the areas where this is most needed. The recent procedural simplification of the State Aid Modernisation (SAM) will result in the highest possible efficiency gains. The new Block Exemption Regulation that entered into force in July 2014 is expected to reduce the number of new notifications and thereby result in notable working time savings Access to file Preparing and providing access to file to the companies concerned in antitrust investigation is of fundamental importance to the rights of defence for the parties subject to the Commission's investigation. Access to file also represents a significant amount of work for DG Competition and for the parties. In order to efficiently improve the management of its antitrust investigations in this respect, DG Competition started in 2014 to evaluate in partnership with external consultants whether the antitrust procedural rules on access to file and on complaints still correspond to the needs that they are supposed to address and whether they do so in an efficient manner. With regard to access to file, this evaluation aims to provide DG Competition with better information on the respective costs and benefits of the traditional access to file method set out in the Notice on the rules for access to the Commission file and the alternative access to file methods set out in the Notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU, namely data rooms and confidentiality rings. 71

72 ANNEX 1. INDICATIVE PLAN OF EVALUATIONS AND STUDIES Type of evaluation or other study Timing No Title Reason Scope Focus Author Type Start End I. On-going evaluations (work having started in previous years) Associated DGs Ex-post evaluation of key procedural aspects of Regulation 1/2003 access to file and complaints Ex-post evaluation of the impact of R&R decisions on the viability of aided industrial undertakings Ex-post evaluation of two mobile telecom mergers Other: preparation for possible future Commission initiative Other: learning for future decisions Other: learning for future decisions Key procedural aspects of Regulation (EC) No 1/2003 Selected parts of Guidelines on State aid for rescuing and restructuring of non-financial undertakings in difficulty Two mobile telecom mergers taken in R E+I R Apr-14 Jul-15 R E R Mar-14 Oct-15 LS, GROW, JUST, SANTE, TRADE, SG GROW, MARE, (ECFIN), (EMPL), (SG) R I R Jun-13 Jul-15 - II. Evaluations planned to start in 2015 or later 2015 No new evaluations will be launched before the pilot evaluations started in 2014 are finalised in the autumn State Aid: Remedies in the banking cases (remedies related to the distortion of competition) Other: learning for future decisions Antitrust/cartels: Effectiveness and Other: efficiency of past learning for remedies under future Article 9 of decisions Regulation 1/ R E+I R R E+I R

73 Mergers: Ex-post evaluation of a merger case - sector to be defined State Aid: GBER or selected aspects of it Mergers: Evaluation on merger cases, notably on the effectiveness of remedies Ex-post evaluation of State Aid Modernisation Antitrust/cartels: Ex-post evaluation of horizontal/ vertical BERs/ guidelines Other: learning for future decisions Other: preparation for possible future Commission initiative Other: learning for future decisions Other: preparation for possible future Commission initiative Other: preparation for possible future Commission initiative (expiry 2020) Antitrust/cartels: Other: Private commitment enforcement: to assess Evaluation of the effects by Damages 2020 Directive R E+I R 2017 R E+I R R E+I R 2018 R E+I R R E+I R R E+I R State Aid: Continuation of ex-post evaluation of State Aid Modernisation Other: preparation for possible future Commission initiative R E+I R 73

74 III. On-going other studies (work having started in previous years) 1 Evaluation of customer benefits from antitrust (cartels) and merger enforcement Antitrust Other: (cartels) and Accountabilit merger y enforcement R I R Continu ous activity Continu ous activity - 2 Study on the economic impact Other: of competition learning for policies on the future functioning of decisions energy markets Merger and antitrust decisions in the energy sector over the past 10 years R E R Apr-14 Jul-15 ENER, GROW, SANTE, ECFIN, RTD, JRC, CLIMA 3 A retrospective study on EU mergers and merger control (meta-study) Other: learning for future decisions Merger control decisions taken under Regulation (EC) No. 139/2004 R E R Dec-14 Jul-15 GROW 4 Study on stimulating the effects of competition policy interventions in the EU using a macro-economic model Other: Advocacy Merger control and cartel decisions R E R Dec-14 Oct-15 JRC, ECFIN IV. Other studies planned to start in 2015 or later 1 2 Support study for impact assessment concerning review of the Insurance Block Exemption Regulation ("IBER") Possible item for CWP 2016 (reporting clause) Study on judges' Other: training needs in learning for the field of future competition law decisions related to Training of Judges programme of DG Justice R (and P) R (and P) E R Apr-15 Dec-15 LS, SG, ECFIN, GROW, ENER, JUST E E Feb-15 Dec-15 JUST 74

75 Study on the economic impact of enforcement of competition policies on the functioning of liberalised markets Feasibility study on the microeconomic impact of enforcement of competition policies on innovation Study on firms' entry and exit and business growth dynamics in the EU and beyond Other: learning for future decisions Other: learning for future decisions Other: Advocacy Ex-post review and data collection for Other: evaluating learning for Commission's future merger decisions decisions for the past years Support study for impact assessment concerning review of Merger Regulation regarding minority shareholdings Study of the existing data on State aid, government subsidies and support to the economy Other: preparation for possible future Commission initiative Other: learning for future decisions Competition policy decisions R+P E R Jul-15 Jul-16 R E R Apr-15 Oct-15 R E R Jun-15 end 2015 R E R R+P E R First half of 2015 First half of 2015 First half of 2016 End of 2015 R+P E R tbd Dec-15 MOVE or CNECT and others SG, BEPA, ECFIN, JUST, GROW, JRC, RTD SG, GROW, ECFIN LS, GROW SG, LS, ECFIN, GROW, CNECT, SANTE GROW, REGIO, ECFIN, ENER, others 75

76 9 Scoping study of financing models for public services in the European Union and their impact on competition Other: preparation for possible future Commission initiative R+P E R Feb-15 Jul-15 EMPL, GROW, SG (and possibly REGIO, ECFIN, SANTE, ENER, CNECT) Study on the fining powers of the national competition authorities (NCAs) and the deterrent level of fines imposed by NCAs for infringements of the EU competition rules Study on the passing-on of overcharges (related to Directive on antitrust damages actions) Study on the role of State aid in the process of liberation of the digital dividend Study on the role of State aid for the rapid deployment of Broadband networks in ensuring the development of the Digital Single Market (DSM) lessons learned and way forward Other: preparation for possible future Commission initiative Legal obligation to draft guidelines on the passing-on of overcharges Other: preparation for possible future Commission initiative Other: preparation for possible future Commission initiative R+P E R Feb-15 Sep-15 JUST, ECFIN, ENER, ENV, GROW, SANTE, LS, SG R+P E R Q1-15 Q2-15 LS, JUST R+P E R Mar-15 Sep-15 R+P E R Mar-15 Sep-15 CNECT, GROW, RTD CNECT, GROW, RTD, AGRI 76

77 14 15 Study on the Other: relationship learning for between future competition and decisions market outcomes in the telecommunicati ons sector Public support to the automotive industry in the EU and key technological challenges of the sector Other: learning for future decisions R+P E R May-15 Mar-16 CNECT R+P E R Jun-15 Dec-15 GROW and RTD 77

78 ANNEX 2. COMMUNICATION STRATEGY Executive summary I. Policy context Seven years after the inception of global financial crisis, signs of economic recovery are beginning to appear. Our competition policy actively contributes to this recovery by setting the best conditions to exit the crisis, by stimulating growth and deepening the Single Market. Action towards restructuring financial institutions continue this year as well as initiatives supporting growth, such as the modernisation of State aid rules including revised sector guidelines for State aid or simplification of the merger process. In the context of the political priorities, the Competition DG's main message for 2015 is that competition policy and enforcement are crucial for Europe to emerge stronger and fitter from the crisis is a year for consolidating all policy changes implemented during the last couple of years (e.g. banking communication of 2013, the State aid Modernisation Framework ), therefore, our communication actions will concentrate on demonstrating to our target audience how competition policy helps to: make doing business easier and better make sure that the efforts to come out of the crisis are spread in a fair way return to growth, boost EU competitiveness leading to more jobs protect the EU citizens 129 II. Target audience Our main stakeholders are those subject to EU competition legislation, in particular businesses and public authorities dealing with State aid, as well as the legal community. In addition, other important stakeholders are other enforcement agencies, opinion leaders and law-makers (European Parliament, press, academics, think tanks). The dialogue with citizens is considered by the Competition DG as critically important and is being achieved mainly by regular interaction with their representatives in the European Parliament and the Committees (CoR, EESC), our website and media relations out of 7 Corporate communication themes 2014 established by the Communication Steering Board relevant to DG Competitions activities. 78