Executive Vice-President and Competition Commissioner Margrethe Vestager discusses the role of competition policy in supporting Europe’s recovery (see here)

On 15 June 2021, Commissioner Vestager spoke at the European Competition Day conference, organized by the Portuguese competition authority. In particular, she focused on the essential role of competition policy in supporting Europe’s strong recovery.

Among recent Commission initiatives, Commissioner Vestager noted the recent review of the horizontal block exemption regulations and their guidelines. Stakeholder comments revealed opinions that these rules should be updated in view of the goals of digitization and sustainability, and this process is now underway. Commissioner Vestager also expressed her view that the pandemic has demonstrated that significant benefits can flow from companies cooperating in R&D or for increasing production. To encourage pro-competitive cooperation, for example, the Commission plans to publish guidance on data sharing and pooling agreements.

Commissioner Vestager also underlined the key role of law enforcement, especially given the COVID-19 outbreak and the importance of keeping pharmaceutical markets competitive. In 2020, the Commission issued eight decisions amounting to € 370 million in fines for cartels and cartels (involving the pharmaceutical sector and other sectors).

With regard to merger control, the Vestager Commission noted the sustained and constant pace of the number of notifications and enforcement compared to the previous five years. The Commission’s response rate during the pandemic has remained almost the same as in 2019 at just over 5% and includes, for example, eighteen phase 1 conditional approvals, seven phase 2 approvals and three phase 2 investigations In progress.

Among the Commission’s new policy plans on merger control, Commissioner Vestager also mentioned the March 2021 guidelines on expanding referrals under Article 22 of the EU Merger Regulation in cases where the transaction does not reach national merger control thresholds (Commentary by Jones Day, “European Commission Expands Antitrust Reviews to Non-Reportable Transactions”, April 2021, see here).

The General Court annuls the third State aid decision linked to COVID-19 for insufficient reasons (see here)

On June 9, 2021, the General Court (“GC”) annulled another decision of the European Commission, following Ryanair’s challenge to State aid granted to the German charter airline, Condor Flugdienst GmbH (“ Condor ”). This is the third COVID-19 state aid decision overturned by the GoC (see also Jones Day COVID-19 Update # 49 of June 2, 2021).

In April 2020, Condor received government cash injections via German state aid measures amounting to € 550 million (see here) to deal with the economic losses suffered by the airline due to travel restrictions related to COVID-19.

Condor, formerly owned by Thomas Cook, filed for bankruptcy in September 2019. Following a failed transaction to sell the company to a new investor, insolvency proceedings were extended in April 2020, resulting in additional costs for Condor.

In rescinding the decision, the GoC expressed its view that the Commission had not provided insufficient grounds to approve the aid measure, and in particular, failed to establish the direct causal link between (i ) Condor’s flight disruptions due to COVID-19 travel restrictions and (i) costs resulting from the extended insolvency period, which were included in the calculation of Condor’s damages due to the pandemic.

Nonetheless, the CG temporarily suspended the effects of the rescinding of the decision pending the adoption of a new Commission decision.

The GC estimated that in view of the serious economic disruptions caused by the COVID-19 pandemic, questioning such aid would have particularly damaging consequences for the German economy.

As of May 1, 2020, Ryanair has brought a total of 21 appeals against Commission decisions authorizing State aid granted by Member States for the benefit of national air carriers.

As of May 19, 2021, the GC had dismissed six of these appeals. As of June 4, 2021, Ryanair had lodged three appeals against the decisions of the GC before the European Court of Justice.

European Parliament adopts resolution calling for temporary waiver of COVID-19 vaccine patents (see here)

On June 15, 2021, the Commission published the latest Eurostat data on international trade.

The first estimate of euro area * goods exports to the rest of the world in April 2021 was € 193.8 billion, an increase of 43.2% compared to April 2020 (€ 135.3 billion euros). These statistics from last April were significantly impacted by member states’ COVID-19 containment measures. Imports from the rest of the world amounted to € 182.8 billion, up 37.4% compared to April 2020 (€ 133.0 billion).

As a result, the euro area recorded a surplus of 10.9 billion euros in trade in goods with the rest of the world in April 2021, compared to +2.3 billion euros in April 2020.

Intra-euro area trade reached 178.9 billion euros in April 2021, an increase of 61.9% compared to April 2020.

For extra-EU exports **, over the period January-April 2021, they amounted to 688.1 billion euros (an increase of 7.8% compared to January-April 2020), and imports amounted to 626.6 billion euros (an increase of 6.3% compared to January-April 2020). In addition, all Member States recorded strong increases in extra-EU exports except Cyprus (-17.7%) and Ireland (-0.3%). The largest increases were recorded in Slovakia (+ 120.6%) and Italy (+ 104.6%).

Extra-EU imports reflect a similar trend. In April 2021 compared to April 2020, all Member States increased their extra-EU imports, with the exception of Luxembourg (- 5.3%). The largest increases were recorded in Malta (+ 160.4%), Estonia (+ 77.8%) and Slovenia (+ 71.2%).

* The euro area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

** The EU (European Union) includes Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy , Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.

European Parliament adopts resolution calling for temporary waiver of COVID-19 vaccine patents (see here)

On June 10, 2021, the European Parliament adopted a resolution, by 355 votes in favor, 263 against and 71 abstentions, calling for negotiations on a temporary derogation from the WTO Agreement on Aspects of Intellectual Property Rights Affecting to trade (“TRIPS”) on patents on products designed to combat and prevent COVID-19. The temporary waiver aims to boost production and ensure global access to affordable COVID-19 vaccines.

Notably, with a view to speeding up vaccine production and promoting greater transparency, the resolution also calls for the following:

• an urgent increase in international investment and coordination for scaling up production of essential vaccine inputs;
• increased transparency and disclosure of future Advance Purchase Agreements (“APAs”) that will be signed by the European Commission and pharmaceutical companies for the purchase of COVID-19 vaccines and in particular with regard to next-generation vaccines ;
• the Commission’s engagement with the private sector and the encouragement of pharmaceutical companies to voluntarily share their technologies and know-how (at low cost for low- and middle-income countries); and
• active mapping of companies, including subcontractors, with the necessary know-how for technology transfer and putting them in touch with companies whose production sites are inactive.

For more details on the resolution, please see the section above on Trade / Export Controls.

EU digital COVID certificate signed in law (here)

On June 14, 2021, the EU COVID Digital Certificate Regulation was officially promulgated by the Presidents of the European Parliament, Council and Commission.

This follows the approval by Parliament, in plenary session, of the regulation on June 9, 2021 (see here), followed by formal adoption by Council on June 11, 2021.

A Commission statement highlights the objectives of the EU’s COVID digital certificate, including the right to free movement. The certificate will be available in digital or paper format, containing a QR code, and will be issued free of charge by national authorities.

The certificate will certify whether a person has been vaccinated against COVID-19, recently had a negative test result, or has recovered from the infection. In practice, this will be three separate certificates (i.e. proof of vaccination, testing or recovery).

In addition, any processing of personal data must comply with the General Data Protection Regulation. Certificates will be verified offline and personal data will not be stored.

The Commission also recalled that the technical backbone of the system, the ‘EU Gateway’, had already been implemented on 1 June 2021.

EU Gateway makes it possible to verify the digital signatures contained in the QR codes of all COVID certificates, without processing any personal data (see also Jones Day COVID-19 Update n ° 49 of June 2, 2021).

The regulation will apply for 12 months from July 1, 2021. 13 Member States are already issuing COVID digital certificates from the EU.