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New European Commissioner for Competition, Joaquín Almunia

16 June 2010
Mayer Brown Article

Joaquín Almunia, the new Commissioner for Competition, is no newcomer to the European Commission (“EC” or the “Commission”), as he has held the portfolio for economic and monetary affairs for the past five years. And, while that position had been a rather low-visibility one, Almunia attracted significant media interest in the wake of the recent financial and economic crisis. During his first term, Almunia gained the confidence of EC President José Manuel Barroso, who entrusted him with one of the EC’s most important political portfolios.

When Pedro Solbes returned to Madrid to become Finance Minister in 2004, Almunia took over as  the European Commissioner of Economic and Monetary Affairs.  Earlier, Almunia  had been a member of the Spanish Parliament from 1979 to 2004, and was leader of the  Spanish Socialist Party for three of those years. In the 1980s and until the early 1990s, Almunia held minister posts both for Employment and Social Security and for Public Administration.

Almunia inherits the competition portfolio from the Dutch Commissioner, Neelie Kroes, who secured a second mandate in a new role as Commissioner for Digital Agenda. Almunia, who has a degree in law and economics, has big shoes to fill: under Kroes' tenure, the Commission imposed record fines and opened proceedings against some of the world's largest companies. Furthermore, against the background of the financial crisis, state aid rules that had attracted little interest in previous years created an important role for the Commission in various restructuring plans.

Not surprisingly, Almunia's confirmation hearing in the European Parliament centered on the economic crisis and how competition policy fits into the plans to regain economic growth and competitiveness. He made it clear that bail-out plans for banks would have to ensure a level playing field and that all types of banks — whether public or private — should be treated equally. The plans for collective redress carried on from the previous Commission must continue in Almunia's opinion, to avoid abuses such as in the US class action system. Overall, Almunia's performance in the hearing was considered good although the Parliamentarians put little pressure on him, allowing him to remain vague on the way forward in competition policy.

Current debates in Brussels focus on topics such as due process, the Commission's fine scheme and private enforcement of competition rules. Regarding the latter, Almunia has shown that he is not afraid of re-assessing the preparatory work done by the previous Commission: recently it was announced that a new round of consultations would take place towards the end of the year with the goal of establishing common principles for collective redress schemes for both consumer and competition law initiatives. This means that work on these initiatives will re-start from scratch despite proposals ready in the drawers since 2009.

In a January 2010 consultation on new best practices for investigations and decisions and the submission of economic evidence, as well as on a Hearing Officer's guidance paper, the Commission received a number of comments demanding tighter and more independent controls on its actions. Some stakeholders even debated whether a broader reform of EC procedures may be needed. To this end, some reflect on new structures that would separate investigations from actual decision-making. While so far the Commission has been lukewarm to such propositions, this still might trigger further debates to which Almunia might have to react in one or the other way.

In his first speeches the Commissioner stressed that the EC's competition law activities need to be based on sound legal and economic analysis, which will be central in a number of reviews of competition law acts that are currently approaching adoption or that will be tackled during Almunia's mandate. Ongoing projects include the new Specialisation and Research & Development Block Exemption Regulations and the Guidelines on Horizontal Agreements. In relation to the cooperation agreements guidelines, businesses hope for more guidance and legal security regarding information exchanges between competitors and standard setting — two issues that have been central in recent cases.

It is yet to be seen what Commissioner Almunia's stance will be on a number of issues. For example, whether the Commission will step up efforts to ensure competition in the digital economy, and whether additional measures will be taken to ensure fair antitrust proceedings. The Commissioner certainly has a lot on his plate during his new mandate.

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