Application of EU Competition Law under Financial Crisis_1_

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					            International Conference on “Regulation crossing Borders”

       Application of EU Competition
         Law under Financial Crisis
                        Dr. jur. Chie SATO (LL.M)
                             Research Fellow
                          Hitotsubashi University
                               31 March 2010
                                Josui Kaikan
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1. Introduction
(1) Financial Crisis
    Financial Crisis challenges current models of
    regulation and oversight in the financial
   →What is the role of the state in economic
(2)New policy for applying EU Competition Law?
       State Intervention vs. Competition
            Regulations, State Aid etc.
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2. EU Competition Law
(1)Rules applying to undertakings
(i) Art. 101
   Prohibition of anti-competitive activities
   *101(3) Exception
(ii) Art.102
   Prohibition of unilateral conduct of
   undertakings with market power
+(iii) The Merger Regulation
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(2) Aids granted by states
Art. 107 Prohibition of State aids
*Art.107(2) & (3) Exception/Exemption
  →Possible measures for rescuing firms in

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(3) Advantage of EU Competition Law
  Commission’s jurisdiction over the anti-
  competitive activities taken by the private
  firms and the Member States

(4) Principles of EU Competition Law

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(5) Possible Competition Policy under recent
   economic crisis
(i)101(3) Exemption
→Strict conditions under the Guidelines (OJ C 101,
 27.4.2004, p.97)
(ii)Lax competition policy
→Disintegration of the EU single market
(iii)State intervention
→Major Commission’s/Member States’ response to the
 financial crisis
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3. Measures taken by Commission (State aid)
(0) Measures on the basis of Art.107(3)(c)
“remedy a serious disturbance to the economy of a MS”
(1)Banking Sector
(i)State Aid
Communication from the Commission- The application of State
  aid rules to measures taken in relation to financial institutions
  in the context of the current global financial crisis (2008/C
Communication from the Commission- The recapitalization of
  financial institutions in the current financial crisis: limitation of
  aid to the minimum necessary and safeguards against undue
  distortion of competition (2009/C 10/03)
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Communication from the Commission on the treatment of
  impaired assets in the Community Banking sector (2009/C
Commission Communication on the return to viability and the
  assessment of restructuring measures in the financial sector in
  the current crisis under the State aid rules (2009/C 195/04)
(ii) New supervision system for financial sector
(2) Real Economy
Community Guidelines on State aid for rescuing and restructuring
   in difficulty (OJ C 244, 1.10.2004, p.2)*on the basis of
+ Communication from Commission- Temporary Community
   framework for State aid measures to support access to finance
   in the current financial and economic crisis (2009/C 83/01)
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(3) Distortion of Competition?
State intervention > Competition?
•Clearly defined and limited in scope
•Limited in time
•Review at least every six months
•Behavioral rules for beneficiaries
•Appropriate follow-up in the form of structural
  adjustment measures
Competition policy is a crucial component to
  recovery plan.
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4. Conclusion
(1)Regulation + Competition for the Future
(2) International cooperation
    e.g. ICN, OECD etc.

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