Recent Developments March 2017
Rome declaration of the 27 Member States and the European institutions
On 25 March 2017, the 60th anniversary of the Rome Treaty, the leaders of the all EU Member States (except the UK), and of the European Council, the European Parliament and the European Commission issued a declaration on the future of the EU. The leaders made declarations on (i) a Social Europe; (ii) the Single Market; (iii) a global EU; (iv) migration; (v) better regulation; and (vi) enhanced cooperation. As regards the Single Market, the Commission stresses the importance of strengthening the investment in digital infrastructures and high-performance computing, e-privacy, boosting e-commerce and modernising copyright rules. On the issue of enhanced cooperation, the European Unitary Patent system is an example of enhanced cooperation where Member States have already agreed upon. The Financial Transaction Tax (TTX) between 10 Member States is another example of enhanced cooperation and can be expected to enter into force in the near future.
Personal data in companies register - no right to be forgotten
On 9 March 2017 the Court of Justice of the European Union ("ECJ") decided in Case C-398/15 (Manni) that there is no "right to be forgotten" for personal data in the companies register. The case concerned Mr Manni, a director of a company involved in the construction of a tourist complex. The properties didn't sell well and according to Mr Manni this was due to the fact that the companies register still contained information about him as an administrator of another company that went bankrupt in 1992 and was wound up in 2005. The question posed to the ECJ was whether the directive on the protection of personal data and the directive on disclosure of company documents preclude any person from accessing personal data in the companies register. According to the ECJ this interference with the fundamental rights of the persons concerned is not disproportionate in so far as (i) only a limited number of personal data are entered in the register and (ii) it is justified that natural persons who choose to participate in trade should be required to disclose data relating to their identity and functions within that company. However, upon expiry of a sufficiently long period after dissolution of the company concerned, Member States may provide for restricted access to such data by third parties in exceptional cases.
Fines for misconduct in the banking sector
On 20 March 2017 the think tank of the European Parliament published a report on the situation in the EU regarding misconduct in the banking sector. Misconduct (conduct risk) may be defined as the risk of losses to an institution arising from an inappropriate supply of financial services, including cases of willful or negligent misconduct. Conduct risk is addressed by a number of EU-wide regulations and supervisory standards. Still, only half of the EU’s competent authorities include conduct risk in their supervisory examination programmes. To discipline conduct risk ex post sanctions play a useful role, but should be complemented by ex ante tools like improving the quality of bank governance, preventing remuneration schemes that encourage inappropriate practices, encouraging whistle-blowing and improving the clarity of regulations to remove grey areas.
EU-Japan Trade Agreement negotiations
On 21 March 2017 President Juncker and President Tusk met the Prime Minister of Japan, Shinzo Abe, with the negotiations for a bilateral trade deal featuring prominently on the agenda. The EU and Japan confirmed their joint commitment to reach a swift conclusion on a bilateral trade deal and a Strategic Partnership Agreement. EU and Japanese negotiators will meet for a new round in Tokyo in April, and the process will intensify further thereafter. Alongside the trade agreement, the EU and Japan are also negotiating a Strategic Partnership Agreement, and leaders are expected to discuss the ongoing negotiations and press ahead for their swift conclusion. This new agreement would reflect Japan's position as a key strategic partner of the EU in Asia and, alongside the trade agreement, demonstrates the partners' joint commitment to open and rules-based trade as well as to the principles of human rights, democracy and the rule of law.
Speech Vestager on algorithms and competition
On 16 March 2017 EU Commissioner Margrethe Vestager gave a speech on the implications of algorithms on competition. She addressed the issue of automated systems that monitor, and even adjust, prices automatically. Companies can therefore instantly react to price changes in the market.
The sector inquiry into e-commerce has shown that two thirds of retailers who track their competitors’ prices use automatic systems. Some of them also use software to adjust prices automatically. Such automated systems could be used to make price-fixing more effective. The question in this respect is whether such automated systems can be qualified as a collusion tool? Last month, the Commission launched a case which looks at whether four companies broke the competition rules by limiting the ability of retailers to set their own prices for consumer electronics. Part of the concern of the Commission is that software may have made those limitations more effective. The challenge for the Commission and for national competition authorities is how to deal with automated price adjustments. Vestager has called for alertness by the national competition authorities.