Lecture on Financial Services and EC Competition Law
Lecture on Financial Services and EC Competition Law
Author: Edijs Poga
Likums un tiesības, vol. 10, No.11 (119), November, 2008
On October 24 2008, the University of Latvia (LU) Faculty of law hosted a lecture by Professor Martijn van Empel on Financial Services and EC Competition Law and a presentation of the PALLAS LL.M. programme in European business law. Several LU students attended the lecture. Those present included Agris Bitāns, attorney at law, who assisted in organizing the lecture.
During his career, Professor Martijn van Empel has been active both as an academic and as a practitioner. He has held professorships at two Dutch universities (the University of Groningen and the University of Amsterdam). As of 1998 Professor Martijn van Empel has been lecturing on European Union (EU) law at LUISS Guido Carli [1] university in Rome. He is also a guest lecturer at Lund University (Sweden) and Queen Mary College, University of London (the United Kingdom). Professor Martijn van Empel is the author of many publications in the sphere of general European Union law, as well as in the spheres of competition, intellectual property, financial services, and product liability [2]. After spending several years as a judge’s assistant at the European Court of Justice in Luxembourg and with the legal service of the Council of Ministers of the European Communities in Brussels, Professor Martijn van Empel served for ten years as counsel with Philips Electronics N.V. For the next twenty years he was senior partner in the sphere of competition law and EU law in the leading Dutch law firm Stibbe Simont Monahan Duhot. Currently, he is acting as a freelance adviser with the Rome law firm Studio Visentini Marchetti e Associati. Since 2003, Professor Martijn van Empel has been academic director of the PALLAS LL.M. programme in European Business Law.
Topics discussed during the lecture included financial services and the rules governing them, prohibition of restrictive agreements and its consequences in the context of payment systems, as well as application of European Community state aid rules in the context of the current banking crisis. At the beginning of the lecture, participants were introduced to the impact of financial services on the economy, supervision of financial service providers, the notion of ‘systemic risk’, and network effects in the financial services sphere. Much of the lecture was devoted to payment systems as well as to practical and legal aspects of their organization in the light of European Community competition law rules. Another topic for discussion was conformity of the so-called interchange fee - levied within the framework of different payment and credit card systems - with Article 81 of the Treaty Establishing the European Community [3] (“the EC Treaty”), as applied by the European Commission (Commission) [4]. Professor Martijn van Empel also raised the matter of European Community state aid rules [5] in the context of the current banking crisis, criticizing the Commission’s attitude towards implementation of rescue plans of particular financial institutions pursued by the governments of several EU Member States.[6] The Commission’s retreat [7] from its rescue and restructuring aid guidelines [8] was especially criticized by emphasizing that this step signals that the European Community state aid rules are possibly only “good weather rules” and that they are not taken into account seriously in the context of severe political consequences of the banking crisis. Professor Martijn van Empel put forward several theses for possible further action by the Commission for preventing negative consequences of this unsatisfactory tendency. He maintains that one possible solution in this regard would be not to treat aid as given to the financial sector, taking into account its generality, as state aid within the meaning of Article 87 of the EC Treaty.
At the end of the lecture, questions raised by participants were discussed. During the break, Professor Martijn van Empel and Edijs Poga, a PALLAS LL.M. programme student during academic year 2007-2008 and lawyer with “Eversheds Bitāns”, presented to lecture participants the PALLAS LL.M. programme and scholarships available to students from Latvia for studying on the programme. The PALLAS LL.M. programme in European Business Law is organized by the PALLAS Consortium consisting of nine European universities [9], and since 2007 has been hosted by the University of Essex, the United Kingdom. The PALLAS programme has been ranked among the ten best LL.M. programmes in the world and among the six best LL.M. programmes in Europe. The programme consists of eight business law subjects: contracts in Europe, international trade and dispute settlement, company law, international and European taxation, competition law, intellectual property law, environmental protection and business activities, as well as capital markets and banking law. Within the framework of these eight subjects, PALLAS students have an opportunity to listen to lectures by some 60 top-level practitioners and academics from different European countries. The programme is also special because some lectures and seminars take place in London law firms (for example, Clifford Chance LLP, Arnold & Porter LLP), multinational corporations (for example, Unilever), the European Court of Justice, the European Commission, and several Brussels law firms (for example, Skadden, Arps, Slate, Meaghier & Flom LLP, Stibbe, Lovells LLP), attendance at which also allows PALLAS students to form an impression about the day-to-day duties of EU law and business law practitioners. During their visit to the Commission in the previous academic year, PALLAS students met with several senior Commission officials responsible for competition policy as well as with Nellie Kroes, commissioner responsible for competition within the Commission, who presented European Community competition policy to PALLAS students. Additionally, when visiting the European Court of Justice, PALLAS students had an opportunity to meet and discuss topical matters of European Community law with Paolo Mengozzi, a former judge of the Court of First Instance and advocate general at the European Court of Justice, who took part in establishing the PALLAS programme as professor at the University of Bologna, as well as judges of the Court of First Instance Nicholas James Forwood and Arjen W.H. Meij. More detailed information about the PALLAS programme may be obtained from the web-site of the PALLAS Consortium: www.pallas-llm.org.
[1] Libera Università Internazionale degli Studi Sociali Guido Carli di Roma
[2] Latvian editions of Professor Martijn van Empel’s books European Union Law – An Introductory Overview and European Union law – Leading Judgments are planned to be published shortly.
[3] Consolidated version of the Treaty establishing the European Community. Official Journal of the European Union, C 321E, 29/12/2006, p.37–325. Available at:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2006:321E:0001:0331:LV:pdf.
[4] The following Commission decisions were particularly discussed: 2002/914/EC: Commission Decision of 24 July 2002 relating to proceedings under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case No COMP/29.373 – Visa International – Multilateral Interchange Fee). Official Journal, L 318, 22.11.2002, pp. 0017–0036 (the so-called “Visa II decision”); Commission Decision of 19 December 2007 C(2007) 6474 final version (In Cases COMP/34.579 MasterCard, COMP/36.518 Euro Commerce and COMP/38.580 Commercial Cards) (the so-called “MasterCard decision”).
[5] Primarily Articles 87–89 of the EC Treaty.
[6] For example, by reviewing and approving the United Kingdom’s rescue aid package for the United Kingdom mortgage bank Bradford & Bingley PLC within 24 hours and allowing submission of the bank’s restructuring or liquidation plan within six months. See: Press release IP/08/1437 (State aid: Commission approves UK rescue aid package for Bradford & Bingley), 1 October 2008. http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1437.
[7] 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”. Official Journal of the European Union, C 270, 25/10/2008, p. 8.
[8] Communication from the Commission “Community guidelines on state aid for rescuing and restructuring firms in difficulty”. Official Journal of the European Union, C 244, 1/10/2004, p. 2.
[9] University of Barcelona in Spain, University of Bologna in Italy, University of Essex in the United Kingdom, University of Konstanz in Germany, University of Münster in Germany, University of Łodz in Poland, University of LUISS Guido Carli in Rome, Italy, University of Jean Moulin Lyon III in France, and the University of Nijmegen in the Netherlands.