Tag Archive: European Commission


The European Union Aims to Banish Plastic Bags

On November 4, 2013, the European Commission approved a proposal that requires the Member States to reduce the use of lightweight plastic carrier bags by its citizens.  These bags are commonly used by consumers to carry items they purchase from stores.  The new amendments to Council Directive 94/62/EC, also known as the Packaging and Packaging Waste Directive, have two premises.  First, it requires the Member States to reduce the use of lightweight plastic bags with a thickness below 50 microns.  The most obvious example is lightweight plastic bags used at grocery stores.  The EU aims to eliminate the consumption of lightweight plastic bags that are not frequently reused.  Secondly, the directive gives the Member States different ways to implement the requirement.  Member States may use economic instruments such as taxes and levies.  Member States may also use national reduction targets and marketing restrictions.  Since this is a directive, Member States may choose how they want to transpose the amendments into their national law.  Member States may also issue a flat out ban.

The EU Environmental Commissioner stated:  “We’re taking action to solve a very serious and highly visible environmental problem. Every year, more than 8 billion plastic bags end up as litter in Europe, causing enormous environmental damage. ”  Last year, it is estimated that 100 billion plastic carrier bags were placed in the EU Market.  It is estimated that each EU citizen uses almost 200 plastic bags a year.  The consumption of plastic bags used in each Member State varies greatly with Denmark and Finland achieving four plastic bags per person and Poland, Portugal, and Slovakia achieving 466 plastic bags per person.  The objective of the amendments to the directive is to reduce plastic bag usage in the EU by eighty percent.

One of the main goals of the amendments is to alleviate environmental issues such as marine litter.  The accumulation of litter in the world’s oceans and  on the world’s coasts is a dangerous growing threat to the world’s ecosystems.  It takes close to 45o years for plastic to dissolve.  This mean litter attributable to humans like plastic accumlates in the ecosystems with no where to go.  Many animals are killed by getting tangled in the plastic or ingesting it.  Plastic has been found in the stomachs of endangered species of turtles and 94 percent of the birds in the North Sea.

 

 

 

The Tentative Free Trade Agreement Between Canada And The European Union

The tentative free trade agreement between Canada and the European Union, known as the  Comprehensive Economic and Trade Agreement, (CETA), will go far beyond the North American Free Trade Agreement, (NAFTA).  It is designed to eliminate thousands of tariffs, encourage foreign investment and promote movement of labor. Once the agreement is implemented, 98 % of EU and Canadian tariffs will be eliminated immediately.

Prime Minister Stephen Harper, who described the agreement as a “historic win for Canada,” signed the tentative deal in Brussels on Oct. 18, European Commission president Jose Manuel Barroso. The agreement provides Canada with preferential market access to the 28-member European Union, and its more than 500 million consumers and  $17 trillion in annual economic activity.

The deal would also allow Canadian automakers to export more cars and Canadian farmers to export more beef, pork and bison.Once in place, Canadian consumers could also see cheaper prices on items that include food, wines and high-end European cars.

The deal will have far reaching impacts, touching just about every sector of the Canadian economy as well as millions of workers and consumers. The final result could see Canadians paying less for thousands of products made in Europe, such as cars, which are currently subject to a 6% tariff. European companies will also be able to bid on large provincial and municipal government contracts.

While a number of export industries have given the deal high praise, some dairy farmers and cheese producers have expressed concerns. The deal would allow the EU to sell Canada 29,000 tons of cheese, an increase from the current 13,000 tons. Some Canadian farmers fear those provisions could threaten jobs and industries in Canada.

The European Union Attempts to Tackle Obesity

Obesity experts are perplexed over the European Commission’s decision to allow a “health claim” for fructose.  Regulation 536/2013 states: “In order to bear the claim, glucose and/or sucrose should be replaced by fructose in sugar-sweetened foods or drinks so that the reduction in content of glucose and/or sucrose, in these foods or drinks, is at least 30 percent.”  Now, manufacturers of drink products can claim their products are healthier than their competitors by replacing the sucrose and glucose in the product with fructose.  The European Food Safety Authority advised the European Commission on this matter.  They concluded fructose has a lower glycaemic index and does not cause rapid or high blood sugar spikes like sucrose and glucose.  This regulation benefits citizens trying to reduce their glycaemic responses likes those with type 2 diabetes.  However, what about the overall effect of high fructose levels on EU citizens?

Fructose, the simple sugar found in fruits, was once thought to be a healthier substitute for table sugar or glucose.   The moderate amount of fructose consumed naturally from fruits is beneficial, because it allows the body to process glucose better. However, the high amounts of fructose contained in fructose corn syrup are not natural.  The human body processes fructose much less easily than glucose.  Fructose is processed in the liver, and the liver cannot process large amounts of fructose fast enough to turn it into energy. Therefore, the body turns the extra fructose into fats.  The lack of moderation in fructose leads to heart disease, obesity, cancer, dementia, and liver failure.

European obesity experts are concerned about large consumptions of fructose.  It has been linked to the significant rise of obesity rates in the United States and around the world.  The obesity rates in most European countries have doubled over the past twenty years.  More than half the adult population in the European Union is overweight or obese. The argument by obesity experts is that this regulation passed by the European Commission will confuse EU citizens into thinking large amounts of fructose in their products are healthier than sucrose and glucose.

 

Electronic Cigarettes Survive Sweeping Tobacco Regulations

On October 7, the European Parliament finally passed new regulations governing the multi-billion dollar tobacco market.   The new legislation aims at tightening up the 2001 Tobacco Products Directive.  Some of the new sanctions placed on the tobacco industry include:  bigger warning signs on cigarette packs, the elimination of “10-pack” cigarettes, and also a ban on menthol and other flavored additives.  Some of these regulations, if passed by the European Council, would not take effect for another five to ten years.

After intense lobbying from the growing electronic cigarette industry, including global tobacco companies, the European Parliament refused to include the European Commission’s recommendation to classify electronic cigarettes like other medicinal products.  The new tobacco regulations still need approval by the 28 European Union government leaders in the European Council, who along with the European Commission, want electronic cigarettes controlled under medical regulations.  There will soon be an intriguing battle in Brussels.   The European Council has endorsed the European’s Parliament’s philosophy on marketing electronic cigarettes as medicines.  However, the European Council would allow tobacco companies more time to acquire medicines marketing authorization.

Should electronic cigarettes be regulated as tobacco products or should they be sold in pharmacies as medicinal products?  Research claims that 85 percent of electronic cigarette users start in order to help them quit smoking.  Electronic cigarettes also cost 90 percent less than your traditional cigarette.  Most electronic cigarette users think that smoking electronic cigarettes is less harmful than smoking traditional cigarettes.  However, health experts are still divided on the long-term effects of using electronic cigarettes, and they are still years away from uncovering these effects.  At the moment, there is yet a clear answer for the European Union on how to regulate electronic cigarettes.

 

 

 

No More Roaming? European Commission Proposes Ban To Cell Roaming Charges

There could soon be more money in the pockets of millions of European travelers abroad after the European Commission proposed a ban this week on cellular telephone roaming charges for European customers.  Instead of roaming charges, the Commission is attempting to force wireless providers to institute flat rate charges for phone calls. The Commission is attempting to achieve this through a series of “airline-style alliances” in countries where wireless companies do not own a network. The Commission is mandating that this alliance include an area of the European Union that would cover at least 85 percent of the European Union’s population across 21 of the current 27 Member States, a total of nearly 425 million people.

By contrast, customers in the United States, as well as many  nations around the rest of the world, are still charged billions in roaming charges every year when they travel internationally. For example, AT&T charges $1.50 in pay-per-minute for U.S.-based customers calling in Europe, as compared to a $0.10 per minute rate under the AT&T GoPhone domestic plan.

U.S. consumers would be able to reduce these charges by buying one of AT&T’s international call packages for Europe that were announced last November, which start at 30 minutes of talk time for $30 per month before incurring the pay-per-minute charge. AT&T also recommends buying an unlocked cell phone and buying a local prepaid SIM card.

This would make the European Union the first large block of nations to agree to end the antiquated practice of charging users of another cell network when calling from outside their coverage area.

 

EU Visa Liberalization – Unequal Outsiders in the Eyes of the EU

Article 18 of the TFEU states that, “Any discrimination on the grounds of nationality shall be prohibited.”  A look at the EU’s recent decisions regarding visa restrictions for third-country nationals makes it clear, however, that this policy can be superseded by Article 77 of the TFEU which vests the European Parliament and the Council with decision-making power regarding the granting of visas to third country nationals. An example of this can be seen in the European Commission’s recent proposal to the European Parliament and Council to add sixteen island nations to the visa-free list, five countries from the Caribbean and eleven from the Pacific islands (see also).  This proposal would allow citizens with a valid passport from these nations to travel within the EU for a period of up to ninety days without the need for a visa.

EU Home Affairs Commissioner Cecilia Malmström and leader for this proposal articulated the rationale behind such measures: “To facilitate travelling for tourists willing to visit Europe, and to spend their time and money, is crucial for our economy, and this is particularly important in a time of crisis, like the one that we are experiencing now.”  A look at the numbers (see IP/12/1177) indicates just how important tourism is to the European Union economy – in 2011, tourism amounted to foreign visitor spending of over €330 billion in 2011 and is estimated to exceed €427 billion by 2022 under the current visa regulations.  Facilitation of tourism through liberalized visa regulations could potentially boost spending by as much as €60 billion.

While this proposal probably came as welcome news to the citizens on the visa-free list, one cannot imagine that all other countries would necessarily share the enthusiasm.  Citizens of Turkey have in the past felt particularly discriminated against by the EU’s visa regulations towards them and have previously petitioned the Commission to adopt a long-term plan to liberalize the EU-Turkey visa requirements. Currently, the visa regulations between the two countries are notably lopsided, with Turkey allowing entry to EU citizens through the simple purchase of a low-cost visa at the border but the EU requiring significantly more extensive documentation, such as airline reservations, proof of insurance and proof of income, and even then, does not ensure entry.  Given the size of the Turkish economy as compared to that of any of the newly proposed island states, it is apparent that economic stimulus was not the only factor at play in the Commission’s proposal.  The EU Commission’s silence with regard to Turkey in this most recent proposal speaks louder than words ever could – that equality and economy must at times yield more immediate concerns.

Newly Revised EU Financial Regulation Emphasizes Fiscal Accountability in Member States

In the midst of the ongoing reforms to the Eurozone in response to the economic crisis, the second, and newest, revision of the Financial Regulation was ushered into existence on October 27, 2012. The Financial Regulation governs core principles of the EU budget and expenditures of EU funds. It originated in 2002, but has been modified only once until now.

This most recent version was designed to simplify the process by which the EU funds European businesses, towns, individuals, students, and other recipients, as well as make the funding process more efficient and accessible by reducing the administrative burden.  Specifically, it promotes innovative measures such as EU trust funds, a greater emphasis on lump sums and flat rates in the grant program, the use of loans, equities, and guarantees to increase the impact of EU funds, and more advanced information technology.

More crucially, however, is the emphasis on fiscal and budgetary accountability. This newest revision of the Financial Regulation coincides with the unprecedented expansion of the Union’s authority over fiscal matters as a reaction to the Eurozone crisis. The destabilization of the Eurozone has led to a consolidation of power in EU institutions in an effort to resolve the crisis and prevent future recurrences, such as the European Stability Mechanism. Accordingly, an official European Commission press release published on Monday links the new Regulation with the crisis, stressing the need for more centralized oversight and accountability over the expenditure of EU funds. Thus, the new revisions correspond to a heightened sense of fiscal responsibility in the Union, such as the tentative plans to impose strict budget deficit limits on member states.  Reflecting this trend towards responsibility, the new Financial Regulation implements more thorough oversight on the budgetary management by the member states. Member states, who manage up to 80% of EU budget expenditure, must now produce annual management declarations which state that funds have been used correctly and are subject to independent audit.

The fact that the Financial Regulation has only been modified twice subsequent to its adoption indicates that changes to it do not come lightly or frivolously. As evident from the contemporaneous economic climate, as well as the content of the Regulation, the Commission deliberately crafted these changes as a reaction to the Eurozone crisis. They signify a larger shift in the EU framework to a more economic centralized authority where member states must further delegate sovereignty over economic matters to EU institutions in order to guarantee the future stability of the EU.

Microsoft Exploring the Limits of Antitrust

The battle of the best Internet browser continues not only in the United States, but in the European Union as well.  Microsoft’s campaign to conquer the browser industry in Europe has been halted by EU antitrust laws.  Microsoft has made it difficult for customers to choose other browsers while using their Windows operating system.  Its dominant position in the market concerned the European Commission back in 2009.  The EU “suspected Microsoft of using its dominant market position to foist its Internet Explorer browser on users.”  Microsoft and the European Commission has come to a legal settlement in which “Microsoft agreed to create a screen where users could choose among competitors’ browsers”.

The European Union’s power to govern antitrust, internationally and intranationally is derived from the Treaty on the Functioning of the European Union.  Under Article 101, “agreements between two or more independent market operators which restrict competition are prohibited”.  The second article governing antitrust is Article 102.  Article 102 states that, “firms holding a dominant position on a determined market to abuse that position are prohibited.”  Article 102 governs here as Microsoft’s dominant position was used to abuse that position by denying competitive browsers the opportunity to compete.

Microsoft has failed to meet the requirements of the settlement.  In the three years since the settlement many computers still did not contain the display option between different browsers.  Microsoft claimed a technical error was responsible for the failure; this excuse is an almost acceptable response due to Window’s history of poor performance.

On October 21, 2012 The EU filed a formal complaint against Microsoft for its failure to abide by the settlement.  Microsoft has given a public apology upholding its position that this failure was the result of a technical malfunction and that it will do everything in its power to abide by the settlement.  Unfortunately for Microsoft this is insufficient to the requirements of the settlement.  Microsoft now has four weeks to answer the accusation made by the EU.  If its defense is inadequate, “The company could face a fine of up to 10% of its annual revenue if found in breach of antitrust law.”

The European Union and the European Commission have shown that they are serious when dealing with antitrust laws.  A compromise was created in an effort to show leniency and fairness to Microsoft.  The elements of the settlement were almost insultingly not complied with, and now Microsoft is facing the sterner side of justice.

Faulty Breast Implants Lead to Increase in EU Medical Device Regulation

The European Union recently decided to place stricter regulations on medical devices after hundreds of thousands of women worldwide received below standard silicone implants made by the French company Poly Implant Prothese (PIP). This silicone-based scandal was partly due to lax EU safety regulations that had done little to scrutinize the 80 national ad hoc agencies that were monitoring medical devices. When compromised, the implants had been known to cause inflammation to body tissues. The implants were made of a cheaper material that had not been approved for medical use, and were rupturing at a rate that was double the industry average.

EU health commissioner John Dalli submitted a proposal that encompassed what was learned from the PIP scandal and would also include the addition of a scrutiny panel, which would monitor the assessments made by the various national agencies. Dalli further mentioned that the panel would have the ability to “pick out medical devices on certain risk-based criteria to decide whether to go into an in-depth analysis of the processes.” In addition to the aforementioned proposed changes, there is also a proposal to expand the legal definition of medical devices to include breast and other aesthetic implants.

There are differing opinions regarding the proposed increase of medical device regulations. Serge Bernasconi, the chief executive of Ecumed, an industry body that represents nearly 22,500 medical technologies in Europe, argued that the regulations that were already in place were more than sufficient and provided a “high level of safety” for patients without causing a delay that would deny them access to life saving technologies. He further argued that by implementing such regulations would effectively stifle European innovation and research to other countries that do not have such regulations, thereby also causing harm to patients.

On the other hand, it is argued by the European Consumer Organisation (also known as BEUC) that the proposed regulations are not going to be strict enough and medical devices should have to undergo the same process as pharmaceutical products. The head of BEUC, Monique Goyens, contends that there is an imbalance regarding the levels of protections afforded to a patient based on whether they “have an artificial heart valve or take medicine for diabetes.” This idea was addressed in a press release made by the European Commission, it was stated that medical devices should not be confused with medicinal products. The distinct difference between the two is that medical devices have a physical principal mode of action. In other words it can serve as a physical barrier or replace support to organs or bodily functions, etc.

The press release further illustrates the proposed changes in regulations to include: clearer rights and responsibilities for manufacturers, better traceability of devices, an adaptation of general health and safety requirements, and a creation of a Medical Device Coordination Group.With these changes, the independent assessment agencies will be provided with more power to monitor the medical devices, including the ability to make unannounced inspections of factories and regular product testing. Because of this increase in power, the EU governments will have to provide better supervision of their agencies.

This proposed legislation is unlikely to occur for two more years, due to the process of needing to be approved jointly by EU governments and lawmakers.

Ebooks and the Agency Model

The European Commission announced on September 19, 2012 that the publishers Hachette Livre, HarperCollins, Macmillan and Simon & Schuster (the Four Publishers), and the retailer Apple violated European law (Pearson is under investigation). The Four publishers and Apple were using an agency model to sell ebooks, “engaging in a concerted practice with the object of raising retail prices of ebooks”, or precluding ebook discounts.

The EC argues that the Four Publishers and Apple are violating Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the European Economic Area (EEA) Agreement. Article 101 of TFEU prohibits any cartels/agreements that inhibit free competition in the European Economic Area. Article 53 of the EEA Agreement prohibits “concerted practices which may affect trade between Contracting Parties” and prohibits “the prevention, restriction, or distortion of completion.” Article 53 of the EEA also says that an individual/company cannot directly or indirectly fix purchase or selling prices.

The agency model allows the publishers, instead of retailers, to decide how much the public pays for a product and the retailer receives a percentage of that price. A retailer has the choice as to whether or not the retailer wants to enter into an agency agreement with a publisher; retailers who don’t enter into an agency agreement set the price of the product themselves.

The EC and the Four Publishers and Apple have made agreements to address the EC’s “competition concerns”. The effects of the agreements are the ending of the agency agreement between the Four Publishers and Apple and that retailers of ebooks will be able to lower the prices of the ebooks that they sell, if they like, for at least two years. In response to the new agreements, in the UK, ebook prices are expected to fall.

The Four Publishers and Apple do not think that they have violated any laws or competition regulations, but they consented to the agreements to ease the competition concerns of the EC. The agreements are “a major victory for Amazon and its philosophy of low prices”, Phillip Jones, editor of The Bookseller, said to The Guardian. “It looks to me that we’ll see renewed discounting on the big ebooks from the major publishers … with minimal restraints on what the big e-bookseller can do with price. Good news for ebook readers in search of a bargain, not great news for publishers, and pretty worrying news for high street bookshops.”

According to The Guardian, Hachette Livre believes that its choice to enter into agency agreements was the best decisions for the book industry as a whole. But, Hachette Livre decided that a legal proceeding against the European Commission would be too “disruptive” to its business. Their main commitment is to their authors and readers and Hachette Livre believes that following the agreements of the EC was the best way to maintain a productive business.

 




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