IP/09 /1241 Brussels, 19 th August 2009 Competition: Commission publishes 2008 Annual Report on Competition Policy The European Commission's 2008 Report on Competition Policy gives an overview of the main developments in EU competition policy and major enforcement actions. It demonstrates how the tools of competition policy were used to face the financial and economic crisis and highlights the benefits that competition policy delivers to consumers. This work did not distract from other competition enforcement: action against anti-competitive conduct, vetting mergers, and reviewing state aid continued as before. Competition Commissioner Neelie Kroes said "2008 was an unusual and difficult year, which confronted Europe with unprecedented economic challenges. I believe that the Commission's actions in the field of competition were a determining factor in preserving the single market and the benefits of competition, while ensuring stability in the financial system. Strong cooperation between partners at European and national level has allowed us to tackle the crisis in an efficient and timely manner. But there has been no let up in other competition enforcement: the competition rules are even more vital to the economy in times of crisis, and the Commission’s enforcement record remains extremely strong." Reforming the policy to deliver quicker and better decisions 2008 has been a very fruitful year for competition policy, be it in antitrust, state aid or merger control. In the field of state aid, the Commission has moved towards a more economic effects-based analysis of the support measures notified by Member States through the adoption of a general block exemption regulation and the introduction of a balancing test. The Commission also adopted a White Paper on damages actions for breach of the EU antitrust rules. The White Paper represents a step forward to overcoming the obstacles currently encountered by victims of competition problems from receiving effective compensation. Pursuing its fight against cartels, the Commission has introduced a mechanism to settle cartel cases with the agreement of the parties involved, through a simplified procedure, which allows to deal more quickly with cases and free up resources to pursue other cartel cases and open new investi gations. Focusing on the benefits competition policy brings to consumers For the first time, the 2008 Annual Report includes a special chapter on a topic considered to be of particular importance in the field of competition policy. The topic chosen is "Cartels and consumers". In 2008, the Commission fined 34 undertakings in seven cartel decisions. In cases such as the Banana cartel, consumers directly suffered from higher prices until the Commission broke up the price fixing cartel (see IP/08/1509 ) According to Commission services estimates, the harm to the economy caused by the cartels fined by the Commission between 2005 and 2007 amounts to at least €7.6 billion Policing dominant firms In the fight against abuses of dominant market positions, the Commission adopted in 2008 important decisions in the energy and IT sectors. As a follow up to the Commission's energy sector competition inquiry and after sustained investigations by the Commission, the German energy company E.ON voluntarily offered to divest significant parts of its business to address the concerns raised in the course of the investigation (see IP/08/1774 ). This will allow new competitors to enter the German energy market and offer more choice to consumers in Germany. The separate management of the transmission infrastructure will also improve the functioning of the European energy market by providing equal access to all players. Also in 2008, the Commission imposed a second penalty payment of €899 million on Microsoft for its non-compliance with a 2004 Commission decision requiring it to share essential interoperability information with its rivals on reasonable terms (see IP/08/318 and MEMO/08/125 ). Conveying strong results to the citizens As the experience of 2008 shows, competition policy is neither static nor rigid but capable of taking account of changing economic realities, while ensuring a level playing field in the Single Market. This combination of firm principles with flexible processes has made competition policy a constructive and stabilising factor in the EU's financial system and the real economy at large. In particular, since the outbreak of the crisis in October 2008 until the end of the year, the Commission adopted around 40 decisions on support for banks and the real economy and issued three guidance documents on how Member States could use the state aid rules to support the financial sector and the economy during the crisis. The 2008 Annual Report on Competition Policy can be found at: http://ec.europa.eu/competition/publications/annual_report/index.html