The European Commission has adopted its 2007 Annual Report on Competition Policy, which gives an overview of the main developments in competition policy. It outlines key changes to competition rules and policy as well as major enforcement actions. Using concrete examples it demonstrates how the tools of competition policy were used to reinforce Europe's competitiveness and to protect consumers and businesses from anticompetitive conduct.

Competition Commissioner Neelie Kroes said “Improving the functioning of markets for the benefit of European consumers and businesses remains at the heart of the European project. In 2007, the Commission made a significant contribution to consumer welfare by tackling hard-core cartels.".

The fight against hard-core cartels continues to bear fruit

Even though the fight against cartels is becoming increasingly global and challenging, in 2007 the Commission was nonetheless more successful in this fight than ever before. The Commission's leniency policy has proved a very potent weapon to encourage companies to own up to cartels. For example, in 2007, thanks to the leniency programme, the Commission condemned a large scale lifts and escalators cartel and fined their members over €990 million as well as a beer cartel in the Netherlands, whose members were fined over €273 million.

Projecting Europe's competition rules and culture internationally

The Commission is continuing its efforts to spread competition culture beyond EU borders. This work involves taking a leadership role in fora such as the International Competition Network and bilateral agreements with other competition authorities and free trade agreements with the EU's major trading partners. For example, during 2007 the Commission's competition department and the Chinese administration had intense exchanges on the adoption of the new Chinese anti-monopoly law.

Network industries and financial services

Financial services, telecoms, gas and electricity remain core target areas of all aspects of competition policy. Ensuring that these markets and other network sectors function well is not only significant for consumer purchasing power and choice but also for the EU's overall competitiveness.

For example, the Commission imposed antitrust sanctions against anticompetitive practices in the payment services and card area to the benefit of individual consumers and merchants and assisted the ongoing efforts to establish a Single European Payments Area by the end of 2010.

Antitrust fines were also imposed in the broadband sector against abuses which had deprived consumers of the benefits of price competition. Likewise, the Commission made use of the EC Treaty prohibitions on restrictive business practices and abuses of dominant market positions to improve the functioning of the gas and electricity markets. Complementing the wider legislative Commission agenda, in one case, antitrust enforcement was able to ensure that one incumbent stopped tying up excessive gas volumes for long periods, which reduced consumer choice and market entry by potentially more efficient competitors.

Companies must not be allowed to reverse the benefits for consumers of a more open internal market. In June 2007, the Commission prohibited the proposed takeover of Aer Lingus by Ryanair. The statistics show that mergers are very rarely prohibited. However, the takeover at hand would have led to a dramatically reduced choice for consumers and, as a result, the likelihood of lower quality and higher fares.

The State Aid Action Plan

The reform of the state aid rules launched through the State Aid Action Plan in 2005 is beginning to bear fruit. Figures from autumn 2007 show that Member States have been moving towards the European Council objective of better targeted aid involving objectives of common interest such as regional development, R&D, SMEs and protecting the environment.