1. Major recent developments

1. With regard to substantive aspects of policy implementation, a major development in the EU since the 1990s has been the progressive implementation of a "more economics-based approach" in the enforcement of all aspects of competition law. While this focused initially on cases and enforcement methodologies relating to Article 101 and mergers and acquisitions, it has now been extended to the area of dominant conduct, with the issuance of the Commission's Guidance paper on the enforcement of Article 102 in 2009.²⁴⁵ An insistence on substantive analysis is now pervasive in most, if not all, aspects of the Commission's antitrust work. Courts adjudicating competition law cases in the EU are also moving away from formalistic applications even with respect to the market integration standard. An important consequence of this trend has been to move the EU closer to the substantive approaches to antitrust enforcement of some of its major trading partners, potentially reducing the scope for inter-jurisdictional conflicts in this policy area.²⁴⁶

2. The EU's competition policy regime also covers state aid, which, by favouring certain firms over their competitors, may distort competition (section (3)(ii)).

3. During the period of the global financial crisis, measures taken by a number of the EU member States have limited the application of competition policy in the financial services sector (Chapter IV(1)(ii)). These measures have been criticized by some in that they may perpetuate rather than relieve the underlying sources of instability, or have other undesirable effects. ²⁴⁷ It has also been argued that much experience shows the health of financial and other markets is unlikely to be well served by the suspension, in times of economic distress, of basic rules to prevent anti-competitive practices.²⁴⁸ The Commission agreed with these comments.

4. An important focus of the Commission's enforcement efforts in recent times has been on the pharmaceutical industry, which relies heavily on intellectual property rights. In January 2008, the EU launched a major inquiry to examine why fewer new medicines were being brought to market and why generic entry seemed to be delayed in some cases. The inquiry found that citizens waited more than seven months after patent expiry for cheaper generic medicines, costing them 20% extra in spending. The delayed market entry of generic medicines could be attributed to both the regulatory framework,²⁴⁹ and certain companies' behaviours. The inquiry showed that originator companies used a variety of instruments to protect the commercial life of their products without generic entry.²⁵⁰ In particular, 22% of the patent settlements were potentially problematic, relating to medicines worth more than €200 million. The EU considered that these instruments, although can be fully legitimate, may under certain circumstances violate the European competition law. In 2010, the Commission carried out a monitoring exercise, focusing on patent settlements concluded in the pharmaceutical sector. This exercise found that compared with 2008, the number of settlements increased while the number of potentially problematic patent settlements decreased (down to 10% and the amount of money covered by these settlements was down to € 1 million).²⁵¹ The decrease of the latter indicates an increased awareness of the industry that settlement agreements may attract the scrutiny of the competition law.