10. 12.81 Official Journal of the European Communities No C 322/3 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the Community competition policy in the light of the current economic and 
social situation 
The opinion of the Committee is not based on any text. 
A. LEGAL BASIS FOR THE OPINION 
At its 170th plenary session held on 17 and 18 July 1979 the Committee, acting on a 
proposal from the Bureau, decided to deliver an opinion on the abovementioned subject 
on its own initiative. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
187th plenary session held in Brussels on 29 and 30 April 1981. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the fourth paragraph of Article 20 
of the Rules of Procedure of the Economic and 
Social Committee, 
Having regard to the decision taken on 16 July 1979, 
on a proposal from the Bureau, to draw up, an own-
initiative opinion on Community competition policy 
in the light of the current economic and social 
situation, and to instruct the section for Industry, 
Commerce, Crafts and Services to prepare work on 
the matter, 
Having regard to the opinion issued by the Section 
for Industry, Commerce, Crafts and Services at its 
meeting on 8 April 1981, 
Having regard to the Report presented by, Mr 
Bagliano and Mr Neumann, rapporteur and co-
rapporteur respectively, Having regard to discussions held at the 187th 
Plenary Session on 29 and 30 April 1981 (session of 
30 April), 
HAS ADOPTED THE FOLLOWING OPINION 
by 95 votes for, none against and 16 abstentions: 
1. Competition policy in an 'open' market in the 
process of integration 
1.1. Background to this opinion 
The serious economic and social situation in the late 
1970s and early 1980s requires the Economic and 
Social Committee to put the Community's 
competition policy under the magnifying glass, taking 
an overall, and above all, long-term view. 
No C 322/4 Official Journal of the European Communities 10. 12.81 
This opinion was prompted by the profound 
conviction, born of experience, that in a period of 
such serious, persistent social and economic 
difficulties, all the Community policies ought to be 
implemented as effectively as possible, with the 
maximum coordination and with all reasonable speed. 
To this end, discussion of the past is not enough: we 
must also undertake a realistic, scrupulous appraisal 
of the current economic and social situation. Above 
all, we must adopt a more imaginative approach to 
the future and display greater commitment in 
decisions and actions. 
All the policies of the European Community should 
be given this new impetus without delay. This 
includes competition policy which has a basic, specific 
and vigorous role to play in a climate characterized 
by a change in economic relations and industrial 
structures, a concentration and 'multinationalization' 
of capital in certain sectors, and a transformation of 
relations between the State and the economy. 
In this context two trends emerge: firstly there is the 
growing importance of State and semi-State firms, 
stronger pressures for direct government aid, and 
more demands for Community aid or protection; 
secondly, stiffer and stiffer competition from imports 
originating outside the Community. Concurrently, 
ties are being forged more and more rapidly with the 
developing countries. 
It is not the intention of this opinion to duplicate the 
specific analyses submitted each year by the European 
Parliament to the Commission for critical evaluation. 
The opinion seeks to tackle the problem of 
competition policy within an overall framework, with 
particular reference to changing conditions in and 
outside the Community. 
1.2. Instruments and aims of the Treaty: rules on 
competition 
Among the many instruments for implementing the 
objectives set out in Article 2 of the Treaty, Article 3 
provides for 'the institution of a system ensuring that 
competition in the common market is not distorted'. 
The rules on competition (Articles 85 et seq.) are 
therefore one of the 'instruments' for bringing about 
the 'common market'. Further, the establishment of a common market 
between the Member States is, according to Article 2, 
a means of 'promoting' the objectives of the Treaty 
which are of course: 
(a) harmonious development of economic activities; 
(b) an increase in stability; 
(c) an accelerated raising of the standard of living 
(Article 2). 
These are clearly economic and social aims and it is 
therefore right and expedient that rules on 
competition should be increasingly considered in the 
light of the economic and social situation. This is 
precisely what this opinion proposes to do. 
1.3. Competition policy 
In the present economic and social situation, both in 
and outside the Community, competition rules should 
be applied in accordance with principles and 
strategies that are geared to a genuine fully-fledged 
competition policy. (Moreover, the whole chapter on 
'rules on competition', from rules applying to firms to 
'aids granted by States', is contained in part three of 
the Treaty entitled 'Policy of the Community'). 
This is all the more necessary in view of the fact that 
the original frame of reference — the economic and 
social situation in the 1960s — has changed radically 
(particularly in the 1970s) and bearing in mind that 
'integration' in a 'single' market is among the primary 
objectives of the Community, even though various 
obstacles, differences and imbalances still remain 
between Member States. 
Even a summary assessment of the 1960s reveals that 
the competition rules were generally applied 
according to largely legal criteria ('). 
After the period of initial notifications, and once 
'mass' solutions had been found (the vast majority of 
the ten thousand or so contracts notified related to 
exclusive distribution), the Commission clarified the 
limits of 'cooperation' between firms and took 
position on a number of cases involving abuse of 
dominant position. 
(') European Parliament resolution on the seventh 
Commission report on competition policy (OJ No 
C 261, 6. 11. 1978, p. 49, point 4). 
10. 12. 81 Official Journal of the European Communities No C 322/5 
The increasing complexity of the issues involved and 
their considerable interdependence vis-a-vis many 
other issues have in recent years obliged the 
Commission to get to grips with situations which call 
for value judgments and a broader approach to 
realities, implications and constraints. 
As is borne out by a number of practical examples, 
the 'rules on competition' referred to in Articles 42, 
85, 86, 92 et seq. of the Treaty of Rome, should be 
implemented more effectively via a package of 
measures, norms and recommendations which are 
compatible with the overall framework of Community 
activity ('), in other words by means of a proper 
policy' which is both complex, flexible and structured, 
and takes account of interdependence and 
interactions between a variety of initiatives and 
situations, both general and sectoral, within the 
Community and in the world outside. 
An approach along these lines must be encouraged. 
1.4. The open common market 
The Treaty itself takes a clear line : 
'By establishing a customs union between 
themselves, Member States aim to contribute, in 
the common interest, to the harmonious 
development of world trade, the progressive 
abolition of restrictions on international trade and 
the lowering of customs barriers. 
The common commercial policy shall take into 
account the favourable effect which the abolition 
of customs duties between Member States may 
have on the increase in the competitive strength of 
undertakings in those States'. (Article 110). 
The present situation confirms the validity of this line 
and the need to press on with efforts to achieve these 
objectives. 
Similarly, the preamble to the Treaty states that the 
Community is created in the desire to 'contribute, by 
means of a common commercial policy, to the 
(') European Parliament resolution on the fifth Commission 
report on competition policy (OJ No C 238, 11. 10. 
1976, P. 35, points 2, 3 and 4). progressive abolition of restrictions on international 
trade'. 
Leaving aside all dogma, we must face the reality that 
the common market is open in so far as it is part and 
parcel of the vaster ambit of the world economy and 
international trade. 
In this connection the Committee fully agrees with 
the Commission's introduction to the eight report on 
competition policy: 
'To operate effectively, the common market is 
largely dependent on the setting-up of a large 
internal market in a Community with an outward-
looking approach to the rest of the world. An 
extensive area in which economic activities may 
intereact without purposeless constraints is a pre­
requisite for a developing economy; it is no longer 
reasonable to suppose that economic activity can 
expand within a confined space.' 
Similarly, the introduction to the ninth report 
acknowledges that: 
'every Community policy is required to adapt 
itself in order to fit into the perspective of a 
common market that is both unified and outward-
looking at the same time'. 
Accordingly, competition policy must further the aims 
of the Treaty with a view to achieving a common 
market which is not isolated but open to trade 
and international competition in the widest possible 
sense (2). 
2. Interdependence and its effects — Community 
competitiveness — relevant market 
2.1. World-wide interdependence and Community 
competitiveness 
The growing interdependence of markets necessarily 
entails a new international division of labour. 
The European Communities feel the impact of this 
interdependence more than any other bloc and the 
initial practical response to this challenge can only be 
an increase and expansion of competitiveness, 
stimulated by a competition policy compatible with 
(2) European Parliament resolution on the European 
automobile Industry (OJ No C 28, 9. 2. 1981, p. 20, 
point 13). 
No C 322/6 Official Journal of the European Communities 10.12.81 
the objectives of the Treaty but also responsive to any 
adjustments that become necessary over time ('). 
In an 'open' market, a coherent competition policy 
must be increasingly orientated towards a realistic 
view ' of overall, world-wide interdependence. This 
economic interdependence embodies all the elements 
for more balanced north-south and east-west 
relations, from the flow of raw materials to trade and 
technological flows. 
Ruling out protectionism, the only possible strategy 
open to us is to further the restructuring of 
production and structural adjustment with the help of 
all social and economic interests. At the same time, 
Community industry will be safeguarded and 
stimulated by a competition policy conceived in the 
broadest and most dynamic terms and thus placing 
increasing emphasis on global Community aims. 
However, it must be remembered that terms of 
competition in many world export markets are often 
different — sometimes very different — from those 
existing in the Community. Close monitoring 
combined with suitable measures, possibly transitional 
or phased, will therefore be needed to prevent 
Community firms being adversely affected. 
2.2. Competition and cooperation 
Since the European Community is more dependent 
than other advanced countries on external relations, it 
must succeed in introducing a system of 'competition 
— cooperation' between the Community and the 
major non-Community blocs in order to promote 
lasting north-south and east-west prosperity based on 
the principle of reasonable reciprocity and balanced 
economic progress in every sector. 
A shrewd competition policy must take account of the 
need to reconcile competition and cooperation in both 
production and trade. Distortions within the common 
market must be avoided, unfair practices must be 
prevented and worthwhile cooperation compatible with the Community's overall progress must be 
promoted. 
2.3. Relevant market 
This trend in the Community and international 
economies requires — in addition to the criterion of 
'practices which may affect trade between Member 
States' — (Article 85 (1)) — a broader criterion 
which effectively takes into account the relations 
between the 'Community market' as a whole and 
other countries. 
We should therefore approve and encourage the 
tendency of the Commission and the Court of Justice 
to consider Article 85 as applicable to agreements 
affecting the Community between companies whose 
registered offices are outside the Member States. 
While it is thus essential and correct from every point 
of view to evaluate the anti-competitive effects of 
agreements between Community businesses and those 
of other countries, it is equally necessary and correct, 
not to confine the analysis of a specific market 
situation (production, sales, substitute or similar 
products, etc.) to the common market alone. 
The assessment of the 'relevant market' is of course 
of considerable importance for the application of 
Articles 85 and 86 (2). 
As part of this assessment, an increasingly careful 
analysis must be made of the position of individual 
companies with respect both to their competitors in 
the Community and to import flows from outside the 
Community. Assessments of the competitive position 
and the relevant market cannot be artificially 
confined to the Community area. 
This is the only way to make the concept of an 'open' 
common market effective, complete and coherent. 
Competition policy is already moving in this direction 
and must be given every encouragement to do so. 
(') OJ No C 283, 3. 11. 1980, pp. 7-8, (Written Question 
No 562/80). (2) Reports of cases before the Court of Justice, 1973, 
p. 216. 
10. 12.81 Official Journal of the European Communities No C 322/7 
3. Importance of the economic and social context — 
coordination of community policies 
3.1. Impact of economic and social aspects 
The aims of the Treaty emphasize the economic and 
social aspects (cf. 1.2.). 
The economic recession and inflationary pressures 
bedevilling all the Member States today, the need to 
protect employment, the need to promote 
technological progress and innovation, the continuing 
oil crisis and the disparities in national legislation in a 
number of key sectors are all factors, to name but the 
most important, which must be taken into account in 
accessing the behaviour of firms and Member States 
with a view to the application of Articles 85, 86, 92 et 
seq. 
Competition policy cannot be governed by abstract or 
theoretical criteria but must take into account the real 
conditions and requirements of the various countries 
and regions. The original frame of reference (setting 
in motion of an integration process in a high growth-
rate economy) which marked the initial period of 
implementation of the rules of competition has now 
changed. 
The major changes in the Community and inter­
national economies over the last few years have had 
serious repercussions in the social and productive 
sectors of a Community which is not yet fully 
integrated. 
Given this state of affairs, application of the 
competition rules cannot disregard economic and 
social institutions and factors (see 3.3.). Account must 
therefore be taken of the new 'framework conditions' 
governing all facets of Community development. 
For this reason the Commission should inform and 
consult employers' associations and trade unions in 
particular about its competition policy. The Economic 
and Social Committee is an ideal forum for briefing 
and consulting all socio-economic interest groups on 
this matter. 
3.2. Inflation, social problems and the energy crisis 
The hallmarks of the present economic and social 
situation include persistent inflation, rising 
unemployment and the numerous effects of the 
energy crisis. Competition policy must therefore pay special heed to these vital. aspects of the present 
economic situation. 
A vigorous competition policy can also help to 
contain inflation, for instance by rationalizing 
production and promoting labour and capital 
mobility, with corresponding benefits in costs and 
prices. Stricter controls can check abuses and 
eliminate the various artificial constraints which 
distort competition ('). 
On the social front, the redistribution of labour 
within the Community should be orientated towards 
expanding sectors. The alignment (2) of social security 
systems (J) should also be pursued more vigorously, 
without ignoring the importance of the different 
traditions of industrial relations, particularly in the 
context of Community enlargement. 
Competition policy should also keep a close watch on 
the wide disparities in energy prices in the Member 
States (4). It is vital to foster tax alignment and 
promote greater international cooperation in this area 
in order to permit a more accurate assessment of 
needs and strike a more satisfactory balance between 
supply and demand. 
3.3. Rulings of the Court of Justice 
The Commission and Court of Justice have already 
shown their responsiveness to socio-economic needs 
(5). This is both a realistic and far-sighted policy. 
These institutions have, for example, recognized that 
the following considerations should be taken into 
account when defining the 'promotion of technical or 
economic progress' (Article 85 (3)): 
(a) the scope for (i) planning production and 
marketing on a long-term basis and with greater 
(') Fourth medium-term economic policy programme (1976 
— 1980), part III, point (b) (OJ No L 101, 25. 4. 1977, 
p. 22). 
O OJ No C 205, 14. 8. 1979, p. 4 (Written Question 
No 15/79, point 5 of reply). 
(J) OJ No C 301, 3. 12. 1979, p. 29 (Written Question 
No 649/79, paragraph 4, 5 of reply). 
O OJ No C 131, 2. 6. 1980, p. 35 (Written Question 
No 1708/79). 
(s) Reports of cases before the Court of Justice, 1980, 
p. 2691. 
No C 322/8 Official Journal of the European Communities 10. 12.81 
accuracy, (ii) restricting the market fluctuations, 
and (iii) lowering production, storage and 
marketing costs; 
(b) the protection of employment as part and parcel 
of an overall stabilization plan, especially when 
the business climate is gloomy ('). 
The Court — while acknowledging that 'workable 
competition' (2) is a sina qua non — has also stated 
explicitly that competition may vary in nature and 
intensity according to the particular products or 
services in question and according to the economic 
structure of the sectors concerned. The Court has 
also ruled that price competition should not be given 
absolute priority in all circumstances (3). 
These decisions show an awareness that rules on 
competition cannot be applied in a vacuum but are 
influenced by the economic and social context 
existing at any given moment in time. 
Above all, it is clear that in practice the conditions 
under which Community firms operate differ from 
Member State to Member State in respect of: access 
(to domestic and international financial facilities; the 
labour market; research and development), scale of 
production and marketing; taxation and social 
security rules; infrastructure; transport and energy 
supplies. 
To make its full impact, a competition policy needs to 
be carefully researched and take account of the 
various factors involved, while at the same time 
seeking to create conditions truly conducive to the 
changes required. 
3.4. Coordination of policies 
If there is agreement on an overall approach, 
interdependence and the need to take into account 
the constraints imposed by the widely differing 
economic and social situations within the 
Community, then, if the objectives of the Treaty are 
to be achieved, there must also be agreement that 
undistorted competition within the Community is a 
(1) Reports of cases before the Court of Justice, 1977, 
p. 1914. 
(2) Reports of cases before the Court of Justice, 1977, 
p. 1901 — 1903. 
(3) Reports of cases before the Court of Justice, 1977, 
p. 1903. prerequisite for adjusting industrial structures which 
increasingly come into contact with one another in an 
open market. 
Framed along these lines, a competition policy will 
spur Community firms to be more competitive and 
further a bold, far-sighted strategy of industrial 
restructuring whose main concern will be to reinforce 
the Community's industrial structures. 
What is absolutely necessary is close coordination, 
particularly with overall sectoral and industrial 
policies, with the social, regional and commercial 
policies of the Community ("), and with the Common 
Agricultural Policy. 
The Commission has shown in a number of cases that 
it has done just that (5). 
Its 1978 and 1979 programmes concentrated on 
structural aid for ailing industries (steel, shipbuilding, 
textiles, footwear, paper). In addition, the 
Commission has issued detailed reports and various 
other initiatives concentrating on 'growth sectors' 
designed to promote economic expansion and thereby 
increase job opportunities in industry and the tertiary 
sector (alternative energy sources), the aircraft 
industry, telecommunications, data-processing, 
electronics). 
Competition policy should encourage a coordinated 
target-orientated approach to and settlement of such 
problems. 
3.5. Regional imbalances and restructuring 
It is also essential to prevent the restructuring of 
productive industries from being hampered by 
institutional inflexibility. 
The most serious and crucial examples of institutional 
inflexibility are related to regional imbalances in the 
Community. 
Competition policy at regional level must, on the one 
hand, respect the need for specific priorities but, on 
the other, must help to incorporate regional re-equi­
librium and development needs into an overall policy, 
(4) European Parliament resolution on the eighth Com­
mission report on competition policy (OJ No C 85, 
8. 4. 1980, p. 43, point 21). 
(') OJ No C 316, 17. 12. 1979, pp. 45 — 46 (Written 
Question No 710/79, points 1 and 2, of answer). 
10. 12.81 Official Journal of the European Communities No C 322/9 
having a social dimension in order to prevent conflicts 
or delays. 
If the socio-economic background is to be taken 
seriously, competition policy should be geared to 
general or medium-term goals and should observe the 
principles of gradualism and consistency. Coordi­
nation and harmonization should be entrusted jointly 
to senior officials in the General Directorates directly 
concerned. This would make it possible to hold 
comprehensive discussions and assessments before 
Commission decisions are taken (l). 
4. Mixed economy — full information — aids 
4.1. Mixed economy 
It is generally recognized that, to varying degrees and 
in varying forms, the public sector is an ever-present 
feature of modern economies. 
In some Member States, this intervention has deep-
seated historical, socio-political roots and, in a 
number of ways, influences national economic and 
political decisions. 
At all events, it is now a fact that many Member 
States have, even if to varying degrees, been involved 
for a considerable time in economic activity, through 
State and semi-State bodies. 
The Member States have an undeniable right to 
pursue economic and social advance through the 
vehicle of such bodies. 
However, (Competition rules must operate even in 
mixed economies, except of course where the notion 
of 'public service' of specific general interest is 
concerned (Article 90.2 of the Treaty). 
Here it is hardly surprising that the issue of like 
treatment of private and public-sector firms 
(') Opinion of the Economic and Social Committee on the 
proposal for a Council Regulation on the control of con­
centrations (OJ No C 88, 26. 7. 1974, p. 21, point VI). competing in the same market (2), so crucial to the 
proper operation of the economy as a whole, should 
have arisen. The only means of ensuring such 
treatment is to eliminate any fiscal or financial 
discrimination and to dispense with preferential 
arrangements and measures of equivalent effect. 
Competition policy has a crucial role here. 
4.2. Full information 
The direct or indirect allotment of public resources to 
public-sector firms, and the way such resources are 
used, must not be shrouded in secrecy. The recent 
Commission Directive on this matter is a step in the 
right direction (3). 
This requirement must not be interpreted or applied 
so as to lead to discrimination between public and 
private-sector firms. It merely, reflects the principle 
that public-sector firms must also be required to 
disclose appropriate particulars about their financial 
relations with the State, even though this information 
is not demanded by shareholders. 
Identical market conditions for public and private-
sector firms will facilitate non-distorted, increased 
competition. Where social factors — at the level of an 
establishment, region or sector — take precedence, 
convincing grounds should be provided along with a 
schedule for phasing out relief measures over a 
reasonable period of time. 
It should be made clear that the derogations accorded 
to a number of sectors for an initial period are merely 
temporary. The requirement that full information 
should be given should be extended as soon as 
possible to cover the credit, insurance and energy 
distribution sectors. 
(2) European Parliament resolution on the eighth Com­
mission report on competition policy (OJ No C 85, 
8. 4. 198C, p. 42, point 16). 
(') Commission Directive of 25 June 1980 on the 
transparency of financial relations between Member 
States and public undertakings (OJ No L 195, 29. 7. 
1980, p. 35). 
No C 322/10 Official Journal of the European Communities 10. 12.81 
4.3. Competition policy and aids 5. Business practices 
The ban on aids laid down in principle by Article 
92 (1) must be observed, but current economic and 
social circumstances in the Community require a new 
look at the interpretation and application of this ban. 
In particular, Article 92 (3) must be applied 
consistently and with increasing stringency, account 
being taken of the purpose of aids and of specific 
national or regional circumstances. 5.1. The fragmentation and decentralization of 
productive investment, which is already under way in 
some sectors and desirable in others, together with 
the increasing rigidity of constraints and structures 
conditioning the behaviour of large firms, suggest 
that competition policy should do more to safeguard 
free access to the market, to preclude abuse and to 
further cooperation not only between small and 
medium firms, but also between the latter and large 
firms (2). 
However, since many factors are involved, it would 
be helpful if the Member States and firms received 
regular, detailed updates on the Treaty-compatibility 
criteria adopted by the Commission in the light of 
changing general and sectoral circumstances in the 
Community economy. Rather than encouraging 
applications for State aid, fuller disclosure of 
compatibility criteria could preclude concealed aid 
schemes and help to ensure that aids are consistent 
with Treaty aims at all levels (national and local) ('). The Commission has already moved in this direction 
by eliminating a number of technical, administrative 
and legislative barriers and by encouraging 
cooperation between, in particular, small and medium 
firms. The small/medium business sector is more 
flexible than the large business sector, and adapts 
more readily to changing market requirements and to 
the many variables of risk and innovation. 
In addition to straightforward aids, which are direct 
and declared, there is also the problem of partial or 
full reimbursement of capital expenditure undertaken 
by private-sector firms for a variety of purposes, 
including R&D. The large number of small and medium firms, their 
geographical dispersion and the enterprising spirit of 
their managers are likely to stimulate competition and 
give consumers (particularly specific categories of 
consumers) possibilities of a wide choice and easy 
availability of supplies. 
Community industry cannot overcome the present 
recession unless it sharpens its competitiveness. 
Competition policy must therefore allow adequate 
support for R&D, especially to enable Community 
firms to compete on equal terms with their rivals in 
non-member countries, some of whom have specific 
incentives for R&D. 
Conditions conducive to stepping up competitiveness 
can be achieved in this way. 
Here again, there should always be a proper flow of 
information, and it should be possible to demand 
equally detailed particulars of special relations 
between private-sector firms and banks or financial 
consortia with public backing. However, though it should be possible to upgrade the 
role of the small/medium business sector, by 
providing appropriate support and incentives, this 
should be done without impairing free competition. 
While their size makes it easier for SMEs to adapt 
rapidly and relatively cheaply to changing market 
needs, it also makes them more vulnerable in respect 
of access to the capital market, supplies and any 
unfair economic and trade practices. It is therefore 
necessary, in the interests of maintaining an 
undistorted and workable competition system, to 
protect SMEs against such practices through adequate 
legislative and administrative measures as well as 
through legal means. At the same time the notion of 
'sectoral markets concerned' should be made to work 
more to the advantage of SMEs when evaluating the 
competitive position of bigger firms. 
(') OJ No C 160, 30. 6. 1980, pp. 20—21 (Written Question 
No 1695/79, third paragraph of answer). (2) Opinion of the Economic and Social Committee on the 
report on certain structural aspects of growth (OJ No 
C 146, 16. 6. 1980, point 2.4.3.3.). 
10. 12.81 Official Journal of the European Communities No C 322/11 
As a result of increasing difficulties in adjusting to 
changing conditions of competition, both in and 
outside the Community, it will be necessary for large 
firms to make considerable efforts to reorganize their 
structures and production and to adopt a new 
strategy on vertical and horizontal cooperation for 
the purpose of cutting back expenditure and 
achieving optimum efficiency; however, one must not 
ignore the need for effective controls, given the 
dangers that can result from productive or financial 
mergers. 
5.2. There are, however, still many legislative and 
tax obstacles to the most efficient forms of inter-firm 
cooperation in the fields of both R&D and services. 
5.3. The Draft Regulation on the 'exemption by 
category' of patent licence agreements should further 
simplify the application of Article 85 (3). It should 
ensure greater legal clarity and certainty and should 
create a more favourable climate for R&D and the 
transfer of technologies (J). 
Far from discouraging firms from concluding licence 
agreements, the new Regulation should ensure that 
'patents' and 'industrial property' are harnessed to 
competition and to technological and economic 
advance. 
All firms irrespective of their size, should be able to 
participate in the exchange of technology and know-
how. A more active licence market, within a system 
that adequately protects property rights, is — 
together with appropriate research incentives — a 
sina qua non for faster innovation. 
5.4. In the distribution sector, competition policy 
should put particular emphasis on the primary need to 
rationalize channels and methods and preclude abuses 
that could inflate retail prices. 
When exclusive dealing arrangements and selective 
distribution systems are being considered, due weight 
should be given to their constructive contribution in 
(') Draft Commission Regulation on the application of 
Article 85 (3) of the Treaty to certain categories of 
patent licensing agreements (OJ No C 58, 3. 3. 1979, 
p. 12). sectors where there are objective reasons for a high-
grade, well-organized distribution system linked inter 
alia to the nature of the product (2) and the 
responsibilities of the producer. 
The variety of types of marketing, and the continued 
existence of the small/medium business sector, must 
be safeguarded. 
5.5. In connection with the restructuring of 
individual sectors and firms, the present economic 
situation in the Community is such that the waivers 
provided for in Article 85 (3) should, until a satis­
factory balance has been restored, be applied to 
partial agreements (even between business rivals) 
designed to enhance the participants' competitiveness 
and especially their ability to compete with non-
Community firms (3). 
Close monitoring will be necessary at all times to 
prevent abuses of dominant positions. 
5.6. With regard to business mergers, one must 
remember that if legal instruments lack the requisite 
flexibility and phasing in both conception and 
implementation, their practical impact will vary from 
Member State to Member State. 
In particular one should remember that market and 
productive-capacity structures, and hence the levels of 
mergers, differ from Member State to Member State 
for historical, economic and social reasons. 
Business mergers should be vetted, though many 
cyclical and structural factors, including at the present 
time employment difficulties, militate in favour of 
policies free of legal and other rigidities (4) (5). 
The Draft Regulation currently being examined by 
the Council might be a satisfactory frame of reference 
(2) Reports of cases before the Court of Justice, 1977, 
p. 1903. 
(') European Parliament resolution on the European 
automobile industry, point 2, (OJ No C 28, 9. 2. 1981, 
p. 21, point 24). 
(4) OJ No C 192, 10. 8. 1978, p. 21 (Written Question No 
210/78, points 1 and 2 of the reply). 
(s) Opinion of the ESC on the proposal for a Council Regu­
lation on the control of concentrations. Point I 
'fundamental principles' (OJ No C 88, 26. 7. 1974, 
p. 20). 
No C 322/12 Official Journal of the European Communities 10. 12.81 
in so far as it takes realistic account of the many and 
varied aspects of the problem (1). 
5.7. The consultation and approval procedures for 
the company law directives which are still in the 
pipeline should be speeded up. However, it would be 
wrong to try to resolve all the problems at one go (2) 
(')• 
Inter alia, the Commission should stress the 
importance of adopting the Draft Regulation on the 
creation of a European Cooperation Group, which in 
many instances would be a useful legal vehicle. 
5.8. The procedures for applying competition rules 
to firms, and the time they take to complete, have a 
direct impact on costs, because they protract legal 
uncertainty and are detrimental to the interests of the 
parties. 
A speeding-up of procedures could help to reduce 
this uncertainty, though accurate analysis and optimal 
decision-making remain as essential as ever. 
The overall legal framework should be reformed by 
providing for better access to files, more respect for 
information, the confidential nature of certain 
documents, appropriate delays for reply, oral 
evidence, greater precision of complaints and 
provision of fuller information and reasons for 
decisions (4) (5). 
Thought should also be given to ways of ensuring 
more objective decision-making and information in 
matters where no formal decisions have been taken. 
5.9. Keeping tabs on the fairness of company 
advertising is also a valid instrument of competition 
policy. (6). 
(') OJ No C 282, 12. 11. 1979, pp. 5—6 (Written Question 
No 225/79). 
(2) Proposal for a fifth Directive on the management 
structure of limited liability companies (OJ No C 131, 
13. 12. 1972, p. 49). 
(') Amended proposal for a seventh Directive on group 
accounts (OJ No C 14, 17. 1. 1979, p. 2). 
(4) Reports of cases before the Court of Justice, 1979, 
p. 462. 
(s) European Parliament resolution on the eighth Commis­
sion report on competition policy (OJ No C 85, 
8. 4. 1980, point 20, p. 43). 
(') Proposal for a Council Directive on the approximation 
of the laws, regulations and administrative provisions of 
the Member States on misleading and unfair advertising 
(OJNoC 70,21. 3. 1978, p. 4). 5.10. The Court of Justice has in various rulings 
confirmed that the prohibitions set out in Articles 85 
and 86 are directly applicable in national provisions; 
by now there is more or less general agreement on 
the principle that Community law takes precedence 
over national law. 
Although growing harmonization between national 
and Community law diminishes the theoretical risk of 
conflict, national laws (even if not developed to the 
same degree in each Member State) should provide 
the necessary back-up via a decentralized and 
effective competition policy which does not exclude 
close cooperation between the Member States. 
6. Consumer protection 
Competition policy is complementary to, and closely 
linked with, a Community policy on consumer 
protection (7). 
Information and market transparency generally, are 
essential if consumers — and firms — are to be able 
to make the proper choice. However, information 
should not be provided exclusively by suppliers; the 
consumer must be able to evaluate alternatives within 
the framework of a system which is more rational and 
balanced than the present one. 
It is particularly important to supply information on 
prices since these are the consumer's main indicator 
of rising inflation. 
However, competition policy alone cannot be 
expected to create the prerequisite for achieving 
uniform or equivalent prices for comparable and rival 
products within the market (8). 
Tax structures vary, widely and so do the production 
situations of individual firms, distribution arrange­
ments, and sales policies f). 
However, those responsible for competition policy, 
especially where inexplicably large differences are 
found to exist, should keep prices under close review. 
Price differences are not in themselves proof of such 
O OJ No C 198, 4. 8. 1980, p. 75, (Written Question No 
434/80, first sentence of answer). 
(*) OJ No C 214, 27. 8. 1979, (Written Question No 
194/79, point 1 of answer). 
(') OJ No C 214, 27. 8. 1979, (Written Question No 
194/79, point 2 of answer). 
10. 12. 81 Official Journal of the 
malpractices, nor do they necessarily indicate that 
barriers to trade continue to exist or that markets 
have not been integrated. 
7. Conditions for the development of a competition 
policy 
In an 'open' competition situation, like that in the 
Community, it is necessary to pursue an 'open' 
competition policy, that is to say a flexible, overall, 
realistic and dynamic policy that takes account of 
changing social and economic circumstances in the 
Community, of international trade patterns, and of 
economic and production trends outside the EEC that 
influence the Community's relations with the rest of 
the world. 
However, it is hardly posible to claim the benefits of 
free trade, and thus of healthy and effective 
competition, without accepting the constraints, 
ranging from fair pricing and advertising to 
abstention from agreements and abusive practices 
which violate the principles of non-distorted 
competition or the specific anti-trust rules of the 
Community, individual Member States and regional 
areas (1). 
Monitoring, therefore, though not an end in itself, is 
essential. 
Done at Brussels, 30 April 1981. ropean Communities No C 322/13 
A Community competition policy must also safeguard 
effective competition between products and services 
within the common market. But, particularly in 
relations with the rest of the world, it must also 
preclude abnormal competition, dumping, 
malpractices, concealed protectionist retaliation and 
any distortion of the terms of competition. 
At international level, steps should be taken to ensure 
that anti-trust rules in non-EEC countries do not 
distort competition. Cooperation between the 
Member States would be helpful here. 
Generally speaking, an intelligent Community policy 
— based on a close and continuing review of changes 
in the international division of labour and resources 
— can do much to contain inflationary pressures and 
high unemployment, and leave adequate room for 
competition and collaboration between firms both in 
and outside the Community. 
With this end in mind, effective coordination of the 
different Community policies must be a priority to 
ensure compliance with the aims of the Treaty and 
mutual consistency; national sectoral policies should 
show similar convergence and compatibility (2). 
Finally, the Commission's resources should be 
boosted so as to improve the efficiency of its services. 
The Commission will then be able to play to the full 
its vital, unique role in the construction of a forward-
looking Europe. 
The Chairman 
of the 
Economic and Social Committee 
Tomas ROSEINGRAVE 
(l) Opinion of the ESC on the report on certain structural 
aspects of growth, point 2.2.2.1. (OJ No C 146, 16. 6. 
1980, p. 11). (2) European Parliament resolution on the seventh 
Commission report on competition policy (OJ No 
C 261, 6. 11. 1978, p. 50, point 20).