No C 71/22 Official Journal of the European Communities 20. 3. 89 
Opinion on the 17th Report on Competition Policy 
(89/C 71/07) 
On 25 May 1988 the Commission decided to consult the Economic and Social Committee, 
under Article 198 of the Treaty establishing the European Economic Community, on the 
17th Report on Competition Policy. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing 
the Committee's work on the subject, adopted its Opinion on 4 January 1989. The rapporteur 
was Mr Ramaekers. 
The Section for Regional Development and Town and Country Planning, which was respon­
sible for drawing up a Supplementary Opinion, adopted its Opinion on 19 July 1988. The 
rapporteur was Mr Broicher. 
At its 262nd plenary session (meeting of 26 January 1989) the Economic and Social Committee 
adopted the following Opinion by 40 votes in favour, with 6 abstentions. 
1. Introduction 
1.1. In the introduction to its 17th Report on Compe­
tition Policy, covering events in 1987, the Commission 
states that(!): 
'The completion of the wider internal market means 
that the Commission must define a competition 
policy allowing both companies and consumers to 
draw maximum benefit from that achievement.' 
1.2. The Committee considers that the competition 
policy pursued by the Commission should be a fully-
fledged instrument of the Community's economic and 
social policy. With the single market now on the hor­
izon, the concepts and aims of competition policy 
should be clearly spelled out in order to define effective­
ly its contribution as part of a broader policy and ensure 
that henceforth it has the full backing of the Member 
States. 
Furthermore, the Committee finds that the 17th Report 
on Competition Policy is an excellent pointer to the 
Commission's philosophy, and it would therefore take 
this opportunity to make a number of comments on 
competition policy, taking as its starting point the Com­
mission's announcement that it intends to define a 
genuine competition policy (!), and the importance, 
from the democratic point of view, of formulating 
such a policy, given the socio-economic and political 
decisions to be taken into consideration. 
2. General comments 
2.1. The Committee considers that competition pol­
icy forms an important link between industry, workers 
and consumers. Continuity and predictability are par­
ticularly important factors in the administration of 
competition policy. 
(') Commission of the European Communities, 17th Report on 
Competition Policy, p. 14. 2.1.1. Moreover it is essential that the Community 
market, and more particularly the single market of 
1992, should remain an open market and that there 
should be free operation of competition, not just 
between Community firms but also between Com­
munity firms and third-country firms, provided the 
latter observe the General Agreement on Tariffs and 
Trade (GATT) rules. In this connection the Committee 
thinks that greater 'reciprocity' in trade should prefer­
ably be seen in terms of equivalent, rather than ident­
ical, reciprocal constraints and that at all events the 
Community must avoid being overly cautious in its 
external trade policy. 
Furthermore, the Committee can only express deep 
disappointment at the results of the Montreal GATT 
Conference, as this is liable to prejudice the outcome 
of the Geneva negotiations and thereby adversely affect 
the development of competition and coordination of 
the process of expanding world trade. 
2.1.2. Completion of the internal market also pre­
supposes an improvement in working conditions in the 
Community on the basis of a social policy that precludes 
unfair competition in this area. 
2.1.3. The Committee would also observe that in 
each Opinion issued in recent years (2) it has stressed 
the need to adopt the Regulation on the control of 
concentrations at Community level (16th Report, para­
graphs 38 and 39). in this context, merger policy is 
crucial if we want to maintain a competitive structure 
for our industry' (17th Report, BI, 5.1). The Committee 
reiterates its point of view and deplores the fact that 
the Regulation in question has not been adopted by the 
Council. 
(2) Committee Opinions on the 16th Report on Competition 
Policy (OJ No C 35, 8.2.1988) and on the amended proposal 
for a Council regulation on the control of concentrations (OJ 
No C 208, 8.8.1988). 
20. 3. 89 Official Journal of the European Communities No C 71/23 
2.2. Whilst the competition policy pursued by the 
Commission has indeed changed significantly in recent 
years, becoming in effect more interventionist, the Com­
mission itself admits that 'much remains to be done in 
this field'I1). 
Although it appreciates that—particularly in the 
absence of a regulation on concentrations—competition 
policy is based to a certain extent on decisions handed 
down by the Court of Justice in specific cases, interpre­
ting Articles 85 and 86 of the Treaty in particular, the 
Committee is of the view that a similar approach is 
sometimes adopted in the planning of objectives. The 
Committee acknowledges the progress made by the 
Commission and more particularly DG IV in recent 
years, but nevertheless feels that better results could be 
achieved if these objectives were part of a more precise 
policy previously expounded and ratified by the other 
Community authorities, in the interests of transparency 
and legal certainty. 
2.3. This lack of precision in implementing a genuine 
competition policy is to a certain degree visible in the 
differences in the price of a given good or service from 
one Member State to another. The Commission itself 
makes the point that price differences are 'a particularly 
useful indicator' for assessing the economic efficiency 
of competition policy (2). Looking at the findings of 
the survey of the Statistical Office of the European 
Communities (EUROSTAT) based on a harmonized 
classification of patterns of consumption (purchasing 
power parities), one is struck by the fact that the 
sizeable price differential which existed in 1975 (exclud­
ing taxes and all taxes included) had narrowed only 
very slightly ten years later (3). 
2.4. It is also worrying that in some sectors where, 
in the Commission's own view, the formal obstacles to 
intra-Community trade are more marginal, i.e. closer 
to the ideal situation in 1992, the effects of increased 
competition have still not manifested themselves. Too 
often price variations for a given product sold on differ­
ent national markets indicate that trading practices 
have led to a significant degree of market segmentation, 
which is incompatible with healthy and genuinely Com­
munity-wide competition. 
2.5. So far indirect taxes (VAT and excise duties), 
which vary from one country to another for the same 
categories of products, have obviously contributed to 
some extent to sizeable price disparities. Surveys (4) 
have nevertheless shown that tax differences account 
(') Commission of the European Communities, 17th Report on 
Competition Policy, p. 13. 
(') European Economy, No 35, March 1988, The Economics of 
1992, p. 118. 
(•') Idem, p. 119. 
(4) Idem, p. 121. for only a quarter, or thereabouts, of the price disper­
sion. The remaining three-quarters stem from factors 
largely related to the competition situation (mergers, 
market access, etc.). 
2.6. Whilst it is aware of the difficulty of calculating 
the 'natural' price dispersion within a fully integrated 
Community, the Committee would draw attention to 
one of the conclusions arrived at by the Cecchini Report 
on the basis of the price variations between one Member 
State and the Community average for a sample of 
consumer durables (5). The price dispersion is in fact 
twice as great in the Community as a whole as in a 
single Member State, proof that there is considerable 
scope for improving the allocation of Community 
resources. 
In the light of the above, it is reasonable to assume that 
even after the removal of the main non-tariff barriers, 
a number of factors will perpetuate price variations 
amongst the Member States. 
The Committee therefore thinks that the Commission 
should now embark on a political and media campaign 
(on the same scale as that devoted to the completion 
of the internal market) with the aim of clearly and 
accurately defining the basic concepts of competition 
policy so that the benefits anticipated for companies, 
workers and consumers alike can be achieved. 
2.7. The Commission appears so far to have some­
what overlooked the fact that these two perspectives 
are complementary. If its basic principles are too 
removed from the everyday concepts of the people of 
Europe, competition policy will lose all credibility as 
regards its ability to play a role in the creation of a 
genuine internal market. 
3. Specific comments 
3.1. In order to accomplish these admittedly difficult 
tasks, the Commission should as far as possible equip 
itself with the means to monitor structural trends in 
the main sectors of the economy, both European and 
international. 
3.2. Only by keeping abreast of the fluid and com­
plex state of an economy which is becoming increasing­
ly international and is undergoing constant restructur­
ing will the Commission be in a position to apply a 
competition policy in a more appropriate and system­
atic way. 
3.3.1. In particular, it is necessary to define in 
advance, sector by sector, the criteria that will make it 
possible to identify better the threshold above which 
(5) Idem, p. 122. 
No C 71/24 Official Journal of the European Communities 20. 3. 89 
economic power is excessive in respect of both the 
internal and the world markets (the scale effects will 
not necessarily be the same) (1). 
3.3.2. Furthermore, if, in order to be able to compete 
internationally, the Community has to permit the for­
mation of groups that are liable to affect internal com­
petition because of their strength, this should be above 
board so as to enable the relevant Community insti­
tutions to play their role. 
3.3.3. The Committee would also like the Com­
mission to draw all the appropriate conclusions from 
the Court of Justice's decision to the effect that agree­
ments between third-country firms are covered by the 
competition rules insofar as they are liable to have 
repercussions on the common market. 
3.4. The Committee notes that the work on a guide 
to the application of EC competition rules by the 
national courts is nearing completion. 
It urges the Commission to put forward, on the basis 
of this work, specific measures aimed at improving and 
aligning existing procedures for the application of EC 
competition rules by the national courts. 
3.5. The development of the common agricultural 
policy (CAP) is causing the Community to modify 
considerably its position regarding aids, particularly 
through the introduction of income support. This devel­
opment will affect the conditions of competition, and 
the Committee would like information on this subject 
to be given in the 18th Report on Competition Policy. 
3.6. It will be possible to establish a framework for 
State aid and set limits to it where account has to be 
taken of the difficulties facing firms, sectors or regions. 
Here too, the interests of economic and social groups 
should be weighed up in the open in line with criteria 
which need not necessarily be the same for each sector 
and region. 
3.6.1. Although the Commission's approach to 
regional aid is developing along favourable lines, it 
should take account of the legitimate ties of solidarity 
(*) See ESC Opinion on the amended proposal for a Council 
Regulation on the control of concentrations (OJ No C 208, 
8. 8. 1988). which have been forged. The Committee welcomes the 
fact that the Commission has adopted a criterion (per 
capita gross domestic product (GDP) less than 75% 
of the Community average) for defining regions in 
need of intensive regional policy support under 
Article 92(3) (a) of the EEC Treaty. 
3.6.2. As the situations diverge widely, the above-
mentioned criteria should be appropriate and not of a 
blanket nature, and should be applied in consultation 
with all the interested parties. The economically 
stronger Member States will welcome the fact that the 
Court of Justice's decision allows them to grant an 
appropriate degree of regional aid. This is the only way 
to ensure that Member States can exercise their right 
to develop their disadvantaged regions and can justify 
this action vis-a-vis their citizens. Community efforts, 
which are concentrated on the economically weakest 
regions, must not of course be thwarted by this action. 
3.6.3. It cannot be in the interests of efficient regional 
development for the Commission to treat all investment 
equally. If deprived regions need labour-intensive 
investment (i.e. investment which will preserve existing 
jobs and create new ones), then the permitted aid per­
centage should be determined primarily by the employ­
ment impact of the investment. This is the only way 
that hitherto poorly developed rural regions will have 
a chance to catch up in the long term. 
3.7. At all events permanent monitoring will be 
required to ensure that market forces operate with due 
regard for the interests of consumers and the socio­
economic interest groups. 
3.7.1. The Committee accordingly considers that if 
in the interests of greater effectiveness the Commission 
wishes to have more preventive action in this area, it 
should improve price surveys and increase their number. 
Excessive price variations for a given product are the 
most meaningful and rapid indicator of a deficiency in 
competition at some stage in the economic process. 
3.7.2. The Committee stresses the importance of a 
dialogue with the relevant firms and sectors on the 
interpretation of these price surveys with a view to 
submitting reasoned opinions to the authorities respon­
sible for implementing competition policy. 
3.8. Between now and 1992, the prices of everyday 
consumer goods and services will warrant special atten­
tion. Statements and policies relating to the creation of 
20. 3. 89 Official Journal of the European Communities No C 71/25 
a single market will ring hollow if price disparities are by its impact on everyday realities as experienced by 
too great. The common market will inevitably be judged consumers, workers and companies in the Community. 
Done at Brussels, 26 January 1989. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
Opinion on the proposals for a Council Decision extending the collection of information 
concerning the activities of carriers participating in cargo liner traffic in certain areas of 
operation and for a Council Decision amending Decision 78/774/EEC concerning the activities 
of certain third countries in the field of cargo shipping 
(89/C 71/08) 
On 23 December 1988, the Council decided to consult the Economic and Social Committee, 
under Article 84(2) of the Treaty establishing the European Economic Community on the 
abovementioned proposal. 
The Section for Transport and Communications, which was responsible for preparing the 
Committee's work on the subject, adopted its Opinion on 11 January 1989. The rapporteur 
was Mr Whitworth. 
At its 262nd plenary session (meeting of 25 January 1989) the Economic and Social Committee 
unanimously adopted the following Opinion. 
1. Introduction 
1.1. Council Decision 78/774/EEC (*) of 19 Septemb­
er 1978 based on Article 84(2) of the EEC Treaty, 
established a monitoring system under which all Mem­
ber States could collect information on the activities of 
the merchant fleets of third countries whose practices 
were considered detrimental to the shipping interests 
of Member States. The Decision provided for the 
Council to determine at a future date to which third 
countries' fleets the information system should be joint­
ly applied, and what kind of information should be 
collected. 
1.2. On 19 December 1978 the Council adopted the 
Decision on the collection of information concerning 
the activities of carriers participating in cargo liner 
traffic in certain areas of operation (79/4/EEC) (2). This 
(') OJ No L 285, 21. 9. 1978, p. 35. 
(2) OJ No L 5, 9. 1. 1979, p. 31. Decision was an implementing measure applying the 
monitoring to the activities of carriers participating in 
liner trades between the Community and East Africa 
and Central America. The need for the establishment 
and implementation of the scheme was fully endorsed 
by the Committee at the time (3) (4) and indeed followed 
the production of an earlier own-initiative Opinion 
on transport problems in relation with Eastern Bloc 
countries (5). 
(') OJ No C 269, 12. 11. 1978, p. 56. 
(4) OJ No C 105, 26. 4. 1979, p. 21. 
(5) OJ No C 59, 8. 3. 1978, p. 10.