A4-0327/95

Resolution on the 24th Report of the Commission on competition policy - 1994

The European Parliament,

- having regard to the 24th Report of the Commission on competition policy (COM(95)0142 - C4-0165/95),

- having regard to the Commission's response to Parliament's resolution of 16 March 1995 on the 23rd report ((OJ C 89, 10.4.1995, p. 146.)),

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinions of the Committee on Legal Affairs and Citizens' Rights and the Committee on External Economic Relations (A4-0327/95),

A. whereas the continuing liberalization of trade in goods and services through the implementation of the results of the Uruguay Round is giving international firms ever greater scope for their activities worldwide,

B. whereas the pursuit of free and fair competition by means of a set of rules is one of the cornerstones of the single market project and indeed of European integration,

C. whereas the aims of competition policy must be to promote the efficiency and competitiveness of production and distribution, thus contributing to the creation of employment, whilst protecting the interests of all those involved in the production and distribution processes (owners and employees, consumers, and the environment),

1. Welcomes this 24th report of the Commission on competition policy and the essentially sound implementation of the Community's competition rules to which it bears witness, and also the separate booklet which summarizes the year's decisions and developments in an easily digestible form;

2. Welcomes the significant reduction in the number of Article 85 and 86 cases pending compared to 1993 as well as the Commission's vigorous action against certain large cartels in key economic sectors;

3. Notes the growing complexity of the Commission's task given the explosive development in the number of strategic agreements and the difficulties in weighing up their positive aspects against the need to preserve free competition;

4. Notes also the considerable increase in the number of notifications of concentrations, including the increase in the number of cases subject to more in-depth examination;

The competition authority

5. Expresses its concern at the large backlog of unpublished decisions at DGIV, due, apparently, in part to translation delays; calls for the allocation of greater resources to the DG and for attention to be given to the improvement of the structure of the organization and to access to information technologies; praises, however, the speed and efficiency with which particularly the Merger Task Force hands down its decisions;

6. Strongly regrets the division of competences between the Directorates General of the Commission which means that certain state aid cases are screened by DG's other than DGIV, and proposes that all cases of state aid be dealt with by DGIV so that it can truly become the European Union's competition authority;

Transparency and subsidiarity

7. Regards openness and transparency as being of vital importance for the public acceptance of competition policy; welcomes in this connection the Commission's initiative in having the Directorate-General for Competition publish a regular newsletter about competition files in progress but invites the Directorate-General for Competition to improve the information further, in particular about state aid cases;

8. Considers that small and medium-sized enterprises frequently lack information, and have difficulty obtaining information, about decisions of relevance to them, and proposes a form of DGIV hotline which SMEs could ring to obtain such relevant information;

9. Endorses the attempts to promote the decentralization of the application of competition rules as long as the essential balance between subsidiarity and the need for a 'level playing field¨ is ensured; warns however strongly against any trend towards renationalization of competition policy;

10. Calls for a strengthening of the democratic control of competition policy in the European Union, and for this purpose requests that the Member of the European Commission responsible for competition come personally to inform Parliament's Committee on Economic and Monetary Affairs and Industrial Policy of the latest decisions and developments in the sphere of competition policy; this information should be given on a regular basis and at a rhythm to be defined in common agreement with the Committee concerned;

11. Intends to consider the evolution of competition policy once a year, and in particular on the occasion of the debate on the Annual report on competition policy presented by the Commission, and to express its political assessment in this respect in the plenary session;

12. Calls on the Commission to produce an Annual Report on Industrial Policy to be viewed in conjunction with the Annual Reports on Competition Policy and the Single Market;

13. Calls for greater efforts to be made, within the framework of the Annual Report, to assess the impact of competition policy on other policy areas, in particular social, regional and environmental policy;

The challenges facing competition policy

14. Considers that Economic and Monetary Union will create a completely new competitive environment where devaluation will no longer exist as an instrument of economic policy; requests the Commission to ensure that state aid is not seen as an alternative to devaluation as a means of favouring chosen industries or sectors and that, on the contrary, budgetary constraints will be seen to limit Member States' scope to grant state aid;

15. Recalls that the White Paper on Growth, Competitiveness and Employment emphasized the important role that competition policy has to play for industrial restructuring and urges that competition cases before the Commission that would have the effect of creating employment be considered in that light;

16. Believes that the Commission could look more favourably on agreements between undertakings within markets, such as telecommunications and information technology, which face liberalisation and globalisation, and on agreements which can substantially improve enterprises' research and development effort;

17. Calls for a thorough review of Implementing Regulation (EEC) 17/62 ((OJ 13, 21.2.1962, p. 204.)) for Articles 85 and 86 and proposes in this connection that the Commission take a more accommodating attitude to vertical agreements within sectors, which are usually more transparent than horizontal agreements and are certain to become more common with the completion of the single market;

18. Calls again for progress to be made on reducing the turnover thresholds above which a concentration operation can be deemed to be of Community dimension, noting that the advanced state of integration of the single market requires lower thresholds;

19. Welcomes the creation of a specialised cartel unit within DG IV of the Commission whose sole task will be the detection of cartels and the preparation of decisions leading to their prohibition and fining;

20. Welcomes the steps already undertaken to introduce competition to sectors which have hitherto been protected by national governments, calls for this process to be continued, but recalls the need to have a regulatory framework safeguarding public interests and to observe in the sectors of telecommunications and energy the principles of universality, continuity and transparency which are fundamental to the notion of the public provision of services;

21. Calls on the Commission to develop proposals on the definition and financing of public services and calls for the inclusion of a definition of public services in the Treaty during the 1996 IGC;

22. Opposes the use of Article 90(3) of the Treaty when the Commission has issued a directive without democratic oversight by the European Parliament;

23. Calls for competition policy to make appropriate allowance for the process of structural change in the public services sector, taking into account the principles which characterize the notion of public service;

24. Points out that competition policy must go hand in hand with implementation of an effective policy for financing and precisely defining a universal service in those sectors which provide certain services for all European citizens, regardless of their place of residence or their social situation, and calls for the application of Article 90(3) to be suspended in this area;

25. Calls upon the Commission to integrate into the application of competition law other policy areas, such as the development of the internal market and economic growth, employment, and the international competitivity of the European Union;

26. Regrets that to date no review of the merger control regulation has taken place and calls for such a review to be carried out immediately;

27. Calls upon the Commission to apply rigorously the rules concerning the granting of state aids, while reconciling their application with the principles of economic and social cohesion and with the protection of Community interests in its regional policy;

28. Calls on the Commission to open up fully the telecommunications and postal sectors to competition, while still ensuring that consumers in all parts of the Community continue to enjoy an efficient service;

29. Recognizes that while the application of competition rules to public services should be under constant review, the same level of service which the citizens of the Union have the right to expect must be maintained;

30. Calls on the Commission to cooperate closely with the national authorities of the Member States and with other bodies such as the US authorities and the World Trade Organization in developing a worldwide framework for sustainable development and fair competition, while at the same time fulfilling its obligation to look after the Community's own competition policy interests at international level;

The Link between Competition Policy, Competitiveness and Employment

31. Notes that, while the Single Market formula - removal of trade barriers between Member States, combined with a strong competition policy - has brought considerable gains, it has not solved Europe's underlying problems of lack of competitiveness and structural unemployment;

32. Calls therefore for a detailed study to be carried out as to the links between competition policy, competitiveness and employment;

33. Calls on the Commission - using all available Treaty instruments - to put in place an active industrial policy so as to ensure a balanced mix of policies at EU level;

34. Welcomes the recognition contained in the Annual Report that, with increasing globalisation, definitions of relevant markets or actual or potential competitors should take account of third countries;

35. Welcomes too the Commission's favourable attitude to forms of cooperation which strengthen efficiency and hence the competitiveness of the firms involved;

36. Welcomes attempts to encourage technology transfers by simplifying the legal framework for patent and know-how licensing agreements;

37. Calls for greater clarification concerning the scope for cooperation between SMEs within the framework of competition policy;

State aid

38. Is particularly alarmed at the level of aid granted to European airlines and calls for strict enforcement of the 'one time, last time' principle;

39. Insists however that state aids granted for the conversion of industries hit by structural change and transitional aids for the workforce affected remain possible;

40. Agrees that state aids should not be granted solely to defend national interests but also to further Community interests, and believes that the locus for effective intervention has to some extent shifted to the European level;

41. Considers that firms have a fundamental right to defend themselves against arbitrary incursions by the state which can void property rights through distortions of competition. The rights of third parties should be enhanced to create a new culture based on:

- the right to information,

- the right to be heard,

- the right to comment before decisions are taken,

- a right to redress for legal aid;

42. Welcomes the Commission's recognition that aid to research and development and SMEs cannot be reduced, and calls for clarification concerning aid to employment, particularly given the active labour market policies advocated by the White Paper on Growth, Competitiveness and Employment;

43. Emphasizes that acquisitions and mergers can have serious implications for those working in the companies concerned, and calls for a reformulation of competition policy to take social factors into account;

44. Notes that the recently adopted Council Directive 94/45/EC on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees ((OJ L 254, 30.9.1994, p. 64.)) demonstrates the Commission's determination to protect the right of workers to independent representation within EU companies which cross national borders;

45. Calls on the Commission to take all possible steps to ensure that this basic democratic principle is also respected in cases where mergers or alliances occur between EU companies and companies outside the EU;

International aspects

46. Welcomes the Commission's efforts to introduce rules for the conduct of competition at international level, and considers the new cooperation agreement between the European Union and the United States, as well as the OECD agreement on support for shipyards, to be important steps in the direction of closer international cooperation;

47. Points out that the continuing liberalization of trade in goods and services will only benefit society as a whole, and consumers in particular, if at the same time uniform and binding rules governing business activities are established at international level;

48. Calls, therefore, for the prompt opening of negotiations under the aegis of the World Trade Organization (WTO) with the aim of incorporating minimum competition and social and environmental protection standards in the multilateral world trading system;

49. Calls on the Commission to submit to the Council a corresponding draft negotiating mandate;

50. Regards a ban on anti-competition agreements between firms (cartels), controls on transfrontier mergers and a code of conduct governing state aid as the key components of an international system of competition rules, with particular regard to the WTO's planned transitional periods and exemptions for developing countries;

51. Draws attention, in particular, to the importance of the exchange of confidential information between the competition authorities of the EU and of third countries as a sine qua non for the effective implementation of competition rules;

52. Acknowledges that the existing bilateral cooperation agreements between the EU and a large number of third countries in the sphere of competition policy make a valuable contribution to improving international competition; is convinced, however, that this network of bilateral agreements is no substitute for multilateral rules on competition;

53. Is convinced that a multilateral agreement will help to ensure that less frequent use is made of safeguards such as anti-dumping measures;

54. Stresses that the moves to liberalize direct international investments make the need for uniform competition rules all the more urgent and draws attention, in this connection, to the obligation for the WTO member states to consider incorporating provisions on competition into the agreement on trade-related investment measures when that agreement is revised;

55. Points out that the loosening of trade relations with the countries of central and eastern Europe will require the careful coordination of competition rules between the European Union and the countries concerned in order that enterprises in the European Union are not faced with unfair competition from businesses in countries with less rigorous competition regimes;

56. Stresses that the completion of the Union's internal market without frontiers has removed virtually all scope for long transitional periods and derogations to be granted to the countries of central and eastern Europe to allow their early accession, and insists that these countries must first comply with all Internal Market legislation, including the rules on competition, to avoid undermining the Union's own foundations;

57. Agrees that a new set of competition rules is required at international level and that these should aim at removing private sector obstacles to trade as well as public sector obstacles; stresses that such international competition rules should be designed to take account of social and environmental factors;

58. Instructs its President to forward this resolution to the Commission and the Council, the appropriate authorities in the Member States and the EFTA countries and the governments and parliaments of the Member States and EFTA countries.