26. 7. 74 Official  Journal  of the European  Communities No C 88/19 
Deleted  text  relating  to the 12th  and  13th  paragraphs  of the  Chapter  'Comments  on the Com-
mission  proposals': 
'However,  the  Committee  notes  that  in 1973  costs  increases  were  exceptionally  high  by 
comparison  with  those  of previous  years.  Therefore,  by scrupulously  applying  the Commis-
sion's  calculation  method,  but  using  a more  recent  reference  period,  a quite  different  result 
would  be obtained.  By way  of illustration,  on the basis  of cost  increases  in 1973,  and  taking 
account  of the productivity  factor,  agricultural  prices  would  have  to rise  more  than  12 % to 
achieve  the Commission's  objective.' 
Outcome  of the voting: 
A large  majority  voted  for deletion  of the text. 
Nevertheless  the Committee  is of the opinion  that  it would  be wrong  to make  a premature  forecast 
of price  and  cost  rises  in 1974/75. 
CONSULTATION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
on a proposal  for a Council  Regulation  on the control  of concentrations  between 
undertakings 
On 20 September  1973,  the Council  decided  to exercise  its option  of consulting  the Econo-
mic and  Social  Committee  on the above  proposal  for a Regulation. 
The request  for an Opinion  was  sent  by the President  of the Council  to the Chairman  of 
the Economic  and  Social  Committee  on 24 September  1973. 
B. TEXT  WHICH  WAS  THE  SUBJECT  OF  THE  CONSULTATION 
The text  which  was  the subject  of the consultation  was  published  in the Official  Journal 
of the European  Communities  No  C 92 of 31 October  1973,  pages  1 to 7. 
C. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
At its 118th  plenary  session  held  in Brussels  on 28 February  1974,  the Committee  adopted 
its Opinion  on the text  referred  to under  B, by 74 votes  to 15, with  25 abstentions  out of 
114 members  present  or represented. 
The text  of the Opinion  is as follows: A. REQUEST  FOR  AN  OPINION 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, Having  regard  to the  decision  of the  Bureau  of the 
Economic  and  Social  Committee  on 26 September 
1973  entrusting  the Section  for Industry,  Commerce, 
Crafts  and Services  with  the preparation  of an Opinion; Having  regard  to the  request  of the  Council  of the 
European  Communities  on 24 September  1973  for 
the delivery  of an optional  Opinion  on the proposal 
for a Council  Regulation  on the  control  of con-
centrations  between  undertakings; Having  regard  to the report  prepared  by Mr Clark, 
rapporteur,  and  Mr Friedrichs,  co-rapporteur; 
Having  regard  to the  second  sentence  of the  first 
paragraph  of Article  198  of the  Treaty  establishing 
the European  Economic  Community; Having  regard  to its information  report  of 3 September 
1973  on the phenomena  of concentration  (rapporteur, 
Mr de Grave)  (Doc.  CES  773/71  fin.); 
No C 88/20 Official  Journal  of the European  Communities 26. 7. 74 
Having  regard  to the  Opinion  delivered  by  the 
Section  for Industry,  Commerce,  Crafts  and  Services 
on 6 February  1974; 
Having  regard  to the  discussions  during  its 118th 
plenary  session,  held  on 27 and  28 February  (sitting 
of 28 February); 
Considering  the  continuing  trend  towards  larger 
undertakings,  partly  through  concentrations  and  the 
effects  which  it may  have  on the degree  of competition 
in the  Community; 
Considering  the  importance  of competition  in pro-
moting  healthy  economic  growth  and  satisfaction  of 
the economic,  social  and  regional  needs  of the  popu-
lation  of the  Community; 
Considering  the  legal  and  practical  difficulties  with 
which  the  Community  institutions  are  faced,  given 
the existing  possibilities  for  intervention  under  the 
EEC  Treaty; 
Considering  the  effects  which  an additional  Com-
munity  control  system  can  have  as regards  th e 
planning  of business  strategy; 
Considering  that  the Commission  has  cited  Articles  87 
and 235  of the  EEC  Treaty  as the  basis  in law  for 
this proposed  Regulation, 
HAS  ADOPTED  THE  FOLLOWING  OPINION: 
The Committee  approves  the proposal  for a Regulation 
subject  to the following  general  and  specific  comments: 
GENERAL  COMMENTS 
I. BASIC  PRINCIPLES 
The Committee  accepts  that  it is necessary  for  the 
Community  to control  certain  concentrations  of 
enterprises  in order  to preserve  the  competitive 
system  with  the  benefits  it brings  in efficiency  and  in 
freedom  of choice.  At the  time  the Committee  recog-
nizes  that,  in some  cases  concentration  may  bring 
substantial  benefits  through  economies  of scale  and 
by rationalization  which  it may  be  necessary  to 
achieve  in order  to make  European  industries  com-
petitive  with  those  in other  major  industrialized 
countries.  The  problem  of controlling  concentration 
must  therefore  be approached  on  a 'case-by-case' 
basis  within  a framework  of general  principles  and 
having  regard  to the  economic  and  social  provisions 
of the  Treaty. II. POWERS  OF  CONTROL  OF  CONCENTRATIONS 
IN THE  COMMON  MARKET 
The present  powers  to control  concentration  are 
derived  exclusively  from  Article  86  of the  EEC 
Treaty  which  prohibits  the  abuse  of a dominant 
position.  The  Court  of Justice  has  ruled  (Judgement 
Continental  Can)  that  it cannot  be supposed  that 
Article  86 allows  undertakings  to attain,  through 
concentration,  'such  a dominant  position  that  any 
serious  competition  is practically  excluded'. 
The proposed  Regulation  would  strengthen  the 
present  powers  in two  ways: 
(i) it would  specifically  provide  that  concentrations 
which  confer  or enhance  the  power  to hinder 
effective  competition  are  incompatible  with  the 
common  market  unless  thay  are  necessary  to 
achieve  an essential  Community  objective; 
(ii) prior  notification  of intended  concentrations 
would  be required  where  large  enterprises  are 
involved  and  this  notification  would  have  a 
suspensory  effect  while  the Commission  assessed 
whether  the concentration  would  be incompatible 
with  the  common  market. 
III. THE  CRITERIA  FOR  JUDGING  WHETHER  A 
CONCENTRATION  IS  INCOMPATIBLE  WITH  THE 
COMMON  MARKET 
The Committee  agrees  with  the  Commission  that  the 
basic  criterion  for  judging  whether  a particular 
concentration  is compatible  with  the common  market 
should  be its likely  effect  on the degree  of competition 
in the  markets  for  the  goods  or services  concerned. 
However,  the  Committee  considers  that  it will  be 
necessary  to take  a broad  view  of the  competitive 
process  in judging  whether  further  concentration 
would  result  in the  acquisition  or enhancement  of 
the power  to  hinder  effective  competition.  The 
structure  of the  market  concerned  and  in particular 
the market  shares  in the hands  of the  main  suppliers 
are obviously  important.  Nevertheless,  there  are 
other  considerations  which  may  be at least  as import-
ant, such  as the  availability  of near-substitutes  for 
the product  concerned  or the  possibility  that  new 
suppliers  may  enter  the market. 
The Committee  accepts  that  exemption  should  be 
provided  for  concentrations  which,  although  they 
may have  an effect  on the  degree  of competition  in 
the sector  concerned,  are: 
26. 7. 74 Official  Journal  of the  European  Communities No C 88/21 
'indispensable  to the  attainment  of an objective 
which  is given  priority  treatment  in the  common 
interest  of the  Community.' 
Whilst  accepting  that  it is not  practicable  to specify 
in advance  the  criteria  which  will  be applied  when 
granting  such  exemptions,  the  Committee  urges  the 
Commission  to reduce  uncertainty  by amplifying  the 
Regulation  in order  to give  more  specific  guidance  to 
enterprises  which  the  Regulation  may  affect. 
IV. TIMING  OF  NOTIFICATION 
The Committee  acknowledges  that  any  system  of 
prior  notification  and  control  could  cause  delays  and 
have  other  disadvantages  for  business  enterprises. 
Uncertainty  about  whether  a proposed  merger  would 
be allowed  to proceed  would  adversely  affect  the 
efficiency  of strategic  planning,  and  the  prospect  of 
diversion  of resources  and  time  during  the period  of 
investigation  might  well  inhibit  desirable  mergers. 
The Committee  appreciates  too  the  considerable 
difficulties  in assessing  in advance  whether  a proposed 
merger  would  hinder  effective  competition. 
The Committee  believes  that  the  maintenance  of 
competition  in the  Community  is of over-riding 
importance.  It is difficult  and  may  be impossible  to 
break  up,  after  the  event,  a merger  which  may  ad-
versely  affect  competition.  The  Committee  therefore 
believes  that  the  balance  of advantage  is in favour 
of a system  of prior  notification.  It stresses,  however, 
that the Commission  must  ensure  rapid  and  adequate 
investigation  of each  case  and  thus  minimize  the 
unavoidable  period  of uncertainty. 
V. RELATIONSHIP  BETWEEN  THE  REGULATION 
AND  NATIONAL  LAWS 
The Committee  is anxious  that  the use  and  develop-
ment  of the powers  to control  mergers  under  national 
legislation  in the  Member  States  shall  not  adversely 
affect  the exercise  of the powers  which  this  Regulation 
gives  to the Commission.  To this  end,  the Regulation 
must  specifically  provide  that  only  the  Commission 
is competent  to pronounce  on the  compatibility  as 
defined  in its Article  1 (1) of concentrations  with  the 
common  market. VI. NEED  FOR  COORDINATED  ACTION 
The Committee  accepts  that  the  basic  criterion  for 
assessing  a concentration  is its likely  effect  on com-
petition.  However  there  are  other  important  factors 
to be taken  into  account.  These  include,  for example, 
the commercial  and  regional  interests  of the  Com-
munity,  the  industrial  interests  of the  Community, 
notably  the  effect  on small-  and  medium-sized  busi-
nesses,  and  the  social  interests  of the  Community, 
notably  the impact  on employment  and  the  rights  of 
workers.  The  necessary  consultation  on these  matters 
should  be carried  out. 
Consequently,  the  Committee  wishes  to stress  the 
need  for  close  liaison  and  consultation  between  the 
several  Directorates  of the  Commission  whenever  a 
concentration  is examined  under  the  terms  of this 
Regulation. 
The Committee  notes  with  satisfaction  that  the 
proposal  for  a Regulation  provides  for  conditional 
authorizations.  Enterprises  could  offer  guarantees  as 
regards  employment,  for  instance,  while  the  Com-
munity  could  offer  guarantees  under  Community 
policies. 
SPECIFIC  COMMENTS 
Recitals 
Whilst  the Committee  agrees  that  Community  control 
of certain  concentrations  is necessary  in order  to 
preserve  the  competitive  system,  it draws  attention 
to the  need  for  much  more  research  than  has  been 
carried  out  so far into  the reasons  for and  the effects 
of concentration.  Such  research  is required  in order 
to provide  the  factual  background  against  which  to 
assess  whether  particular  concentrations  are  incom-
patible  with  the common  market. 
Article  1 
1. In order  to remove  any  possibility  of doubt  about 
which  transactions  bringing  about  concentration 
would  come  within  the  scope  of the  Regulation,  it 
should  state  specifically  that  it covers  only  transactions 
No C 88/22 Official  Journal  of the European  Communities 26. 7. 74 
which  take  effect  or are intended  to take  effect  after 
the Regulation  has  entered  into  force. 
2. The  Committee  recognizes  that  there  are advan-
tages  and  disadvantages  in using  turnover  as a main 
criterion  for determining  the concentrations  to which 
the Regulation  applies.  The  main  advantages  are 
simplicity  and  the  fact  that  there  is likely  to be a 
relationship  between  turnover  and  market  power. 
The disadvantages  are that,  in many  cases,  turnover 
may include  a large  element  of trade  outside  the 
Community,  which  is of doubtful  relevance,  and 
that total  turnover  may  give  little  if any  indication  of 
market  power,  particularly  for multi-product  under-
takings. 
On balance  the Committee  would  accept  turnover  as 
a relevant  second  practical  criterion  but  draws 
attention  to the need  to consider  the broader  aspects 
of the situation. 
The Committee  also  draws  attention  to the  need 
for a more  precise  definition  of turnover  in order  to 
resolve  any  doubts  about  whether,  for  example,  it 
includes  intra-group  transactions  and  the indirect  tax 
element  in sales. 
The Committee  recognizes  that  any  turnover  figure 
which  is used  to determine  those  transactions  to 
which  the Regulation  applies  must  be to some  extent 
arbitrary  and  that  arguments  could  be advanced  for 
both  higher  and  lower  figures.  In this  situation  the 
Committee  accepts  the proposed  figure  of 200  million 
units  of account,  provided  that  it is reviewed  at 
regular  intervals.  The  effects  of inflation  should  be 
considered  when  such  review  takes  place. 
The Committee  approves  in principle  the  use  of a 
market-share  criterion,  in addition  to turnover,  as a 
means  of establishing  whether  a concentration  comes 
within  the  scope  of paragraph  1 of this  Article.  It 
recognizes,  however,  that  the  particular  criterion 
proposed  (25%  of the turnover  in any  Member  State 
in goods  or services  which  are identical  or are regarded 
as similar  by the  consumer)  is somewhat  arbitrary-
It may  also  discriminate  against  undertakings  in the 
smaller  Member  States.  The  Committee  therefore 
urges  the  Commission  to re-examine  whether  there 
is any  other  criterion  which  would  be fairer  in its 
application. 
Article  2 
The Committee  is not clear  whether  the definition  of 
concentration  in this  Article  would  cover  a case 
where  two  independent  undertakings  merge  to form a new  undertaking.  It requests  that  this  matter 
should  be clarified. 
Article  3 
This  Article  raises  the important  question  of whether 
the powers  of investigation  and  decision  on particular 
cases  of concentration  should  be the responsibility  of 
the Commission  subject  to review  by the  Court  of 
Justice,  or of some  other  body  set up for this  purpose. 
There  are  divided  views  on this  question,  but  on 
balance  the  Committee  approves  the  Commission's 
proposal  subject  to two  important  considerations: 
1. The  Commission  must  be empowered  to recruit 
the necessary  staff  to enable  investigations  to be 
carried  out  quickly  but  thoroughly,  and  the  staff 
must  be of very  high  calibre. 
2. There  must  be appropriate  consultation  within 
the Commission  to ensure  that  all aspects  of each 
particular  case  are duly  considered. 
The Committee  considers  that  the opening  words  of 
paragraph  5 of this  Article  are equivocal  and  that  it 
should  be made  clear  that  review  by the  Court  of 
Justice  of a decision  made  under  this  Article  will 
occur  only  if an undertaking  party  to the merger  in 
question  duly  applies  to the  Court  for such  review. 
Article  4 
The comments  made  on the  turnover  criterion  in 
Article  1 (2), apply  also  to the criterion  proposed  for 
prenotification  of merger  intentions,  and  the  Com-
mittee  urges  that  the proposed  figure  of 1 000 million 
units  of account  should  be  reviewed  at regular 
intervals. 
Article  5 
The comment  already  made  on Article  1 (2), drawing 
attention  to the  need  for  a more  precise  definition 
of turnover  also  applies  to this  Article. 
The Committee  understands  that  some  financial 
institutions  see objections  to the  proposed  formulae 
to replace  turnover  figures  in their  own  cases.  The 
Committee  suggests  that  the  Commission  should 
further  consult  representatives  of the  organizations 
concerned. 
26. 7. 74 Official  Journal  of the European  Communities No C 88/23 
The Committee  believes  also  that  the  amounts  of 
turnover  proposed  should  be increased  for mergers 
involving  commercial  as distinct  from  productive 
undertakings. 
Article  6 
The Committee  has  already  indicated  its views  that 
suitable  arrangements  must  be made  by the  Com-
mission  to ensure  rapid  and  adequate  investigation 
of each  case  so as to minimize  the unavoidable  period 
of uncertainty.  It is therefore  important  that  the 
Commission  should  avoid  causing  delay  in formally 
commencing  proceedings  by making  clear  in advance 
what  information  it requires. 
For this  purpose  the  Committee  believes  that  the 
Commission  should  issue  an implementing  provision 
which  gives  general  guidelines  on the information  it 
requires  in order  to accept  a notification.  It should 
also indicate  clearly  at the earliest  possible  moment 
the specific  information  it requires  on a particular 
case otherwise  the notifier  will  run  the risk  that,  at 
a later  stage,  the Commission  may  regard  the notifi-
cation  as incomplete.  In this  case  the  Commission 
could  impose  fines  on the parties  concerned  and  may 
suspend  the  concentration  for  an indefinite  period. 
Clearly-defined  requirements  would  avoid  the  pos-
sibility  that  the time  taken  by an investigation  would 
be unnecessarily  lengthened  by any  of the parties. 
Article  10 
The Committee  is very  concerned  about  the  wide 
powers  which  this  Article  would  give  the Commission 
to require  information  to be provided  by third  parties, 
particularly  trade  and  professional  associations.  Such 
bodies  can  reasonably  be expected  to supply  the 
Commission  with  factual  information  directly  relevant 
to a case  under  consideration  when  this  information 
is readily  available  from  existing  records  and  is not 
held in confidence.  The  Committee  considers  that 
this article  should  be redrafted  so as to limit  accord-ingly  the Commission's  powers  of compelling  third 
parties  to provide  information. 
Article  17 
The Committee  accepts  that  adequate  time  must  be 
allowed  for thorough  investigation  of a concentration 
or proposed  concentration.  It again  draws  attention, 
however,  to the  need  to complete  the investigation 
as rapidly  as possible  in order  to remove  uncertainty 
and to avoid  the effects  of such  uncertainty  on busi-
ness and  social  planning.  The  Committee  notes  that 
in some  Member  States  similar  investigations  are 
conducted  in a shorter  time  and  it suggests  that  the 
Commission  should  review  the  suggested  period  of 
nine months  following  the date  of commencement  of 
proceedings  with  the object  of reducing  it if possible. 
Article  19,  point  4 
The Committee  believes  that  the opportunity  should 
be taken  to enlarge  the  Advisory  Committee  on 
Restrictive  Practices  and  Monopolies  so that  it does 
not consist  only  of Government  officials  appointed 
by Member  States  as their  representatives  but  also 
includes  representatives  of the  economic  and  social 
groups  recognized  at European  level. 
Article  21 
The Committee  wishes  to be consulted  about  any 
implementing  provisions  made  under  this  Article. 
Done  at Brussels,  28 February  1974. 
The Chairman 
of the Economic  and  Social  Committee 
Alfons  LAPPAS 
No C 88/24  Official  Journal  of the European  Communities  26.  7. 74 
ANNEX 
to the  Opinion  of the  Economic  and  Social  Committee 
Rejected  amendments: 
The following  amendments,  submitted  in accordance  with  the Committee's  Rules  of Procedure 
were  rejected  by the Committee. 
Article  I (2),  second  subparagraph: 
We cannot  accept  to consider  as subordinate  the criterion  of turnover.  This  paragraph  should 
read  as follows: 
'In short,  the Section  accepts  to consider  turnover  as a practical  and  as an important  criterion. 
It however  stresses  the need  to take  into  account  other  analyses  of concentrations.' 
Outcome  of the  voting: 
Votes  in favour:  32. 
Votes  against:  47. 
Abstentions:  8. 
Article  4: 
We cannot  consider  a concentration  of undertakings  of the order-of-magnitude  foreseen,  solely 
under  the aspect  of the possible  effects  on competition.  It also  has effects  in employment  and  on 
the social  status  of the workers  employed  in the undertakings  concerned. 
Therefore,  the following  text  must  be added  to the remarks  on Article  4: 
'The  Section  remarks  that  such  concentrations  cannot  solely  be considered  under  political 
and competitive  aspects:  their  effects  are also  noticeable  in the fields  of the social  interests  of 
the workers,  (for  example  in the  employment  field).  That  is why,  for  the  concentrations 
subject  to a compulsory  declaration,  it is proposed  to provide  for a procedure  of information 
and of consultation  of the workers,  in the form  proposed  by the Commission  in its third  direc-
tive for the coordination  of company  law,  (internal  merger).  The  Economic  and  Social  Com-
mittee  advocated  at that  time  the article  corresponding  to the  Directive  "Internal  Fusion".' 
Outcome  of the  voting: 
Votes  in favour:  46. 
Votes  against:  51. 
Abstentions:  8.