29. 12. 86 Official Journal of the European Communities No C 333/1 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
240th PLENARY SESSION — OCTOBER 1986 
Opinion on the 15th report on competition policy of the Commission of the European 
Communities 
(86/C 333/01) 
On 20 June 1986 the Commission of the European Communities decided to consult the 
Economic and Social Committee on the abovementioned report. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing 
the Committee's work on the subject, adopted its opinion on 3 September 1986. 
At its 240th plenary session (held on 23 October 1986), the Economic and Social Committee 
unanimously adopted the following opinion with four abstentions. 
Foreword 
It is now generally recognized that competition policy 
is vital for the smooth running and promotion of the 
free market, and for the protection of consumer rights 
and freedom. 
The present assessment of the 15th Report on Compe­
tition Policy is conducted in the light of the changes 
underway in the Community and world economies. 
An active realistic competition policy will have to take 
account of two factors currently of particular import­
ance: the advent of world-wide markets, and inno­
vation. 
1. The world economic context: world-wide markets, 
and innovation 
1.1. Against a world economic backdrop of rapid 
change in all sectors, the Committee endorses the Com­
mission's conviction that 'the promotion of dynamic, 
innovative competition will continue to be a key yard­
stick in applying Articles 85 and 86 to restrictions of 
competition'. (Introduction to the 15th report). This conviction must be acted upon consistently in 
all political or administrative action taken towards 
companies, States or international organizations. 
1.2. Two factors have broken the existing balances: 
the growth of world-level markets, and the acceleration 
of innovative technological change. 
Faced with this new and rapidly evolving situation, 
companies are obliged to adapt their strategies in the 
short term by restructuring and rationalization, and 
above all by innovation. 
1.3. During this period of swift and radical change, 
the guardians of free competition must take account — 
particularly by adopting the necessary social measures 
-— of the pressing need to adapt companies and econ­
omic, financial and legal structures; they should act to 
encourage and smooth these processes while ensuring 
the necessary control and coordination. 
The changed scale of the markets and the phenomenon 
of innovation mean that rigid analyses of behaviour are 
no longer possible. In applying and interpreting the 
No C 333/2 Official Journal of the European Communities 29. 12. 86 
rules, the Commission must find new criteria which are 
better geared to the changed situation. 
1.4. Against this backdrop of major change, the cre­
ation of a single market, as gradually as may be necess­
ary, is a vital and urgently needed tool for the new 
Community strategy in which competition has a key 
part to play, working in close and consistent collabor­
ation with the other Community policies (see also point 
7). 
2. The scale of the market — Cooperation between 
companies 
2.1. Integration is essential both for the necessary 
rationalization of Europe's production system and for 
new initiatives. Removal of internal barriers is the 
prerequisite for development of the Community's dom­
estic market. 
2.2. The continued existence of national economic 
areas is an anachronism when it comes to achieving a 
sufficient degree of real competitiveness, or assessing 
or defining relevant markets. The smallest possible 
geographical yardstick is now the Community, and 
even then the world dimension cannot be disregarded. 
Although the Treaty of Rome cites a 'substantial part' 
of the common market (but only as an alternative to 
the common market; and today this alternative applies 
only to very few minor cases), the common market is the 
smallest possible geographical unit for consideration. 
However, in a number of sectors it too is no longer 
large enough, for example when assessing the market 
position of a company or group of companies which 
compete with non-Community firms. 
2.3. The real unit today is the world even though 
economic and commercial integration at Community 
level are the main forces for ensuring the competitive­
ness of European industry. 
2.4. In such a situation, cooperation between com­
panies must be encouraged. 
2.4.1. The Committee thus fully endorses Point 26 
of the 15th report, which states that: 'The Commission 
hopes to be able to speed up the rate of structural 
change by facilitating cooperation between firms, while 
maintaining a competitive environment'. 
The Committee and economic circles await the prom­
ised guidelines on joint ventures. From the point of 
view of legal certainty, their effectiveness will depend on their success in the following areas: firstly, solution 
of the problems of 'relevant markets' and of yardsticks 
and reference thresholds; secondly, definitive abandon­
ment of the imprecise criterion of potential competition; 
thirdly, a proper definition of 'structural effects'. 
2.5. The Commission proposal on merger control, 
though amended, has not yet met sufficient consensus 
for adoption by the Council. The Committee refers 
back to its detailed opinion (!) issued at the time of this 
proposal, and urges the Council to adopt the proposal 
as soon as possible. 
National and international situation have meanwhile 
changed, and alongside field of application, thresholds 
and yardsticks, and procedures, a clearer definition is 
needed of the Commission's powers under Article 86, 
whilst remembering the differing situations of the Mem­
ber States. 
Here too the necessary clarity and legal certainty can 
only help create conditions which will favour company 
initiatives during the changes underway. 
3. Innovation 
3.1. The shift towards a world-scale market is flan­
ked by the rapid growth of innovation, primarily in the 
most advanced sectors but also in the 'creative' ones. 
Its effects are widely felt, not least in the services sector 
and in employment. 
3.2. In its opinion on the 13th report (page 12, indent 
d) (2), the Committee stated clearly that the term 'inno­
vation' should be used in the broad sense to include 
both the technological development of the product 
(improved quality and performance) and of the process 
(lower costs), and the development of new finished 
products or components, or of new materials. 
3.3. A strategy to develop Community industry and 
the services sector must hinge on the promotion of 
innovation: the ability to create and incorporate inno­
vation is today the key factor determining a company's 
competitive success on the world market. 
(') OJ No. C 252, 27. 9. 1982. 
(2) OJ No C 343, 24. 12. 1984. 
29. 12. 86 Official Journal of the European Communities No C 333/3 
Competition policy has a part to play in this Com­
munity strategy, stimulating innovation by creating 
conditions favourable to investment in research and 
development. 
3.4. Innovation is a complex phenomenon which 
affects all sectors to some degree, and which involves 
all stages of the production process. Encouragement 
of investment in research and development (R&D), 
including a favourable attitude to cooperation, which 
is vital in cases where enormous expenditure is needed, 
must therefore not be limited to pre-competitive 
research, but must include applied research and indus­
trialization itself. Innovation can thus be present 
throughout the production process. 
Regulation 418/85 provides Commission R&D pol­
icy (*) with a suitable instrument for monitoring and 
promotion; this policy must at all events guarantee 
continued effective competition and technical progress. 
4. State aids 
4.1. Growth — both industrial and non-industrial 
— is a major concern of national economic-industrial 
policy in all developed countries. 
The problems of international competitiveness are so 
serious that they are unlikely to be resolved by firms 
acting alone. This is amply demonstrated by the Com­
munity shipbuilding sector which, despite the major 
drive to restore productivity and competitiveness, still 
requires aid: the prospect of a sector which can stand 
on its own two feet is still some way off (2). 
4.2. It is impossible to remain competitive without 
innovation, and there can be no innovation without 
R&D. State support for R&D, and thus for inno­
vation, is indispensable. We have to be realistic about 
this. 
4.3. The Commission has adopted a code for state 
support, setting out principles, criteria and possible 
contingencies. The Community's approach is thus 
known. Because of the multifarious practical instances, 
and the diversity of national circumstances, the practi­
cal application of this approach is less well known, less 
indentifiable and fraught with difficulty. 
(!) OJ No C 206, 6. 8. 1984. 
(2) OJ No C 189, 28. 7. 1986, (ESC opinion of guidelines^ for a 
Community policy in the shipbuilding sector). 4.4. Some points should be made about the (in some 
cases) 'relative' character of the general principles and 
criteria. The total amount of concessionary financing 
and grants provided by the State for R & D is impor­
tant, regardless of whether it goes to industry, public 
laboratories or universities. A company has an advan­
tage over its rivals in other countries if it operates in a 
'richer' scientific environment. 
The scale of support for industrial R&D consequently 
has to be evaluated in the light of national circum­
stances, and of the situation in other countries. 
4.5. The Committee would point to another aspect 
of discrimination, resulting from the competition policy 
approach to aids. 
As a result of the continuing tax differences between 
Member States, even carefully planned aids can gener­
ate competition distortions. 
It would be wrong to look at State aids in isolation 
when assessing whether they are compatible with the 
Treaty. They have to be considered in their overall 
context, i.e. in terms of the difference between the tax 
burden of the firm or sector concerned and that of rival 
firms based in countries with a smaller or differently 
patterned tax burden. 
The Committee certainly does not think that it is the 
task of aids to offset tax or structural differences 
between Member States. 
The inadequate, indeed insignificant progress towards 
harmonization of tax systems makes it difficult to 
implement a correct, balanced policy not only on state 
aids but also in many other areas. No competition 
policy, however bold and far-sighted, can obviate the 
resultant imbalances and distortions. 
4.6. Small firms await the launch of a series of spec­
ific measures to ensure that true free competition is 
respected. These measures should not just consist of 
exemptions in favour of small firms, but should provide 
an overall action programme. 
The recent appointment of a Commissioner with special 
responsibility for small firms is undoubtedly a step in 
No C 333/4 Official Journal of the European Communities 29. 12. 86 
the right direction, but small firms await specific rules 
to implement an overall policy. 
4.7. The Committee realizes how difficult it is for 
the Commission to implement an aids strategy as part 
of a coherent competition policy. 
Resisting the temptation to recommend a rigid auto­
matic system, the Committee endorses the pragmatic 
approach adopted by the Commission but urges that 
account be taken of the factors mentioned above. 
4.8. It is especially necessary to be circumspect when 
making comparisons between countries, as it is not 
always easy to obtain full, adequate information on the 
effective national situation. 
It suffices to point out that alongside State aids, i.e. 
aids provided by the central government, there are also 
aids provided by local authorities; these are harder to 
identify and their background is more complex. The 
fact that circumspection is needed does not mean that 
the problem should be neglected or, worse, underesti­
mated. The Commission is right to attempt to compile 
an aids inventory. But apart from issuing the official 
results of any inquiries — which then prove outdated 
because of the slowness of bureaucratic procedures 
— the Commission should keep the current, coherent 
policy regarding national and regional aids under close 
review, with a view to reconsidering and changing its 
intervention policies (including the use of the Com­
munity's funds). 
4.9. More up-to-date, accurate information and 
increased vigilance are needed to ascertain the circum­
stances surrounding each aid measure, whatever its 
form. 
It is not easy to establish a theoretical definition of 
'Stade aid'. But neither is it easy to establish an adequate 
inventory or vetting criteria. Two examples: firstly, 
existence of public contracts, which is a potential cause 
of distortions in itself, since one firm may be a party 
to more such contracts than another. 
A second weakness, in some cases, is the automatic 
exclusion from checks of firms which receive aids but 
whose business does not affect trade between Member 
States. After all, such firms may supply major exporters. A pragmatic approach, combined with up-to-date accu­
rate information, can improve and render effective a 
theoretical reference system which serves to remind 
everybody — State and firms — of the Commission's 
criteria and thinking with respect to measures adopted 
under Treaty Articles 92 and 93. In its opinion on the 
13th report (1), the Committee urged the Commission 
to 'carefully consider the need for one or more Council 
Regulations to help reach the vitally necessary consen­
sus between the Member States on correct implemen­
tation of the basic concepts contained in Articles 92 
and 93\ 
5. Public undertakings — State monopolies 
5.1. Blanket extension to all public-enterprise sectors 
of the 'transparency' directive should at least provide 
the Commission with the information and factors it 
needs to make considered evaluations. 
The Committee is alive to the difficulties caused for the 
Commission by the reticence of the Member States, but 
hopes that it will nevertheless be possible to achieve 
satisfactory results, especially if the Commission 
ensures that the responsibility of the Member govern­
ments in this matter becomes public knowledge. 
5.2, The difficulties posed by the national monopol­
ies, especially the fiscal monopolies, are still more seri­
ous, as the close link with the structure of revenue, and 
thus with the central-governement budget, makes it 
difficult to dismantle them. 
Support should nevertheless be given to the Com­
mission's endeavours to at least reduce the impact of 
these state monopolies on trade. But the Committee 
reiterates that the real problem is the inadequate har­
monization of tax systems in the Community, and trusts 
that an overall approach to the issue will yield new, 
realistic proposals. At all events, where State monopol­
ies exist, they must respect the rules of the market. 
6. Specific sectors — air and sea transport 
6.1. The competition rules apply to all production 
and service sectors, both public and private. 
The steps taken by the Commission to ensure com­
pliance with the rules of open competition have already 
had positive results and should be encouraged. 
(') OJ No C 343, 24. 12. 1984. 
29. 12. 86 Official Journal of the European Communities No C 333/5 
6.2. In the air transport sector, the Commission is 
hampered by the complexity of the problem and the 
structured-association system at world level. 
Government behaviour is a further obstacle to a sol­
ution for this sector, which has been described as a 
'microcosm of anti-competitive practices'. 
The Committee looked at the air transport issue in its 
opinion of September last concerning the Commission's 
memorandum 2 on the whole problem of civil aviation. 
The Committee would however reiterate its concern 
about the way the issue of air transport remains in a 
state of deadlock at the Council. 
The recent ruling by the Court of Justice should have 
cleared the obstacles impeding the Commission. Indeed, 
this ruling should prompt the long-awaited legislative 
initiative. Progress must be made gradually, taking 
account of the many aspects of the problem. There will 
also be tangible effects for the consumer, at least as 
regards tariffs. 
63. Turning to sea transport, the Committee refers 
back to the relevant Committee opinion (*) and trusts 
that the Council will make rapid progress in this sector 
too, particularly in view of the beneficial effects which 
this will have on the internal market. 
7. Co-relation with other common policies 
7.1. Competition policy must develop in accordance 
with the Treaty, like the other policies — social, trade, 
tax, transport, and the overall policy on consumer 
protection. 
Competition policy, which should be dynamic and 
innovative, is seriously constrained by the lack of har­
monization and coordination. 
7.2. The Single Act provides for social harmoniza­
tion, and the Committee hopes that this will occur at 
the highest level. But as part of this overall strategy for 
the social sector an effective competition policy must 
also take account of any distortions resulting from 
differing social situations, and avoid creating new 
imbalances. This applies not only within the Com­
munity — where the Commission can operate most 
effectively — but also in dealings with non-Member 
countries. 
(!) OJNoC344, 31. 12. 1985. 7.3. A Community policy geared to the harmoniza­
tion of fiscal systems, which is still at the initial stage, 
is likewise an essential component of an effective com­
petition policy. 
The competition distortions caused by differing tax 
situations and structures in the Member States, and by 
certain national measures which overfavour firms or 
producers in free zones, cannot be eliminated unless the 
Commission makes more vigorous use of its powers 
and of its right to put forward proposals. 
7.3.1. The Member States are still separated by fully-
fledged frontiers. The competition distortions caused 
in frontier regions by differing national value added tax 
(VAT) and excise rates are a striking, concrete example. 
These distortions affect small firms in particular. 
7.3.2. The White Paper admittedly provides for a 
gradual alignment of excise rates, while allowing mod­
est differentials. The standstill proposal adopts the same 
line for VAT. But an effective harmonization policy 
designed to reduce or eliminate competition distortions 
will affect the structure of national budgets and the 
relations between the various types of taxes. Only if 
this is achieved will competition policy play its full role 
as a control and stimulus. 
7.4. A competition policy which guarantees free 
trade, and free choice by consumers, will have tangible 
and increasing beneficial impact if consumer protection 
policy is closely coordinated with other common poli­
cies. 
7.5. The Committee trusts that the Commission will 
react vigorously whenever the delays, uncertainties or 
setbacks of other policies threaten to hamper the 
achievement of genuine open competition, which is the 
prerequisite for effective economic integration and thus 
the competitive edge of the Community's economy 
internationally. 
8. Legal procedure; certainty in legal relations 
8.1. The Committee notes the substantial procedural 
improvements (speed, guarantees for adversary parties). 
8.2. The plan to introduce a double legal control, in 
order to provide better guarantees for the rights of 
defendants, is to be welcomed. 
No C 333/6 Official Journal of the European Communities 29. 12. 86 
8.3. Decentralization to national courts of the 
implementation of Articles 85 and 86 is likewise to 
be endorsed. More frequent and widely disseminated 
information is clearly valuable here. 
Particular attention must nevertheless be paid to the 
varying circumstances obtaning in the Member States, 
to ensure that competition rules are not in practice 
applied non-uniformly and 'with varying degrees of 
effectiveness', as the Commission fears could be the 
case (Section 41 of the 15th report). 
The disadvantages of further discrimination and distor­
tions should not be set against the advantages of speed 
and possibilities of damages at national level. 
8.4. The Committee welcomes the increased use by 
the Commission — perhaps encouraged by the endorse­
ment in the Committee's opinion — of communications 
and guidelines to notify companies and Member States 
of its approach, thus providing them with a benchmark 
which will help to clarify the law and make for certainty 
in legal relations. 
9. Competition policy — role and means 
9.1. Competition policy has a key role to play in 
the unification of Europe, and a direct impact on the 
behaviour and decisions of companies and govern­
ments. The Commission should draw up a comparative 
study of the various national competition policies, pro­
viding a vital source of information for the completion 
of the internal market. 
The application of the policy mapped out in Articles 
85 and 86, and 92 and 93, often requires more on-going 
evaluation and action — even on individual, highly 
complex cases — than that of other Community poli­
cies. 
9.2. In the past, the Committee has stressed the 
need to strengthen the various units of the General 
Directorate for Competition. Experience confirms the 
urgent need to provide this General Directorate with 
more skilled staff and physical resources, so as to equip 
it to cope properly with its highly responsible and 
important tasks. 
The economic and social interest groups represented 
within the Committee are familiar with the complexity 
and trickiness of the cases which have to be investigated, 
vetted and straightened out. They realise what human 
and physical resources are needed. The Committee therefore trusts that this repeated refer­
ence to the vital need for greater resources — coupled 
with the similar recommendations by the European 
Parliament — willlead to prompt action by the authori­
ties. 
10. Relations with international organizations 
10.1. Mention must be made of the increasing 
importance of active participation by the Community 
in the work of the international organizations, particu­
larly on matters covered by Community policies. 
10.2. Greater integration and cohesion would give 
the Community a more powerful voice at international 
meetings. 
10.3. The prospective negotiations in GATT(!) will 
give the Community an opportunity to exploit its 
importance as the world's leading trading unit. Recipro­
city and/or safeguard clauses should confirm the prin­
ciples of the Rome Treaty and the legitimate interests of 
Community consumers, and lay down the appropriate 
implementing measures. 
Conclusion 
The Committee states its appreciation of the Com­
mission's Annual Report on Competition Policy. 
The Annual Report is not just of interest to those who 
work directly on competition policy. The report makes 
it possible to ascertain the current state of progress 
within the Community towards free trade, which is 
essential for economic and social integration and 
increased competitiveness. 
Our opinion concentrates this year on the accelerated 
pace of change throughout the socio-economic system, 
and in particular on two stimuli, namely larger markets 
and innovation. 
0) OJ No C 207, 18 8. 1986. 
29. 12. 86 Official Journal of the European Communities No C 333/7 
The Community competition policy will be a success if are the true challenges of our time, 
it accommodates these two forces for change, which 
Done at Brussels, 23 October 1986. 
The Chairman 
of the Economic and Social Committee 
Alfons MARGOT 
Opinion on the proposal for a Council Directive amending Directive 77/143/EEC on the 
approximation of the laws of the Member States relating to roadworthiness tests for motor 
vehicles and their trailers 
(86/C 333/02) 
On 20 May 1986 the Council decided to consult the Economic and Social Committee, 
under Article 75 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 10 September 1986, in the light of 
the oral report by Mr Corell Ayora. 
At its 240th plenary session (meeting of 23 October 1986) (rapporteur-general: Mr Corell 
Ayora, Article 18 of RP) the Economic and Social Committee adopted the following opinion 
unanimously. 
1. General comments 
1.1. The Committee welcomes the objectives of the 
proposed Directive, which is aimed primarily at increas­
ing road safety and could also have an impact on: 
— the protection of the environment by limiting noise 
and reducing CO, HC and NOx emissions from 
exhausts, 
— fuel savings, new jobs, improved vehicle availability, 
and the provision of better information for vehicle 
owners and manufacturers. 
1.2. By approximating legislation, the proposal will 
also help to eliminate differences between Member 
States and eventually to bring the Community together 
in such a sensitive area as road safety. 1.3. It must be pointed out in this context that some 
Member States have considerable ground to make up 
and gaps to fill in their vehicle testing legislation: this 
has serious consequences on road safety. The sharp rise 
in the number of vehicles on the roads in recent years 
has further aggravated the situation. In this respect 
the Committee regrets that the Community institutions 
and, first and foremost, the Council have been very 
slow to do anything about introducing Community 
legislation for the testing of light vehicles. 
1.4. However, it must not be forgotten that the 
extension of roadworthiness testing to private cars and 
vans concerns only one aspect of road safety. Only if 
measures are taken as soon as possible in other fields 
—as the Committee has already suggested in its opinion 
on European Road Safety Year (1986) (2)—will a con­
siderable improvement in road safety be possible. The 
Commission's proposals on these matters are eagerly 
awaited. 
(J) OJ No C 133, 31. 5. 1986, p. 3. (2) OJ No C 101, 28. 4. 1986, p. 8.