20. 12. 85 Official Journal of the European Communities No C 330/29 
Opinion on the Fourteenth Report of the Commission of the European Communities on 
Competition Policy 
(85/C 330/07) 
On June 1985 the Commission of the European Communities asked the Economic and Social 
Committee to deliver an opinion on the Commission's Fourteenth 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 1 October 1985 in the light of 
the report by Mr Mourgues. 
At its 230th Plenary Session (meeting of 31 October 1985) the Committee adopted the 
following opinion by a majority, with 11 abstentions: 
1. Competition policy: the cornerstone of the Com­
munity's trade and economic policies 
1.1. In its own-initiative opinion (!) and in successive 
Opinions on the Commission's Annual Reports on 
Competition Policy (especially par. I and VI of the 
Twelfth Report) (2), the Committee has stressed the 
need to safeguard undistorted competition, which is 
essential to the implementation of competition, which 
is essential to the implementation of industrial, trade, 
monetary, and even taxation and social policy. 
1.2. A healthy system of competition is also one of 
the conditions to be laid down as reciprocity clause in 
the negotiations between the Community and non-
EEC countries within the framework of the General 
Agreement on Tariffs and Trade (GATT). 
1.3. This position is endorsed by the Organization 
for Economic Cooperation and Development (OECD), 
which on 7 June 1984 called specifically for cooperation 
between the authorities responsible for trade and com­
petition policies. 
1.4. The Committee welcomes this united approach 
and endorses the key principle that the maintenance of 
undistorted competition will promote competitiveness. 
1.5. This principle must be internationally recog^ 
nized and applied, thereby facilitating more effective 
monitoring of, and making more transparent, the fol­
lowing: 
— both import and export agreements; 
— restrictive business practices; 
— voluntary restraint agreements; 
(!) OJ No C 322, 1981. 
(2) OJNoC341, 1983. — the effects of distribution and technology transfer 
agreements, particularly as regards market-
sharing (3); 
— practices employed by multinationals when the end 
result is the abuse of a dominant position. 
1.6. Similarly, in the case of invitations to tender 
for public works, supplies or capital goods issued by 
governments, local authorities and other public bodies, 
national undertakings must not in any way resort to 
restrictive practices as regards the choice of contractor 
or supplier or the nationality thereof (4). 
2. Action by the EEC Commission 
2.1. The economic difficulties currently afflicting the 
Member States and the Community as a whole have 
prompted measures to stimulate the Community econ­
omy; this process can be speeded up by implementation 
of a competition policy that is more consistent, more 
comprehensive and—most important of all—more 
realistic and more closely attuned to the other Com­
munity policies (see point 1.1). 
2.2. Accordingly, the Committee is grateful to the 
Commission for having 'legislated' in the Community's 
general interests through the application of Article 85(3) 
of the Treaty. The Commission has taken account of 
de facto situations inside and outside the Community 
in such areas as: 
— research and development agreements; 
— patent licensing; 
(') See ESC opinion on R&D Agreements, OJ No C 206. 
(4) The ESC is currently preparing an opinion on this matter on 
the basis of a Communication from the Commission to the 
Council. 
No C 330/30 Official Journal of the European Communities 20. 12. 85 
— automobile distribution and after-sales services ([); 
— specialization agreements (especially for small and 
medium-sized enterprises). 
2.3. One should also mention here the contribution 
to information made by the publication of a guide for 
SMEs. 
2.4. However, in other spheres, as is indicated in the 
introduction to the Fourteenth Report, some of the 
Commission's efforts have met with failure, e.g.: 
(a) The public aids referred to in point 3 of this opinion; 
(b) Merger control (2), which presupposes Community 
monitoring machinery. The oligopolies prevalent in 
many industries make such monitoring more and 
more necessary. However, in some circumstances 
mergers of companies from different Member States 
may result in the firms concerned becoming more 
conscious of being European and above all may 
assist them in adjusting more effectively to the 
keener international competition. 
(c) Distortion of competition and lack of transparency 
in the air transport sector in the absence of a com­
mon policy (3); 
2.5. The Committee also notes that to date the Com­
mission has omitted to take account of certain of its 
opinions, particularly on: 
(a) merger control: 
— the advisability of gearing the 'turnover cri­
terion' to the specific circumstances of certain 
sectors, 
— the need to avoid abuse of the Commission's 
powers to oblige third parties to communicate 
information, and 
— the need for general account to be taken of 
the Community's trade, regional, industrial and 
social interests through adequate consultation 
procedures (this now seems to be accepted in 
principle by the Commission); 
(') Here the Commission has, however, failed to take account 
of most of the criticisms expressed in the relevant ESC opinion 
(OJ No C 341, 1983), despite having given considerable 
attention to the Committee's views on other subjects. 
(2) See ESC Opinion: OJ No C 252, 27. 9. 1982. 
(') See the recent ESC Opinion on Air Transport Policy (OJ No 
C 303, 29. 11. 1985, Plenary session — September 1985). (b) adoption of the statutes of the European Com­
pany^). 
3. Public aids (State and other authorities at regional 
and local level (5)) 
3.1. The implementation of competition policy large­
ly hinges on close cooperation between the Member 
States and between the latter and the Commission on 
such matters as consistency between Community and 
national laws and application by national courts of 
Community anti-trust legislation as well as implemen­
tation of Articles 92 et seq. of the Treaty as regards 
aids. 
3.2. This last area gives rise to most problems. The 
current period is characterized by constant pressure on 
the individual Member States to grant national aids. 
3.3. The notification procedure gives the Com­
mission an opportunity to step in. Such intervention 
will become more effective as knowledge of all the 
various national aids improves. 
The Commission is therefore asked to take all measures 
necessary to fulfil its obligations under Articles 92 and 
93. In particular, the Commission should consider 
improving transparency in such a way that both Mem­
ber States and interested third parties will know in good 
time about any measure or act having legal conse­
quences and will be able to effectively assert their rights 
under the Treaty. 
To alleviate the Commission's administrative burden 
provision could be made for simplified opposition pro­
cedures, which have already been applied by the Com­
mission in other cases. 
3.4. The Committee agrees in principle with the 
application of the new cumulation rules introduced on 
1 March 1985 and will examine with interest the details 
to be given in the Fifteenth Report. 
3.5. It also feels that the publication of a white paper 
listing all categories of aid, including general measures, 
will facilitate monitoring of the implementation of 
Community policies. 
3.6. State participation in company capital must be 
viewed in the general context of support measures. 
(4) See ESC Opinion: OJ No C 131, 13. 12. 1972. 
(s) The Committee has discussed this matter in greater depth in 
its Opinion on the Thirteenth Report on Competition Policy 
(OJ No C 343, 1984, p. 10). See also the Information Report 
on National Regional Development Aids. 
20. 12. 85 Official Journal of the European Communities No C 330/31 
3.7. Lastly, the effectiveness of competition policy 
will be boosted if aids subsequently held to be unlawful, 
or detected after failure to notify, have to be refunded 
or are recoverable. 
3.8. In addition, such refunds should be 
accompanied by a fine. The Committee considers the 
financial aid received by a beneficiary to be a substantial 
cash advantage. The fine could be calculated on the 
basis of the interest rates prevailing on the market by 
analogy with Article 15 (6) of Regulation No 17/62. 
4. The Commission's new approach 
4.1. Franchising (agreements between producers and 
dealers) is a flourishing form of distribution. US legis­
lators have shown an interest in this since 1929— 
while their Community counterparts remain silent. The 
Committee recommends that attention be given here 
too to the creation of conditions conducive to free 
competition. 
4.2. The same applies to transfers of 'know-how', 
the issuing of licenses, copyright, technology transfer 
and privileged links between parent companies and 
their joint subsidiaries. 
4.3. With a view to fostering cultural creativity, the 
Committee is also prompted to recommend the framing 
of specific proposals for the book trade concerning 
either retail prices or, preferably, the price charged by 
the publisher to direct buyers. 
4.4. The harmful effects on competition of State 
monopolies must be eliminated especially when the 
ultimate result is to compartmentalize the market and 
cause discrimination between the public and private 
sectors. 
4.5. Rules on competition must be defined and 
applied in the field of maritime transport as a matter 
of urgency (1). 
5. Application of the wide arsenal of procedures avail­
able 
5.1. In view of the Community's free market econ­
omy, compliance with the implementing rules can best 
be achieved by means of recommendations and com­
munications rather than binding measures and the 
attendant penalties. 
(' The Committee is studying this matter in connection with 
another opinion currently in preparation. 
Done at Brussels, 31 October 1985. 5.2. The Committee therefore favours adoption of 
the simplified opposition procedure and the use of 
administrative letters as provided for in the competition 
policy decision-making procedures. 
5.3. Similarly, extensive scope is allowed for the 
right of defence under the hearing procedure, which is 
facilitated by the brief given by the Commission to the 
hearing officer. 
Appropriately these provisions are supplemented by the 
requirement to state reasons (Article 190 of the Treaty), 
within the limits laid down in the Court's decisions. 
5.4. It would seem possible to envisage supplement­
ing the procedure for notification of aids within the 
meaning of Articles 92 and 93 of the Treaty by a 
communication to the Member States, on the basis of 
concrete information, such as potential market outlets, 
the recipient firm's market position and the detrimental 
effects the aid could have on the Community market. 
5.5. Admittedly this more sophisticated procedure 
would mean more paperwork, but it would have the 
advantage of placing the relevant authorities in the 
Member States in a position to (a) extend the Com­
mission's 'case law' at national level and (b) gain a 
clearer picture of the scale of aid being granted through­
out the Community. 
6. The Annual Report on Competition Policy 
6.1. The Committee would once again draw atten­
tion to the increasingly high standard of these annual 
reports, which summarize successes and difficulties and 
failures with equal clarity and frankness. 
6.2. In providing the general public with detailed 
information, this Report makes a substantial and vital 
contribution towards a close and critical analysis of the 
development of the internal market. 
6.3. The Committee will continue its own efforts 
and take the Annual Report as a reference for assessing 
the action taken on its Opinions on this subject. The 
constant aim of these Opinions is to strengthen compe­
tition and consolidate the unified market within the 
European Economic Community, against the back­
ground of international competition. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR