WRITTEN QUESTION E-1894/99

by Ilda Figueiredo (GUE/NGL) to the Commission

(29 October 1999)

Subject: Commission authorisation of the Siemens-Fujitsu joint venture

According to press reports, on 3 October 1999 the Commission authorised an operational joint venture between Fujitsi Limited (Japanese) and Siemens AG (German). It apparently laid down certain economic and commercial conditions, but no social conditions.

Agreements to establish business mergers or joint ventures generally entail internal restructuring measures in the companies concerned, leading to pressure to cut jobs.

At a time when relocation measures, closures and downsizing strategies are on the agenda in countries like Portugal, with the possibility of Siemens factories closing down or, as in the case of Michelin, the prospect of thousands of workers being made redundant, I wish to ask the Commission whether approval of joint ventures or mergers of multinational firms in the internal market is subject to certain social conditions being met, in particular with respect to job maintenance and/or creation. If so, what specific conditions are laid down in this case?

Answer given by Mr Monti on behalf of the Commission

(29 November 1999)

On 30 September 1999 the Commission decided to authorise a joint venture between Fujitsu and Siemens designed to combine the businesses of both companies in Europe with a view to developing, producing and selling computer hardware and related products. It examined the joint venture in the light of the Merger Regulation (Council Regulation (EC) No 1310/97 of 30 June 1997 amending Regulation (EEC) 4064/89 on the control of concentrations between undertakings(1)).

The Commission sought to determine whether the operation would create or strengthen a dominant position on the markets concerned. Given the market shares of the parent companies and the presence of strong competitors on all those markets, it concluded that there was no such risk. Moreover, it noted effects of coordination between the two parent companies only on the financial workstations market. To address these serious doubts as to competition on that particular market, Siemens has undertaken to divest

itself of Siemens Nixdorf Retail and Banking Systems GmbH, a subsidiary active on that market. The Commission has therefore decided to authorise the joint venture on condition that Siemens complies fully with that undertaking.

The Commission has assured itself that the operation to set up a joint venture between Fujitsu and Siemens will not distort competition on the relevant markets in the European Union. It has not laid down any social conditions relating to the maintenance or creation of jobs. The Merger Regulation does not provide for such conditions to be imposed on firms.

In this matter, the Commission does not possess any information allowing it to conclude that that the joint venture will result in job losses. The prime purpose of the restructuring is to enable Siemens and Fujitsu to offer a full range of computer hardware. The ranges currently offered by them can be regarded as being complementary and so the joint venture will not create any substantially overlapping of activities.

In a more general context, operations of this kind must be viewed positively since they often satisfy the requirements of dynamic competition. They are apt to structure markets, increase the competitiveness of European industry and improve the conditions for job-creating growth.

The Commission would remind the Honourable Member that two Community directives on worker information and consultation may be applicable in this case: Council Directive 98/0059/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies(2) and Council Directive 94/0045/EC of 22 September 1994 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(3).

Under those Directives and the relevant national provisions transposing them and under the agreements concluded within the Siemens and Fujitsu groups on the establishment of European works councils, workers' representatives should, where appropriate, be informed about, and consulted on, the operation referred to by the Honourable Member and on any social repercussions it might have, and this at both international and national level.

(1) OJ L 180, 9.7.1997.

(2) OJ L 225, 12.8.1998.

(3) OJ L 254, 30.9.1994.