White Paper on modernisation of the rules implementing Articles 85 and 86 of the EC Treaty - Corrigendum
Date: 1999-04-28
Institutions: European Commission
Subjects: European Commission, European treaties, administrative check, competition law, competition policy

12.5.1999

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I

(Information)

COMMISSION

WHITE PAPER

ON MODERNISATION OF THE RULES IMPLEMENTING ARTICLES 85 AND 86 OF
THE EC TREATY

Commission Programme No 99/027

(1999/C 132/01)

(Text with EEA relevance)

CONTENTS

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER I — BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I. The establishment of a system for the implementation of Community competition law . . .

II. Development of the role of the Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

3

6

8

8

9

III. Adjustments and their limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

A. Reduction in individual notifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

B. Quicker processing of individual notifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

C. Encouraging the decentralised processing of complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

CHAPTER II — THE NEED FOR REFORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

I. The objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

A. Ensuring effective supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

1. Refocusing the Commission’s implementation of Article 85 . . . . . . . . . . . . . . . . . . . . . 14

2. Decentralising the application of the competition rules . . . . . . . . . . . . . . . . . . . . . . . . . 15

B. Simplifying administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

1. No need for an authorisation system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

2. Easing the constraints on undertakings while at the same time providing them with

a sufficient degree of legal certainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

II. The options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

A. Improving the authorisation system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

1.

Interpretation of Article 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

2. Decentralisation of the application of Article 85(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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3. Broadening the scope of application of Article 4(2) of Regulation No 17 . . . . . . . . . 18

4. Procedural simplification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

B. Switching to a directly applicable exception system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

CHAPTER III — MODERNISATION OF THE COMPETITION RULES . . . . . . . . . . . . . . . . . . . . . 20

I. The ending of the notification and authorisation system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

II. Decentralised application of the competition rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

A. A new division of responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

1. Competition policy to be determined by the Commission . . . . . . . . . . . . . . . . . . . . . . . 22

2. National authorities to play an enhanced role in the application of the competition

rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

3. The national courts to play an enhanced role in the application of the competition

rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

B. Consistent and uniform application of the competition rules . . . . . . . . . . . . . . . . . . . . . . . 25

1. Risk of inconsistencies and principles for their resolution . . . . . . . . . . . . . . . . . . . . . . . 25

2.

Information and cooperation mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

III. Intensified ex post control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

A. Strengthening the Commission’s powers of enquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

B. The increased importance of complaints in the new system . . . . . . . . . . . . . . . . . . . . . . . . 28

C. Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

IV. Transition to the directly applicable exception system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

V. Sectoral Rules

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

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EXECUTIVE SUMMARY

1.
In the field of competition law applicable to undertakings, the EC Treaty sets out
general rules applicable to restrictive practices (Article 85) and abuses of dominant position
(Article 86). The Treaty empowers the Council
to these provisions
(Article 87).

to give effect

In 1962, the Council adopted Regulation 17, the first Regulation implementing
2.
Articles 85 and 86. This Regulation laid down the system of supervision and enforcement
procedures, which the Commission has applied for over 35 years without any significant
change.

Regulation 17 created a system based on direct applicability of the prohibition rule of
3.
Article 85(1) and prior notification of
for exemption under
Article 85(3). While the Commission, national courts and national authorities can all apply
Article 85(1), the power to grant exemptions under Article 85(3) was granted exclusively
to the Commission. Regulation 17 thus established a centralised authorisation system for
all restrictive practices requiring exemption.

restrictive practices

4.
This centralised authorisation system was necessary and proved very effective for the
establishment of a (cid:28)culture of competition’ in Europe. It should not be forgotten that in the
early years competition policy was not widely known in many parts of the Community. At
the time when the interpretation of Article 85(3) was still uncertain and when the
Community’s primary objective was the integration of national markets, centralised
enforcement of the EC competition rules by the Commission was the only appropriate
system. It enabled the Commission to establish the uniform application of Article 85
throughout the EC and to promote market integration by preventing companies from
recreating barriers which Member States themselves had gradually eliminated. It created a
body of rules which is now accepted by all Member States and by industry as fundamental
for the proper functioning of the internal market. The importance of competition policy
today is borne out by the fact that each Member State now has a national competition
authority to enforce both national and (where empowered to do so) Community
competition law.

5. However, this system, which has worked so well, is no longer appropriate for the
Community of
today with 15 Member States, 11 languages and over 350 million
inhabitants. The reasons for this are to be found in the Regulation 17 system itself and in
external factors relating to the development of the Community.

6.
As to the reasons inherent in the Regulation 17 system, the centralised authorisation
system based on prior notification and the Commission’s exemption monopoly has led
companies to notify large numbers of restrictive practices to Brussels. Since national
competition authorities and courts have no power to apply Article 85(3), companies have
used this centralised authorisation system not only to get legal security but also to block
private action before national courts and national competition authorities. This has
undermined efforts to promote decentralised application of EC competition rules. As a
result, the rigorous enforcement of competition law has suffered and efforts to decentralise
the implementation of Community law have been thwarted. In an ever more integrated
Community market, this lack of rigorous enforcement and the failure to apply one
common set of rules harms the interests of European industry.

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The development of

7.
the Community since 1962 has been extraordinary. The
Community of six Member States has become a Union of 15 and is likely to become even
larger as applicant countries join. The internal market with all its imperfections is a reality
and Economic and Monetary Union is under way.

8.
The role of the Commission in this new environment has changed. At the beginning
the focus of its activity was on establishing rules on restrictive practices interfering directly
with the goal of market integration. As law and policy have been clarified, the burden of
enforcement can now be shared more equitably with national courts and authorities, which
have the advantage of proximity to citizens and the problems they face. The Commission
has now come to concentrate more on ensuring effective competition by detecting and
stopping cross-border cartels and maintaining competitive market structures. It has also
risen to the challenges of merger control, liberalisation of hitherto monopolised markets
and international cooperation.

9.
The Commission can cope with all these developments only by focussing its attention
on the most important cases and on those fields of activity where it can operate more
efficiently than national bodies. To this end it has already adopted various measures such
as the (cid:28)de minimis’ Notice for agreements of minor importance and block exemption
regulations.

10. However, these measures are not sufficient to meet the new challenges outlined
above. It is no longer possible to maintain a centralised enforcement system requiring a
decision by the Commission for restrictive practices which fulfil the conditions of Article 85
(3). To make such an authorisation system work in the Community of today and tomorrow
would require enormous resources and impose heavy costs on companies. It is essential to
adapt the system so as to relieve companies from unnecessary bureaucracy, to allow the
Commission to become more active in the pursuit of serious competition infringements and
to increase and stimulate enforcement at national level. Our Community requires a more
efficient and simpler system of control.

11.
In the White Paper, the Commission discusses several options for reform. It proposes
a system which meets the objectives of rigorous enforcement of competition law, effective
decentralisation, simplification of procedures and uniform application of law and policy
development throughout the EU.

The proposed reform involves the abolition of the notification and exemption system
12.
and its replacement by a Council Regulation which would render the exemption rule of
Article 85(3) directly applicable without prior decision by the Commission. Article 85 as a
whole would be applied by the Commission, national competition authorities and national
courts, as is already the case for Articles 85(1) and 86.

13.
This reform would allow the Commission to refocus its activities on the most
serious infringements of Community law in cases with a Community interest. It would
pave the way for decentralised application of the EC competition rules by national
authorities and courts and eliminate unnecessary bureaucracy and compliance costs for
industry. It would also stimulate the application of the EC competition rules by national
authorities.

14.
In the new system, the Commission would keep a leading role in determining EC
competition policy. It would continue to adopt Regulations and Notices setting out the

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principal rules of interpretation of Articles 85 and 86. The Commission would also
continue to adopt prohibition decisions and positive decisions to set out guidance for the
implementation of these provisions. It is also envisaged that production joint ventures
involving sizeable investments would not be included in the new system, but submitted
instead to the procedural rules of the Community merger regulation.

In this system of concurrent jurisdiction of the Commission, national authorities and
15.
it would be necessary to maintain certain measures enabling the
national courts,
Commission to ensure coherent application of the rules throughout the Community. In
particular, it is proposed that the Commission maintain the power to remove a case from
the jurisdiction of national competition authorities and to deal with a case itself if there is
a risk of divergent policy. There should also be a clear obligation for national courts to
avoid conflicts with Commission decisions. Additional measures are explained in the White
Paper.

16.
The Commission invites the Member States, all other institutions and interested
parties to submit comments on the White Paper by 30 September 1999 to the address on
the last page.

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INTRODUCTION

for

The Commission has been responsible

1.
the development of Community
competition policy since the inception of the European Coal and Steel Community (ECSC)
in 1952. The Europe of those days was very different from what it is today, as we
approach the end of the century and the new millennium. After having taken its first
tentative steps within the ECSC,
to implement
competition policy after the adoption of Regulation No 17 in 1962, under the Treaty
establishing the European Economic Community. The challenge was enormous: to create a
completely new policy on a continental scale, without any direct point of reference in most
of the then Member States, in order to meet two needs: the integration of national markets
into a single economic area and the development of competition as the driving force of the
economy.

the Commission began in earnest

Little by little, by means of decisions and notices and,

2.
the
Commission established a competition policy covering the major aspects of economic life.
The Court of Justice played its part to the full: sometimes upholding, sometimes annulling,
but always contributing to a better understanding of the competition rules as they affected
the everyday life of consumers and undertakings in the nascent common market.

later, regulations,

3.
The result of those first years of effort is remarkable: a comprehensive policy,
abundant case-law, clearly established basic principles and well-defined details. Community
policy provides solutions to the problems of the modern economy, whether in terms of
action against the most harmful cartels or as regards technology licences or the distribution
of goods and services. Over the years, Community policy has been supplemented by
policies on merger control, liberalisation of monopoly sectors, international cooperation
and an array of specific measures designed to cope with the new economic challenges.

Competition policy in 1999 is applied in a world which is very different to that
4.
known by the authors of the basic texts. Fifteen Member States, a single currency and a
single market, a globalised economy, enlargement to include the countries of Central and
Eastern Europe and Cyprus: no one could have predicted these developments in 1962. The
changes in competition have been no less remarkable. The policy established by the
Commission covers the entire range of economic activities, whilst the national competition
policies set up in each Member State form part of a coherent whole with the Community
system. The fact that it is now necessary to modernise that system does not detract from its
merits: created from nothing, Community competition policy made it possible to lay the
foundations of the single market and to dynamise the European economy. The task now is
to adapt the system in order to face up to the challenges of the years ahead.

5.
The first Regulation implementing Articles 85 and 86, Council Regulation No 17,
was adopted over 35 years ago. It was designed for a Community of 170 million
inhabitants and six Member States working in four different languages. It is still being
applied, without having been substantially modified,
in a Community of 380 million
inhabitants and 15 Member States whose markets have already been extensively integrated.
In addition, the internationalisation of the European economy has speeded up in recent
years, so that competition policy is now for the most part conducted in a global context.
Adjustments have of course been made to the existing legal framework, but they now
appear to have reached their limits. The need for reform is all the more pressing as the

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coming decade will present two major challenges for competition policy: economic and
monetary union and the enlargement of the Community to include the countries of Central
and Eastern Europe and Cyprus.

6.
Economic and monetary union is certain to have major consequences for competition
policy. It will first entail further economic integration and, in the long term, will strengthen
the effects of the internal market by helping to remove the last economic barriers between
Member States. It also will help to cut the overall costs of intra-Community trade by
reducing transaction costs. Such factors will encourage undertakings to develop trade and
thus increase competition throughout the Union. A single currency will also increase price
transparency and thus highlight price differences still existing between Member States.
Economic operators may, when faced with stronger competition, be tempted to take a
protectionist attitude to avoid the constraints of adapting to the new conditions, thereby
compensating for their lack of competitiveness in a new environment. Lastly, the fact that
some Member States are, at least for the time being, not part of monetary union may
encourage undertakings to partition markets.

The enlargement of

7.
the Community will also make it necessary to strengthen
competition policy with regard to cartels and abuses of dominant positions. Dominant
positions held by undertakings which inherited state monopolies are particularly numerous
in the applicant countries, and such undertakings might to be tempted to abuse those
positions so as to make up for their lack of economic competitiveness. The tradition of the
planned economy is also a potential danger inasmuch as it encouraged agreements between
(cid:28)competitors’. Any proposal to amend the competition rules of procedure must take
account of the fact that those countries, with administrative structures that are still not
very familiar with the concepts of market and free enterprise, will have to apply them as
part of the (cid:28)acquis communautaire’. The enlargement will also have a mechanical effect in
increasing the number of restrictive practices and abuses of dominant positions potentially
subject to Community law. In a European Union with more than 20 Member States, the
rules for implementing Articles 85 and 86 must be modernised if competition policy is to
continue to operate efficiently.

8.
The globalisation of the economy is another challenge for the competition authorities.
Although this trend is theoretically beneficial to competition because of the opening-up and
it confronts the
integration of markets on a scale going beyond the Community,
competition authorities with cartels or restrictive practices aimed at erecting artificial
barriers between the major regions of the world market. This can happen when large
undertakings set up vertical restrictions impeding access to their market, share markets
among themselves or conclude anti-competitive contracts on a world scale. Such practices
are generally complex in nature, require in-depth investigation and cooperation with other
competition authorities and,
to the
economy and consumers because of the vast geographical scale involved.

they go unpunished, are particularly harmful

if

9. Given this new Community and global economic environment,
the continued
application of Regulation No 17 as drawn up in 1962, with its highly centralised system of
prior authorisation, is no longer consistent with the effective supervision of competition.
This White Paper sets out the Commission’s views on the subject and is intended to elicit
reactions from all
interested parties, a prerequisite for the formal presentation of a
proposal for a new regulation to the Council.

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CHAPTER I

BACKGROUND

I. The establishment of a system for the

implementation of Community competition law

The Chapter in the Spaak Report (1) concerning
10.
competition policy highlighted the need for the Treaty
to prevent monopolies or monopolistic practices from
impeding the fundamental aims of
the common
market (2). The authors of
the report defined the
concept of a (cid:28)monopoly’ as both a dominant position
held by an undertaking and the
concluding of
agreements restricting competition. This approach was
adopted by the Treaty of Rome, which prohibits
undertakings
from abusing a dominant position
(Article 86) and from engaging in (cid:28)restrictive practices’
(all agreements between undertakings, decisions by
associations of undertakings and concerted practices).
Such practices are void ab initio (Article 85).
Article 85(1) and (2) provide that (cid:28)1. The following
shall be prohibited as incompatible with the common
undertakings,
market:
decisions
and
concerted practices which may affect trade between
Member States and which have as their object or effect
the prevention, restriction or distortion of competition
within the common market, … 2. Any agreements or
decisions prohibited pursuant to this Article shall be
automatically void.’

agreements
associations

between
of

undertakings

all
by

been authorised by the competent authority. Under a
directly applicable exception system, the prohibition
on restrictive practices is not applicable to those which
satisfy certain conditions defined by law. Taken as a
whole,
such conditions may be regarded as an
exception to the prohibition principle. Restrictive
practices which satisfy the conditions are therefore
valid as soon as they have been concluded.

favouring

Article 85(3)

12.
is the result of a compromise
between the delegations favouring a directly applicable
exception system and those
a prior
authorisation system. Whilst those in favour of an
authorisation system proposed wording along the lines
of
(cid:28)restrictive agreements may be declared valid’,
agreement was eventually reached on a negative
wording: (cid:28)the provisions of paragraph 1 may, however,
be declared inapplicable’. By opting for this negative
the Community
approach, Article 85(3)
an
legislator
between
the
authorisation
applicable
exception system.

system and

freedom to

directly

choose

allows

a

effect,

negotiators

11. Whilst
the national delegations meeting in
Messina were very much in favour of a system based
on the prohibition principle, chiefly because of its
dissuasive
had
the Treaty
considerable difficulty in defining the conditions in
which the prohibition in Article 85(1) could be lifted.
Two systems were feasible: an authorisation system or
In an
a directly
authorisation system, the prohibition imposed by law
may be lifted only by an appropriately empowered
public authority which, by constitutive decision,
is lifted. Under the authorisation
declares that
system, restrictive practices are void until they have

applicable

exception

system.

it

the

final

Thus,

choice of

system for
13.
a
controlling restrictive practices was
to the
left
Community legislator: Article 87 entrusts the Council,
acting on a proposal from the Commission and after
consulting the European Parliament, with the task of
laying down detailed rules for the application of
Article 85(3), taking into account the need to ensure
effective supervision, on the one hand, and to simplify
administration to the greatest possible extent, on the
other. In doing so, the Council may institute a system
of prior authorisation or make Article 85(3) directly
applicable, without the need for a prior administrative
act.

(1) Report of the Heads of Delegation of the Governmental
Committee set up by the Messina Conference and
addressed to the Ministers for Foreign Affairs on 21
April 1956 (pp. 53-60).

implementing regulations

(2) The report stated that the principles laid down in the
Treaty should (cid:28)enable the European Commission to adopt
general
the
drawing-up of detailed rules concerning discrimination,
organising the control of mergers and implementing a
prohibition on restrictive agreements having the effect of
sharing or exploiting markets, restricting production or
technical progress’ (Spaak Report, op. cit., p. 56).

(…) aimed at

14.
Article 87(1) also gave the Council the power to
adopt any appropriate regulations or directives to give
effect to the principles set out in Articles 85 and 86.
The Commission presented the Council with a
proposal for a Regulation to that end on 28 October
1960 (3). The
explanatory memorandum

short

(3) Document IV/COM(60) 158 final, of 28 October 1960.

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a

sufficiently uniform regime

accompanying the proposal listed the three principal
objectives
that had guided its drafting: providing
greater information to the supervisory authorities,
ensuring
the
application of Article 85 in the six countries and
establishing the conditions for providing businesses
with adequate legal certainty. Given the prevailing
circumstances at the beginning of the 1960s, it was
not easy to achieve these three objectives.

for

responsibility

15.
First, ensuring that the competition authorities,
both national and Community, were provided with the
necessary information was a difficult matter at a time
when the Commission services, and in particular the
Directorate-General
for
with
competition policy, were not sufficiently familiar with
markets and the nature of restrictive practices. The
victims of breaches of the competition rules gave little
thought to lodging complaints with the Commission
and only gradually was recourse had to Community
law. In addition, the competition authorities of the
Member States, where they existed, had been set up
recently and had little experience in the field of
competition. The case-law of the national courts was
also very limited in the competition field.

in

to

order

provide

Accordingly,

16.
the
Commission with information and businesses with
certainty, Regulation No 17 set up an
legal
authorisation system which normally requires
the
Commission to be informed in advance, in the form of
a notification. The Regulation does not make prior
notification of restrictive practices compulsory, but
undertakings which wish to benefit from Article 85(3)
must
the
restrictive
Commission (apart from restrictive practices exempted
from notification under Article 4(2)). Decisions
granting exemption are constitutive in nature and may
be backdated to the date of notification but no earlier
(Article 6(1) of Regulation No 17).

practices

notify

their

to

Secondly,

the coherent development of

the
17.
interpretation of Article 85(3)
initially required a
certain centralisation of control. This was achieved by
giving the Commission sole power to declare that
Article 85(1) is inapplicable to restrictive practices
(Article 9(1) of Regulation No 17). This sole power
was
then strengthened by the mechanism which
automatically removes the jurisdiction of the national
authorities as
the Commission initiates
procedures (Article 9(3) of Regulation No 17).

soon as

any

block

in their

regulations

18.
Thirdly, the legal certainty of businesses was
weakened by the fact that Article 85(2) stipulates that
prohibited restrictive practices are automatically void,
as well as by the very general wording of Article 85,
whose scope had not yet been defined by Community
case-law,
and
exemption
Commission decision-making practice. What is more,
at that time, national laws, which either did not exist
or were heterogeneous, were unable
to guide
interpretation of
undertakings or courts
Community law. Whilst neither Italy nor Luxembourg
had
the
Netherlands had opted for a system of controlling
abuses (4) which allowed illegal agreements
to be
date
penalised
the
from the
infringement was
competition
recorded by
authority. Only German and French law were based,
like Community law, on the prohibition principle,
although German law had introduced an authorisation
system for agreements between competitors (GWB
(Restriction of Competition Act) of 27 July 1957),
whilst French law had set up a system of directly
applicable exception (French Order No 45-1483 of
30 June 1945).

on which
the

Belgium and

competition

only

law,

II. Development of the role of the Commission

19.
Since the 1960s, the role of the Commission
and the number of cases have expanded considerably
owing to the combined effects of market integration,
the accession of new Member States, the adoption of
cooperation agreements with third countries and the
globalisation of the economy.

It

the

should be

recalled that

the completion of

20.
scope of
Community competition law is based on the criterion
of effect on trade between Member States. An
inevitable result of
the internal
market and the progressive integration of national
markets was an increase in the number of cases
covered by Community law. In an integrated market,
undertakings
even
established in one and the same Member State may
have a direct or indirect, actual or potential influence
on intra-Community trade and may thus fall within
the scope of Community law.

restrictive

practices

between

(4) The Belgian Law of 20 May 1960 on protection against
the abuse of economic power, and the Dutch Law of 28
June 1956.

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21.
The series of accessions of new Member States
has had a mechanical effect on the geographical scope
of the Commission’s competence. Founded in 1957 by
six countries,
the Community currently has 15
members and will soon have more than 20. The
enlargements did not bring any major changes to
Regulation No 17. The accession of
the United
Kingdom, Ireland and Denmark (5) resulted simply in
the incorporation of an Article 25 providing that the
date of accession was the date of entry into force of
the Regulation and that agreements, decisions and
concerted practices which, as a result of the accession,
were covered by Article 85, should be notified within
a period of six months. When Greece (6), Spain and
Portugal (7) acceded, it was simply stated that the rules
applicable to previous accessions would also apply.
The same rules were retained for the accessions of
Austria, Sweden and Finland (8), except as regards
agreements, decisions and concerted practices which,
on the date of accession, were covered by the
Agreement on the European Economic Area (the EEA
Agreement) (9).

further

geographical

The Commission’s
competition was

jurisdiction
22.
over
expanded by the
agreements concluded with third countries, either
prior to accession, or simply as free trade agreements.
The EEA Agreement contains rules based on Articles
85 and 86 and empowers the Commission to deal
with a majority of the cases in which trade within the
territory covered by the Agreement is affected.

Thus, while

the Commission’s

23.
has
expanded considerably since the 1960s, its means of
action have not changed. Procedural rules that were
designed for a Community of six Member States are
still being applied, without any significant changes, to
15 Member States.

role

(5) See documents concerning the accession to the European
Communities of the Kingdom of Denmark, Ireland, the
Kingdom of Norway and the United Kingdom of Great
Britain and Northern Ireland (OJ Special Edition L 73,
27.3.1972, p. 92).

(6) See documents concerning the accession of the Hellenic
Republic to the European Communities (OJ L 291,
19.11.1979, p. 93).

(7) See documents concerning the accession of the Kingdom
of Spain and the Portuguese Republic to the European
Communities (OJ L 302, 15.11.1985, p. 165).

(8) See documents concerning the accession of the Kingdom
of Norway, the Republic of Austria, the Republic of
Finland and the Kingdom of Sweden to the European
Union (OJ C 241, 29.8.1994, p. 57).

(9) OJ L 1, 3.1.1994, p. 1.

III. Adjustments and their limits

to

thus

authorities,

competition

in the Community,

The authorisation system provided for

24.
in
Regulation No 17 met the three main requirements
identified at the time by the Commission (provision of
uniform
information
application of the competition rules in the Community
and legal certainty for undertakings). It allowed a
coherent corpus of rules to be developed and applied
uniformly
contributing
significantly to the completion of the internal market.
Nevertheless, it is now showing signs of its limitations.
The ex ante control mechanism inherent
in the
authorisation system set up by Regulation No 17
resulted in undertakings systematically notifying their
restrictive practices to the Commission which, with
limited administrative resources, was very soon faced
with the impossibility of dealing by formal decision
with the
submitted. Under
the adoption of an exemption
Regulation No 17,
decision requires,
in addition to the appropriate
investigative measures, the publication of a notice in
the Official Journal of the European Communities in,
at present, 11 languages (Article 19(3) of Regulation
No 17) to allow other interested parties to submit
their observations,
the Advisory
Committee on the draft decision, adoption by the
Commission and publication of the decision in the
Official Journal of the European Communities in the
11 languages.

consultation of

thousands of

cases

25.
The combination of the ex ante control system
provided for in Regulation No 17, the Commission’s
limited administrative resources and the complexity of
decision-making procedures meant that, as early as
the Commission was faced with a mass of
1967,
37 450 cases that had accumulated since the entry into
force of the Regulation four years earlier. It was thus
essential to make certain adjustments to the system
then in force in order to limit individual notifications,
for
speed
and,
authorisation
encourage
complainants
to turn to the national courts or
authorities.

applications
cases,

processing
in

of
certain

the

up

A. REDUCTION IN INDIVIDUAL NOTIFICATIONS

The Commission has

26.
taken a number of
measures over the years to reduce notifications seeking
negative clearance or exemption.

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published

In its first formal decision under Article 85 (10),
27.
the Commission introduced the concept of appreciable
effect on competition, which allowed more minor
cases to be removed from the scope of Article 85(1).
The concept was upheld by the Court of Justice in
V(cid:246)lk v. Vervaeke (11). On the basis of that judgment,
the Commission quantified the concept for guidance
in a notice on agreements of minor
purposes
second
importance
in
paragraph of which states that (cid:28)in the Commission’s
opinion, agreements whose effects on trade between
Member States or on competition are negligible do not
fall
restrictive
agreements.(…). Only those agreements are prohibited
which have
impact on market
conditions (…)’. The notice, which was updated in
1977 (13), 1986 (14) and 1997 (15), helped to reduce the
number of notifications of restrictive practices that
were not harmful to competition.

an appreciable

prohibition

1970 (12),

under

the

the

on

in the

field of

The Commission started using general notices
28.
in 1962 in order to clarify the conditions under which
certain restrictive practices would not normally have
the object or effect of restricting competition and
would not therefore be caught by Article 85(1). A
notice on exclusive dealing contracts with commercial
agents (16) was published in 1962,
followed by a
notice concerning agreements, decisions and concerted
practices
cooperation between
enterprises (17) adopted in 1968. In addition, a notice
concerning the assessment of certain subcontracting
agreements in relation to Article 85(1) was adopted in
1978 (18). A notice concerning the assessment of
cooperative joint ventures pursuant to Article 85 (19)
was adopted in 1993. Intended to allow undertakings,
if necessary with the help of their legal advisers, to
determine themselves whether the restrictive practices
to which they were parties were compatible with
Community law, the notices to some extent helped to
for negative
the number of applications
reduce
clearance under Article 2 of Regulation No 17.

29.
applications

In an effort to reduce the number of individual
the Commission,

exemption,

for

(10) Commission Decision 64/344/EEC of 1 June 1964
concerning a request for negative clearance pursuant to
Article 2 of Regulation No 17 (Grosfillex-Fillistorf Case)
(OJ L 64, 10.6.1964, p. 1426).

(11) Case 5/69 Franz V(cid:246)lk v. SPRL Ets Vervaecke [1969] ECR

295, paragraph 7.

(12) OJ C 64, 2.6.1970, p. 1.
(13) Commission notice of 19 December 1977 (OJ C 313,

29.12.1977, p. 3).

(14) OJ C 231, 12.9.1986, p. 2.
(15) OJ C 372, 9.12.1997, p. 13.
(16) OJ 139, 24.12.1962, p. 3921.
(17) OJ C 75, 29.7.1968, p. 3, corrected by OJ C 84,

28.8.1968, p. 14.
(18) OJ C 1, 3.1.1979, p. 2.
(19) OJ C 43, 16.2.1993, p. 2.

be

of Article

85(1) may

rules defining the

empowered by the Council, adopted a series of block
exemption regulations. Under Article 85(3),
the
provisions
declared
inapplicable to categories of agreements, decisions of
associations of undertakings or concerted practices.
The (cid:28)declaration of inapplicability’ thus stems from
the
characteristics which the
restrictive agreements in question must have in order
to be regarded, without prior assessment, as qualifying
for exemption under Article 85(3). Article 87 of the
Treaty provides that
the Council shall adopt any
appropriate regulations or directives to give effect to
the principles set out in Articles 85 and 86. On that
basis, the Council has to date adopted three enabling
19/65 (20),
regulations,
Regulation (EEC) No 2821/71 (21) and Regulation
the
(EEC) No
Commission to declare the prohibition in Article 85(1)
inapplicable to certain categories of agreements.

1534/91 (22), which

(EEC) No

Regulation

empower

There are

currently five block exemption
30.
regulations
transfer
and technology
agreements, adopted by the Commission on the basis
of Regulation (EEC) No 19/65:

vertical

for

— Regulation (EEC) No 1983/83 of 22 June 1983 on
the application of Article 85(3) to categories of
exclusive distribution agreements (23),

— Regulation (EEC) No 1984/83 of 22 June 1983 on
the application of Article 85(3) to categories of
exclusive purchasing agreements (24),

— Regulation (EC) No 1475/95 of 28 June 1995 on
to certain
vehicle distribution and

application of Article 85(3)

the
categories of motor
servicing agreements (25),

(20) OJ 36, 6.3.1965, p. 533.
(21) Council Regulation (EEC) No 2821/71 (OJ L 285,
(EEC)

by Regulation

29.12.1971),
No 2473/72 (OJ L 191, 29.12.1972).

amended

as

(22) Council Regulation (EEC) No 1534/91 (OJ L 143,

7.6.1991, p. 1).

(23) OJ L 173, 30.6.1983, as amended by Commission
Regulation (EC) No 1582/97 (OJ L 214, 6.8.1997, p. 2).
(24) OJ L 173, 30.6.1983, as amended by Commission
Regulation (EC) No 1582/97 (OJ L 214, 6.8.1997, p. 2).

(25) OJ L 145, 29.6.1995, p. 25.

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— Regulation (EEC) No 4087/88 of 30 November
1988 on the application of Article 85(3)
to
categories of franchise agreements (26),

33.
These block exemption regulations produced a
considerable reduction in the number of individual
applications for exemption.

— Regulation (EC) No 240/96 of 31 January 1996 on
to certain

the
categories of technology transfer agreements (27).

application of Article 85(3)

B. QUICKER PROCESSING OF INDIVIDUAL

NOTIFICATIONS

restraints,

In connection with its review of policy concerning
vertical
the Commission presented the
Council with a proposal for a Regulation amending
Regulation (EEC) No 19/65 in order to give the
Commission the necessary powers to adopt a block
exemption
vertical
agreements (28).

regulation

covering

all

Under the powers conferred by the Council by
31.
virtue
the
Commission adopted two block exemption regulations
for horizontal agreements:

of Regulation

(EEC) No

2821/71,

— Regulation (EEC) No 417/85 of 19 December
1984 on the application of Article 85(3)
to
categories of specialisation agreements (29),

— Regulation (EEC) No 418/85 of 19 December
1984 on the application of Article 85(3)
to
development
research
of
categories
agreements (30).

and

Lastly,

1534/91
32.
(EEC) No
Regulation
empowered the Commission to adopt
a block
exemption regulation specifically for the insurance
industry: Regulation
of
21 December 1992 on the application of Article 85(3)
to certain categories of agreements, decisions and
concerted practices in the insurance sector (31).

(EEC) No

3932/92

(26) OJ L 359, 28.12.1988, p. 46.
(27) OJ L 31, 9.2.1996, p. 2.
(28) OJ C 365, 26.11.1998, p. 27.
(29) OJ L 53, 22.2.1985, p. 1, as amended by Commission
Regulation (EC) No 2236/97 (OJ L 306, 11.11.1997,
p. 12).

(30) OJ L 53, 22.2.1985, p. 1, as amended by Commission
Regulation (EC) No 2236/97 (OJ L 306, 11.11.1997,
p. 12).

(31) OJ L 398, 31.12.1992, p. 7.

As

the cases

stated above,

to apply to all

the adoption of

formal
34.
decisions by the Commission involves particularly
cumbersome procedures which very rapidly proved
difficult
submitted for
assessment to the Commission. Accordingly, in order
for
to speed up the processing of applications
authorisation, since the early 70s the Commission
services have used the technique of (cid:28)comfort’ letters.
These letters informed undertakings that, according to
the information in the Commission’s possession, the
notified agreement either did not meet the conditions
for the application of Article 85(1) (negative clearance
letter) or qualified for exemption (exemption letter).
They
the
are
director
for Competition. They help to
Directorate-General
speed up the processing of cases considerably as they
generally
requirement
provided for in Articles 19 and 21 of Regulation No
17 and the formal consultation of
the Advisory
reducing the amount of
Committee, as well as
translation required. The use of such letters developed
very rapidly, and they currently total some 150—200
a year. Today, over 90% of notifications are closed
informally (comfort
letter or simply filed without
further action (32)).

publication

eliminate

signed

the

by

of

a

the European Communities

35.
The comfort letter system has worked very well
and won general acceptance, but it has two major
drawbacks. First, the requirement that administrative
acts must in principle be published and transparent is
not met by comfort letters as they are only rarely
preceded by the publication of a notice in the Official
Journal of
enabling
interested parties to put forward their comments in
accordance with Article 19(3) of Regulation No 17.
Secondly, the Court of Justice defined their legal value
in a judgment delivered on 10 July 1980 (33), holding
that
they constitute neither a decision granting
negative clearance nor a decision in application of
Article 85(3) of the Treaty and that they do not have
the effect of binding the national courts before which
the restrictive practices in question are alleged to be

(32) A large number of cases are filed each year without a
decision: they may concern complaints or notifications
withdrawn or no longer relevant.

(33) Case 99/79 SA Lanc(cid:244)me and Cosparfrance Nederland BV
v. Etos BV and Albert Heyn Supermarkt BV [1980] ECR
2511.

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incompatible with Article 85. They constitute an
element of
courts and
fact which the national
authorities may take into account.

C. ENCOURAGING THE DECENTRALISED

PROCESSING OF COMPLAINTS

Article 9(1) of Regulation No 17 gives the
36.
Commission sole power only to declare Article 85(1)
inapplicable pursuant to Article 85(3). The national
courts and the competent authorities of the Member
States may apply Article 85(1) and Article 86 of the
Treaty and, in particular, rule on applications based on
Community law. The Commission has
frequently
expressed its wish for more decentralised application
by both national authorities and national courts.

The Court of Justice had already ruled in 1974
37.
in BRT (34) that, as the prohibitions of Articles 85 and
86 tend by their very nature to produce direct effects
in relations between individuals, the Articles create
rights directly in respect of the individuals concerned
which the national courts must safeguard. Ten years
before adopting the notice on cooperation with the
national courts (35),
the Commission in its 1983
Competition Report (36)
role which
legal channels could play in establishing
national
infringements of the Community competition rules. In
the Commission
most of
expressed regret
in this
respect (37). In addition,
in Delimitis (38), the Court
confirmed that a national court could directly apply
Article 85(1) if it was beyond doubt that Article 85(3)
was not applicable to the case in question. The Court
also acknowledged that a national court has the power
(cid:28)to adopt interim measures pursuant to its national
rules of procedure’ (39) and to carry out a positive

subsequent Reports,
the

slow progress

stressed the

its

at

(34) Case 127/73 BRT 1 [1974] ECR 51.
(35) Notice on cooperation between national courts and the
Commission in applying Articles 85 and 86 of the EEC
Treaty (OJ C 39, 13.2.1993, p. 6).
(36) 1983 Competition Report, point 217.
(37) See in particular the 1985 Competition Report, point 38,
the 1986 Competition Report, point 40,
the 1987
Competition Report, point 55 and the 1991 Competition
Report, point 69.

(38) Case C-234/89 Stergios Delimitis v. Henninger Br(cid:228)u AG

[1991] ECR I-935.

(39) Ibid., paragraph 52, footnote 38.

they

require,

provided

judgment,

it stated hat,

assessment as to the application of Article 85(3).
Lastly,
in order to limit the risk of
national courts taking decisions which conflict with
those adopted or planned by the Commission, national
courts could apply to the Commission to obtain the
information
the
Commission was in a position to provide it. Following
that
the
above-mentioned notice on cooperation between itself
and national courts in 1993. The notice clarifies the
general
legal framework and sets out the practical
measures for increasing the involvement of national
courts in the application of Articles 85 and 86. In
particular, it defines the conditions in which the courts
may apply to the Commission to seek information of a
procedural, legal or factual nature.

the Commission

adopted

that

sets out guidelines

38.
In the same vein, the notice on cooperation
between the Commission and national authorities (40),
published in 1997,
the
allocation of cases between the national authorities
and the Commission and invites undertakings to make
greater use of the national competition authorities to
obtain enforcement of Articles 85(1) and 86. The chief
aim of
to reduce the number of
complaints addressed to the Commission if they can
be dealt with effectively by the national authorities.

the notice is

for

to apply

to notify their

to the national

39.
The two above-mentioned notices concerning
decentralisation have now reached their limits within
the existing legal framework. Complainants remain
courts or
reluctant
competition authorities when they consider they have
been harmed by an infringement of Community law.
Undertakings involved in national proceedings are still
able
to the
Commission in order to thwart the actions of the body
to which the matter has been referred. As already
noted above, as soon as the Commission initiates
procedures, the competition authorities automatically
lose their jurisdiction (Article 9(3)) and the courts can
stay proceedings until the Commission has taken a
decision. Aware of
the Commission
referred, in point 57 of the notice on cooperation with
competition authorities, to notifications chiefly aimed

restrictive practices

this problem,

(40) Commission notice on cooperation between the national
competition authorities and the Commission in handling
cases falling within the scope of Articles 85 or 86 of the
EC Treaty (OJ C 313, 15.10.1997, p. 3).

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at suspending national proceedings, stating that
it
considered it was justified in not examining them as a
matter of priority. However, it must be said that the
mechanisms for cooperation with national authorities
have not to date encountered the success expected,
owing
the
to the Commission’s monopoly
application of Article 85(3) of the Treaty.

for

CONCLUSION

40.
The Commission has therefore managed to stem
the flood of notifications, but at the cost of focusing
less on the most serious restrictions of competition

It

radical

legal certainty.

which, generally, are never notified. In addition, the
Commission is not able to close all of the cases which
it handles by formal decision, to the detriment of
undertakings’
is clear from the
foregoing that the measures taken have reached their
limits and that more
reforms must be
considered. The need is all the more pressing as the
closer integration of national markets aggravates the
effects of restrictions of competition, compelling the
the
Commission to take stronger measures against
most harmful restrictive practices. In a Union with
over 20 Member States, it will no longer be possible
to retain a centralised prior authorisation system in
assessment of
Brussels,
thousands of
system would be
cumbersome, inefficient and impose excessive burdens
on economic operators.

individual

involving

Such a

cases.

the

CHAPTER II

THE NEED FOR REFORM

I. The objectives

A. ENSURING EFFECTIVE SUPERVISION

41.
Article 87(2)(a) stipulates that the regulations
or directives adopted to give effect to Articles 85 and
86 shall be designed to ensure compliance with the
laid down in Article 85(1) and in
prohibitions
Article 86 by making provision for fines and periodic
penalty payments. Article 87(2)(b) provides that the
rules for the application of Article 85(3) must take
into account the need to ensure effective supervision,
on the one hand, and to simplify administration to the
greatest possible extent, on the other. The need to
ensure a balance between effectiveness of policy and
simplification of control must therefore be the guiding
principle in choosing between the various options for
reform.

42.
The Commission considers that, in seeking such
a balance and in order to accomplish its institutional
mission,
it must have a procedural framework that
enables it, in the first place, to refocus its activities on
combating the most serious restrictions of competition
and, secondly, to allow decentralised application of the
Community competition rules while at the same time
maintaining
policy
throughout the Community. Lastly, the Commission
considers that the procedural framework should ease
the administrative constraints on undertakings while
at the same time providing them with sufficient legal
certainty.

competition

consistency

in

1. Refocusing the Commission’s implementation of

Article 85

in

for

the

that,

notification

In an opinion delivered in 1961 (41),
the
43.
Economic and Social Committee pointed to the risks
inherent
and
obligatory
in the Commission
authorisation system set out
proposal
In its opinion of
a Regulation.
28 March 1961, the Economic and Social Committee
observed
the
authorisation system as a means of obtaining better
knowledge of the existence of agreements that were
harmful to competition, such a system risked diverting
the Commission from its true mission by overloading
it with administrative work that would prevent it from
in-depth examination of
carrying out a serious,
agreements between undertakings and of their real
effects (42).

some might

although

see

44.
The Economic and Social Committee’s warning
did indeed prove to be correct. A look at the recent
statistics on the Commission’s work shows that the

(41) Opinion of 28 March 1961 on the first Regulation

implementing Articles 85 and 86 of the Treaty.

(42) Emphasis added.

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number of notifications makes it very difficult
to
pursue a proactive policy of combating restrictive
practices.
In the period 1988—98, own-initiative
procedures (43) accounted for only 13 % of new cases
registered, with the Commission gradually having been
reduced to a reactive role in handling the large
number of notifications and complaints it receives.
Similarly, formal Commission decisions account on
average for only 6 % of cases closed.

most of them have the human (44) and legal resources
needed to take action against infringements whose
centre of gravity is in their territory. Lastly, they are
closer to complainants, who will more readily turn to
a national authority than to the Commission. Where
complainants invoke provisions both of Community
law and of national
law, the national competition
authorities, like the national courts, can apply the two
sets of rules. The national courts for their part are in a
better position than the Commission to accede to
certain requests by complainants: they can act rapidly
through interlocutory proceedings and, unlike the
Commission, can grant damages to those who have
been the victims of infringements.

application

allow decentralised

47. Modernisation of the procedural rules should,
of
therefore,
Community law by removing the obstacle posed at
present by the Commission’s sole power to apply
Article 85(3). Community
law could then be
implemented by the body that was able to do so most
effectively. However, any such move must not
compromise uniform interpretation of Community law
or result in a number of national authorities being
able to adopt contradictory decisions in one and the
same case.

B. SIMPLIFYING ADMINISTRATION

1. No need for an authorisation system

48.
A system of prohibition of restrictive practices
does not need to have an authorisation system in order
like
to work properly. Other systems exist which,
Community law, are based on the principle that
restrictive practices are prohibited, but which do not
have a system involving notification and authorisation.
A prohibition system does not mean that all restrictive
practices must be presumed to be illegal, but rather
only those that restrict competition to an appreciable
for
extent
satisfy
exemption.
for
practices
undertakings
authority. The
validated

and do not
It

their
administrative

conditions
necessary

is
to have

the
therefore

restrictive

not

by

an

(44) In 1998, there were around 1 222 officials responsible for
investigating cases involving mergers, restrictive practices
and abuses of dominant positions in the Member States
as opposed to 153 in the Commission. These figures must
be treated with the greatest caution and are merely
indicative, since comparisons between one Member State
and another are very difficult to make.
taken from the XVIIIth FIDE Congress,
Figures
Stockholm, 3-6 June 1998, National Application of
Community Competition Law,
by
J. Temple Lang, page 265 (for the detailed figures by
Member State, see the report).

general

report

45.
There is today an obvious need to refocus the
Commission’s implementation of Article 85, allowing
it to use its resources to combat cartels, particularly in
concentrated markets and in markets which are being
Instead of having to adopt a reactive
liberalised.
stance in the face of the large number of notifications
it has to handle, the Commission should be able to be
proactive and to pursue own-initiative procedures
against restrictive practices and abuses of dominant
competition and
that
positions
threaten market integration.

seriously restrict

2. Decentralising the application of the competition

rules

46.
In an enlarged Community with more than 20
Member States, centralised detection of, and action
against, infringements of the competition rules will be
increasingly inefficient and inappropriate. Application
of the rules will have to be decentralised more to the
Member States’ competition authorities and to the
national courts. The competition authorities are well
placed to take effective action in certain types of case:
they are normally well acquainted with local markets
them have an
and national operators,
infrastructure covering the whole of
the relevant
country and can carry out investigations rapidly, and

some of

(43) These are proceedings instigated by the Commission on
its own initiative where it wishes to investigate and take
action against infringements.

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prohibition rule laid down in Article 85 can also be
met by ex post control
in which action would be
taken only against restrictive practices that infringe
Article 85 as a whole. This is all the more relevant
since, after 35 years of application, the law has been
clarified and thus become more predictable
for
undertakings. At all events, it is inconceivable that, in
an enlarged European Union, undertakings should
have
and the Commission examine,
thousands of restrictive practices.

to notify,

than 30 years of Commission decision-making practice
and Court of Justice case-law and by the many
different kinds of general instruments that have been
adopted (block exemption regulations, notices and
guidelines). Any reform must endeavour to ensure that
a reasonable level of legal certainty is maintained for
undertakings. This means, on the one hand, that the
rules must be defined as clearly as possible so that
restrictive practices
undertakings can assess
their
that consistency of
themselves and, on the other,
application
responsible
bodies
various
(Commission, national competition authorities and
courts)
is ensured by appropriate preventive and
corrective mechanisms.

the

by

49.
Lastly, the current division between paragraph 1
and paragraph 3 in implementing Article 85 is
artificial and runs counter to the integral nature of
Article 85, which requires economic analysis of the
overall impact of restrictive practices (45).

II. The options

2. Easing the constraints on undertakings while at
the same time providing them with a sufficient
degree of legal certainty

determining

take account of

50. While in 1962 it was necessary to ensure that
the Commission was informed through a system of
notification, the situation is now very different and
provides less justification for the constraints imposed
by notification. The legal environment is one of the
of
the
factors
competitiveness
undertakings, and their
competitiveness must be
fostered as much as possible. At present, in pursuing
their industrial and business strategies, undertakings
must
the need to notify their
restrictive practices to the Commission in order to
obtain assurance
the
competition rules. This requirement generates major
costs, particularly for medium-sized undertakings. One
of the objectives in modernising the competition rules
therefore be to avoid impeding cooperation
must
between undertakings, where such cooperation does
not pose any threat to competition, by freeing them
from the
current
notification system.

they do not

constraints

imposed

infringe

that

the

by

52.
The options available for reforming the system
of control of restrictive practices must be assessed in
the light of the requirements of effective supervision
and simplification of administration. The reform
options considered must also be such as to ensure
consistency and uniformity in the application of the
competition rules and to maintain a reasonable level
of legal certainty for undertakings.

the

legislator

In a system under which restrictive practices are
53.
confronted with a
is
prohibited,
fundamental choice: adoption of an authorisation
system or one of directly applicable
exception.
Authorisation systems are based on the principle that
the prohibition on restrictive practices (in Community
law, Article 85(1)) can be lifted only by an act of a
public authority empowered to do so, its authorisation
decision being constitutive. Where the prohibition on
restrictive practices is sanctioned by their being void,
logic dictates that such practices are void until such
time as the authority has authorised them. In directly
applicable
the
prohibition on restrictive practices does not apply to
those which meet certain criteria specified by law.
Such criteria taken as a whole represent an exception
to the principle of prohibition.

exception

contrast,

systems,

by

Undertakings also at present enjoy a satisfactory
51.
level of legal certainty thanks to the set of clear rules
that have been developed and refined through more

(45) Case

13/61 Kledingverkoopbedrijf

en
Uitdenbogerd v. Robert Bosch GmbH and Others [1962]
ECR 89, and Case 59/77 Etablissements A. de Bloos
SPRL v. Socie´te´ en Commandite par Actions Bouyer
[1977] ECR 2359.

de Geus

54.
The reasons which led to the adoption of an
authorisation system in Community law in 1962 have
been explained above. Today,
in the
circumstances in which the Commission acts lead one
to ask whether it is necessary to change the system.
Various suggestions have been made in recent years by
interested parties:
some suggestions maintain the
authorisation system approach and try to make it
more efficient and less time-consuming, while others

changes

12.5.1999

EN

Official Journal of the European Communities

C 132/17

pursue a more
adoption of a directly applicable exception system.

far-reaching reform through the

A.

IMPROVING THE AUTHORISATION SYSTEM

that

first,

the fact

55.
A number of suggestions have been made for
improving the operation of the present system, whose
the
main disadvantages are,
Commission cannot focus its resources on dealing with
the most serious restrictions of competition, secondly,
the fact that it is difficult for the Commission to deal
with the
referred to it within reasonable
deadlines by means of formal decisions that provide
satisfactory legal
certainty for undertakings and,
thirdly, the obstacles to decentralised application of
the Community competition rules by national courts
and competent authorities in the Member States.

cases

However, the structure of Article 85 is such as to
prevent greater use being made of this approach: if
more systematic use were made under Article 85(1) of
an analysis of the pro- and anti-competitive aspects of
a restrictive agreement, Article 85(3) would be cast
aside, whereas any such change could be made only
through revision of the Treaty. It would at the very
least be paradoxical to cast aside Article 85(3) when
that provision in fact contains all the elements of a
(cid:28)rule of reason’. It would moreover be dangerous if
modernisation of the competition rules were to be
based on developments in decision-making practice,
subject
to such developments being upheld by the
Community Courts. Any such approach would mean
that modernisation was contingent upon the cases
submitted to the Commission and could take many
years. Lastly,
this option would run the risk of
diverting Article 85(3) from its purpose, which is to
economic
framework
provide
assessment of restrictive practices and not to allow
application of the competition rules to be set aside
because of political considerations.

legal

the

for

a

1.

Interpretation of Article 85

2. Decentralisation of the application of Article 85(3)

the

exemption provided for

56. One option that is sometimes put forward is to
change the interpretation of Article 85 so as to include
analysis of the harmful and beneficial effects of an
in the assessment under Article 85(1).
agreement
Application of
in
Article 85(3) would then be restricted to those cases in
which the need to ensure
consistency between
competition policy and other Community policies took
precedence over
competition
analysis.
It would in a way mean interpreting
Article 85(1) as incorporating a (cid:28)rule of reason’ (46).
Such a system would ease the notification constraints
imposed on undertakings, since they would not be
required to notify agreements in order to obtain
negative clearance.

results of

the

the

the

the Commission’s
causes of
58. One of
difficulty in focusing its action on cases involving a
real Community interest lies in its monopoly on the
application of Article 85(3).
It has accordingly
sometimes been suggested that Article 9(1) of
Regulation No 17 should be abolished, so as to
change the current attribution of powers and enable
national
apply
Article
exemption
decisions. There are several variants of this option
depending on the power-sharing criteria applied.

competition authorities
adopting

constitutive

to fully

85

by

57.
The Commission has already adopted this
approach to a limited extent and has carried out an
assessment of the pro- and anti-competitive aspects of
some restrictive practices under Article 85(1). This
approach has been endorsed by the Court of Justice (47).

(46) Approach in which the authorities or courts responsible
for competition law balance the pro-competitive aspects
of an agreement against its anti-competitive aspects in
deciding whether to prohibit it.

(47) See, for example, Case 258/78 L.C. Nungesser KG and
Kurt Eisele v. Commission of the European Communities
[1982] ECR 2015, and Case 161/84 Pronuptia de Paris
GmbH v. Pronuptia de Paris Irmgard Schillgalis [1986]
ECR 353.

59.
The first variant of this option involves sharing
the power to apply Article 85(3) and allocating cases
between the Commission and national competition
their centre of gravity
authorities on the basis of
((cid:28)Schwerpunkttheorie’) (48).
for
criteria
The
determining the centre of gravity of a case would be
not only the effects of the agreement or practice, but
also the need to safeguard competition effectively.
Some
cases of Community relevance would be
reserved to the Commission: these would include cases
that raised a new legal
issue and cases involving
application of Article 90 of the Treaty.

(48) This variant was set out in a working document of the
Bundeskartellamt: Arbeitsunterlage f(cid:252)r die Sitzung des
Arbeitskreises Kartellrecht am 8. und 9. Oktober 1998:
(cid:28)Praxis und Perspektiven der dezentralen Anwendung des
EG-Wettbewerbsrechts’ (http://www.bundeskartellamt.de).

C 132/18

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Official Journal of the European Communities

12.5.1999

60.
This option does not reduce the total number of
notifications, but merely redistributes the total number
of current and future cases between the Commission
and the national competition authorities. It does not
make it possible to increase action against the most
serious infringements of the competition rules, which
are almost never notified. Its effectiveness is further
limited by the fact
that notifications liable to be
handled by the national competition authorities are
few in number: the decisions of a national authority
are enforceable only within its own territory, which
means that cases involving several countries cannot be
handled in this way.

notification

that all national competition authorities would have to
introduce
the
establishment of such systems could prove particularly
difficult
States, whose
administrative structures might not be up to such a
task.

new Member

systems,

though

the

for

3. Broadening the scope of application of Article 4(2)

of Regulation No 17

of

In

the

is well

criterion

addition,

proposed

concept
complaints

61.
for
allocating cases is not sufficiently precise to allow
notifications to be allocated along clear lines. The
suited to the
centre-of-gravity
competition
allocation
between
authorities, but would be difficult
to apply in
allocating notifications. Furthermore, any such system
application of
would continue
Community law by national courts, since it would not
remove the blocking effect of any system involving
authorisation by an administrative authority, whether
national or Community.

to impede

the

thresholds,

competence

the Commission,

62.
The second variant would involve allocating
responsibilities between the Commission and national
competition authorities on the basis of
turnover
lines of Regulation (EEC)
thresholds, along the
4064/89 (49).
the
Below the
No
competition authorities would be able to apply either
their own national law, as in the case of mergers, or
Community law. Whereas the thresholds provided for
in Regulation (EEC) No 4064/89 establish both the
scope of application of Community law and the
the
of
exclusive
thresholds to be used for the purposes of applying
Article 85 would be confined to defining competences,
with the criterion for the application of Community
law being the effect on trade between Member States.
If the national authorities were to apply national law,
there would be a risk of forum shopping and the
renationalisation of competition policy (50). Such a
situation would be detrimental to undertakings. If the
national authorities were to apply Community law
and had the power to adopt constitutive exemption
decisions, there would be a major risk to the uniform
application of Community law, particularly in the
event of multiple notifications being submitted to
different national authorities. This option would mean

63.
Article 4(2) of Regulation No 17 waives the
prior notification requirement for a number of types
of agreement. Consequently, Article 6(1), under which
the date on which an exemption decision takes effect
may not be earlier than the date of notification, does
not apply to them. The purpose of this provision is to
reduce the number of notifications involving restrictive
single
practices whose main
Member State.

impact

in

is

a

the

64. One option might be to extend further the
exception to the notification requirement provided for
in Article 4(2) of Regulation No 17. The advantage of
such a change for the undertakings concerned would
be that, even in the event of late notification, the
restrictive
Commission could assess whether
practices satisfied the conditions of Article 85(3) and,
if so, could adopt an exemption decision that would
be effective from the date on which the agreement was
concluded. Thus, undertakings’ legal certainty would
be enhanced as this would prevent agreements falling
within the scope of Article 85(1) which have not been
notified from being automatically void, as is the case
under the present system. This type of change would
not entail any relaxation in Commission supervision,
since Article 4(2) does not prevent it from prohibiting
restrictive practices covered by Article 85(1) that do
not meet the tests of Article 85(3).

it

is

this

limits

option

not wholly
65. Nevertheless,
satisfactory:
scope for
refocusing its activities on the most serious restrictions
of competition, since it maintains the Commission’s
monopoly on granting exemption and thus poses an
obstacle to decentralisation.

the Commission’s

(49) Council

No

Regulation

of
(EEC)
21 December 1989 on the control of concentrations
between undertakings (OJ L 395, 30.12.1989, p. 1;
corrected version OJ L 257, 21.9.1990, p. 13), as
amended by Council Regulation (EC) No 1310/97
(OJ L 180, 9.7.1997, p. 1).

4064/89

(50) See the opinion of the European Parliament on the 1996

Competition Report.

4. Procedural simplification

66. One of
difficulties

the reasons

the Commission’s
for
in handling cases by formal decision

12.5.1999

EN

Official Journal of the European Communities

C 132/19

is

in

that

discussed

down
these procedures

pursuant to Regulation No 17 is the complexity of the
Regulation.
procedures
laid
Simplification of
sometimes
proposed, in order to allow the Commission to deal
with cases rapidly and provide undertakings with legal
certainty. The
include
simplifications
abolishing the requirement of
translation into all
Community languages, both in the case of Article 19(3)
notices and in the
case of decisions, and the
simplification of Advisory Committee consultation
procedures. Whatever the simplifications envisaged
and regardless of how they should be viewed, they will
not reduce the number of cases notified and will not
therefore enable the Commission to focus on the most
serious restrictions of competition, which are notified
only in exceptional circumstances. This option would
indeed have a perverse effect in that all notifications
would be dealt with by decision, and undertakings
would therefore be encouraged to notify.

restrictions

67.
A variant of this option would be the general
application of opposition procedures. A number of
block exemption regulations currently provide for
non-opposition procedures, under which agreements
expressly
that
involving
exempted by the regulation nor expressly prohibited
may be notified to the Commission (51).
the
Commission does not oppose exemption within a
period of six months, the agreement is exempt. It has
been proposed that
this system should be applied
generally to all restrictive practices.

are neither

If

68.
This option, however, has major disadvantages.
As already emphasised in the Green Paper on vertical
restraints in EC competition policy (52), the general
application of
such a procedure would have an
extremely centralising effect, creating a powerful
incentive for undertakings to notify their restrictive
practices to the Commission. It would not therefore
the competition
allow decentralised application of
rules. In addition, the Commission does not have the
necessary resources to handle large numbers of cases
under non-opposition procedures, and notification
costs would remain high for undertakings. This option
would not therefore allow the Commission to refocus

(51) These are Commission Regulation (EEC) No 4087/88 of
30 November 1988 on the application of Article 85(3) of
the Treaty to categories of franchise agreements (OJ L 359,
28.12.1988, p. 46), Commission Regulation (EEC)
No 417/85 of 19 December 1984 on the application of
Article 85(3) of the Treaty to categories of specialisation
agreements
and
of
Commission
19 December 1984 on the application of Article 85(3) of
the Treaty to categories of research and development
agreements (OJ L 53, 22.2.1985, p. 5).

22.2.1985,
(EEC) No

L
Regulation

p.
418/85

(OJ

53,

1)

(52) Document COM(96) 721 final, of 22 January 1997.

its work on combating the most serious restrictions of
competition.

B. SWITCHING TO A DIRECTLY APPLICABLE

EXCEPTION SYSTEM

ex

exception

system allowing

69. Within the framework of the prohibition system
provided for in the Treaty, there exists another option
for reform, which would be to adopt a directly
applicable
post
supervision of restrictive practices. The switch to such
a system can be achieved by a Council Regulation,
based on Article 87 of
the Treaty, which would
stipulate that all national authorities or courts before
which the applicability of Article 85(1) of the Treaty
was invoked would also consider the applicability of
Article 85(3). Article 85 would then become a unitary
norm comprising a rule establishing the principle of
prohibition, unless certain conditions are met. The
whole of Article 85 would then become a directly
applicable provision which individuals could invoke in
court or before any authority empowered to deal with
such matters. This interpretation would have the effect
of making restrictive practices which are prohibited by
Article 85(1), but which meet the tests of Article 85(3)
lawful as from the time they were concluded, without
the need for any prior decision. Similarly, restrictive
practices
be
unlawful once the conditions of Article 85(3) are no
longer fulfilled. This new framework would mean that
restrictive practices would no longer have to be
notified in order to be validated. The arrangements for
implementing Article 85 as a whole would then be
identical to those for Article 85(1) and Article 86.

competition would

restricted

that

and

horizontal

restrictions

The adoption of such a system in Community
70.
the changes and
law is now possible because of
developments
that have occurred in Community
competition law since 1962. The legislative framework
in the competition policy area has been considerably
strengthened, and the reforms currently under way on
vertical
cooperation
agreements will help to simplify and clarify it further.
While there were legitimate doubts in 1960 as to the
scope of the conditions for exemption under Article 85,
the
the Commission’s
case-law of
the
Court of First
Instance and the various block
exemption regulations and general notices have made
the conditions governing exemption much clearer.
the national authorities and courts,
Furthermore,
have
undertakings
progressively
of
Community competition law. These changes now

advisers
knowledge

practice,
and

decision-making

and
gained

legal
better

the Court

their
a

Justice

of

C 132/20

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Official Journal of the European Communities

12.5.1999

make it possible to overcome obstacles which, at the
time when Regulation No 17 was adopted, prevented
the establishment of a system of ex post control and
stemmed essentially from uncertainties as
to the
precise scope of the exemption conditions provided for
in Article 85(3).

and

horizontal

restrictions

The reforms currently under way in the area of
71.
cooperation
vertical
agreements will help to simplify the
legislative
framework and to define more precisely the scope of
application of Article 85(1) and (3). The simplification
results from the Commission’s intention to adopt a
new type of block exemption regulation that will no
longer be based on an approach that
restricts
exemption to certain specific agreements and clauses
regulation. The new type of
identified in the
exemption will provide general exemption for all
agreements and all clauses in a given category, subject
only to a list of prohibited restrictions ((cid:28)blacklisted
clauses’) and specific conditions of application, on the
one hand, and a restriction of the benefit of general
exemption through a market-share threshold criterion,
on the other. This exemption arrangement will provide
legal certainty for a wider category of agreements and
will
to
undertakings, while at the same time continuing to
safeguard
regards
agreements concluded between undertakings holding
significant market power. The new generation of
regulations will thus help to simplify the applicable
rules for most undertakings. Notices will also be
the
issued to clarify

freedom of

competition

conditions

effectively

governing

contract

greater

restore

the

as

application of Article 85 to cases not covered by the
block exemption regulations.

72.
Adopting a directly applicable exception system
and ex post control could help to meet the challenges
facing competition policy in the coming decades.
Under such a system, any administrative authority or
court endowed with the necessary powers could carry
out a full assessment of restrictive practices referred to
it, examining both their
restrictive effects under
Article 85(1) and any economic benefits under
Article 85(3). Adopting a directly applicable exception
system would thus mean removing the sole power
conferred on the Commission by Article 9(1) of
Regulation No 17 as
the application of
Article 85(3). This would facilitate decentralised
competition rules. A directly
application of
applicable exception system would also remove the
bureaucratic
for
undertakings, since authorisation would no longer be
required to make restrictive practices that meet the
tests of Article 85(3) legally enforceable. Freed from
the burden of having to process notifications,
the
Commission for its part could concentrate on taking
action against the most serious infringements.

notification

constraint

regards

the

of

73.
Under a system of directly applicable exception,
application of Article 85 would be similar to that for
the national
Article 86, which the Commission,
authorities and the courts already apply in parallel and
concurrently.

CHAPTER III

MODERNISATION OF THE COMPETITION RULES

74.
The Commission believes, then, that a directly
applicable exception system is the option most likely
to achieve the stated objectives of refocusing the
Commission’s activity, decentralising the application
of the competition rules, and easing the administrative
burden on undertakings.

application of Article 85 will continue to be rigorously
economic.

I. The ending of the notification and authorisation

system

75.
The reform proposed in this White Paper,
namely the introduction of such a directly applicable
exception system, has three main elements: the ending
of
system of notification and authorisation,
decentralised application of the competition rules, and
intensified ex post control. The approach taken to the

the

The

notification

system established

76.
by
Regulation No 17 has enabled the Commission to
build up a coherent body of precedent cases, and to
applied
ensure
the Member States of
consistently throughout
the
it has several disadvantages that
Community. But
that
make it questionable today. The requirement

competition rules

that

the

are

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Official Journal of the European Communities

C 132/21

of

and

collection

undertakings wishing to invoke Article 85(3) must
notify their restrictive practices to the Commission
acts as a curb on their commercial strategy and
cost. The drafting of
represents a considerable
necessary
notifications,
information,
imposes a heavy burden of work and
expense on undertakings, whether they carry out the
task in-house or entrust it to outside legal advisers. In
a directly applicable exception system they would be
freed from this obligation to notify, and their position
would be strengthened if
they had to seek the
enforcement of their restrictive practices in the courts,
as
their
restrictive practices were covered by Article 85(3).

they would now be able to plead that

the

it

this,

to ensure

77.
The notification system proved useful as long as
the interpretation of Article 85 and in particular of
paragraph 3 was uncertain; but it no longer makes it
possible to detect the most serious infringements of the
(cid:28)effective
competition rules, and thus
supervision’ within the meaning of Article 87. As
evidence of
is only extremely rarely that
notifications lead to prohibition decisions (53), and the
Commission has made only exceptional use of
Article 15(6) of Regulation No 17, which empowers it
to withdraw notifying undertakings’
immunity from
fines. In a system of ex post control, undertakings
would have to make their own assessment of the
restrictive practices with
compatibility of
Community law, in the light of the legislation in force
and the case-law;
this would certainly lighten the
administrative burden weighing on them, but it would
also require them to take on added responsibility.

their

In the new enforcement system, undertakings’
78.
legal certainty will remain at a globally satisfactory
level, and in certain respects will even be strengthened.
Thus,
instead of depending on the Commission
adopting an exemption decision, undertakings will be
able to obtain immediate execution of their contracts
before national courts, with effect from the date of
their conclusion, provided that
the conditions of
Article 85(3) are satisfied. There is no presumption
that restrictive practices are void under Article 85: the
prohibition contained in this provision is applicable
only when the conditions of prohibition are met. After
40 years of
these conditions have
been largely clarified by case-law and decision-making
practice and are known to undertakings. In addition,
the Commission intends to adopt block exemption
regulations with a wider scope of application. The use
of market share thresholds will allow the Commission

implementation,

(53) In more than 35 years of application of Regulation No 17
there have been only 9 decisions in which a notified
agreement was prohibited without a complaint having
been lodged against it.

undertakings.

individual cases,

and medium-sized

to eliminate the straight-jacket effect of the current
regulations and to cover
the vast majority of
agreements, and in particular those concluded by
small
The
Commission will adopt guidelines and individual
decisions to clarify the scope of application of Articles
85(1) and 85(3) outside the block exemptions. In its
handling of
the Commission will
adopt a more economic approach to the application of
its
Article 85(1), which will
application to undertakings with a certain degree of
market
of
Community competition law by national authorities
and courts will be strengthened. This will accelerate
the convergence of national laws and Community law,
and thus
simplify undertakings’ determination of
commercial strategy. Finally, preventive and corrective
mechanisms will exist in order to ensure consistent
and uniform application of Community law by
national authorities and courts.

power. Moreover,

the scope of

application

limit

the

the

prior

The directly applicable exception system ought
79.
the restrictive practices currently
to apply to all
it would appear
covered by Article 85. However,
authorisation
desirable
to maintain
requirement
for partial-function production joint
ventures. Operations of this kind generally require
substantial investment and far-reaching integration of
operations, which makes it difficult to unravel them
afterwards at the behest of a competition authority.
For this particular category of transaction, therefore,
effective supervision would probably be better served
by a system of compulsory prior notification.

to

In

order

avoid

imposing

80.
unnecessary
constraints on undertakings, only production joint
ventures to which a certain minimum level of assets
to prior
was to be contributed would be subject
control, and then always provided that no block
exemption applied.

to deal with this one

It does not seem expedient to create a special
81.
category of
procedure
transaction. The procedures established by the Merger
Regulation (EEC) No 4064/89 allow rapid and
effective prior control. The Commission accordingly
envisages extending the scope of
that Regulation
(EEC) No 4064/89 to include partial-function joint
production ventures, which would be subjected both
to the dominance test, under Article 2(3) of
the
Regulation, and to the Article 85 test, under
Article 2(4).

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II. Decentralised application of the competition rules

82.
The Regulation No 17 system is based on
centralised application of Article 85(3): Article 9(1) of
the Regulation states that the Commission is to have
sole power to exempt restrictive practices. Under a
directly applicable exception system this allocation of
responsibilities would be changed, and competition
authorities and courts would likewise have jurisdiction
to consider the compatibility of restrictive practices
coming before them with Article 85 as a whole.

A. A NEW DIVISION OF RESPONSIBILITIES

1. Competition policy to be determined by the

Commission

83. Decentralisation must not be allowed to result
in inconsistent application of Community competition
law. Competition policy will
thus continue to be
determined at Community level, both by means of the
adoption of legislative texts and individual decisions.
The Commission, as guardian of
the Treaties and
guarantor of the Community interest subject to the
supervision of the Court of Justice, has a special role
to play in the application of Community law and in
ensuring the consistent application of the competition
rules.

In a directly applicable exception system, the
84.
legislative framework is of primary importance. The
application of the rules must be sufficiently reliable
and consistent to allow businesses to assess whether
their restrictive practices are lawful. The Commission
would keep the sole right to propose legislative texts,
in whatever form — regulations, notices, guidelines
etc. — and would act whenever necessary in order to
ensure consistency and uniformity in the application of
the competition rules.

are

Block exemptions

these
85.
legislative texts. Given the importance of legislation in
the new directly applicable exception system,
legal
certainty for undertakings demands that an agreement
exempted by a block exemption should not then be

first of

the

held contrary to national law. This can be achieved by
invoking Article 87(2)(e): a Community regulation
should be enacted to prevent national legislation from
prohibiting or varying the effects of agreements
exempted by Community regulation. Some Member
States have already entered this principle in their own
legislation. For example, the Belgian Law No 91/2790
provides
of
that Community
exemptions are a bar
to action by the Belgian
authorities, and that agreements so exempted need not
be notified under domestic law. Danish law excludes
a Community
restrictive
covered
exemption
the
of
scope
prohibition that it lays down. Spanish and UK laws
make similar provision.

by
from the

practices
regulation

5 August

1991

the application of

are particularly well

86.
The Commission also intends to draw up more
notices and guidelines to explain its policy and provide
guidance for
the Community
competition rules by national authorities. These
instruments
suited to the
interpretation of rules of an economic nature, because
they make it easier to take account of the range of
criteria that are relevant to an examination under the
competition rules. They might not be binding on
national authorities, but they would make a valuable
contribution
of
Community law, because in its decisions in individual
cases the Commission would confirm the approach
they set out. Provided those individual decisions were
upheld by the Court of Justice,
then, notices and
guidelines would come to form part of the rules that
must be applied by national authorities.

application

consistent

the

to

In a directly applicable

87.
exception system,
Commission policy on competition would continue to
be reflected in prohibition decisions in individual
cases, and these would be of great importance as
be
the
precedents.
concentrating its attention on the most
serious
restrictions,
individual prohibition
decisions can be expected to increase substantially.

Commission would

the number of

As

It is true that the Commission would no longer
88.
adopt exemption decisions under Article 85(3) as it
does now, but it should nevertheless be able to adopt
individual decisions that are not prohibition decisions.
Where a transaction raises a question that is new, it
may be necessary to provide the market with guidance
regarding the Commission’s approach to certain
restrictions in it. Positive decisions of this kind would
therefore be taken in exceptional cases, on grounds of
general interest.

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that

to a

These

finding

positive

decisions would

confine
89.
themselves
is
compatible with Article 85 as a whole, whether
because it falls outside Article 85(1), or because it
satisfies the tests of Article 85(3). They would be of a
declaratory nature, and would have the same legal
effect as negative clearance decisions have at present.

an agreement

In the

90.
that might
course of procedures
otherwise end with a prohibition, it can happen that
the undertakings concerned propose to give the
Commission undertakings that would overcome the
objections raised against their agreement. It is useful
that the Commission should be able to make such
commitments binding, both in order to oblige the
undertakings to comply with them and to enable the
to rely on them before their
parties and others
national courts.
In the new Regulation applying
Articles 85 and 86, therefore, the Commission intends
individual
to make provision for a new kind of
decision,
publication
to
requirements,
in which the Commission would take
note of the commitments entered into by the parties
and render them binding. Such a decision would allow
the procedure to be terminated while ensuring that the
commitments were respected. As a corollary to this
change, a clause would be included in the system of
penalties in the Regulation providing for fines and
periodic penalty payments in the event of failure on
the part of undertakings to meet such commitments.

ordinary

subject

the

2. National authorities to play an enhanced role in

the application of the competition rules

are

level,

rather

and Community

The actions of competition authorities, at both
91.
national
guided by
considerations of public policy in the economic sphere:
unlike the national courts, they do not set out to
decide disputes between parties, but
to
guarantee the maintenance of a system ensuring that
competition is not distorted. Cooperation between the
Commission and the national competition authorities
has hitherto been on a pragmatic footing, and has
been limited by the Commission’s exclusive right to
apply Article 85(3). After 35 years of application of
the Community competition rules, the time has come
to make better use of the complementarity that exists
between the national authorities and the Commission,
and to facilitate the application of the rules by a
network
common
principles and in close collaboration.

authorities

operating

on

of

(a)

If such a network is to work properly, however,
92.
measures of
the
three kinds will be needed:
Commission must give up its monopoly of exemption;
(b) the national authorities must be empowered to
block
of
withdraw the benefit
exemption regulation; and (c) an authority considering
a case, whether at Community or national level, must
be in a position to pass a file on it
to another
authority, including any confidential information that
might be used in procedures for infringement of the
Community competition rules.

a Community

93.
In a directly applicable exception system the
national authorities would themselves be able to assess
the
whether or not a restrictive practice meets
conditions of Article 85(3), and would no longer have
to refer the question to the Commission. They could
investigate cases of application of Community law, in
response to complaints or on their own initiative,
without fear that the parties to a restrictive practice
might
the
Commission.

invoke a notification pending before

considering

94.
To allow the role of the national authorities to
be strengthened in this way, Regulation No 17 would
have to be amended to remove the monopoly of
that any
exemption and to make it quite clear
application of
authority
for
tests
the
Article 85 must
exemption are satisfied. If this reform is really to
improve the application of the competition rules, the
seven Member States that have not yet done so will
have to empower their competition authorities to
apply Community law.

consider whether

case of

a

exemption,
to be able

As a logical consequence of the abandonment of
95.
the
the Commission’s monopoly of
national authorities would have
to
withdraw the benefit of a block exemption on their
own territory if that territory or part of it constituted
a separate market. The authorities of the Member
States are particularly well placed to assess whether, in
a particular case provided for in the block exemption,
there are in their territory agreements covered by the
Regulation which do not
tests of
Article 85(3), and which consequently do not qualify
for exemption. This possibility has already been
provided for in the Commission’s communication on
vertical restraints (54), and could be generalised in the
new Regulation applying Articles 85 and 86.

satisfy

the

(54) OJ C 365, 26.11.1998, p. 3.

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12.5.1999

A

seeks

competition

authority may
96.
national
encounter difficulties when it
to act on a
complaint requiring investigation in several Member
States. Cases may also come before the Commission
whose effects are essentially concentrated in a single
Member State. The most effective solution in such
situations would be for the authority considering the
case to pass it on to the authority best placed to deal
with it. This implies that the authority to whom the
documents in the case are forwarded must be able to
use them directly as evidence. Article 20 of Regulation
No 17 currently prevents the national competition
authorities
information
supplied by the Commission (55).

from using

evidence

as

in

to

are

any

practice

primarily

confidential

information,

If the Commission finds that the effects of a
97.
disputed
one
felt
Member State, therefore, it should be entitled under
the new Regulation to send the whole of the file,
the
including
competent authority in that Member State, so that
that authority can continue the investigation making
direct use in evidence of the information supplied.
Conversely, if after investigation a national authority
comes to the conclusion that a case has a Community
dimension and requires action by the Commission, it
should be able to forward its file to the Commission,
on the model of what can already be done by the
EFTA Surveillance Authority (56). The only limitation
that must be retained is that imposed by the terms of
the original mandate: whatever the authority that
made the earlier enquiries, the information could be
used only for the purpose for which it was originally
collected and for the application of Articles 85 and 86
or of national competition law as the case might be.

98.
This extension of the use of information should
be counterbalanced by the incorporation in the new
Regulation of
the principle that separate penalties
could not be imposed by a national authority and by
separate commitments
the Commission, and that
would not have to be entered into to satisfy objections
raised by the two levels.

(55) Case C-67/91 Asociaci(cid:243)n Espan˜ ola de Banca Privada and
Others [1992] ECR I-4820, at paragraphs 37 et seq.
(56) Protocol 23 concerning the cooperation between the
surveillance authorities (Article 58 of the Agreement on
the European Economic Area), OJ L 1, 3.1.1994, p. 186.

3. The national courts to play an enhanced role in

the application of the competition rules

99. National courts are close to European citizens,
and since the inception of the Treaty they have had a
specific role in safeguarding the rights of individuals
within their jurisdiction which are conferred directly
by Community law (57). The Court of Justice has
to the
accepted that
effective application of Community law,
including
competition law. They apply Article 85 in proceedings
liability proceedings
contractual
of
agreement),
to
parties
(disputes
non-contractual liability proceedings (disputes between
a third party and one or more parties
to the
agreement), and applications for injunctions.

the national courts are vital

three kinds:

between

an

no

jurisdiction

apply Article

100.
Because of the exclusive right to exempt that
is conferred on the Commission by Regulation No 17,
national courts cannot themselves apply Article 85(3)
so as to exempt an agreement. And because the courts
85(3),
to
have
undertakings can, in practice, bring court proceedings
to a halt by lodging a notification with the
Commission. This phenomenon is a major obstacle to
more extensive application of the competition rules by
national courts.
In a directly applicable exception
system, undertakings would be able to invoke the
direct applicability of Article 85(3) as an argument in
their defence before the courts. This new ground of
defence would allow them to obtain immediate civil
enforcement of
their restrictive practices
which satisfy the conditions of Article 85(3). Their
legal
strengthened.
Complainants, on the other hand, would be able to
obtain damages more quickly where they are victims
of illegal agreements. Except where an appeal was
lodged, the judgments of national courts would have
the
judgments are
recognised by the courts of all Member States under
Judgments
the
Conventions.

certainty would

judicata. These

Brussels (58)

Lugano (59)

force of

those of

thus

and

res

be

(57) Judgment of the Court of Justice in Case 26/62 Van Gend
see

[1963] ECR 1, and BRT v. SABAM,

& Loos
footnote 34.

(58) Brussels Convention on jurisdiction and the enforcement
of judgments in civil and commercial matters (OJ L 299,
31.12.1972, p. 32); last amended by the 1997 Accession
Convention (OJ C 15, 15.1.1997, p. 1).

(59) Convention on jurisdiction and the enforcement of
judgments in civil and commercial matters concluded in
Lugano on 16 September 1988 (OJ L 319, 25.11.1988,
p. 9).

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B. CONSISTENT AND UNIFORM APPLICATION OF

THE COMPETITION RULES

1. Risk of inconsistencies and principles for their

resolution

101. Decentralised application of the competition
rules and abandonment of
the prior authorisation
system must not be allowed to stand in the way of the
maintenance of conditions of competition that are
consistent throughout the Community. The principle
the
the primacy of Community law prevents
of
application of national law from undermining the full
and uniform application of Community law and the
implementing it (60). But
effectiveness of measures
where Community law is being applied by several
bodies at once (Commission, national authorities and
national courts), there are potential conflicts of two
kinds:

(1) A national authority or

court may take a
favourable approach to a restrictive practice
prohibited by the Commission (by rejecting a
complaint on the ground that the agreement is
not caught by Article 85(1) or that it satisfies the
tests of Article 85(3), or by a judgment ordering
its enforcement);

(2) An authority may prohibit a restrictive practice,
or a court may refuse to enforce it, despite a
positive approach taken by the Commission
(rejection of a complaint against it or a positive
decision).

It should be pointed out,

that
102.
parallel application of Article 85(1) and Article 86 has
existed since 1962, and has given rise to very few
problems. The principles for resolution of conflicts are
as follows:

first of all,

(1) The Court of Justice held in Delimitis (61) that
once the Commission has initiated procedures,
and a fortiori when it has adopted a decision no
longer open to appeal or which has been
confirmed on appeal,
the national courts are
bound to avoid conflicting decisions, if necessary
by suspending the proceedings before them to ask
the Commission for information, or by making a
reference
under
Article 177 of the Treaty; the same principle can
by analogy be applied to national competition
authorities, although the avenue of a reference
under Article 177 is not open to them;

preliminary

ruling

for

a

(60) See Case 14/68 Walt Wilhelm [1969] ECR 1.
(61) See footnote 38.

(2) When a national authority has adopted a positive
decision which is either no longer open to appeal
or which has been confirmed on appeal, or a
court has delivered a positive judgment
(for
example rejection of a complaint on the ground
that a restrictive practice satisfies the tests of
Article 85(3)) which is either no longer open to
appeal or has been confirmed on appeal,
the
Commission can always intervene to prohibit the
agreement, subject only to the principle of res
judicata that applies to the dispute between the
parties themselves, which has been decided once
and for all by the national court;

(3) Where an authority or a national court takes a
negative decision in respect of a restrictive
practice, the Commission believes that it should
not normally seek to intervene otherwise than as
an intervener on a reference for a preliminary
ruling under Article 177, if any such reference is
made;

(4) For as long as a decision of a national authority
or court is still open to appeal or the decision on
appeal is pending, the Commission may at any
time adopt a contrary decision. In that case the
principle
conflicting decisions must be
avoided will apply to the appeal body.

that

103.
If conflicts should arise between the different
bodies applying Community competition law, these
principles should allow them to be resolved. It may
also be necessary to strengthen the principle that the
application of national or Community law by national
courts or authorities should be consistent with the
application of Community competition law by the
Commission, subject to the supervision of the Court of
Justice. But
it would nevertheless be advisable to
establish mechanisms to avoid such conflicts in the
first place.

2.

Information and cooperation mechanisms

To ensure the consistent application of

104.
the
rules, and the preservation of the unity of competition
policy, there are two main instruments that already
exist in Community law: these are Article 169 and
Article 177 of the Treaty. Article 169 empowers the
Commission to refer to the Court of Justice cases of
infringement of Community law by Member States,
while Article 177 requires courts of last instance to
refer questions of interpretation of Community law to
the Court of Justice for a preliminary ruling. These
two procedures are certainly effective, but they can be

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Official Journal of the European Communities

12.5.1999

very

a
restoring
slow way of maintaining or
consistency in competition policy, which calls for
day-to-day
competent
authorities. There is a need for flexible and rapid
information and
mechanisms for the exchange of
cooperation between competition authorities, courts
and the Commission.

cooperation

between

of

the

context

pre-accession

In
the
Commission will devote particular attention to the
development of competition in the candidate countries
and will provide their competition authorities with
increased assistance.

strategy,

it

of

As

10

the

regards

by Article

the Member States;

competition authorities,

105.
is
proposed that the amended Regulation No 17 should
include an obligation to inform the Commission of
cases in which Articles 85 and 86 are applied by the
competition authorities of
this
would correspond to the obligation imposed on the
Commission
present
Regulation (62). The Commission would have to be
informed of the initiation of procedures and before
their termination. The Commission would also have to
be informed if an authority planned to withdraw the
benefit of a block exemption. Information of this kind
take
together with any correspondence that might
place with the national authorities should ensure that
the consistency of competition policy can be preserved
without requiring machinery to impose solutions to
conflicts in the application of Community law. But the
Commission would still have the possibility of taking
a case out of
the national
competition authorities, by means of a mechanism
equivalent
the present
Regulation No 17. To ensure consistency between
proceedings under Community law and proceedings
under domestic law, the national authorities would
also be required to inform the Commission, on their
own initiative or at the Commission’s request, of any
proceedings they were conducting under national law
that might
for Community
implications
proceedings.

in Article 9(3) of

jurisdiction of

to that

have

the

the role of

The proper

functioning of

106.
the network
between the Commission and the Member States
clearly implies a reinforcement of
the
Advisory Committee on Restrictive Practices and
Dominant Positions.
It would become a full-scale
forum in which important cases would be discussed
irrespective of the competition authority dealing with
them. It would continue to be consulted on legislation
drafted by the Commission and on draft Commission
decisions
the
same way as
Commission, acting on its own initiative or at the
request of a Member State, could also be empowered
to ask the Committee for its opinion on cases of
application of Community law by national authorities.

today, but

in the

(62) German law already provides that the Commission is to
be informed of cases of application of Community law so
as to enable it to state a view: see paragraph 50(3) of the
Restriction
gegen
Wettbewerbsbeschr(cid:228)nkungen — (cid:28)GWB’), as amended by
the Sixth Amendment, which entered into force on
1 January 1999.

of Competition Act

(Gesetz

As

courts,

in order

regards national

to
107.
maintain consistency of
interpretation when the
application of the rules is decentralised, and to lend
support to the national courts in the exercise of their
functions, mechanisms would have to be set up for
cooperation between the Commission and the courts.
It is vital, first of all, that the Commission should be
aware of proceedings in which Articles 85 and 86 are
invoked before the courts, so that it is made aware of
any problems of textual interpretation or lacunae in
the legislative framework. It is therefore proposed that
the regulation should require courts to supply such
information. A similar obligation already exists in
German law, for example (63). The Commission should
also be allowed, subject to the leave of the court, to
intervene in judicial proceedings that come to its
attention as a result of information supplied in this
way. Allowing it to intervene as amicus curiae would
be an effective way of helping to maintain consistency
is consequently
in the application of
proposed that a specific provision to this effect should
be included in the regulation. It is also proposed that
the amended Regulation No 17 should incorporate the
in the Commission notice on
rules now set out
cooperation between the Commission and national
course of
courts, which provides
proceedings
address
themselves to the Commission to ask for information
of a procedural, legal or economic nature. Moreover,
there exist cooperation
in certain Member States,
mechanisms between national
a
courts hearing
competition law question and national competition
authorities
the
Bundeskartellamt to intervene in Germany, or for the
Conseil de la Concurrence to give expert testimony in
France).

them courts may

the possibility for

example,

the law.

in the

before

that

(for

It

III.

Intensified ex post control

an

As

indispensable

108.
the
introduction of a directly applicable exception system,
there would have to be a reinforcement of ex post
control to ensure that the competition rules were being
reform the
respected.

proposed

corollary

Under

the

to

(63) Paragraph 96 of the Restriction of Competition Act, read
in conjunction with paragraph 90, requires courts to
inform the Bundeskartellamt
in which
Community law is applied.

cases

of

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powers

of
it would be made easier

be
Commission’s
strengthened,
to lodge
complaints, and the system of penalties would be
reorganised.

enquiry would

A.

STRENGTHENING THE COMMISSION’S POWERS
OF ENQUIRY

procedures, and resolving once and for all
the
problems of inconsistency and lack of simultaneity.
Another possibility would be
to harmonise and
simplify the procedural law in the Member States, so
as to ensure that in any Member States where orders
were needed they could be obtained rapidly and
simultaneously. This second option is a great deal
far-reaching
more
complex,
amendment of
law in certain
Member States.

and would require

judicial procedural

against

undisclosed

the Commission is

to be able to act
109.
If
of
restrictions
effectively
competition, it is not enough that it should be able to
concentrate its resources on investigating cases arising
out of complaints or taken up on its own initiative: it
is also important that its powers of enquiry should be
increased.

assisting

110. When the Commission wishes to carry out
investigations under Article 14(3),
the national
authorities
in most Member
it must,
States (64), secure authorisation from a judge in order
the
to overcome any opposition on the part of
undertaking (65). Where there are several undertakings
involved,
to be
conducted in several Member States, and authorisation
has therefore to be sought from several judges, whose
role is confined to satisfying themselves that
the
decision ordering the investigation is authentic and
that the investigation envisaged is not arbitrary or
excessive (66).

investigations most often have

There are several possible ways to ensure that
111.
the investigations are simultaneous and consistent, and
to strengthen the guarantees offered to undertakings
under investigation. The element of judicial review
the
could be centralised, and entrusted to one of
Community courts. This method of safeguarding the
rights of undertakings under investigation would have
the advantage of greatly simplifying investigation

(64) Belgium, Denmark, France, Germany, Greece, Ireland,
Luxembourg, Portugal, Spain and the United Kingdom.
(65) This situation is in line with the judgment in Hoechst,
which leaves it to national law to define the procedures
guaranteeing
the undertakings
concerned are respected (Judgment of the Court of Justice
in
v.
Commission [1989] ECR 2859).

227/88 Hoechst

Joined Cases

rights of

46/87

that

and

the

(66) Hoechst,
judgment.

see footnote 65, at paragraph 35 of

the

ask

officials

112. During investigations, the right of authorised
Commission
an
to
undertaking’s representatives or staff which are not
directly related to documents found on the premises
has
the
system of administrative penalties
supplying
for
incorrect information is silent on this point.

sometimes been questioned.

In addition,

questions

of

It

that

is therefore proposed that Article 14 of
113.
Regulation 17 should be amended to make it quite
clear
in the course of an investigation the
authorised Commission officials are empowered to ask
the undertaking’s representatives or staff any questions
that are justified by and related to the purpose of the
investigation, and to demand a full and precise
answer. A further provision could be introduced under
which the authorised officials would be empowered to
draw up official minutes of the answers given in the
course of the investigation. These minutes would be
included in the file, and could be used at later stages
of the procedure. As a corollary to this new provision,
the answers given in the course of
investigations
would be brought within the scope of the penalties for
supplying incorrect information.

114.
In order to increase the effectiveness of its
enquiries the Commission should also be empowered
to summon to its own premises any person likely to be
able to provide information that might be helpful to
its enquiries, and to take minuted statements (67). This
possibility
to the
undertakings that are the subject of the procedure: it
would serve to complement Article 14 by allowing
persons to be questioned who were not present at the
time of the investigation. It could also be used with
respect to complainants and third parties.

could be used with respect

(67) Most of the national systems of competition law give the
authorities power to summon persons likely to be able to
give information relevant to the investigation. This is the
case for example in Belgium, France and Germany.

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In a directly applicable exception system the
115.
detection of
infringements would rely largely on
surveillance of the market. Inquiries into sectors of the
economy provide a tool which has been very little
take on greater
used since 1962, but which will
importance in the new context. The present provision
should accordingly be maintained.

Experience has
addressed

requests
the Commission

for
shown that
116.
information
to
by
undertakings under Article 11 do not raise any major
difficulty. The principle that undertakings are bound
to reply has repeatedly been upheld by the Court of
Justice, which has allowed an exception only in the
case of directly incriminating questions (68). The
procedures for the imposition of penalties in the event
of incorrect or incomplete information are effective.
The only point
that needs to be considered here
the
concerns Article 11(4), which provides
information requested is to be supplied by (cid:28)the owners
of the undertakings or their representatives and, in the
case of
legal persons, companies or firms, or of
associations having no legal personality, the persons
authorized to represent
them by law or by their
constitution’. This wording prevents lawyers from
replying
information from the
for
Commission on their clients’ behalf, even though it
may very often be the same lawyers who actually draft
the answers given. It is therefore proposed that the
wording of Article 11 should be amended to allow
properly authorised lawyers to reply on behalf of their
clients if their clients so desire.

to requests

that

B.

THE INCREASED IMPORTANCE OF COMPLAINTS
IN THE NEW SYSTEM

Formal

account

currently

complaints

117.
for
almost 30% of new cases dealt with by the
Commission, and most own-initiative procedures
to the Commission
begin with information sent
informally. Information supplied in this way is a very
valuable means of detecting infringements of
the
competition rules. It must therefore be ensured that
any person, natural or
legal, who identifies a
competitive practice that might prima facie be caught
by Article 85 or 86, and who can show a legitimate

interest, should continue to be entitled to lodge a
complaint with the Commission.

serious

As the Commission concentrates its activities
118.
on the most
restrictions of competition,
complaints will take on even greater importance than
at present. The new system ought
therefore to
facilitate the lodging of complaints. A series of
measures could be taken to help to encourage the
victims of infringements to approach the Commission.
In particular,
the Commission could publish an
explanatory notice on complaints; time limits could be
introduced for
the procedure for
rejecting complaints could be simplified; and rules
could be laid down regarding interim measures.

their handling;

improve

should
potential

the
Commission
119.
The
information
complainants
to
available
regarding its likely course of action. The case-law
accepts that the Commission is entitled to lay down
takes against
priorities governing the action it
infringements, on the basis of the concept of sufficient
Community interest (69). It now seems advisable to
publish a notice clarifying this concept,
so that
complainants can more easily determine whether they
would be better advised to address their complaint to
the national or to the Community authority. This
notice could thus guide complainants’ choice of the
forum in which to pursue their complaint. The notice
should also indicate what the complainant can hope
for from the Commission, namely a cease-and-desist
order, valid erga omnes, but no award of damages.
The notice could help complainants to draft
their
complaints by indicating the sort of information the
Commission usually needs in order to establish that an
it should
infringement has been committed. Finally,
draw attention to the Commission’s
severity in
imposing fines on undertakings
that have taken
reprisals against complainants.

120.
At present the Commission’s only obligation is
to consider complaints within a reasonable timeframe.
But complainants who believe they are the victims of
an infringement of the Community competition rules
need to know quickly whether the Commission will be
taking up their complaint, that is to say whether it
will be carrying out investigations or sending requests
for information in order to establish whether the
alleged practices exist, or whether it intends to reject
the complaint on the grounds that the complainant

(68) Case 374/87 Orkem v. Commission [1989] ECR 3283.

ECR II-2223.

(69) Case

T-24/90 Automec

v. Commission

[1992]

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C 132/29

has no legitimate interest or that the complaint is
unfounded or lacks a Community interest. If there is
in fact no Community interest, it is imperative that the
complainant should be able to turn quickly to the
national competition authority or law court that may
be able to deal with the matter. It is proposed that a
time limit of four months should be introduced, by the
end of which the Commission would be required to
inform the complainant of the action it proposed to
take on the complaint. If it did not propose to take up
the complaint, the Commission would write to the
complainant stating why it did not intend to proceed.
That letter could be challenged before the Court of
First Instance. If it took the view that the case should
be investigated further, the Commission would inform
again within four
the
complainant
months, without
subsequent
to
If after more detailed enquiries, which
procedure.
timeframe (70),
the
exceed a
cannot
it could not proceed
Commission concluded that
further with the complaint,
it would write to the
complainant stating its reasons. This letter would also
be open to challenge before the Court of First
Instance.

accordingly,
prejudice

reasonable

the

is

up

The

present

procedure

the Commission’s provisional view,

121.
rendered
cumbersome by the obligation under Regulation (EC)
No 2842/98 (71)
to send the complainant a letter
setting out
to
consider the complainant’s comments, and to adopt a
formal decision. This is a demanding procedure, and
of
proportion
takes
the
a
rejecting
Commission’s
Decisions
complaints accounted for over half of
the formal
decisions adopted by the Commission in recent years.
The introduction of a four-month time limit should
therefore be accompanied by a simplification of the
procedure for rejecting complaints, and in particular
more
the
complainant
complained
against.

considerable
resources.

the undertaking(s)

arrangements

hearing

flexible

and

for

putting an immediate end to the infringement at issue.
Although Regulation No 17 does not
expressly
empower the Commission to adopt interim measures,
the case-law accepts that it may do so where it finds
prima facie that there is an infringement, that the
matter is urgent, and that there is danger of serious
and irreparable damage (72). It would appear necessary
now to spell out in Regulation No 17 not merely the
circumstances
in which interim measures may be
granted, but also the procedure for their adoption, and
the duration of their validity. The present practice has
proven to be efficient.

C.

PENALTIES

123.
Article 15(2) of Regulation No 17 provides
that the Commission may impose fines of up to 10%
of the turnover in the preceding business year of each
of the undertakings taking part in an infringement of
Article 85(1) or Article 86. The Commission’s policy
on fines has gradually been clarified in its decisions, in
the guidelines on the method of setting fines imposed
pursuant to Article 15(2) of Regulation No 17 and
Article 65(5) of the ECSC Treaty (73), and in the notice
on the non-imposition or reduction of fines in cartel
cases (74). The 10% ceiling has proved appropriate,
and it is not proposed that it should be changed. But
the introduction of a system of directly applicable
exception would require the removal of the immunity
from fines conferred by notification, as notification
would have disappeared. The prohibition on restrictive
practices would thereby be rendered more effective,
and its dissuasive effect would be increased.

A complaint will very often be accompanied
122.
by an application for interim measures aimed at

(70) Cases T-213/95 T-18/96, SCK and FNK v. Commission
[1997] ECR II-1739. Case C-185/95 Baustahlgewebe
GmbH v. Commission, not yet published.
(EC) No
Regulation

of
22 December 1998 on the hearing of parties in certain
proceedings under Articles 85 and 86 of the EC Treaty
(OJ L 354, 30.12.1998, p. 18).

(71) Commission

2842/98

do

fines

need

Procedural

124.
amendment.
Regulation No 17 currently provides for a fine of
EUR 100 to EUR 1 000 where an undertaking supplies
incorrect information or produces books and records
in incomplete form during an investigation. These
figures have remained unchanged since 1962, and are

(72) Order of the Court of 17 January 1980 in Case 792/79R

Camera Care v. Commission [1980] ECR 119.

(73) OJ C 9, 14.1.1998, p. 3.
(74) OJ C 207, 18.7.1996, p. 4.

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Official Journal of the European Communities

12.5.1999

too small today to have any real dissuasive effect. It is
proposed that they should be aligned on the Merger
the
(EEC) No
Regulation
corresponding
of
provisions
EUR 1 000 to EUR 50 000 in such cases (75).

4064/89, where
provide

fines

for

not

125.
The same applies to the levels of periodic
that may be
penalty payments
imposed on an
undertaking
does
that
information
requested by decision, or refuses to submit
to an
14(3). The
investigation
corresponding provisions in the Merger Regulation
provide for periodic penalty payments of up to
EUR 25 000 per day. The new regulation applying
Articles 85 and 86 could set the same figure.

under Article

ordered

supply

The Merger Regulation makes provision for a
126.
second category of periodic penalty payment, to be
imposed on undertakings that fail to comply with an
obligation imposed by decision (Article 15(2)). These
payments may not exceed EUR 100 000 per day.
There is a similarity between the imposition of
obligations on undertakings in connection with the
authorisation of a concentration and the decisions
accepting
is proposed to
introduce. On the model of the Merger Regulation,
therefore, a second category of periodic penalty
payments could be established.

commitments

that

it

127. When fines are imposed on associations of
undertakings, the turnover to be considered is the
turnover of the undertakings that are members of the
association. But Article 15 of Regulation No 17 does
not provide that the members are to be liable jointly
and severally, and this can prevent collection of the
fine (76).

It

is

therefore proposed that

the new
128.
regulation implementing Articles 85 and 86 of the
Treaty should state that where an association of
undertakings is responsible for an infringement the
undertakings that were members of that association at
the time the infringement was committed are to be
liable jointly and severally for payment of the fine. To
protect the members’ rights of defence, they would
the
have

initiation of

informed of

to be

the

(75) Council Regulation (EEC) No 4064/89, see above.
(76) The problem has arisen for example in connection with
Joined Cases T-213/95 and T-18/96 SCK and FNK
v. Commission [1997] II-1739.

proceedings and a statement of objections would have
to be notified to them by publication in the Official
Journal of the European Communities. If necessary the
association
to
members who requested it.

information

supply

could

fuller

IV. Transition to the directly applicable exception

system

129. When the new regulation applying Articles 85
and 86 enters into force there will be notifications still
pending before the Commission that were lodged by
undertakings with a view to obtaining exemption
under Article 85(3). In the new system Article 85
would be directly applicable in its entirety, and the
lawfulness of restrictive practices would no longer
depend on whether or not the Commission had taken
a decision. Notifications still pending would no longer
serve any purpose. In the time between the publication
of this White Paper and the entry into force of the
new regulation, the Commission will continue to work
on exemptions at the same pace and in accordance
with the same procedures as at present.

V.

Sectoral Rules

that

the Treaty were made applicable

In the case of agriculture, Article 42 of the
130.
Treaty states
the Chapter
(cid:28)the provisions of
relating to rules on competition shall apply to
production of and trade in agricultural products only
to the extent determined by the Council’. Articles 85
to 90 of
to
agriculture in 1962 by Council Regulation No 26 (77).
Article 1 of that Regulation states that Articles 85 to
90 of the Treaty and the measures taken to implement
them,
including Regulation No 17, are to apply to
production of and trade in agricultural products. The
reference in Article 1 of Regulation No 26 to the
measures implementing Articles 85 and 86 means that
amendments to Regulation No 17 will automatically
apply to agriculture. The specific exceptions foreseen
in Article 2 of Regulation No 26 will not be affected
and the Commission will retain the sole power to
apply them.

(77) OJ 30, 20.4.1962, p. 993/62.

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Official Journal of the European Communities

C 132/31

to

those

identical

applicable

The competition rules applying to transport
131.
are
other
industries (78), and restrictions of competition and
markets are defined in the same way. There is
therefore no reason why the transport regulations (79)
should not undergo the same reform as Regulation
No 17, and the same changes should accordingly be
made.

to

of

Journal

exemption is received, a summary is published in
the Official
European
Communities, and interested parties are asked to
comment. If the Commission does not object to
the notified agreement within 90 days of
publication of
is
deemed to be exempt.

the agreement

the summary,

the

(maritime

transport)

132. However, Regulations
(EEC) No 1017/68
(transport by rail, road and inland waterway), (EEC)
(EEC)
4056/86
No
No 3975/87 (air
transport) also contain further
provisions which are not found in Regulation No 17.
These concern block exemptions on the one hand (80),
and special procedural rules on the other (81). The
main procedural differences can be summarised as
follows:

and

(5) Regulation (EEC) No 3975/87 makes
arrangements for some interim measures.

special

(6) Regulation (EEC) No 4056/86 is legally based on
two Treaty provisions, Articles 84(2) and 87, and
has a clause dealing specifically with conflicts of
law with non-Community countries. Regulation
(EEC) 1017/68 is based on Articles 75 and 87.

(1) The Commission can grant exemption without
notification, following a complaint, for example,
or on its own initiative.

(2) Regulation (EEC) No 1017/68 includes a clause

on crisis cartels.

(3) Neither the land transport regulation nor the sea
transport regulation makes any specific provision
for negative clearance.

(4) All of

regulations provide for
opposition procedures. When an application for

the transport

(78) Case 167/73 Commission v. France [1974] ECR 359, at
paragraph 32; Joined Cases 209 to 213/84 Ministe`re
[1986] ECR 1425 (the Nouvelles
Public v. Asjes
Frontie`res case), at paragraphs 42 to 45; and Case 66/86
Ahmed Saeed and Others v. Zentrale zur Bek(cid:228)mpfung
unlauteren Wettbewerbs [1989] 803, at paragraphs 32
and 33.

No

4056/86

Regulation

(79) Council Regulation (EEC) No 1017/68 of 19 July 1968
applying rules of competition to transport by rail, road
and inland waterway (OJ L 175, 23.7.1968, p. 1);
Council
of
(EEC)
22 December 1986 laying down detailed rules for the
application of Articles 85 and 86 of
the Treaty to
maritime transport (OJ L 378, 31.12.1986, p. 4); and
Council
of
(EEC)
14 December 1987 laying down the procedure for the
application of the rules on competition to undertakings in
the air transport sector (OJ L 374, 31.12.1987, p. 1).
(80) See Articles 4, 6, 9 and 14 of Regulation (EEC)
No 1017/68 and Articles 1, 3, 4, 5, 6 and 8 of
Regulation (EEC) No 4056/86.

Regulation

3975/87

No

(81) See Articles 17 and 18 of Regulation (EEC) No 1017/68

and Article 9 of Regulation (EEC) No 4056/86.

(7) Under Regulation (EEC) No 1017/68,

the
Commission may not adopt a decision within
20 days of
the Advisory
the meeting of
Committee. This is to allow Member States to ask
to consider a
for a meeting of
question
the
event
Commission must in its decision take into account
the policy guidelines
from the
meeting.

the Council

principle.

emerge

that

that

In

of

(8) Tramp vessel

services

air
services
and
the
non-member countries continue to be subject to
the transitional arrangements in Article 89.

and international
Community

between

land transport

133.
There can be no doubt that the differences
between the procedures laid down by the transport
regulations and Regulation No 17 reflect the political
concerns that presided at the time of their adoption.
The
regulation, Regulation (EEC)
No 1017/68, was the first regulation applying the
to transport, and was adopted
competition rules
before the Court of Justice had expressly confirmed
that the competition rules did apply to transport. Since
regulations were adopted,
the various
considerable
the
has
transport, and sea
liberalisation of air and rail
transport has been liberalised for a long time. The
concerns
largely
disappeared.

transport
progress

sectors have

been made

to these

specific

in

134.
The application of the procedural rules in the
amended Regulation No 17 to transport will

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Official Journal of the European Communities

12.5.1999

automatically remove the first five differences noted
above. For the remainder it
the
following action be taken:

is proposed that

implementing
Commission.

powers

conferred

on

the

(1) The dual

legal bases of Regulations (EEC) No
1017/68 and (EEC) No 4056/86 have never been
invoked, and there is no reason to preserve them.

(3) The regulation that would replace Regulation
No 17 should make it quite clear that it does not
apply to tramp vessel services and international
air
and
between
non-member countries.

the Community

services

(2) The provision allowing the Council to intervene
in individual cases following the meeting of the
Advisory Committee has never been invoked, and
should be removed, which would be in line with
Council Decision 87/373/EEC of 13 July 1987
laying down the procedures for the exercise of

135. When the ECSC Treaty expires, in July 2002,
the restrictive practices currently subject to Article 65
of the ECSC Treaty will also come within the scope of
the regulation applying Articles 85 and 86 of the
EC Treaty.

CONCLUSION

136.
Competition policy has an important part to
play in the process of economic integration called for
by the founding Treaties: and the place occupied by
the (cid:28)Rules on Competition’ in the part of the Treaty
dealing with (cid:28)Community policies’ is no coincidence.
The importance given to secondary legislation in the
founding Treaty shows that the drafters of the Treaty
the rules
were well aware of
governing the application of competition policy to
changes and developments in economic life, business
and the geographic dimension of Europe. Now that
Regulation No 17 has been in operation for more than
35 years there are a large number of provisions
implementing the competition rules that are manifestly
no longer suited to business as it has now become, nor
to the imperatives of an enlarged Community facing
the prospect of further accessions and whose national
markets are already extensively integrated.

the need to adapt

137.
The considerations that led to the adoption of
a centralised authorisation system no longer carry the
same weight today: both Community and national
competition authorities are now familiar with the
operation of a system of competition law which has
been refined by the Commission’s decisions, the case
law of the Court and legislative texts. The prospect of
the completion of economic and monetary union, and
further enlargement, also demands the reform of a
system that was designed for a Community of six
Member States.

of

the

notification

the
century. The system has three main elements:
abolition
and
system of
authorisation to be replaced by a directly applicable
exception system; the development of decentralised
application of the competition rules; and intensified
ex post control. The Commission is convinced that
only a radical reform of the present system along the
lines set out here can ensure the effective application
of the competition rules throughout the Community,
while
on
undertakings as far as possible, and at the same time
providing them with a satisfactory level of
legal
certainty.

administrative

burden

easing

the

This

require

reform will

far-reaching
139.
amendment not only of Regulation No 17, but also of
the transport regulations and of measures adopted in
implementation thereof. It should also be accompanied
by a reinforcement of the legislative framework, which
has already begun with the amendment of the rules
governing vertical restraints, and is to continue with a
study of horizontal cooperation agreements.

140.
The White Paper is intended as a point of
departure of a wide-ranging debate between the
interested
Commission,
parties. The Commission would welcome observations
on any aspect of the reform proposed and on the
options outlined in this document.

the Member States and all

138.
This White Paper sets out the Commission’s
thinking, and describes the system it believes is best
suited to the Union at the dawn of the twenty-first

141. Observations on the White Paper should be
sent by 30 September 1999:

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Official Journal of the European Communities

C 132/33

— By post, to the following address:

— By electronic mail, to the following address:

Directorate-General for Competition
European Commission
White Paper on Modernisation
C 150
Rue de la Loi/Wetstraat 200
B-1049 Brussels

modernisation@dg4.cec.be

This White Paper is also available on the
142.
World Wide Web, in all the official languages of the
Community, at the following address:
http://europa.eu.int/comm/dg04/entente/other.htm
#dgiv_pdf_wb_modernisation