Opinion of the Economic and Social Committee on the "XXXth Report on competition policy 2000"
Date: 2001-11-28
Institutions: European Economic and Social Committee
Subjects: EU Member State, approximation of laws, competition law, competition policy

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4.2.
This mandatory data-base could be set up at the
European Central Bank or another independent and credible
institution/body and administered by the latter in accordance
with rules that are based on the general principles of prudential
supervision.

4.3.
Only a system which is generally accessible for consul-
tation and in which all collaterals of this kind are registered
for as long as they exist will be able to provide the requisite
transparency and security so that all creditors, suppliers and
shareholders, etc., can have a clear picture at any one moment
of the real situation regarding the collateral provider’s assets.

Brussels, 28 November 2001.

5.

Final consideration

5.1.
Because of its importance, particularities and conse-
quences for existing legislation, the proposal will have to be
amplified. It will be necessary to make changes which make
the proposal’s application more transparent and secure and
ensure that the principles of the general protection of creditors
and the universality of their rights are not perverted. The
Committee would like to give its views on a new Commission
proposal which addresses the concerns expressed in this
opinion.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘XXXth Report on competition policy
2000’

(2002/C 48/02)

On 10 May 2001 the Commission decided to consult the Economic and Social Committee, under Article
262 of the Treaty establishing the European Community, on the ‘XXXth Report on competition policy
2000’.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 21 November 2001. The rapporteur was
Mr Sepi.

At its 386th plenary session (meeting of 28 November 2001) the Economic and Social Committee
adopted the following opinion by 108 votes to one, with one abstention.

1.

Introduction: general background

the increasingly high profile of this policy in a period of
technological change and industrial mergers, have prompted
the Competition DG to make a number of
fundamental
changes to structures and practice.

1.1.
In addition to the regular review of the activities of the
Competition DG, the XXXth report on competition policy
includes a series of important pointers for the future of this
policy.

1.2. Major new developments at institutional level, such as
the advent of the Euro, and internationally, such as the growing
trend towards globalisation and imminent enlargement, and

1.3.
This makes it important that rather than just passing
judgment on the past, this opinion should use the past as a
starting point to highlight these changes and outline their
possible consequences.

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1.4. Moreover, as has been mentioned several times in
previous opinions, an assessment limited to what happened in
2000, published only at the end of 2001, would be barely
relevant given the extremely dynamic processes going on
before our eyes, and the danger is that our institutional
partners would view it as obsolete.

indifference towards the operation of market mechanisms; on
the contrary, it requires constant vigilance aimed at preserving
those mechanisms ... promoting competition by improving
the business environment’ (1).

1.5.
In the opinion on the XXIXth report, while stating its
broad agreement, the Committee warned the Commission of
the risks inherent in slowing down the process of modernising
the legal framework, as this had become a vital precondition
for addressing the new issues facing Community competition
law.

For the above reasons, the report argues that it is absolutely
essential to adjust competition rules and practice to the new
environment.

2.1.1.
The XXXth report looks at these activities in four
chapters: I) Antitrust: Articles 81 and 82; state monopolies
and monopoly rights: Articles 31 and 86; II) Merger control;
III) State aid; and IV) International activities. It also includes a
statistical review of activities and a chapter on the outlook for
2001.

1.6.
The reasons for modernisation are, as mentioned in
the XXXth report, the rapid development of three economic,
the
interdependent and mutually supportive phenomena:
globalisation of the markets, the development of the new
economy and the growing number and scale of transnational
mergers, with important consequences not just for the econ-
omy, but for employment, too.

2.2. Chapter I

1.7.
To complete the picture of the context in which the
new regulations must operate, consideration must also be
given to the imminent introduction of the Euro, the gradual
enlargement process and the need as stressed in the XXXth
report to give the citizen/consumer a central position in
Community competition policy.

On 27 September 2000, the Commission adopted a draft
regulation which defined the competition rules applicable to
restrictive practices between businesses and abuses of a
dominant position (Articles 81 and 82). This is considered to
be the most important legislative initiative in Europe in the
competition field since the adoption of the Merger Regulation
in 1989. In the field of vertical agreements, a new block
exemption regulation and guidelines concerning distribution
have been adopted. These cover all sectors with the exception
of car distribution. In the area of horizontal agreements the
Commission has adopted revised block exemption regulations
for research and development, and specialisation agreements.

2. Content of the XXXth Report on competition policy

2000

2.3. Chapter II

The introduction to the XXXth report explains the

2.1.
thinking behind the strategy very clearly.

Technological developments and political initiatives are shap-
ing a new economic environment, based increasingly on rapid
access to information.

This has caused growth in the services sector and has forced
companies to re-examine their business relations with both
liberalisation has
customers and suppliers. Furthermore,
opened up a number of crucial sectors that were previously
closed to competition. Competition policy is founded on the
principle enshrined in the Treaty of ‘an open market economy
the
with free competition’, and is one of
Community’s action in the economic field. This principle does
not however imply ‘an attitude of blind faith or, possibly,

the pillars of

2.3.1.
According to the report, the issue of mergers is the
most sensitive in terms both of the modernisation of legislation
and of checks and monitoring.

The Commission itself is very cautious in its approach partly
owing to practical problems for which definitive solutions
have yet to be found. For instance, it is asking whether the
turnover thresholds are set at the most appropriate level and
whether the established concept of a ‘concentration’ is still
appropriate in a world of strategic alliances, minority sharehol-
dings and production joint ventures.

(1) SEC(2001) 694 final — Introduction, p. 8.

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The Commission’s approach here is two-pronged: introducing
a simplified procedure and revising the regulation.

In contrast to the progress made in the field of antitrust policy,
state aid control has proved much more difficult and politically
sensitive.

2.3.2.
The simplified procedure was introduced by the
adoption of a notice on the treatment of certain mergers under
the regulation in force and it was put into practice on
1 September 2000.

The procedure applies to the treatment of three categories of
merger that do not raise serious concerns in terms of
competition.

2.3.3.
The conference on mergers, staged by the Com-
mission and the International Bar Association (IBA) in Sep-
tember 2000, provided an opportunity to discuss a wide range
of issues, many of which are now being explored in the context
of the review of the merger control regulation.

The Commission is now at the fact-finding stage, in consul-
tation with the Member States, the applicant countries, busi-
ness associations and the legal community.

During 2001, the Commission will produce a document
setting out its conclusions and recommendations for change.
This will then form the basis for a further round of official
consultations.

2.4. Chapter III

In 2000, the Commission adopted three regulations, on the
application of the de minimis rule to state aid, on aid to small
and medium-sized enterprises and on aid to training.

The eighth survey of state aid in the EU showed that in the
period 1996-1998 an average of EUR 93 billion per year
were paid by the 15 Member States to the manufacturing,
agricultural, fisheries, coal mining, transport and financial
services sectors.

The Commission notes that while this constitutes a consider-
able amount in absolute terms it nevertheless represents a
reduction of 11 % in relation to the previous period.

2.5. Chapter IV

2.5.1.

E n l a r g e m e n t

Most applicant countries have set up national monitoring
authorities. However, to ensure transparency, several have still
to draw up comprehensive inventories of aid.

2.5.2. B i l a t e r a l c o o p e r a t i o n

According to the report, the Commission has continued to
cooperate closely with the US and Canadian antitrust auth-
orities in the context of the agreements signed. The trend
towards market globalisation continued apace during the year
and 2000 saw a considerable increase in the number of
transactions notified to both the Commission and the auth-
orities in the above-mentioned countries.

The Commission began wide-ranging, informal, exploratory
talks with Japan during which the two delegations managed to
resolve all issues; and at the EU-Japan summit held in Tokyo
in July it was announced that the two sides had reached a
mutual understanding on the draft cooperation agreement,
which should be signed during 2001.

2.5.3. M u l t i l a t e r a l c o o p e r a t i o n

The Commission continued to play an active part in the work
of the WTO and the OECD and participated in the fourth UN
conference on reviewing the set of equitable competition
principles.

As the increasing internationalisation of economies makes ever
greater demands of competition authorities, Commissioner
Monti, in addition to creating a multilateral competition law
framework at the WTO, has proposed the establishment of an
‘International Competition Forum’. This will serve as a basis
for national competition authorities to share experience and
find a common understanding on central issues of competition
law.

The Commission reports regularly to the Council on the
progress made by each of the applicant countries towards
accession. According to the report, the achievements in the
area of antitrust and merger control are generally satisfactory,
both on the legislative side and with regard to administrative
the applicant countries have adopted basic
capacity. All
competition laws and most of them have also established
merger control.

3. General comments

3.1.
A series of Committee opinions have underlined the
legislative work being done by the Commission as part of the
process of overhauling and decentralising competition policy.
An outline of these will be given in the Specific Comments in
point 4 below.

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3.2.
The Committee is pleased to note that this change is
possible now that the long battle to introduce a competition
culture to our countries is all but won. The Competition DG
can thus take on its proper guiding role and intervene only in
the most important cases.

3.6. While welcoming and supporting these measures, the
Committee remains convinced that the introduction of this
new distribution of responsibilities must be closely monitored.

3.3.
The establishment of competition authorities in all the
Member States is the most telling institutional sign of this.
They allow for a more rational organisation of responsibilities
and enable the Commission to operate in the area that suits it
best.

3.7.
The Honeywell-General Electric case is highly signifi-
cant as it raises at least three major considerations for the
future.

Here, however, the Commission’s proposal to delegate

3.4.
powers to the national authorities does raise a few concerns.

3.7.1.
The first is that the importance of the European
market obliges even economic giants like the two companies
mentioned above to comply with European competition rules.
The Commission must draw the right conclusions from this
and extend its analyses to other multinationals in new sectors.

3.4.1.
Firstly, uniform application of competition policy is
demanded of bodies which differ in terms of powers, insti-
tutional position and membership criteria: this could lead to
divergent decisions and conduct.

3.4.1.1.
Serious concern is aroused by the activity of
the new competition authorities which have recently been
established in the applicant countries, either because they still
lack the necessary experience, or because the Commission’s
competition policy reform gives them greater responsibilities.
It would be helpful in this respect for the Competition DG to
set out a number of criteria to ensure that these new bodies
can act in a uniform and effective manner.

Secondly, companies with a presence in more than
3.4.2.
one country could quite legally remove themselves from the
reach of stricter authorities in one country by choosing a more
favourable environment in another.

The second consideration is that competition policy
3.7.2.
must be based on real economic trends and not just on formal
legal criteria. As the Commissioner states in his introduction,
applying competition policy is not a static exercise but
demands choices that take account of the economic signifi-
cance of the issues and the overall objectives of EU economic
policy.

3.7.3.
A further problem raised by the Honeywell case
is the need to internationalise competition principles. The
Commission’s proposal to work on this area within the WTO
seems to be extremely well-timed. The Committee has raised
this issue time and again in its previous opinions over the last
four or five years. The forum proposed by the Commission,
however, can be considered only a first step in this direction.
At the same time, bilateral cooperation with the leading
industrial nations should continue.

3.4.3.
Lastly, it is not certain that all the national authorities
have the resources required to fulfil this role, particularly in
the smaller countries.

The Committee also endorses

3.8.
the Commission’s
attempt to involve consumers and other relevant categories to
an ever greater extent in its competition policy, both to
demonstrate the benefits for them and to encourage them to
file complaints and criticisms, as has already occurred in a
number of cases.

3.5.
The Commission seems to be aware of these difficulties,
as indicated by the choice of a regulation as the preferred legal
means of implementing this reform, the proposal for an
information network and cooperation instrument for national
authorities, and the plans for joint training courses for their
members and the judges involved.

3.9.
It would perhaps be useful to stress that the Committee,
with the various interests it represents, could play a much
more significant role in tightening the link with the public in
general and consumers in particular.

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3.10.
In this context, the Competition DG’s communication
policy must be improved. Although the official report could
not be produced any faster, the Commissioner’s introduction
and a brief summary of the Competition DG’s legislative and
‘legal’ activities could be issued on their own earlier.

3.11.
The publication of on-line information on state aid
should be extended to other subjects and accompanied at
regular intervals by paper summaries.

3.12.
The Committee would restate its position in favour
of controlling not only state aid, but all other public aid, so
that it does not distort inter-company competition.

3.12.1.
However, economic intervention by the public
authorities may now be necessary given the weak economic
phase which Europe and the United States had already entered,
but which is set to worsen in the wake of the terrorist attacks
of September 2001, especially in terms of the resulting market
uncertainty and fall in demand. Such intervention must, in any
event, be carefully channelled towards productive investment,
in line with the objectives defined by the EU at Lisbon.

3.12.2.
At the same time, the enlargement process could
have the effect of reducing Community aid to the more
disadvantaged areas of the present EU, and require further
intervention to ensure a proper territorial balance, at least
during a transitional phase.

3.13.
Regarding liberalisation processes and, more gener-
ally, the relation between the public and private sectors of
the economy, it would appear increasingly necessary — as
previously indicated in the opinion on the XXVIII report on
competition policy (1) — for the Commission to carry out
periodic analyses of the impact of such processes over recent
years, in terms of both economic and social effects, as well as
of citizens’ safety.

3.15.
Enlargement brings with it the major challenge of
promoting competition culture and modernisation in the
applicant countries. The process will be much harder and will
have to happen much more quickly than in the 15 Member
States. The Committee understands the reasons for the acceler-
ation explained in the Commissioner’s introduction, but it
cannot underestimate the profound social damage that could
result if changes are made too suddenly and without any social
shock absorbers: this applies equally to the applicant countries
and the existing Member States.

The Committee feels that

3.15.1.
if social aspects are
sacrificed the accession of these societies into the Community
could generate major disappointment and a backlash. The
process must therefore be accompanied by robust, targeted
economic and social policy measures, including an improved
climate for enterprise development potential, particularly for
SMEs. To this end the Committee believes the European Union
must provide far greater resources than those presently
available.

Certain full-blown international cartels that dominate
3.16.
the world economy, for instance in the oil and natural gas
markets, must be confronted. The cartel policy conducted by
OPEC, and also by the oil companies, clearly runs counter
to competition policy, and should be confronted with the
appropriate instruments and the necessary level of political
determination. In a global economy, even economic actions
directly conducted by national governments must obey the
rules of economic propriety and competition policy.

3.17.
The continued existence in individual countries of
professional sectors benefiting from contractual, administrat-
ive or legislative protection represents an unacceptable breach
of
the principles of European competition policy. At a
time when public service monopolies are being liberalised,
multinational businesses are being punished, and all sectors
these
are being urged to step up their competitiveness,
occupational cartels — which are a hang-over from the past
— must be brought into line with the new situation. The
Commission must take on this task, and not only with words,
but with practical steps designed in part to encourage national
authorities to take the appropriate action.

The need for such an analysis is now all the greater in
3.14.
that a debate on the future European constitution is in full
swing: and the Committee must extend the discussion from
purely institutional aspects to encompass the ‘unwritten consti-
tution’, in order to identify the social structures which will
underpin the new institutional architecture.

4. Specific comments

(1) OJ C 51, 23.2.2000, p. 1.

4.1.
In order to provide our partners with a fuller picture
of the Committee’s views on the subject, it has been decided
the Committee’s opinions on
to include a summary of
the most recent significant legislative provisions concerning
competition policy.

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The first opinion concerns the regulation reforming

4.2.
Treaty Articles 81 and 82, and concludes as follows:

The third opinion is on the Competition rules relating

4.4.
to horizontal cooperation agreements.

‘The Committee wholeheartedly supports the reform of
the system for applying competition rules. This initial
legislative instrument establishes essential machinery, and
the Committee appreciates the clear and bold wording
used. However, in view of the complexity of the topic, and
also in order to match the laudable commitment shown
by the Commission,
the Committee cannot hide the
fact that it would have liked further clarifications and
information,
in the form of official accompanying
measures, as stated in its December 1999 opinion. The
Committee will
follow the Commission’s future work
with keen interest, particularly as regards the important
additional measures announced. The Committee promises
to offer the Commission its usual constructive collabor-
ation.’

4.4.1.
The Committee expresses its satisfaction with the
considerable work carried out by the Commission and broadly
supports the proposed reform of horizontal cooperation
agreements.

4.4.2.
It is nevertheless concerned by the partial nature of
the reform, and most of all by the risk that Member States will
differ in their assessments or take differing action as a result of
non-uniform interpretation and application of the rules. The
Committee thinks that the new block exemption regulations
must be designed on the basis of decentralised application, and
would prefer a single comprehensive block exemption on
horizontal agreements.

4.3.
The second opinion concerns the Regulation on the
application of Article 81(3) of the EC Treaty to categories of
vertical agreements and concerted practices.

The Committee would also like to see retrospective
4.4.3.
notification of horizontal agreements as is the case for vertical
agreements, and calls for the Commission to take steps to
resolve this problem.

The Committee welcomes the broad lines of the
4.3.1.
proposed reform, as much of it mirrors the recommendations
made by the Committee in previous opinions.

4.3.2.
Concerning the scope of the block exemption, the
Committee notes that, in cases where the turnover threshold
is exceeded by a limited number of undertakings, a positive
assessment of individual notifications would be possible. It
considers that the Guidelines should better explain how the
Commission intends to provide a realistic interpretation of the
notion of ‘potential competitor’ in order to prevent a large
number of industrial supply agreements from falling outside
the scope of the block exemption.

4.3.3. With regard to market shares, identification of the
relevant market should be made clearer through a series of
significant examples to help undertakings define their market
share at
the regional, national and European levels. The
Committee also requests the Commission to insert clauses to
limit, in the case under consideration, the powers of grantors
in relation to distribution SMEs, or which at least would
provide SMEs with effective safeguards.

4.4.4.

The Committee therefore recommends:

— a market share of 30 % for research and development

agreements;

— a market share of 25 % for specialisation agreements;

— a market share of 20 % for SME joint purchasing

agreements;

— extending the transitional period for adaptation of the
existing rules to the new provisions from one year to
two, i.e. to 31 December 2002. Until then, agreements
which comply with the existing rules should be allowed
to continue unchanged.

4.5.
The fourth opinion concerns the rules governing
agreements of minor importance (‘de minimis’), particularly
for small and medium-sized enterprises, and concludes as
follows:

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‘The communication (1) is part of the process of updating
competition policy law. The Committee highlights the
major improvements over the previous communication:
the establishment of “categories”, the raising of existing

(1) Communication from the Commission relating to the revision of
the 1997 notice on agreements of minor importance not covered
by the provisions of Article 81(1) of the EC Treaty — SEC(2001)
747 final.

thresholds,
improved legal certainty.

the establishment of a new threshold,

The Committee calls for further thought to be given
to the concept of “relevant market”, and for further
simplification of the categories of agreement giving rise
to hardcore restrictions of competition policy and greater
uniformity in the leeway allowed in the event of the
market share laid down being exceeded.’

Brussels, 28 November 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Regulation of the European
Parliament and of the Council on the Common Procurement Vocabulary (CPV)’

(2002/C 48/03)

On 15 September 2001 the Council decided to consult the Economic and Social Committee, under
Article 47(2) of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 21 November 2001. The rapporteur was
Mr Herna´ndez Bataller.

At its 386th plenary session of 28 and 29 November 2001 (meeting of 28 November), the Economic and
Social Committee unanimously adopted the following opinion.

1.

Introduction

1.1.
In 1996 the Commission adopted a recommen-
dation (1) on the use of the Common Procurement Vocabulary
(CPV) (2) for describing the subject of contracts.

1.2.
In its Green Paper entitled ‘Public procurement in
the European Union: exploring the way forward’ (3),
the
Commission invited all interested parties to state their views
on the appropriateness of making use of the CPV more
widespread. The Committee had previously expressed its views
on the subject in an opinion adopted unanimously on 28 May
1997 (4), which referred to the need to simplify the Community
legal
to the electronic age and
it
highlighted problems in the area of access to information.

framework and adapt

(1) OJ L 222, 3.9.1996, pp. 10-12.
(2) The CPV consists of a main vocabulary for defining the subject of
a contract, and a supplementary vocabulary for adding further
qualitative information. The main vocabulary is based on a five-
level hierarchical structure, while the supplementary vocabulary
has two levels. A wording describing the supplies, works or
services in all the official languages is associated with each code.

(3) COM(96) 583 final, 27.11.1996.
(4) Opinion on the Green Paper, rapporteur: Mr Malosse; OJ C 287,

22.9.1997, p. 2.