WRITTEN QUESTION P-3926/03 by Jacqueline Foster (PPE-DE) to the Commission. Distortion of competition in the diamond industry.
Date: 2003-12-16
Institutions: European Parliament, Provisional data
Subjects: competition law, distributive trades, exclusive purchasing agreement, precious stones, restriction on competition

27.3.2004

EN

Official Journal of the European Union

C 78 E/877

1. What is the problem with the granting of government aid to the Frisian Expocentre (public/private
ownership) for investment in the livestock market as a result of the foot and mouth epidemic in Friesland
in 2001?

2. Why is the procedure for granting European approval for the support referred to in paragraph 1
taking so long?

Answer given by Mr Fischler on behalf of the Commission

(9 February 2004)

The Commission wishes to assure the Honourable Member that it is fully aware of the precarious situation
of the sectors affected by the foot-and-mouth crisis in 2001.

The Frisian authorities notified the Commission of several measures related to the foot-and-mouth crisis in
2001.

As to the measures notified in spring 2002, the Commission assumes that the Honourable Member refers
to State Aid N 315/02 (Foot-and-mouth disease compensation fund Friesland). This measure with a budget
of EUR 6 353 000 was approved by Commission Decision C(2003)128 of 13 February 2003.

the Frisian authorities notified two additional measures (N 665/02 and N 667/02)

in
Furthermore,
particular related to the Leeuwarden cattle market in October 2002. These measures involve ‘inter alia’
investment aid for FEC (Frisian Expocentre).

As to the first question asked by the Honourable Member, the Commission is not yet in a position to
establish whether the above-mentioned measures are compatible with the common market.

As to the duration of the procedure, these measures were notified to the Commission by letters of
11 October 2002 from the Dutch Permanent Representation to the Union.

Due to the fact that the original notification did not contain all necessary information, the Commission
asked the Dutch authorities for additional information. On the request of the Dutch authorities, a meeting
was held after which the Dutch authorities decided to adapt the measures. From the examination of the
modified measures, it appeared that the information was not complete. By letter of 22 October 2003, the
Commission has asked for additional information. So far, this letter has remained unanswered.

(2004/C 78 E/0930)

WRITTEN QUESTION P-3926/03

by Jacqueline Foster (PPE-DE) to the Commission

(16 December 2003)

Subject: Distortion of competition in the diamond industry

In the Commission’s current investigations into the compatibility with EC competition law of De Beers’
Supplier of Choice distribution system and its proposed exclusive purchase agreement with Alrosa, what
steps does the Commission intend to take to prevent De Beers from drastically reducing competition by
effectively destroying the secondary market for the independent supply of rough diamonds to non-
sightholders, in particular given that:

C 78 E/878

Official Journal of the European Union

EN

27.3.2004

(cid:1) the vast majority of desirable rough diamonds are sold by De Beers/DTC to strictly controlled

sightholders for manufacture,

(cid:1) that former sightholders which were pure dealers and independent suppliers of rough diamonds to the

secondary market have been eliminated under the Supplier of Choice selection procedure, and

(cid:1) that De Beers intends to take control of the distribution of rough diamonds to the secondary market

through its subsidiary Diamdel?

Answer given by Mr Monti on behalf of the Commission

(20 January 2004)

On 16 January 2003 the Commission announced that it had authorised the distribution system known as
‘De Beers’s Supplier of Choice’ (SoC) following the changes that De Beers had made to the original system
notified to the Commission and after conducting a detailed market survey to find out the views of actual
and potential clients of De Beers regarding the modified system. On completion of the survey, the
Commission published in November 2002 in the Official
Journal of the European Union a notice
summarising the content of the modified system and formally inviting interested parties to present their
observations. Overall, the reactions of third parties were not negative.

When giving the go-ahead, the Commission undertook to monitor the market closely and reserved the
right to reopen the file if any change in the factual and legal circumstances concerning a key aspect of the
agreements led it to alter its position.

As indicated in its answer to Oral Question H-0637/03 by Mr R. Corbett (1), the Commission confirms that
it intends to abide fully by its commitment. It is, therefore, continuing to monitor closely De Beers’
implementation of the system in order to ascertain whether the Community competition rules are being
complied with.

A number of sightholders have lodged complaints with the Commission regarding the compatibility of the
system with the Community competition rules. These complaints are being vetted in accordance with the
Commission’s normal procedures under Articles 81 and 82 of the EC Treaty.

The Commission cannot as yet indicate to the Honourable Member the measures it might take as it does
not possess all the information needed to decide on the matter in full knowledge of the facts. In particular,
it cannot yet say whether the three events referred to in the Honourable Member’s question have actually
taken place and, even if they have, it cannot give an assessment as to whether they are compatible with
Articles 81 and 82.

It is only after examining the information obtained when vetting the complaints that the Commission will
decide whether implementation of the system gives rise to competition problems.

At the same time, the Commission is pressing ahead with its examination of the agreement between Alrosa
and De Beers with a view to verifying its compatibility with Articles 81 and 82.

(1) Oral answer of 18.11.2003.

(2004/C 78 E/0931)

WRITTEN QUESTION E-3927/03

by Freddy Blak (GUE/NGL) to the Commission

(18 December 2003)

Subject: Modular road trains on European roads

At present it is only Sweden and Finland which are taking advantage of exemptions to use modular road
trains up to 25,25 m in length.