Opinion of the European Economic and Social Committee on the Report from the Commission: Report on Competition Policy 2005 SEC(2006) 761 final
Date: 2007-04-26
Institutions: European Economic and Social Committee
Subjects: ESC opinion, competition policy, report

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the Report from the Commission:
Report on Competition Policy 2005

SEC(2006) 761 final

(2007/C 168/04)

On 15 June 2006 the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the Report from the
Commission: Report on Competition Policy 2005.

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 27 March 2007. The rapporteur was Mr Garai.

At its 435th plenary session, held on 25 and 26 April 2007 (meeting of 26 April), the European Economic
and Social Committee adopted the following opinion by 115 votes to 40 with 12 abstentions.

1. Conclusions and recommendations

It was not possible for this opinion to cover all DG
1.1
COMP's activities (1). Only a limited number of selected cases
could be discussed briefly, and judicial rulings on antitrust,
merger and State aid cases were not dealt with at all, since this
would have required a separate,
in-depth study of detailed
is viewed by the authorities.
market conduct and how it
However,
the Report makes it clear that DG Competition's
approach to handling cases is characterised by perseverance in
carrying out procedures and a concern to find suitable and prac-
If
ticable solutions to the problems which are encountered.
then perhaps some selected
something could be criticised,
subjects might be mentioned where the importance of
the
sector from the point of view of fulfilling the requirements of
international competitiveness outlined by the Lisbon agenda and
accompanying documents did not warrant the attention paid to
it by the Commission. For the EESC, one example is the ‘2005
Report on Professional Services — Scope for more reform’
follow-up paper and the staff working document entitled
‘Progress by Member States in reviewing and eliminating unjusti-
fied restrictions to Competition in the area of Professional
Services’. In the Committee's view, the Lisbon agenda's call for
liberalisation of services mainly applies to services of interna-
tional relevance (infrastructure, telecommunications, transport,
etc.), and is much less concerned with the ‘liberal’ professions
(including architects,
lawyers, doctors, engineers, accountants
and pharmacists); most of the latter are small-scale entrepre-
neurs of mainly local importance, and in keeping with the subsi-
diarity principle they fall within Member State competences (see
and
the Cipolla-Macrino
C-202/04) (2). It cannot be denied that certain restrictions are
necessary to ensure that practitioners meet society's expectations
of high professional standards, experience and trustworthiness.
The Committee welcomes in-depth studies of
the relevant
markets for the various liberal professions in the Member States;
these studies assess the extent and seriousness of existing restric-
tions. At the same time it must be emphasised that not only the
economic effects of proposed liberalisation on competition

Joined Cases C-94/04

case,

(1) DG COMP's international activity is worth mentioning in this context
since in many fields and subjects it represents a form of ‘applied
economic diplomacy’ on the part of the EU.
(2) OJ C 94, 17.4.2004 and OJ C 179, 10.7.2004.

patterns should be analysed, but also their probable repercus-
sions on the fabric of society. This does not preclude NCA anti-
trust procedures, mainly directed against the efforts of profes-
sional associations to fix prices.

1.2
The EESC has been advised to place greater reliance on
the vast professional expertise and experience of the civil society
associations and organisations represented in the Committee in
monitoring the activity of DG COMP; it has even been suggested
that the Committee could occasionally carry out investigations
with a view to initiating antitrust and State aid cases. The
Commission's DG Competition could assist in this by supplying
regular information on its policy-making objectives and even
case-handling activity, within the constraints of confidentiality.

1.3
Regular meetings between EESC representatives and DG
Competition's Consumer Liaison Officer should be introduced.
Exchanging information could promote ongoing dialogue with
consumer protection organisations. Whenever DG COMP
summarises the findings of sector inquiries (3) into energy (gas
and electricity) and financial services (retail banking and busi-
ness insurance), they should be made available to EESC repre-
sentatives
study and
comment.

(preferably in a working group)

for

1.4
The EESC recognises the need to summarise its views on
the impact of competition policy on the economic and social
values set out in the Committee's remit. To this end, work
should soon begin on issuing the a study interpreting the
concepts of competition and competitiveness (including their
actual content) in the spirit of the Lisbon agenda, and assessing
their probable social impact in Member States.

1.5 When DG COMP launched a debate on application of
Article 82 TEC (abuse of a dominant position), it published a
paper on exclusionary conduct, which is harmful to competitors
and competition itself. This paper has been widely discussed.
The Commission has promised to follow this up by looking at
exploitative abuses which is an even more sensitive issue from
suppliers of
the point of view of consumers and (SME)

(3) See page 23 paragraph 35 and page 42, paragraph 115 of the Report.

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companies with a dominant position. The Committee is of the
opinion that the Commission should now draft a discussion
paper on exploitative conduct within the meaning of Article 82
TEC; this paper could serve as a basis for discussions, and, once
sufficient shared characteristics have been identified for both
types of abusive conduct (exclusionary and exploitative), unified
guidelines should be established incorporating conclusions on
interpretation of the rules on abuse of a dominant position.

2. Introduction

2.1
The free market does not always lead to the best result
possible. Distortions of competition hit employees and consu-
mers as well as businesses and the economy in general. Compe-
tition law is a tool for governments to set and enforce fair
market conduct by means of substantive and procedural rules of
administrative law.

2.2 When expressing the opinion of the EESC on the Report,
it is worth mentioning that modern market-oriented democratic
States possess two main sets of
influencing the
economy:

tools for

— Industrial policy, which involves influencing market players by
means of tax breaks, subsidies and other forms of support,
and which amounts to direct intervention in the economy.

— Competition policy in the narrower

sense, which not only
defines which types of practices are considered undesirable,
but in order to ensure a level playing field for competition
also offers access to legal proceedings,
including enforce-
ment, which entails sanctions.

DG Competition is in a position to employ both poli-
2.2.1
the application of Articles 81, 82 and 86 (4) of
cies:
the
EC Treaty represents the typical activities of a competition
authority.

it

Another important consideration is that

2.3
is widely
accepted that fair, undistorted and viable competition between
market players is probably the best guarantee for consumers
that the quality and choice of goods will come up to their
expectations. Nevertheless, it should not be forgotten that many
other circumstances influence so-called consumer benefit: the
general state of society, favourable or disadvantageous material
and moral/spiritual factors, etc. The European Economic and
Social Committee (henceforth referred to as the EESC or the
Committee) would like to put the Report by DG Competition in
a general context, and to discuss it from the perspective of the
Committee's values as set out in its remit.

3. Application of Articles 81 and 82 TEC

3.1 When the EU Commission exercises law enforcement
the antitrust provisions (on anti-competitive
powers under

(4) Article 86 (EC Treaty) is applied by the Commission to Member States

and not enterprises.

in Member States;

behaviour) of Articles 81 and 82 of the Treaty of Rome, these
are directed towards undertakings (5)
the
Commission's actions can therefore be compared to the exercise
in that it judges the market
of a quasi-judicial competence,
conduct of companies ex post, according to the provisions of
competition law. This activity, which has been the task of the
Commission's Directorate-General for Competition (DG COMP)
since the early 60s, is reflected in the Commission's decisions,
the Court of First
which,
Instance and the European Court of Justice (on appeals), has
developed a legal system of authoritative precedents over a
period of forty-five years. The case-law accumulated in this way
by judging different market situations is one of the most valu-
able achievements of the acquis communautaire.

together with the judgements of

The 2005 Report makes it clear that DG COMP is well
3.2
aware of all the important aspects of economic competition
within and outside the EU and of its role in ensuring the legal
protection thereof. This is all the more so because EU substan-
tive case-law can also be applied by national competition autho-
rities and courts; therefore, these rules are continuously shaping
EU and national legal practices.

With regard to 2005, the EESC would like to comment on the
following initiatives, proposals and measures:

3.2.1
Rules for access to European Commission files in anti-
trust and merger cases: This is always a delicate question in
procedures and the relevant details are continuously being fine-
tuned by the Commission. The Commission considers it impor-
tant to ensure that businesses interested in antitrust or merger
procedures have access to files in both paper and electronic
versions. The new rules replace an earlier text adopted in 1997.

3.2.2
A request to potential complainants to supply informa-
tion to help effective enforcement of competition rules: Interest-
ingly enough, this request was published in the Report under
review. It highlights the difficulties associated with the moni-
toring of markets by competition authorities, and calls on civil
society organisations and professional associations to play an
active role in initiating and conducting investigations (e.g. gath-
ering evidence) into major competition law infringements.

3.2.3
Discussion paper on the application of Article 82 TEC
(abuse of dominant position): DG COMP's aim was to generate
specialist debate on the exclusionary anti-competitive conduct
of companies that have sufficient market power to influence the
behaviour of
their competitors to gain unilateral advantages
over them. More than 100 contributions were made to the
discussion paper (which serves as a basis for future guidelines).
The majority of these stress the need for an economic analysis
of the relevant market and players. The truth of these observa-
tions cannot be denied. However, many of the contributions

(5) Undertakings do not necessarily have to be present on the territory of a
Member State. A major strength of European competition law is that it
can apply sanctions simply on the basis of the effects of restrictive beha-
viour or agreements.

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emphasise that it is important to acknowledge the principle of
not hindering efficient companies in their execution of market
strategies. Hence, this currently fashionable theory,
instead of
strictly condemning unfair market conduct, advocates greater
indulgence (‘rule of reason’) for effective, though aggressive busi-
ness strategies. However, according to European case-law (6)
such ideas are inconsistent with the intolerance of unfair market
conduct aimed at eliminating unwelcome competitors, which is
the most widespread approach at European level (7). There can
be no doubt that defining the borderlines which key market
players must not cross is a fundamental dilemma for competi-
tion policies. Given the EESC's role in defending the interests of
civil society (SMEs (8), workers, consumers, etc.) it keenly awaits
the outcome of this debate.

The

provide

3.2.4
for
Impact Assessment Guidelines
screening of all legislative and policy initiatives included in the
European Commission's Annual Work Programme from the
point of view of probable positive or negative impacts on
competition: The aim is ‘to avoid unnecessary or dispropor-
tionate restrictions of competition’, right from the EU legislative
phase. Efforts to gauge probable impacts on markets (which
ones?) are proof of how deeply engrained the notion of
‘vigorous’ or ‘perfect’ (i.e. fair and undistorted) competition has
become in the Commission's approach. The EESC is of
the
opinion that
‘competition’ should be perceived in a much
broader sense and that, especially in the case of consumers,
workers and small and medium enterprises, long-term interests
could diverge considerably from the immediate interests of
ensuring conditions which are conducive to ‘perfect’ competi-
tion (9).

3.2.5
Green Paper on damages actions for breach of the EC
antitrust rules: The EESC's recent opinion of 26 October 2006
on the Green Paper was positive about the Commission's efforts
in this field. The Commission's publication of the Green Paper
on damages actions for breach of the EC antitrust rules has
opened up a broad and welcome debate on the need to make it
easier for those injured by anticompetitive practices to recover
damages. In its opinion of 26 October 2006 (INT/306), the
EESC states,
inter alia, that the aim is to ensure the effective
protection of everyone concerned by the European Single
Market. Given the free movement of goods, there must be a
degree of uniformity in all countries in terms of contractual
transactions are
rights and obligations. Where cross-border
concerned, efforts should be made to achieve a certain degree of
harmonisation between various systems of national law.

(6) Paragraph 341 of the Judgment of the Court of First Instance (Third
Chamber) of 28 February 2002 — Compagnie générale maritime and
Others v Commission of the European Communities, ECR 2002 PII —
01011.

(7) See the AKZO case, 31.12.1985, OJ L 374/1, paragraphs 74-79.
(8) Which very often fall prey to unrestrained manœuvres by companies in

a dominant position.

(9) See the opinion of the Zentralverband Gewerblicher Verbundgruppen
F.V. Berlin:
‘Stellungnahme zum Diskussionspapier der Kommission
zur Anwendung von Art 82 EG auf Behinderungsmissbraeuche’
21.3.2006.

3.2.5.1
Secondly, account must be taken of the existence of
both European and national competition authorities (NCAs),
whose task it is to determine what prohibited practices are, and
to establish the economic sanctions that could be imposed on
companies in breach of the rules.

3.2.6
Launching sector inquiries into the recently liberalised
gas and electricity sectors: These examinations will certainly
help to clarify what is really happening in these very important
and wide-ranging sectors — sectors in which liberalisation has
long been perceived as a panacea. It is high time to subject
local, nationwide and even broader markets to unbiased scrutiny
in order to shed light on numerous monopolistic situations
which are detrimental to consumers, workers and businesses.

3.2.7
Electronic communication: There is growing dissatisfac-
tion with the
increasingly integrated European electronic
communications markets. Mobile network operators' wholesale
rates for international roaming services are too high. For this
reason, DG COMP has initiated investigations by submitting
statements of objections to the operating companies. The provi-
sional conclusion of the investigation was that two out of the
three leading German companies were abusing their dominant
position by charging ‘unfair and excessive prices’.

The EESC would take this opportunity to state
3.2.7.1
frankly that interpretation of Article 82 TEC (10) has progres-
sively been infiltrated by ‘excessive pricing’, both as a concept
and expression, whereas the actual wording of the Treaty only
refers to ‘imposing unfair prices’, i.e. unjust or unjustified prices.
The reason why the European Commission has so far refused to
investigate and take action against exploitative price-raising
market conduct by dominant companies is its reluctance to
define ‘right’ and ‘wrong’ prices (11) (especially with regard to
services provided in different countries). However, the demand
for international services (roaming) from mobile phone opera-
tors is intensifying, and customers are becoming increasingly
cost-sensitive in their attitudes. They rightly feel that even slight
price-increases might be ‘unfair’, without actually being ‘exces-
sive’. The EESC eagerly awaits the findings and decisions of the
Commission in this and other similar cases.

the

3.2.8
Decision fining the AstraZeneca company for misuse
of
system: The Commission adopted a
regulatory
new approach to interpreting Article 82 (EC) when it fined
AstraZeneca AB and AstraZeneca Plc (AZ) EUR 60 million for
infringements of Article 82 TEC (and Article 54 of the Euro-
pean Economic Area Treaty). The abuse committed by the
merged companies was that they — in order to maintain intel-
lectual property rights protection enabling them to maintain
high product prices on many markets — initiated official proce-
dures based on a Council regulation and thus obtained a supple-
mentary protection certificate relating to the patent of their
involved supplying
anti-ulcer product Losec. The
decision-making
misleading

information to the

relevant

abuse

(10) See Article 82 TEC.
(11) See ‘Commission Practice concerning excessive pricing in Telecommu-
nications’, Competition Policy Newsletter, p. 36, Issue No. 2, June
1998.

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authorities and bodies, resulting in extension of
the patent.
Consequently, the validity of the Losec patent could not be
deemed to have expired. As a result, Losec did not become a
generic product, and smaller companies capable of marketing
this anti-ulcer product were prevented from manufacturing it at
a much lower price than the AstraZeneca companies. Thus, the
effect of delaying the patent's expiration indirectly harmed
consumers.

3.2.10.2 With regard to business insurance, the sector inves-
tigation ‘will examine in particular the extent of cooperation
among insurers and insurance associations in areas such as the
setting of standard policy conditions (14). While in many cases
such cooperation may create efficiencies, possibly distortive
forms of cooperation may limit the potential for the demand
side to negotiate terms of coverage and may also restrict compe-
tition and innovation in the market’.

3.2.8.1
The novelty of this antitrust procedure was that in its
decision the Commission ruled that even if remedies under the
patent extension procedure were open to competitors, this did
not exclude the application of Article 82 (EC). The AstraZeneca
companies were in a dominant position in the relevant Euro-
pean (and other) markets and the abuse had been committed
through fraudulently initiated procedures.

3.2.8.2
The EESC would take this opportunity to point out
that this type of market conduct would fit much better into the
category of ‘unfair marketing practices’ (12), which as yet do not
fall within the remit of DG Competition. On this particular
occasion the abuse was pushed through from a dominant posi-
tion, but there are many other instances of companies acting in
a similar way, irrespective of their market power, without being
punished. If we are thinking in terms of integrated European
markets, we also need to put in place better protection for
consumers and competitors, which are often SMEs. The
Commission's decision in the AstraZeneca case heralds likely
progress in this direction.

3.2.9
Decision concerning the monitoring trustee in the
former Microsoft case: This well-known case had significant
repercussions and lessons for American companies, who realised
that the European legal system acts as watchdog even vis-à-vis
powerful non-EU market players. The latest decision shows how
flexible the European Commission is in searching for and
devising mutually acceptable solutions enabling companies in
breach of Community law to re-align themselves within normal
competitive conditions. In fact, nomination of the trustee (13) to
monitor the IT giant's endeavours to comply with the remedies
prescribed by the Decision is a tool borrowed from merger
control practice and reflects the good intentions of DG COMP
in terms of cooperation on settling disputes.

3.2.10
Launching sector inquiries in financial services: The
Committee endorses the inquiries which have been initiated in
the field of payment cards and retail banking services (current
accounts and SME financing tools), as well as investigation into a
particular case involving business insurance (see point 3.2.10.2).

above-mentioned banking
3.2.10.1 With regard to the
services, competition seems to be impaired by barriers to entry,
lack of real choice and, presumably, existing dominant posi-
tions.

(12) Directive 2005/29/EC of 11 May 2005, on unfair trade practices

between businesses and consumers, recital 8.

(13) In full agreement with Microsoft on the choice of the person acting as

trustee, whose costs are even covered by the company.

3.2.11
Commission proposal on public service requirements
and contracts in passenger transport by road, rail and inland
waterway: The revised proposal on public service requirements
and contracts in passenger transport may promote the involve-
ment of SMEs active in these fields, thereby placing them in a
better position to participate in local transport.

against hard-core

3.2.12
Setting up of the Cartels Directorate specialised in the
fight
the EESC wholeheartedly
cartels:
supports the progress made in the professional handling of
cartel cases.

3.2.13
Since 1 May 2004, Regulations 1/2003 and
773/2004 on antitrust procedures have introduced a new
system for identifying the possible anticompetitive intentions
and effects of agreements to be concluded by market players.
Notifications to obtain a preliminary position of the competi-
tion authority on the possible anti-competitive nature of
planned joint venture and (horizontal and vertical) cooperation
agreements may no longer be submitted either to the European
Commission or to the Member States competition authorities.
This means that instead of an individual exemption, in the form
of a ‘comfort letter’ or ‘negative clearance’ as issued by DG
COMP before 1 May 2004, it is up to the companies themselves
to carefully scrutinise all aspects of the planned agreement to
establish compliance with any (or all) of the conditions set out
in Article 81(3) TEC (15) for beneficial effects on the relevant
markets. One of these conditions is that if such an agreement
(usually a joint venture agreement) is concluded in a certain
market and is advantageous to the participants, the benefits
must be shared with consumers.

3.2.13.1
The EESC would emphasise that failure to fulfil the
condition set out in the final sentence of the previous paragraph
should be grounds for considering a given conduct as anticom-
petitive. When evaluating agreements which are in breach of
the Commission should qualify any evidence
Article 81(1),
proving that the conduct was intended to disadvantage consu-
mers as an aggravating circumstance.

(14) http://europa.eu.int/comm/competition/antitrust/others/sector_inqui-

ries/financial_services/decision_insurance_en.pdf.

(15) §81. (3) The provisions of paragraph 1 may, however, be declared

inapplicable in the case of:
— any agreement or category of agreements between undertakings;
— any decision or category of decisions by associations of under-

takings;

— any concerted practice or category of concerted practices, which
contributes to improving the production or distribution of
goods or to promoting technical or economic progress, while
allowing consumers a fair share of the resulting benefit, and
which does not:
(a) impose on the undertakings concerned restrictions which
are not indispensable to the attainment of these objectives;

(b) afford such undertakings

the possibility of eliminating
competition in respect of a substantial part of the products
in question.

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4. Merger control

An important task for the Commission is to examine the
4.1
foreseeable market
structures and dominance arising from
mergers by companies intending to concentrate development,
manufacturing and marketing capacities in order to enhance
their position and power on the market. Not only company
mergers but even joint ventures between enterprises can be
regarded as concentrations if executive powers are concentrated
in a single unified management structure and if the various
participants act as a single market player in the relevant market.
The benefits of concentrations include increased efficiency,
accelerated product development, lower costs and management-
level synergies. However, from the competition policy perspec-
tive concentrations can be disadvantageous, given that aggrega-
tion of market powers often gives rise to dominance, which in
turn is associated with a high risk of abuse. Sometimes mergers
can have a negative impact. Several studies have shown that
they do not always enhance efficiency or growth; in the long
run, a company's profits and value may even suffer as a result.
Mergers can also lead to substantial
job losses. Hence, when
evaluating mergers, it is also important to take employment and
social policy aspects (e.g. jobs) into account. The best means of
assessing whether the effects of a planned concentration might
distort competition is to check various aspects of the relevant
merger against the conditions set out in Article 81(3) TEC (see
footnote 12). If the market structure and market power of the
companies involved in the merger complies with the conditions
set out in this article, then the concentration is considered as
acceptable. This is an important link between merger control
(which is essentially an industrial policy tool) and antitrust rules,
which help authorities to apply competition policy in the stricter
sense of the term.

their serious intention to bring about

4.1.1
Companies in excess of certain thresholds for annual
EU and/or global turnover must notify the European Commis-
joint market
sion of
power (concentrations), whereupon DG Competition initiates
Phase I and occasionally Phase II procedures. The obligation to
notify the Commission is not conditional on market strength;
what the Commission considers is whether the relevant concen-
tration would significantly reduce competition, for example by
creating or strengthening a dominant position.

4.2
One of the main objectives (or expected outcomes) of
merger control is to promote the international competitiveness
of European manufacturers and distributors (16). The inherent
problem associated with EU practice is that companies achieve
such a strong market position by means of mergers that they
may be tempted to restrict competition in the common market.
The Commission has made noticeable efforts to offset that risk
by imposing various conditions for clearance (i.e.
‘remedies’)
prescribing divestitures, the sale of intellectual property rights,
discontinuation of distribution in certain countries, etc. Be that
as it may, after a study of the impressive statistics on mergers

(16) The main objective of merger control is to ensure that concentrations
do not significantly impair competition in large sections of the
common market. For example, under European competition law the
enhanced competitiveness of a particular company on global markets
is not admissible as an argument for authorising a merger which
would distort competition within the EU.

one may conclude that they do not give any indications as to
whether:

— all or most concentrations which actually take place and are
in excess of the threshold figures have been notified by
companies;

— DG Competition is able to prove whether companies which
carried out approved concentrations over the last few years
have abused their enhanced market power or not.

4.3
In October 2005, DG Competition published a Merger
Remedies Study detailing the commitments imposed on compa-
nies and prerequisites for clearance in order to lessen presumed
anticompetitive effects, together with detailed ex post evaluations
In over 40 percent of the approved
of those commitments.
cases, serious unresolved issues (incomplete transfer of divested
businesses,
incorrect carve-out of assets, etc.) have emerged.
This can be taken as a reminder of the need to assess any poten-
tial anti-competitive behaviour infringing Article 82 (EC) in the
light of the interested parties' increased market power arising
from cleared mergers.

5. State aid

5.1
One of the main tasks of DG Competition is monitoring
the activity of Member States: which businesses receive financial
support, and on what basis? Since the European Union aims to
ensure a ‘level playing field’ for all companies active in the
the notion ‘State aid’ has been carefully
common market,
defined and consistently interpreted in relation to government
industrial policies. Scrutiny extends not only to direct financial
interventions, but also to tax breaks, as well as to any other
kind of advantage granted to businesses on a selective basis;
these may be deemed unacceptable by the European Commis-
sion if they distort competition.

In 2005, DG Competition attempted to reach a better
5.2
understanding of the objectives of State aid in Member States
and the rules which apply to its allocation. The aim of this
initiative was to contribute to the success of the Lisbon agenda
by using aid to enhance the competitiveness of the EU economy
as a whole. With a view to improving coordination among
stakeholders (i.e. State bodies, enterprises and their associations)
and directing public funds to sectors where they could be used
efficiently, it launched a State Aid Action Plan (17). The guiding
principles of the Plan do not break with existing practice but
aim to help shape better practices which Member States can
adapt to. Some remarks:

The ‘good and bad’ examples outlined in the Report
5.2.1
reflect the variety of reasons for which aid can be granted. The
aim of using public money ‘effectively to the benefit of EU citi-
zens in terms of
improving economic efficiency, generating
more growth and sustainable jobs, social and regional cohesion,
improving services of general economic interest, sustainable

(17) http://europa.eu.int/comm/competition/state_aid/others/action_plan/

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is, of course,

development and cultural diversity’ (18)
fully
endorsed by the EESC. However, taking into consideration poor
conditions due to under-developed infrastructure and an unfa-
vourable business climate for small and medium-sized enter-
prises, as well as other disadvantages — especially in the new
Member States — the EESC cannot support the objective of
distributing less State aid.

It seems that creating financially favourable conditions
5.2.2
for conventional companies in crisis by extending aid to rescue
or restructure them is still an important issue in several Member
States. From the point of view of employment, the EESC cannot
criticise this. However, there have been several cases in which
the Commission has expressed its doubts as to the viability of
aid that serves to restore rescued companies to a balanced
economic position.

According to a package of legal measures launched in
5.2.3
July and coordinated with the State Aid Action Plan, ‘companies
can receive public support to cover all costs incurred, including
a reasonable profit, when carrying out public service tasks as
defined and entrusted to them by public authorities’. In helping
importance) over
to tide companies (probably SMEs of
financial difficulties, such possibilities may be good examples of
how public money can be used effectively to the benefit of EU
citizens and enterprises.

local

6. Running of the European Competition Network (ECN)

6.1
2005 was the first full year in which the changes to anti-
trust procedures introduced by Council Regulation No 1/2003
became operable. What this means is that

— if

trade between Member States is affected, EU antitrust
substantive law directly applicable to enterprises (Articles 81
and 82) together with case-law is to be enforced by competi-
tion authorities and courts in the Member States;

— at the same time, the Commission has made efforts to estab-
lish close, ongoing contacts with each national competition
authority (and vice versa), while encouraging NCAs to do
likewise with each other, in order to ensure that a suitable
forum exists for general policy issues and that suitable tools
are available to support cooperation on dealing with actual
cases.

Brussels, 26 April 2007.

6.2
The Report under review in this opinion makes it clear
that national courts rarely become involved in the enforcement
of EU competition law, and there is no immediate prospect of
overcoming problems in this area. One of the main reasons
may be that first instance jurisdiction in competition law varies
from country to country. Another reason is that so far only
national competition law has been available, whereas — despite
the fact that legislative harmonisation has had a very significant
impact on Member States' legal systems — differences between
EU law and national laws remain in many Member States. For
the time being, it seems that even litigant parties are reluctant to
lodge cases with national courts (19).

A hidden reason is that European case-law, which is in
6.3
fact one of the real sources of competition law, is not readily
accessible to judges in the Member States. As far as procedural
law is concerned, concise summaries of different procedural
situations together with references to precedents are available,
but similar handbooks for substantive law (20) have not been
compiled as yet by the Commission or the European Court of
Justice. The first step towards wider application of current EU
antitrust articles by Member State courts should be compilation
of the most important (and often cited) sample cases together
with explanatory concepts and definitions in a handbook,
supplemented by statements and conclusions from the judge-
ments of the Court of First Instance and the European Court of
Justice. The compilation should of course be translated into all
languages, and updated regularly. The Committee
national
firmly believes that unless case-law collections are compiled and
the languages used in Member States and
published in all
training in EU competition law is organised for all
interested
national judges, lawyers and experts, correct application of EU
competition rules in Member States will not gain ground.

competition authorities,

6.4 With regard to establishing a network to communicate
and cooperate with national
the
Commission (and of course, DG COMP in particular) has
succeeded in placing the European Competition Network (ECN)
on a firm footing within a relatively short time. The fora and
working groups described in the Report are effective links in a
well-established cooperation system in which NCAs very often
establish direct contacts with each other (even at the level of
case-handlers) without any need for Brussels to act as a go-
between. It may well be asserted that integration has not been
this far-reaching in any other part of the official organisation of
the EU.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

(18) SEC(2006) 761 final.

(19) If the litigant companies are registered in several Member States and
the market conduct has extended to more than one country, it might
not even be clear which country's courts have jurisdiction over a case.
(20) Leading lawyers' offices have already put together comparable texts,

but they are of course for their own use.

C 168/28

EN

Official Journal of the European Union

20.7.2007

APPENDIX

to the Opinion of the European Economic and Social Committee

The following amendments, which received at least a quarter of the votes cast, were rejected in the course of the debate:

Point 3.2.10.1.

Delete point.

‘3.2.10.1 With regard to the above-mentioned banking services, competition seems to be impaired by barriers to entry, lack of

real choice and, presumably, existing dominant positions.’

Reason given by Mr Sartorius:

The point is unclear, as it is hard to understand what barriers, real choices or dominant positions are being referred to.
This could lead to confusion unless a detailed explanation is provided, without generalisations.

The European banking sector is probably one of the most competitive sectors in the European economy. This competition
benefits both consumers and the sector.

If the point is referring to the obstacles to greater integration of retail banking within Europe, then the main hurdles
result from the lack of harmonisation of regulations for consumer protection and tax regimes. This harmonisation should
be emphasised. One important step will be the implementation of the Single Euro Payments Area (SEPA), which will bring
fundamental changes to credit cards and cross-border payments.

Reason given by Mr Pater:

This paragraph should be deleted for the following reasons:

— the text is vague and could therefore give rise to the impression that the Committee is opposed to natural barriers to

entry into the banking services market, which are meant to ensure an adequate level of protection,

— it is unclear what the comment on the lack of real choice refers to, as the banking services market is one of the most

competitive European economic sectors,

— if dominant positions actually existed in the sector (at the expense of clients), DG COMP — which the opinion praises

over 20 times — would of course immediately take the necessary steps to prevent negative effects,

— the point digresses from the main line of reasoning in the opinion, and thus deleting it — far from introducing addi-

tional complexity — renders the whole opinion clearer and more concise.

Reason given by Mr Burani:

The claim that competition in banking services is ‘impaired’ is simply not borne out by the facts, as anyone can easily
check. There is no indication of what, or of what kind, these ‘barriers to entry’ are — in any case, they do not exist (if
they did, they should be pointed out). Regarding ‘freedom of choice’, there are thousands of banks throughout the EU in
fierce competition with each other in terms of both quality of service and prices. As for ‘dominant positions’, consumers
continue to have a choice between banks of all types and sizes, ranging from multinationals to private banks and local
cooperatives. If such positions existed, both the national and the European competition authorities would certainly long
since have taken action: this has not happened to date. The entire point simply repeats a number of clichés about restric-
tions on freedom to provide services in respect of public works contracts, with no supporting evidence or instances.

Voting:

For: 66

Against: 71

Abstentions: 25