Source: EURLEX
Language: en
Format: md

2 . 2 . 94 Official Journal of the European Communities No C 34 / 83

Opinion on the XXIInd Report on Competition Policy

( 94 / C 34 / 24 )

On 9 July 1993 the Commission decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Economic Community, on the
XXIInd Report on Competition Policy .

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee 's work on the subject, adopted its Opinion on 3 November 1993 . The
Rapporteur was Mr Bagliano .

At its 310th Plenary Session ( meeting of 24 November 1993 ) the Economic and Social
Committee adopted the following Opinion unanimously .

1 . A new context, the slowdown in economic growth The guidelines of anti-trust and competition monitoring
policies have gradually changed accordingly .

1.1 . The Single Market increasingly requires a uni ­
form, clear and consistent competition policy . The These guidelines are focusing more and more on the
Economic and Social Committee shares the Com ­ efficiency of businesses and the economic system as a
mission 's view that we are living in changed circum ­ whole and give priority to the strategies of firms rather
stances resulting from the slowdown in economic than to their size or the goods they produce .
growth and the application of the subsidiarity principle
and that competition policy therefore needs new guide ­
lines and greater vigilance . Protection or safeguard of the ' market ' - — seen as an
agglomeration of consumers and producers ( of both
goods and services ) — is therefore no longer static . It

1.2 . The Commission includes among these new is no longer enough to ban ' all ' restrictive agreements,
guidelines the need to take a dynamic view of markets, mergers or take-overs which create more powerful pro ­
which calls for ' greater flexibility in adapting to the ducer groups .

These guidelines are focusing more and more on the
efficiency of businesses and the economic system as a
whole and give priority to the strategies of firms rather
than to their size or the goods they produce .

1.2 . The Commission includes among these new is no longer enough to ban ' all ' restrictive agreements,
guidelines the need to take a dynamic view of markets, mergers or take-overs which create more powerful pro ­
which calls for ' greater flexibility in adapting to the ducer groups .
new situation and staying in tune with the objectives
which the Community has set itself for economic and
social cohesion, ....'. Protection or safeguard of the ' market ' ( i.e. the rules
for ensuring healthy, effective competition ) must in
future be dynamic : in short, restrictive agreements,
1.3 . It is with these correct, pragmatic remarks that mergers and take-overs must be assessed ' case by case '.
the Commission opens its XXIInd annual report on
Competition Policy . As usual the Report is a clear
document but this time it is even more meticulous and
well-documented . 2.3 . The pace of change is increasing, and not only
in the economic sphere, and decisions need to be
implemented more swiftly . It is right that all interested
parties should be consulted before a decision is adopted,

2 . A dynamic view of markets but excessively protracted drafting procedures and

efforts to achieve consensus, and delays that lack any
real justification, are no longer acceptable .

2 . A dynamic view of markets

2.1 . The Committee considers that the requirement
to take a dynamic view of markets holds true not only
for competition policy but also for economic operators .
By taking account of ' potential ' competition in its
assessment of merger operations, the Commission is
following the same strategic approach as companies,
which have always had to be dynamic and look ahead .

2.2 . Technical progress — evolving in the direction
of greater flexibility and lower cost — combined with
growing international competition ( with the increas ­
ingly tangible threat of new players entering the market
as markets become more and more open ) has led to a
radical change in corporate market strategies .

2.4 . In its 1981 Opinion the Economic and Social
Committee made it clear that it was necessary to shape
competition policy on the basis of a realistic view of
overall, world-wide interdependence .

The Committee mentions this not merely for the satis ­
faction of showing that it has in the past said things
that remain topical today ; the Committee feels it useful
to recall its past Opinions because they are relevant to
its consideration of the XXIInd report . The quotation
should give the Commission further confirmation of

No C 34 / 84 Official Journal of the European Communities 2 . 2 . 94

the usefulness of consulting the Committee — a point
which has become increasingly clear recently .

3 . The subsidiarity principle

staff . Today, even in a period of budget austerity, a
solution could be found by making better use of existing
resources . The Maastricht Treaty in any case brings
with it new structures and responsibilities which will
inevitably alter the balance of means / ends in some
Directorates-General .

4 . The role of the national courts
3.1 . The Committee agrees with the Commission in
identifying Treaty Articles 85 and 86 ( whose general
applicability to the entire Community market is con ­
firmed in the selfsame Treaty of Rome ) as an early 4.1 . Article 5 of the Treaty establishes the principle
example of the subsidiarity principle : the exclusion of permanent, fair cooperation between the Community
from the criterion the competition of the effect rules on of intra-EC minor trade agreements, are already, and the and national the Member courts States and . However the Commission, cooperation — now between for ­
a clear and practical illustration of this . The same is also malized in the Commission 's notice of 13 February
true of the merger control Regulation, which allows the 1993, albeit only in indicative terms — still has to prove
Commission to refer cases to the national authorities . itself .

3.2 . At national level, however, Member State legis ­
lation designed to safeguard the market and free compe ­
tition continues to play a vital and complementary role .
In this connection the Economic and Social Committee
agrees with the Commission that, in order to ensure
maximum consistency with Community legislation,
there is a need to push ahead more vigorously with
progressive harmonization of national anti-trust legis ­
lation in order to prevent distortions in intra-Com ­
munity trade and significant changes in the equivalence
of terms of competition between the Member States,
which would undermine the Community 's own compe ­
tition policy .

4.2 . Concern arises from the traditional indepen ­
dence of the national courts and the difficulties of
carrying out complex economic assessments which do
not fall within the usual sphere of responsibility of
courts of first instance .

progressive harmonization of national anti-trust legis ­ 4.3 . At all events, cooperation between national
lation munity in trade order and to significant prevent distortions changes in the in intra-Com equivalence ­ courts as entailing and the any Commission ' renationalization must not ' whatsoever be understood of the
of terms of competition between the Member States, Community 's competition policy . Community compe ­
which would undermine the Community 's own compe ­ tition laws still need to be interpreted and applied
tition policy . uniformly in all the Member States — something which

can be guaranteed by the Court of Justice — although
the national courts should be encouraged to involve
themselves more closely in procedural matters and ques ­
3.3 . Moreover, the situation in many sectors — such tions of application .
as the pharmaceutical industry, on which the Com ­
mittee has already delivered specific Opinions — shows
for example that there are differences in national laws
and that marked price differentials between Member 5 . Activities of the Commission
States can only be tackled at Community level .

5 . Activities of the Commission

5.1 . The Committee recognizes that the Commission

3.4 . In connection with the allocation of responsi ­ was extremely active in 1992, both in handling individ ­
bilities between the Commission and the national ual cases and in approving general measures . The latter
authorities, concern might be raised by the Com ­ included Regulations and notices designed in particular
mission 's reference in its Annual Report to its ' limited to encourage certain types of cooperation between
resources '. firms ; measures to broaden the scope of certain block

exemption Regulations ; and a notice on cooperative
joint ventures .
Clearly it is not for this reason, i.e. to lighten its
workload, that the Commission intends to give an
increasing role to the national authorities . The criteria 5.2 . The Committee urges the Commission to issue
should remain — rightly — both legal and economic, official guidelines, in the form of notices spelling out
in line with the rules, practice and policy of the Com ­ the stance taken by its departments, as it is they who
mission . '

3.4 . In connection with the allocation of responsi ­
bilities between the Commission and the national
authorities, concern might be raised by the Com ­
mission 's reference in its Annual Report to its ' limited
resources '.

Precisely because of this concern about ' limited
resources ' the Committee has repeatedly called for the
Competition Directorate-General to be allocated more

5.2 . The Committee urges the Commission to issue
official guidelines, in the form of notices spelling out
the stance taken by its departments, as it is they who
in practice assess firms ' circumstances and action . This
would help to improve the relationship between busi ­
nesses and the Directorate-General for Competition
and would speed up administrative procedures and
legal proceedings . Indeed, the litigation stage could be
shortened .

2 . 2, 94 Official journal of the European Communities No C 34 / 85

5.3, The Commission is also, issuing an increasing
amount of information . The Committee is particularly
pleased that it has become regular practice to publish
guidelines, codes and draft frameworks for certain sec ­
tors and problems in the EC Official Journal .

5.4 . The neat if brief presentation of a number of
' studies ' in one of the Annexes is of great interest and
value . Some of these studies nevertheless deserve more
detailed coverage and wider dissemination . The Com ­
mittee is well aware that the complex topic of ' compe ­
tition ', embracing as it does all aspects of social and
economic life, civic activities and the activities of indi ­
viduals, requires those responsible for analyzing and
taking decisions regarding the implementation of mar ­
ket-regulating provisions to continually update their
professional skills and general culture ; this is a splendid
investment which is duly reflected in the high quality
of the work of those concerned .

6 . Coordination of Community policies

6.1 . The XXIlnd report begins by noting that ' along ­
side the establishment of a common market, compe ­
tition policy is one of the two great strategies by which
the T reaty of Rome sets out to achieve the Community 's
fundamental objectives '. Hence competition policy is
not ' an end in itself ', but an instrument for
implementing the objectives set out in Article 2 of the
Treaty of Rome . This was already the view of the
Commission in its first annual report in 1971, and the
point was also stressed by the Committee in its first
Opinion in 1981 .

6.2 . While these repeated affirmations may reassure
us as to the source of this provision — Article 2 of the
Treaty — they also bring a need for consistent action .
In the case of competition policy, where the aim is to
pursue the objectives enshrined in the Treaty, this
means taking account of a broader context which
embraces all Community policies . Hence the need for
coordination .

6.3 . In this respect the Economic and Social Com ­
mittee has already made clear, as far back as its first
Opinion of 1981, the need for ' close coordination ' with
other Community policies .

6.3.1 . This need to increase coordination of all Com ­
munity policies can to some extent be met if appropriate
Commission procedures are used within the Com ­
mission and if all decisions concerning the implemen ­
tation of Articles 85 to 93 and the merger control
Regulation ( notices and decisions ) are rigorously adopt ­
ed by the Commission acting collectively . Any ' dero ­
gations ' could be restricted to the preparatory stage
and to internal administrative measures .

6.3.2 . It is not a question of lack of trust in a particu ­
lar Commissioner or Director-General ; on the contrary,
the abovementioned procedure is a practical mechanism
for consistently applying the Commission 's full political
responsibilities in the delicate task of monitoring, cor ­
recting and stimulating the EC economy in order to
promote harmonious development throughout the
Community and boost economic and social cohesion .

A truly dynamic and flexible competition policy cannot
stop short at applying fixed rigid structural criteria . It
must be responsive to all aspects of changing economic
and social trends, and these are often not moulded
solely by the behaviour of the individual protagonists .

Each decision thus also acquires a political value, and
is a matter of ' Community policy ' in the fullest and
most responsible sense .

7 . Competition policy and the consumer

7.1 . The advantages of the single market must be
allowed to rebound fully on the consumer, as in the
final analysis it is the consumer who should be the
ultimate beneficiary of the goals of the Treaty of Rome .

7.1.1 . In order to benefit fully from the single market,
consumers must be allowed to play a more effective
role in the various representative bodies ; this would
also help to boost the speed and effectiveness of the
monitoring which the Commission already carries out
as far as is practically feasible in the light of the
resources available .

In particular, in order to allow consumers ' representa ­
tives to play an active part in the application of compe ­
tition policy, third parties should be given the widest
possible access to dossiers, and allowed reasonable
deadlines for the submission of comments ; these dead ­
lines should take account of the need to collect and
analyze relevant data .

7.2 . Competition policy must be allowed to operate
effectively in all Member States, not only in order to
tackle the problems generated by considerable differen ­
tials in the prices of goods and services but also to help
break up the monopolies which still exist in certain
sectors in some Member States and which, in particular,
are actually created by substantial price differentials .

7.3 . The most sensitive sector — and the one which
consumers can judge most directly, in terms of end ­
price — is undoubtedly the distribution sector ( goods
and services ).

Moreover, the efficiency of the distribution sector also
depends on efficient infrastructure, which plays a key
role in the transportation of food and energy .

No C 34 / 86 Official Journal of the European Communities 2 . 2 . 94

8 . Block exemption regulations — Cooperation — 8.5.2 . At all events, the Committee urges the Com ­
Technology transfer — Cooperative ventures mission to extend the possibility of exemption from

Article 85(3 ) to small and medium-sized cooperative ­
type distribution and craft businesses, so as to allow
this important economic group to form effective associ ­
8.1 . The Committee warmly supports the move to ations and groupings that will enable them to compete
extend the scope of the block exemptions allowed by with the large distribution groups .
the Regulations on specialization agreements, research
and development agreements, patent licensing agree ­
ments, and knowhow licensing agreements .

9 . Merger control
8.2 . Subject to a maximum market share and turn ­
over, cooperative and non-concentrative joint ventures
are now also to be exempted from Article 85(3 ) of the
Treaty ' concentrative . This fills ' joint a gap ventures which in subject some ways to the benefited more 9.1 . The Commission views the absence in 1992 of
favourable procedures of Regulation 4064 / 89 . decisions to prohibit mergers, and the rise in the number

of cases where plans were approved after modification,
as a welcome development . This is one possible
interpretation, but in some cases it could also indicate
8.3 . Such measures are a practical way of encourag ­ proceedings that firms prefer of uncertain compromise outcome to lengthy ., costly legal
ing cooperation between firms .

8.4 . The Committee would here stress the close inter ­
relation between competition policy and technology
transfer, which is conducted largely by means of cooper ­
ation, this being the key feature of the structural econ ­
omic changes taking place in response to the new chal ­
lenges of international competition . The planned Regu ­
lation on technology transfer is therefore eagerly
awaited, since it should enable the Commission to act
with greater flexibility and help strike a balance
between research and the protection of intellectual

property .

9.2 . The Committee would here reiterate its earlier
calls for a more cautious approach to ; dominant pos ­
itions held by single firms ; dominant positions held
jointly by a number of firms ; and the creation or
strengthening of duopolies and oligopolies . Care must
be taken to avoid influencing the market in pointless
and perhaps damaging ways which the Commission
itself may not intend . The Commission obviously does
not seek to dictate the optimum number of competitors
in a given sector . Monitoring and disciplinary measures
must be clearly circumscribed to avoid any temptation
or danger of dirigisme .

The Committee recalls its Opinion on the XVIIIth
annual report, which proposed that preparatory studies
be carried out to assess the case for special rules . The 9.3 . Whilst it may be said that businesses are ' in
Commission has acted upon this . general ' reasonably satisfied with the application of the

merger control Regulation, there is still plenty of room
for improvement, particularly with regard to pro ­
cedures . This has become clear now that the Regulation
8.5 . Another area where special rules are justified is has been in force for a few years .
the cooperative sector, which has its own totally unique
characteristics .

8.5.1 . Specific firms should receive specific treat ­
ment, especially as regards restrictive agreements and
mergers . This is particularly true of the users ' cooperat ­
ives which operate in many sectors ( insurance, savings
banks, housing, pharmacies, etc .). Where the intention
of such cooperatives is to form a federation and cooper ­
ate on a transnational basis, it is self-evident that they
will operate in the interest of the user-owners . This
distinguishing feature — recognized in the draft statute
for a European cooperative society — prompts the
Committee to urge the Commission to adopt a special
approach in this matter .

9.4 . Although the Committee is fully aware of the
efforts which have already been made, it nevertheless
calls upon the Commission to show greater trans ­
parency by increasing the quality and quantity of the
information provided to third parties during the first
and second stages . It would also improve transparency,
and be very useful for subsequent discussions if the
Commission were to publish the Opinions of all the
Advisory Committees, and not just that of the Advisory
Committee on Concentrations . Press releases should
also be more comprehensive and contain the views of
interested parties . The latter should at the very least be
sent a copy of the Preliminary Report .

2 . 2 . 94 Official Journal of the European Communities No C 34 / 87

9.5, The Notice regarding merger and cooperation
transactions under Regulation 4064 / 89 should also be
updated in the light of new Regulations and subsequent
case law in the area .

10 . State aids

10.1 . This is undoubtedly a complex and delicate
subject, in which regional and temporal aspects ( i.e. the
duration of aid ) are interwoven . A given aid may have
different implications, and its justification be stronger
or weaker, depending on whether it is short, medium
or long term . The social aspects should also be very
carefully scrutinized in tandem with the regional con ­
siderations .

10.2 . The Commission is showing a growing flexi ­
bility, Experience shows that ' case by case ' assessment
is more helpful than strict bureaucratic application of
rigid rules .

However, the Commission 's responsibility in applying
a criterion of flexibility here needs to be backed by fair
cooperation from the Member States, so as to ensure
that economic and social cohesion is pursued fairly and
effectively .

10.3 . Member States ' state aid policies continue to
differ markedly, depending to a large extent on the level
of prosperity and hence the resources available . The
Commission itself points out that between 1988 and

10,5 . The Committee remains strongly in favour of
a phased reduction in state aid, though this must be
pursued with consistent determination . Particular com ­
mitments and derogations should be rigidly limited
in time-scale and area, and extensions should not be
granted . The Committee is pleased to read in the
XXIInd annual report that the Commission supports
the idea clearly repeated in the Committee 's Opinion
on the XXIst annual report, namely that state aid
should be ' transparent, temporary and degressive '. The
Committee also urges the Commission to apply the
same rules to public and to private firms, without any
form of discrimination .

10.6, While the cooperation provided for in the
Treaty on the European Economic Area as regards the
control of state aid is welcome and necessary, the policy
of drawing up precise provisions on aid involving third
countries merits even greater approval and encourage ­

ment .

10.6.1 . The agreements with the Central and Eastern
European nations are a concrete and positive example,
but the Committee calls for a more determined and
prompt response to aberrant State aids which run coun ­
ter to the Commission 's policy of aligning anti-trust
laws more closely .

This may be an ambitious goal, but strict controls are
vital .

10.6.2 . This combination of alignment and control
must, as a matter of principle, be borne in mind when
dealing with all third countries with which the Com ­
munity has or seeks to have general or special relations,
particularly within the framework of the common trade
policy .

1990 the manufacturing industries of the four largest
Member States received 79% of the total amount of
of state the aid Community granted to . this particular sector in the whole openness 10.7 . At about all events aid rules, the Committee on both sides would, as like this to is see a
precondition for fair relations regardless of their exact

nature or purpose .
This concentration of State aid in the strongest econom ­
ies is deplorable, particularly in the light of the repeated
calls for cohesion .

10.8 . The Committee also wishes to draw the Com ­
mission 's attention to the question of ' indirect ' aid, i.e.
concessionary State export credits and export credit
10.4 . The Committee applauds the regular attention guarantees .
— in the form of periodic reports — which the Com ­

mission devotes to this problem, which varies greatly
from one sector to the next . Suffice it to consider the
coal, steel and shipbuilding industries . There is a clear
contradiction between the Commission 's policy of pha ­
sed but radical reductions in aid, and the situation in
a number of Member States which subsidize certain
industries ( e.g. coal ) or which levy special energy taxes .

It is not only export credits facilitated by a State which
can constitute aid within the meaning of Articles 92 et
seq . of the Treaty, but also — and this problem too
seems to have received insufficient consideration —
credits which one State grants another in order directly
or indirectly to support its home industry .

No C 34 / 88 Official Journal of the European Communities 2, 2 . 94

10,9 . The Committee is particularly concerned at the
Commission 's admission that it is receiving more and
more complaints about failure to notify aid measures .
One must ask why national and — perhaps more fre ­
quently — regional authorities are not meeting their
obligation to notify aid measures in advance . The Com ­
mission may be correct in saying that these complaints
demonstrate economic operators ' growing interest in
state aid . However, it is also possible that even the
public authorities are poorly informed about such key
Community subjects as aid, and do not pay sufficient
attention to the matter .

possible, there is a tendency to sacrifice transport safety,
thereby increasing the potential danger of pollution
of sea and ports . The low costs caused not only by
inadequate safety equipment and inadequate mainten ­
ance, but also in many cases by the low wages paid to
the crews, constitute a clear example of ' dumping '.

13 . Competition policy at international level

13.1 . Trade in goods and services between countries,
economic areas and continents is growing apace and
11 . Competition policy and small and medium-sized increasingly becoming a feature of the economic scene .
enterprises ( SMEs )

11.1 . The Commission should strengthen its SMEs
policy, and make this policy more selective so as to
ensure that the aid it authorizes is genuinely calculated
to make SMEs more efficient and boost their training,
funding sources and research activities .

11.2 . The aim is not to protect SMEs from large
firms, but to prevent abuses of dominant positions .
Particular attention needs to be paid here to the
phenomenon of concentrations of hypermarkets .

11.3 . SMEs play a vital economic and social role in
the Community . Small and medium-sized businesses,
including craft firms, account for 70% of the EC 's
employment and turnover .

11.4 . To help these firms boost their competitiveness
in the single market, competition policy must promote
Community cooperation and information instruments,
strengthening them and ensuring that they are dissemi ­
nated as widely as possible .

12 . Environmental policy and competition policy

12,1 . While national and regional environmental
legislation is necessary, it must not be used as a pretext
for granting or not granting concessions, or for introdu ­
cing discriminatory measures . Situations which distort
competition must at all events be avoided . Careful
ongoing monitoring is needed, with due consideration
for the fact that environmental policy now figures
among the basic policies of the Treaty .

12.2 . The Committee would highlight the special
situation surrounding the transport of oil, as this has
implications for competition and is also important on
social and safety grounds . In order to cut costs wherever

The gradual dismantling of tariff and non-tariff bar ­
riers, though vital, is not sufficient to achieve effective
liberalization of international trade on the basis of fair
terms of competition .

However, ' freedom ' implies ' responsibility '.

Greater, more open free competition on a world scale
must go hand in hand with heavier responsibility for all
operators : private or public enterprises, governments,
international or supranational organizations .

13.2 . It is now generally acknowledged that all econ ­
omic developments are partly conditioned by non-econ ­
omic factors — especially social aspects, for which
everyone bears a mandatory responsibility .

In particular, differences in working conditions and
labour regulations in certain third countries, because
of their significant impact on costs, may generate abnor ­
mal, artificial discrepancies which are totally alien to
the natural, healthy and effective process of fair econ ­
omic and productive competition .

13.3 . The major challenge — requiring courage and
steadfastness — which the Commission must meet
without delay is to reconcile measures devised to safe ­
guard competition effectively at international level with
Community policies .

This is particularly the case where preferential relations
still exist with less-favoured or developing countries .
On no account must such relations cause distortion of
trade or unwarranted changes in terms of competition .

13.4 . The current crisis, both within and outside the
Community, makes this problem a top priority .

2 . 2 . 94 Official Journal of the European Communities No C 34 / 89

To set in motion a process of economic recovery in 14 . Conclusions
these difficult times for the Community and the world
at large calls above all for a forceful policy

The

encompassing the entire range of the Commission 's

the EC and at

operational responsibilities .

13.5 . To create new outlets and markets we must

foster the conditions needed to enable the economies
of less-favoured countries, or those grappling with the
difficult task of transforming their internal political
and socio-economic structures, to launch themselves
speedily in international competition on equal terms,
both as suppliers and buyers, and thus to play a con ­
structive part in the general integration and socio-econ ­
omic growth process .

13.6 . Such a wide-ranging and all-embracing
approach must not, however, obscure the need for
more incisive action to harmonize national anti-trust
legislation, both within and outside the Community, so
as to attain the desired goal of effective, fair inter ­
national competition .

Though the Commission is already working along these
lines, the Committee would urge it to press ahead with
greater conviction and decisiveness .

13.7 . Bearing in mind that the Community derives
its competence in matters relating to competition policy
directly from the Treaty, the Committee calls on the
Commission to frame its own ' policy ' regardless of the
delays and discouragement generated by failure in the
monetary sector and on the GATT front, to quote just
two examples .

Done at Brussels, 24 November 1993 .

The competitiveness of Community firms, both within
the EC and at international level, is a sine qua non for
growth and development, besides being indispensable
to enable other Community policies speedily to recover
their original momentum .

A major drive, backed by firm conviction and a clear
vision, is needed to achieve a policy commensurate with
the present challenge .

Now more than ever, Community competition policy
must kindle entrepreneurial spirit and initiative while
concurrently expanding the options available to con ­
sumers and hence their powers to select .

A new openness is also needed in international trade .

Businesses must be able to make the choices which suit
them, and accept the risks involved, in a climate of
openness that also applies to laws and regulations .

Likewise, consumers — who are playing an increasingly
active role on the economic stage — must be kept more
fully informed so that they can make rational choices .
They must therefore have access to a broader, more
varied and reasonably priced range of goods and ser ­
vices, with optimum quality and safety guarantees .

The Commission must find the resources needed to give
its full attention to these matters and adopt a firmer
stance in the relevant international negotiations .

The Chairman

of the Economic and Social Committee

Susanne TIEMANN