OPINION ON THE 12TH REPORT OF THE COMMISSION OF THE EUROPEAN COMMUNITIES ON COMPETITION POLICY

No C 341/30 Official Journal of the European Communities 19. 12. 83
Opinion on the 12th report of the Commission of the European Communities on
competition policy
A. LEGAL BASIS FOR THE OPINION
On 11 May 1983 the Commission referred the abovementioned report to the Economic
and Social Committee in accordance with Article 198 of the Treaty establishing the
European Economic Community.
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE
The Economic and Social Committee prepared its opinion on the above matter at its
210th plenary session held in Brussels on 28 and 29 September 1983.
The full text of the opinion is as follows:
THE ECONOMIC AND SOCIAL COMMITTEE,
Having regard to the Treaty establishing the Euro-
pean Economic Community, and in particular
Article 198 thereof,
Having regard to the request made by the Commis-
sion of the European Communities on 11 May 1983
for an opinion on the 12th report on competition
policy,
Having regard to the decision taken by its' 'chairman
on 8 June 1983, instructing the Section for Industry,
Commerce, Crafts and Services to draw up an opi-
nion on the matter,
Having regard to the opinion adopted by the Sec-
tion on 7 September 1983,
Having regard to the opinion delivered on its own
initiative on 30 April 1981 on Community competi-
tion policy in the light of the current economic and
social situation ('),
Having regard to its opinions on the 10th and 11th
reports on competition policy delivered on 24 Feb-
ruary 1982 (2) and 28 October 1982 (3),
Having regard to the oral report by the rapporteur,
Mr Mourgues,
(') OJ No C 322, 10. 12. 1981, p. 3.
O OJ No C 112, 3. 5. 1982, p. 23. (3) OJ No C 326, 13. 12. 1982, p. 6.
Having regard to the discussions on 29 September
1983, during its 210th plenary session, held on 28
and 29 September 1983,
HAS ADOPTED THE FOLLOWING OPINION
by a majority with two abstentions:
1.1. Firstly, the Committee would point out that
the 12th report on competition policy testifies to the
Commission's vigilance in implementing Part Three,
Title I, Chapter 1 of the Treaty of Rome. It agrees
with the Commission that now, more than ever
before, steps must be taken to prevent distortion of
competition in these times of severe recession. The
Committee also observes that the sectors which pro-
vide most scope for competition are the ones that
are weathering the storm most successfully.
1.2. In a market economy, the maintenance of
undistorted competition so as to stimulate business
competitiveness is a key principle the Commission
must enforce on the basis of the Treaty. The case
law built up by the Court of Justice and backed up
by decision after decision of the national courts
shows that Community law is being observed.
1.3. As the Commission's report mentions, count-
less obstacles (quite apart from the differing econo-
mic strategies of the Member States) still hamper the
consolidation of the internal market and the smooth
operation of competition procedures is a sine qua
non for consolidation. Yet these procedures cannot
19. 12. 83 Official Journal of the European Communities No C 341/31
solve the price formation problems caused by the
Member States' fiscal, social, monetary or other pol-
icies, which have still to be aligned at Community
level.
1.4. Measures to foster competition, consolidate
the common market and improve the structure of
the economy must therefore progress in tandem.
In particular the Committee would point out to the
Commission that the implementation of competi-
tion policy and the need to boost industrial poten-
tial are closely interlinked. The Community market,
being an open one, requires that industry is
equipped to face up to competition and hold its
own in world trade. Closer industrial cooperation
between Community firms must therefore be
encouraged by competition rules tailored to less
rigid and narrow criteria.
For the purpose of adjusting EEC industrial struc-
tures Articles 85 and 86 of the Treaty of Rome will
have to be interpreted so as to take account of the
current economic situation and the need for a com-
mon policy to enable the Community to face up to
the new terms of international competition.
1.5. Besides being flexible and coordinated, com-
petition policy should incorporate the recommen-
dations and guidelines, set out in the Committee's
own-initiative opinion of April 1981 and again in its
opinion of October 1982 on the 11th report. In point
2.5 of the latter opinion, the Committee urged the
Commission not to confine itself to annual reports
but to express its views more frequently, especially
in the form of communications on specific topics —
a practice which has fallen out of use but should be
resuscitated. The resulting instrument would then be
far more effective and balanced than a set of bans
and derogations tailored to specific and restricted
situations with the consequent disadvantages of
inflexibility or partiality.
1.6. Though the report cannot deal in depth with
the interdependence of competition policy and
Community and national policies in other spheres,
such coordination and closer alignment must be
ensured as part and parcel of a coherent overall
approach consistent with the Community's trade
policy. (Here one obvious example is the link-up
with social, economic and monetary policies in
these times of crisis and spiralling unemployment,
especially among the young).
Procedural rules
2.1. The Committee welcomes the Commission's
continued drive to improve administrative proce-
dures (upgrading of comfort letters, easier access to
files, the information duties carried out by the newly
created hearing officers). The results of these mea-
sures will be recorded in the Commission's 13th
report. Next year's opinion will be able to draw con-
clusions from this experience.
2.2. All moves conducive to speeding up and
streamlining procedures, and hence stimulating
competition, must obviously be explored and
encouraged.
2.3. With this in mind, the Committee would
recommend that:
— injured parties (firms and/or importers, con-
sumer associations, trade unions) address their
complaints to the appropriate national authority
or court,
— the Commission, the Court of Justice and
national courts give priority to applications and
cases which involve ailing sectors.
2.4. In contrast, where a complaint relates to
Article 85 (3) or to a nationalized or privately-owned
undertaking or undertakings heavily subsidized by
central or local government or official bodies, the
Commission must insist on obtaining full details of
the offending measures in order to take an informed
decision.
2.5. Speaking generally, the Committee feels that
the Commission's annual report on competition
policy should provide details of decisions taken by
national courts in furtherance of Community legis-
lation. The Commission should also take steps to
publicize the national remedies available for indivi-
dual plaintiffs (firms, workers, consumers, etc.)
where Community competition law is breached. If
need be, the Commission should frame proposals to
ensure effective and uniform implementation of
Community competition legislation by all national
courts.
No C 341/32 Official Journal of the European Communities 19. 12. 83
National and regional policies — State aids
3.1. National legal systems play a significant role
in monitoring competition on regional and national
markets.
3.2. The Commission must keep constant watch on
national legislation to ensure that it complies with
the spirit of Community provisions. The Court of
Justice has of course delivered several judgments
confirming that the bans provided for in Articles 92
are directly enforceable in the Member States, since
the primacy of Community law over national law is
now an established fact.
3.3. Originally justified as short-term measures to
deal with emergency situations the scale and size of
aids — in the form of subsidies or soft loans — has
increased sharply. The Committee is disturbed by
this trend, especially as experience shows that con-
tingency aids all too frequently become long-term
structural aids, breeding 'dependence' in the firms
concerned. In the circumstances, the Committee
feels that the Commission's competition policy
would be more effective if the criteria for authoriz-
ing or banning aid were (a) the improvement of all-
round Community competitiveness and (b) promo-
tion of the innovation and research potential of
Community firms, based on a realistic appraisal of
trends in the international division of labour. With
this in mind, steps must be taken to:
— clamp down on any escalation of public aid,
— ban such aid when it is tantamount to protec-
tionism and offloads one Member State's
economic difficulties onto another,
— give favourable consideration to research and
development grants designed to facilitate tech-
nical restructuring and the development of new
products or to exploit potential for exports out-
side the Community.
3.4. Comparisons would be easier if the Commis-
sion studied the introduction of a Community-wide
code, applying similar criteria and assessments, for
State, regional and local government aid.
Proceedings under way
4.1. Patent licensing plays a key role in competi-
tion. The Committee notes that a draft Regulation
on this matter is imminent. By way of illustration,
the pharmaceuticals industry should be studied
from this angle.
4.2. The chronic structural crisis in several sectors
of industry, especially those dominated by a few
powerful concerns, militates in favour of the introd-
uction of suitable regulations and merger control
arrangements. In this connection, the Committee
deplores the fact that no action has so far been
taken on its opinion on this matter (see opinion on
merger control — OJ No C 252/82).
4.3. Lastly, it should be remembered that the adop-
tion of the proposed Statute for European compan-
ies and the European Cooperation Grouping —
which in the latter case could encourage closer
cooperation among small businesses in the Com-
munity, including those that claim to be members of
the cooperative movement — would be of consider-
able assistance in ensuring the effectiveness of com-
petition policy.
The development of concentration and competition in
the Community
5.1. The Committee is pleased to see that the Com-
mission's studies are now focusing on sectors, seen
in relation to all Member States, rather than on the
individual country's spheres of activity. Though the
attendant problems cannot be ignored, this new
approach should be warmly encouraged, if need be
with the help of institutes specializing in such mat-
ters and the universities.
5.2. Here the Committee would mention the need
to compile statistics which are as reliable as possible
in order to draw comparisons meeting stringent
methodological requirements at Community level.
5.3. The sectors under examination must be seen
as a composite whole, bearing in mind that the
breakdown between production and services is
roughly equal these days.
19.12.83 Official Journal of the European Communities No C 341/33
5.4. In scrutinizing pricing policy as a factor in
business strategy, attention is unfortunately con-
fined to book-publishing and the motor vehicle
industry. An in-depth study is required, with parti-
cular emphasis on the following sectors; insurance,
pharmaceutical products, bank loan facilities avail-
able to businesses (interest rates and selection cri-
teria), energy and building materials.
Economic background to competition policy
6.1. The lowering of the common external tariff
has significantly reduced customs barriers and
opened up the Community to international competi-
tion. Seen from outside the Community, some
national aids could be regarded as tantamount to
dumping, especially as there can be no attempt at
concealment, and information is freely available to
non-member countries.
6.2. Consequently, the Community has to compete
with (a) high technology countries (United States,
Japan) and (b) LDCs producing labour-intensive
manufactures such as textiles and footwear.
6.3. During its first twenty years, the EEC fol-
lowed the path of free trade in industry and 'plan-
ning' in agriculture (the CAP). Recent economic
straits have prompted a shift in approach. If the
Community is to be able to compete on interna-
tional markets, there is call for:
— a common industrial policy or, failing that, a
Community strategy reflecting changes in the
international division of labour,
— greater selectivity so as to channel a major share
of aid into those sectors with greatest export
potential,
— possible implementation, if the interests of the
Community's trade policy so demand, of the
protection arrangements provided for in the
Treaty of Rome, bearing in mind (a) sectors that
are competitive on world markets, (b) new tech-
nolgies and (c) available funding. In particular,
the new instrument finally proposed by the
Commission to protect Europe against the
unfair commercial practices of third countries
should be approved as soon as possible and
should be implemented with firmness and con-
sistency. These unfair practices are frequently
the expression of protectionism and unilateral
restrictions which are in contradiction and viol-
ation of Community and international agree-
ments.
6.4. Further, the practical implementation by
Member States of the recent Council Directive on
technical standards and rules would seem to be a
key factor in preventing distortion of competition
within the Community.
Done at Brussels, 29 September 1983.
The Chairman
of the Economic and Social Committee
Fran
Opinion on the proposal for a Council Decision adopting the first European strategic
programme for research and development in information technologies (Esprit)
The text referred to the Committee has been published in Official Journal of the Euro-
pean Communities No C 321 of 26 November 1983.
A. LEGAL BASIS FOR THE OPINION
On 17 June 1983 the Council referred the abovementioned proposal to the Economic
and Social Committee in accordance with Article 198 of the Treaty establishing the
European Economic Community.


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