Own-Initiative Opinion of the Economic and Social Committee on the Community competition policy in the light of the current economic and social situation

10. 12.81 Official Journal of the European Communities No C 322/3
II
(Preparatory Acts)
ECONOMIC AND SOCIAL COMMITTEE
Opinion on the Community competition policy in the light of the current economic and
social situation
The opinion of the Committee is not based on any text.
A. LEGAL BASIS FOR THE OPINION
At its 170th plenary session held on 17 and 18 July 1979 the Committee, acting on a
proposal from the Bureau, decided to deliver an opinion on the abovementioned subject
on its own initiative.
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE
The Economic and Social Committee prepared its opinion on the above matter at its
187th plenary session held in Brussels on 29 and 30 April 1981.
The full text of the opinion is as follows:
THE ECONOMIC AND SOCIAL COMMITTEE,
Having regard to the fourth paragraph of Article 20
of the Rules of Procedure of the Economic and
Social Committee,
Having regard to the decision taken on 16 July 1979,
on a proposal from the Bureau, to draw up, an own-
initiative opinion on Community competition policy
in the light of the current economic and social
situation, and to instruct the section for Industry,
Commerce, Crafts and Services to prepare work on
the matter,
Having regard to the opinion issued by the Section
for Industry, Commerce, Crafts and Services at its
meeting on 8 April 1981,
Having regard to the Report presented by, Mr
Bagliano and Mr Neumann, rapporteur and co-
rapporteur respectively,
Having regard to discussions held at the 187th
Plenary Session on 29 and 30 April 1981 (session of
30 April),
HAS ADOPTED THE FOLLOWING OPINION
by 95 votes for, none against and 16 abstentions:
1. Competition policy in an 'open' market in the
process of integration
1.1. Background to this opinion
The serious economic and social situation in the late
1970s and early 1980s requires the Economic and
Social Committee to put the Community's
competition policy under the magnifying glass, taking
an overall, and above all, long-term view.
No C 322/4 Official Journal of the European Communities 10. 12.81
This opinion was prompted by the profound
conviction, born of experience, that in a period of
such serious, persistent social and economic
difficulties, all the Community policies ought to be
implemented as effectively as possible, with the
maximum coordination and with all reasonable speed.
To this end, discussion of the past is not enough: we
must also undertake a realistic, scrupulous appraisal
of the current economic and social situation. Above
all, we must adopt a more imaginative approach to
the future and display greater commitment in
decisions and actions.
All the policies of the European Community should
be given this new impetus without delay. This
includes competition policy which has a basic, specific
and vigorous role to play in a climate characterized
by a change in economic relations and industrial
structures, a concentration and 'multinationalization'
of capital in certain sectors, and a transformation of
relations between the State and the economy.
In this context two trends emerge: firstly there is the
growing importance of State and semi-State firms,
stronger pressures for direct government aid, and
more demands for Community aid or protection;
secondly, stiffer and stiffer competition from imports
originating outside the Community. Concurrently,
ties are being forged more and more rapidly with the
developing countries.
It is not the intention of this opinion to duplicate the
specific analyses submitted each year by the European
Parliament to the Commission for critical evaluation.
The opinion seeks to tackle the problem of
competition policy within an overall framework, with
particular reference to changing conditions in and
outside the Community.
1.2. Instruments and aims of the Treaty: rules on
competition
Among the many instruments for implementing the
objectives set out in Article 2 of the Treaty, Article 3
provides for 'the institution of a system ensuring that
competition in the common market is not distorted'.
The rules on competition (Articles 85 et seq.) are
therefore one of the 'instruments' for bringing about
the 'common market'.
Further, the establishment of a common market
between the Member States is, according to Article 2,
a means of 'promoting' the objectives of the Treaty
which are of course:
(a) harmonious development of economic activities;
(b) an increase in stability;
(c) an accelerated raising of the standard of living
(Article 2).
These are clearly economic and social aims and it is
therefore right and expedient that rules on
competition should be increasingly considered in the
light of the economic and social situation. This is
precisely what this opinion proposes to do.
1.3. Competition policy
In the present economic and social situation, both in
and outside the Community, competition rules should
be applied in accordance with principles and
strategies that are geared to a genuine fully-fledged
competition policy. (Moreover, the whole chapter on
'rules on competition', from rules applying to firms to
'aids granted by States', is contained in part three of
the Treaty entitled 'Policy of the Community').
This is all the more necessary in view of the fact that
the original frame of reference — the economic and
social situation in the 1960s — has changed radically
(particularly in the 1970s) and bearing in mind that
'integration' in a 'single' market is among the primary
objectives of the Community, even though various
obstacles, differences and imbalances still remain
between Member States.
Even a summary assessment of the 1960s reveals that
the competition rules were generally applied
according to largely legal criteria (').
After the period of initial notifications, and once
'mass' solutions had been found (the vast majority of
the ten thousand or so contracts notified related to
exclusive distribution), the Commission clarified the
limits of 'cooperation' between firms and took
position on a number of cases involving abuse of
dominant position.
(') European Parliament resolution on the seventh
Commission report on competition policy (OJ No
C 261, 6. 11. 1978, p. 49, point 4).
10. 12. 81 Official Journal of the European Communities No C 322/5
The increasing complexity of the issues involved and
their considerable interdependence vis-a-vis many
other issues have in recent years obliged the
Commission to get to grips with situations which call
for value judgments and a broader approach to
realities, implications and constraints.
As is borne out by a number of practical examples,
the 'rules on competition' referred to in Articles 42,
85, 86, 92 et seq. of the Treaty of Rome, should be
implemented more effectively via a package of
measures, norms and recommendations which are
compatible with the overall framework of Community
activity ('), in other words by means of a proper
policy' which is both complex, flexible and structured,
and takes account of interdependence and
interactions between a variety of initiatives and
situations, both general and sectoral, within the
Community and in the world outside.
An approach along these lines must be encouraged.
1.4. The open common market
The Treaty itself takes a clear line :
'By establishing a customs union between
themselves, Member States aim to contribute, in
the common interest, to the harmonious
development of world trade, the progressive
abolition of restrictions on international trade and
the lowering of customs barriers.
The common commercial policy shall take into
account the favourable effect which the abolition
of customs duties between Member States may
have on the increase in the competitive strength of
undertakings in those States'. (Article 110).
The present situation confirms the validity of this line
and the need to press on with efforts to achieve these
objectives.
Similarly, the preamble to the Treaty states that the
Community is created in the desire to 'contribute, by
means of a common commercial policy, to the
(') European Parliament resolution on the fifth Commission
report on competition policy (OJ No C 238, 11. 10.
1976, P. 35, points 2, 3 and 4).
progressive abolition of restrictions on international
trade'.
Leaving aside all dogma, we must face the reality that
the common market is open in so far as it is part and
parcel of the vaster ambit of the world economy and
international trade.
In this connection the Committee fully agrees with
the Commission's introduction to the eight report on
competition policy:
'To operate effectively, the common market is
largely dependent on the setting-up of a large
internal market in a Community with an outward-
looking approach to the rest of the world. An
extensive area in which economic activities may
intereact without purposeless constraints is a pre-
requisite for a developing economy; it is no longer
reasonable to suppose that economic activity can
expand within a confined space.'
Similarly, the introduction to the ninth report
acknowledges that:
'every Community policy is required to adapt
itself in order to fit into the perspective of a
common market that is both unified and outward-
looking at the same time'.
Accordingly, competition policy must further the aims
of the Treaty with a view to achieving a common
market which is not isolated but open to trade
and international competition in the widest possible
sense (2).
2. Interdependence and its effects — Community
competitiveness — relevant market
2.1. World-wide interdependence and Community
competitiveness
The growing interdependence of markets necessarily
entails a new international division of labour.
The European Communities feel the impact of this
interdependence more than any other bloc and the
initial practical response to this challenge can only be
an increase and expansion of competitiveness,
stimulated by a competition policy compatible with
(2) European Parliament resolution on the European
automobile Industry (OJ No C 28, 9. 2. 1981, p. 20,
point 13).
No C 322/6 Official Journal of the European Communities 10.12.81
the objectives of the Treaty but also responsive to any
adjustments that become necessary over time (').
In an 'open' market, a coherent competition policy
must be increasingly orientated towards a realistic
view ' of overall, world-wide interdependence. This
economic interdependence embodies all the elements
for more balanced north-south and east-west
relations, from the flow of raw materials to trade and
technological flows.
Ruling out protectionism, the only possible strategy
open to us is to further the restructuring of
production and structural adjustment with the help of
all social and economic interests. At the same time,
Community industry will be safeguarded and
stimulated by a competition policy conceived in the
broadest and most dynamic terms and thus placing
increasing emphasis on global Community aims.
However, it must be remembered that terms of
competition in many world export markets are often
different — sometimes very different — from those
existing in the Community. Close monitoring
combined with suitable measures, possibly transitional
or phased, will therefore be needed to prevent
Community firms being adversely affected.
2.2. Competition and cooperation
Since the European Community is more dependent
than other advanced countries on external relations, it
must succeed in introducing a system of 'competition
— cooperation' between the Community and the
major non-Community blocs in order to promote
lasting north-south and east-west prosperity based on
the principle of reasonable reciprocity and balanced
economic progress in every sector.
A shrewd competition policy must take account of the
need to reconcile competition and cooperation in both
production and trade. Distortions within the common
market must be avoided, unfair practices must be
prevented and worthwhile cooperation compatible
with the Community's overall progress must be
promoted.
2.3. Relevant market
This trend in the Community and international
economies requires — in addition to the criterion of
'practices which may affect trade between Member
States' — (Article 85 (1)) — a broader criterion
which effectively takes into account the relations
between the 'Community market' as a whole and
other countries.
We should therefore approve and encourage the
tendency of the Commission and the Court of Justice
to consider Article 85 as applicable to agreements
affecting the Community between companies whose
registered offices are outside the Member States.
While it is thus essential and correct from every point
of view to evaluate the anti-competitive effects of
agreements between Community businesses and those
of other countries, it is equally necessary and correct,
not to confine the analysis of a specific market
situation (production, sales, substitute or similar
products, etc.) to the common market alone.
The assessment of the 'relevant market' is of course
of considerable importance for the application of
Articles 85 and 86 (2).
As part of this assessment, an increasingly careful
analysis must be made of the position of individual
companies with respect both to their competitors in
the Community and to import flows from outside the
Community. Assessments of the competitive position
and the relevant market cannot be artificially
confined to the Community area.
This is the only way to make the concept of an 'open'
common market effective, complete and coherent.
Competition policy is already moving in this direction
and must be given every encouragement to do so.
(') OJ No C 283, 3. 11. 1980, pp. 7-8, (Written Question
No 562/80).
(2) Reports of cases before the Court of Justice, 1973,
p. 216.
10. 12.81 Official Journal of the European Communities No C 322/7
3. Importance of the economic and social context —
coordination of community policies
3.1. Impact of economic and social aspects
The aims of the Treaty emphasize the economic and
social aspects (cf. 1.2.).
The economic recession and inflationary pressures
bedevilling all the Member States today, the need to
protect employment, the need to promote
technological progress and innovation, the continuing
oil crisis and the disparities in national legislation in a
number of key sectors are all factors, to name but the
most important, which must be taken into account in
accessing the behaviour of firms and Member States
with a view to the application of Articles 85, 86, 92 et
seq.
Competition policy cannot be governed by abstract or
theoretical criteria but must take into account the real
conditions and requirements of the various countries
and regions. The original frame of reference (setting
in motion of an integration process in a high growth-
rate economy) which marked the initial period of
implementation of the rules of competition has now
changed.
The major changes in the Community and inter-
national economies over the last few years have had
serious repercussions in the social and productive
sectors of a Community which is not yet fully
integrated.
Given this state of affairs, application of the
competition rules cannot disregard economic and
social institutions and factors (see 3.3.). Account must
therefore be taken of the new 'framework conditions'
governing all facets of Community development.
For this reason the Commission should inform and
consult employers' associations and trade unions in
particular about its competition policy. The Economic
and Social Committee is an ideal forum for briefing
and consulting all socio-economic interest groups on
this matter.
3.2. Inflation, social problems and the energy crisis
The hallmarks of the present economic and social
situation include persistent inflation, rising
unemployment and the numerous effects of the
energy crisis. Competition policy must therefore pay
special heed to these vital. aspects of the present
economic situation.
A vigorous competition policy can also help to
contain inflation, for instance by rationalizing
production and promoting labour and capital
mobility, with corresponding benefits in costs and
prices. Stricter controls can check abuses and
eliminate the various artificial constraints which
distort competition (').
On the social front, the redistribution of labour
within the Community should be orientated towards
expanding sectors. The alignment (2) of social security
systems (J) should also be pursued more vigorously,
without ignoring the importance of the different
traditions of industrial relations, particularly in the
context of Community enlargement.
Competition policy should also keep a close watch on
the wide disparities in energy prices in the Member
States (4). It is vital to foster tax alignment and
promote greater international cooperation in this area
in order to permit a more accurate assessment of
needs and strike a more satisfactory balance between
supply and demand.
3.3. Rulings of the Court of Justice
The Commission and Court of Justice have already
shown their responsiveness to socio-economic needs
(5). This is both a realistic and far-sighted policy.
These institutions have, for example, recognized that
the following considerations should be taken into
account when defining the 'promotion of technical or
economic progress' (Article 85 (3)):
(a) the scope for (i) planning production and
marketing on a long-term basis and with greater
(') Fourth medium-term economic policy programme (1976
— 1980), part III, point (b) (OJ No L 101, 25. 4. 1977,
p. 22).
O OJ No C 205, 14. 8. 1979, p. 4 (Written Question
No 15/79, point 5 of reply).
(J) OJ No C 301, 3. 12. 1979, p. 29 (Written Question
No 649/79, paragraph 4, 5 of reply).
O OJ No C 131, 2. 6. 1980, p. 35 (Written Question
No 1708/79).
(s) Reports of cases before the Court of Justice, 1980,
p. 2691.
No C 322/8 Official Journal of the European Communities 10. 12.81
accuracy, (ii) restricting the market fluctuations,
and (iii) lowering production, storage and
marketing costs;
(b) the protection of employment as part and parcel
of an overall stabilization plan, especially when
the business climate is gloomy (').
The Court — while acknowledging that 'workable
competition' (2) is a sina qua non — has also stated
explicitly that competition may vary in nature and
intensity according to the particular products or
services in question and according to the economic
structure of the sectors concerned. The Court has
also ruled that price competition should not be given
absolute priority in all circumstances (3).
These decisions show an awareness that rules on
competition cannot be applied in a vacuum but are
influenced by the economic and social context
existing at any given moment in time.
Above all, it is clear that in practice the conditions
under which Community firms operate differ from
Member State to Member State in respect of: access
(to domestic and international financial facilities; the
labour market; research and development), scale of
production and marketing; taxation and social
security rules; infrastructure; transport and energy
supplies.
To make its full impact, a competition policy needs to
be carefully researched and take account of the
various factors involved, while at the same time
seeking to create conditions truly conducive to the
changes required.
3.4. Coordination of policies
If there is agreement on an overall approach,
interdependence and the need to take into account
the constraints imposed by the widely differing
economic and social situations within the
Community, then, if the objectives of the Treaty are
to be achieved, there must also be agreement that
undistorted competition within the Community is a
(1) Reports of cases before the Court of Justice, 1977,
p. 1914.
(2) Reports of cases before the Court of Justice, 1977,
p. 1901 — 1903.
(3) Reports of cases before the Court of Justice, 1977,
p. 1903.
prerequisite for adjusting industrial structures which
increasingly come into contact with one another in an
open market.
Framed along these lines, a competit ion policy will
spur Communi ty firms to be more competitive and
further a bold, far-sighted strategy of industrial
restructuring whose main concern will be to reinforce
the Communi ty ' s industrial structures.
W h a t is absolutely necessary is close coordinat ion,
particularly with overall sectoral and industrial
policies, with the social, regional and commercial
policies of the Communi ty ("), and with the C o m m o n
Agricultural Policy.
The Commission has shown in a number of cases that
it has done just that (5).
Its 1978 and 1979 programmes concentrated on
structural aid for ailing industries (steel, shipbuilding,
textiles, footwear, paper). In addit ion, the
Commission has issued detailed reports and various
other initiatives concentrat ing on 'growth sectors '
designed to promote economic expansion and thereby
increase job opportunities in industry and the tertiary
sector (alternative energy sources), the aircraft
industry, telecommunications, data-processing,
electronics).
Competi t ion policy should encourage a coordinated
target-orientated approach to and settlement of such
problems.
3.5. Regional imbalances and restructuring
It is also essential to prevent the restructuring of
productive industries from being hampered by
institutional inflexibility.
The most serious and crucial examples of institutional
inflexibility are related to regional imbalances in the
Community.
Competition policy at regional level must, on the one
hand, respect the need for specific priorities but, on
the other, must help to incorporate regional re-equi-
librium and development needs into an overall policy,
(4) European Parliament resolution on the eighth Com-
mission report on competition policy (OJ No C 85,
8. 4. 1980, p. 43, point 21).
(') OJ No C 316, 17. 12. 1979, pp. 45 — 46 (Written
Question No 710/79, points 1 and 2, of answer).
10. 12.81 Official Journal of the European Communities No C 322/9
having a social dimension in order to prevent conflicts
or delays.
If the socio-economic background is to be taken
seriously, competition policy should be geared to
general or medium-term goals and should observe the
principles of gradualism and consistency. Coordi-
nation and harmonization should be entrusted jointly
to senior officials in the General Directorates directly
concerned. This would make it possible to hold
comprehensive discussions and assessments before
Commission decisions are taken (l).
4. Mixed economy — full information — aids
4.1. Mixed economy
It is generally recognized that, to varying degrees and
in varying forms, the public sector is an ever-present
feature of modern economies.
In some Member States, this intervention has deep-
seated historical, socio-political roots and, in a
number of ways, influences national economic and
political decisions.
At all events, it is now a fact that many Member
States have, even if to varying degrees, been involved
for a considerable time in economic activity, through
State and semi-State bodies.
The Member States have an undeniable right to
pursue economic and social advance through the
vehicle of such bodies.
However, (Competition rules must operate even in
mixed economies, except of course where the notion
of 'public service' of specific general interest is
concerned (Article 90.2 of the Treaty).
Here it is hardly surprising that the issue of like
treatment of private and public-sector firms
(') Opinion of the Economic and Social Committee on the
proposal for a Council Regulation on the control of con-
centrations (OJ No C 88, 26. 7. 1974, p. 21, point VI).
competing in the same market (2), so crucial to the
proper operation of the economy as a whole, should
have arisen. The only means of ensuring such
treatment is to eliminate any fiscal or financial
discrimination and to dispense with preferential
arrangements and measures of equivalent effect.
Competition policy has a crucial role here.
4.2. Full information
The direct or indirect allotment of public resources to
public-sector firms, and the way such resources are
used, must not be shrouded in secrecy. The recent
Commission Directive on this matter is a step in the
right direction (3).
This requirement must not be interpreted or applied
so as to lead to discrimination between public and
private-sector firms. It merely, reflects the principle
that public-sector firms must also be required to
disclose appropriate particulars about their financial
relations with the State, even though this information
is not demanded by shareholders.
Identical market conditions for public and private-
sector firms will facilitate non-distorted, increased
competition. Where social factors — at the level of an
establishment, region or sector — take precedence,
convincing grounds should be provided along with a
schedule for phasing out relief measures over a
reasonable period of time.
It should be made clear that the derogations accorded
to a number of sectors for an initial period are merely
temporary. The requirement that full information
should be given should be extended as soon as
possible to cover the credit, insurance and energy
distribution sectors.
(2) European Parliament resolution on the eighth Com-
mission report on competition policy (OJ No C 85,
8. 4. 198C, p. 42, point 16).
(') Commission Directive of 25 June 1980 on the
transparency of financial relations between Member
States and public undertakings (OJ No L 195, 29. 7.
1980, p. 35).
No C 322/10 Official Journal of the European Communities 10. 12.81
4.3. Competition policy and aids 5. Business practices
The ban on aids laid down in principle by Article
92 (1) must be observed, but current economic and
social circumstances in the Community require a new
look at the interpretation and application of this ban.
In particular, Article 92 (3) must be applied
consistently and with increasing stringency, account
being taken of the purpose of aids and of specific
national or regional circumstances.
5.1. The fragmentation and decentralization of
productive investment, which is already under way in
some sectors and desirable in others, together with
the increasing rigidity of constraints and structures
conditioning the behaviour of large firms, suggest
that competition policy should do more to safeguard
free access to the market, to preclude abuse and to
further cooperation not only between small and
medium firms, but also between the latter and large
firms (2).
However, since many factors are involved, it would
be helpful if the Member States and firms received
regular, detailed updates on the Treaty-compatibility
criteria adopted by the Commission in the light of
changing general and sectoral circumstances in the
Community economy. Rather than encouraging
applications for State aid, fuller disclosure of
compatibility criteria could preclude concealed aid
schemes and help to ensure that aids are consistent
with Treaty aims at all levels (national and local) (').
The Commission has already moved in this direction
by eliminating a number of technical, administrative
and legislative barriers and by encouraging
cooperation between, in particular, small and medium
firms. The small/medium business sector is more
flexible than the large business sector, and adapts
more readily to changing market requirements and to
the many variables of risk and innovation.
In addition to straightforward aids, which are direct
and declared, there is also the problem of partial or
full reimbursement of capital expenditure undertaken
by private-sector firms for a variety of purposes,
including R & D .
The large number of small and medium firms, their
geographical dispersion and the enterprising spirit of
their managers are likely to stimulate competition and
give consumers (particularly specific categories of
consumers) possibilities of a wide choice and easy
availability of supplies.
Community industry cannot overcome the present
recession unless it sharpens its competitiveness.
Competition policy must therefore allow adequate
support for R & D , especially to enable Community
firms to compete on equal terms with their rivals in
non-member countries, some of whom have specific
incentives for R & D .
Conditions conducive to stepping up competitiveness
can be achieved in this way.
Here again, there should always be a proper flow of
information, and it should be possible to demand
equally detailed particulars of special relations
between private-sector firms and banks or financial
consortia with public backing.
However, though it should be possible to upgrade the
role of the small/medium business sector, by
providing appropriate support and incentives, this
should be done without impairing free competition.
While their size makes it easier for SMEs to adapt
rapidly and relatively cheaply to changing market
needs, it also makes them more vulnerable in respect
of access to the capital market, supplies and any
unfair economic and trade practices. It is therefore
necessary, in the interests of maintaining an
undistorted and workable competition system, to
protect SMEs against such practices through adequate
legislative and administrative measures as well as
through legal means. At the same time the notion of
'sectoral markets concerned' should be made to work
more to the advantage of SMEs when evaluating the
competitive position of bigger firms.
(') OJ No C 160, 30. 6. 1980, pp. 20—21 (Written Question
No 1695/79, third paragraph of answer).
(2) Opinion of the Economic and Social Committee on the
report on certain structural aspects of growth (OJ No
C 146, 16. 6. 1980, point 2.4.3.3.).
10. 12.81 Official Journal of the European Communities No C 322/11
As a result of increasing difficulties in adjusting to
changing conditions of competition, both in and
outside the Community, it will be necessary for large
firms to make considerable efforts to reorganize their
structures and production and to adopt a new
strategy on vertical and horizontal cooperation for
the purpose of cutting back expenditure and
achieving optimum efficiency; however, one must not
ignore the need for effective controls, given the
dangers that can result from productive or financial
mergers.
5.2. There are, however, still many legislative and
tax obstacles to the most efficient forms of inter-firm
cooperation in the fields of both R & D and services.
5.3. The Draft Regulation on the 'exemption by
category' of patent licence agreements should further
simplify the application of Article 85 (3). It should
ensure greater legal clarity and certainty and should
create a more favourable climate for R & D and the
transfer of technologies (J).
Far from discouraging firms from concluding licence
agreements, the new Regulation should ensure that
'patents' and 'industrial property' are harnessed to
competition and to technological and economic
advance.
All firms irrespective of their size, should be able to
participate in the exchange of technology and know-
how. A more active licence market, within a system
that adequately protects property rights, is —
together with appropriate research incentives — a
sina qua non for faster innovation.
5.4. In the distribution sector, competition policy
should put particular emphasis on the primary need to
rationalize channels and methods and preclude abuses
that could inflate retail prices.
When exclusive dealing arrangements and selective
distribution systems are being considered, due weight
should be given to their constructive contribution in
(') Draft Commission Regulation on the application of
Article 85 (3) of the Treaty to certain categories of
patent licensing agreements (OJ No C 58, 3. 3. 1979,
p. 12).
sectors where there are objective reasons for a high-
grade, well-organized distribution system linked inter
alia to the nature of the product (2) and the
responsibilities of the producer.
The variety of types of marketing, and the continued
existence of the small/medium business sector, must
be safeguarded.
5.5. In connection with the restructuring of
individual sectors and firms, the present economic
situation in the Community is such that the waivers
provided for in Article 85 (3) should, until a satis-
factory balance has been restored, be applied to
partial agreements (even between business rivals)
designed to enhance the participants' competitiveness
and especially their ability to compete with non-
Community firms (3).
Close monitoring will be necessary at all times to
prevent abuses of dominant positions.
5.6. With regard to business mergers, one must
remember that if legal instruments lack the requisite
flexibility and phasing in both conception and
implementation, their practical impact will vary from
Member State to Member State.
In particular one should remember that market and
productive-capacity structures, and hence the levels of
mergers, differ from Member State to Member State
for historical, economic and social reasons.
Business mergers should be vetted, though many
cyclical and structural factors, including at the present
time employment difficulties, militate in favour of
policies free of legal and other rigidities (4) (5).
The Draft Regulation currently being examined by
the Council might be a satisfactory frame of reference
(2) Reports of cases before the Court of Justice, 1977,
p. 1903.
(') European Parliament resolution on the European
automobile industry, point 2, (OJ No C 28, 9. 2. 1981,
p. 21, point 24).
(4) OJ No C 192, 10. 8. 1978, p. 21 (Written Question No
210/78, points 1 and 2 of the reply).
(s) Opinion of the ESC on the proposal for a Council Regu-
lation on the control of concentrations. Point I
'fundamental principles' (OJ No C 88, 26. 7. 1974,
p. 20).
No C 322/12 Official Journal of the European Communities 10. 12.81
in so far as it takes realistic account of the many and
varied aspects of the problem (1).
5.7. The consultation and approval procedures for
the company law directives which are still in the
pipeline should be speeded up. However, it would be
wrong to try to resolve all the problems at one go (2)
( ' ) •
Inter alia, the Commission should stress the
importance of adopting the Draft Regulation on the
creation of a European Cooperation Group, which in
many instances would be a useful legal vehicle.
5.8. The procedures for applying competition rules
to firms, and the time they take to complete, have a
direct impact on costs, because they protract legal
uncertainty and are detrimental to the interests of the
parties.
A speeding-up of procedures could help to reduce
this uncertainty, though accurate analysis and optimal
decision-making remain as essential as ever.
The overall legal framework should be reformed by
providing for better access to files, more respect for
information, the confidential nature of certain
documents, appropriate delays for reply, oral
evidence, greater precision of complaints and
provision of fuller information and reasons for
decisions (4) (5).
Thought should also be given to ways of ensuring
more objective decision-making and information in
matters where no formal decisions have been taken.
5.9. Keeping tabs on the fairness of company
advertising is also a valid instrument of competition
policy. (6).
(') OJ No C 282, 12. 11. 1979, pp. 5—6 (Written Question
No 225/79).
(2) Proposal for a fifth Directive on the management
structure of limited liability companies (OJ No C 131,
13. 12. 1972, p. 49).
(') Amended proposal for a seventh Directive on group
accounts (OJ No C 14, 17. 1. 1979, p. 2).
(4) Reports of cases before the Court of Justice, 1979,
p. 462.
(s) European Parliament resolution on the eighth Commis-
sion report on competition policy (OJ No C 85,
8. 4. 1980, point 20, p. 43).
(') Proposal for a Council Directive on the approximation
of the laws, regulations and administrative provisions of
the Member States on misleading and unfair advertising
( O J N o C 70,21. 3. 1978, p. 4).
5.10. The Court of Justice has in various rulings
confirmed that the prohibitions set out in Articles 85
and 86 are directly applicable in national provisions;
by now there is more or less general agreement on
the principle that Community law takes precedence
over national law.
Although growing harmonization between national
and Community law diminishes the theoretical risk of
conflict, national laws (even if not developed to the
same degree in each Member State) should provide
the necessary back-up via a decentralized and
effective competition policy which does not exclude
close cooperation between the Member States.
6. Consumer protection
Competition policy is complementary to, and closely
linked with, a Community policy on consumer
protection (7).
Information and market transparency generally, are
essential if consumers — and firms — are to be able
to make the proper choice. However, information
should not be provided exclusively by suppliers; the
consumer must be able to evaluate alternatives within
the framework of a system which is more rational and
balanced than the present one.
It is particularly important to supply information on
prices since these are the consumer's main indicator
of rising inflation.
However, competition policy alone cannot be
expected to create the prerequisite for achieving
uniform or equivalent prices for comparable and rival
products within the market (8).
Tax structures vary, widely and so do the production
situations of individual firms, distribution arrange-
ments, and sales policies f ) .
However, those responsible for competition policy,
especially where inexplicably large differences are
found to exist, should keep prices under close review.
Price differences are not in themselves proof of such
O OJ No C 198, 4. 8. 1980, p. 75, (Written Question No
434/80, first sentence of answer).
(*) OJ No C 214, 27. 8. 1979, (Written Question No
194/79, point 1 of answer).
(') OJ No C 214, 27. 8. 1979, (Written Question No
194/79, point 2 of answer).
10. 12. 81 Official Journal of the
malpractices, nor do they necessarily indicate that
barriers to trade continue to exist or that markets
have not been integrated.
7. Conditions for the development of a competition
policy
In an 'open' competition situation, like that in the
Community, it is necessary to pursue an 'open'
competition policy, that is to say a flexible, overall,
realistic and dynamic policy that takes account of
changing social and economic circumstances in the
Community, of international trade patterns, and of
economic and production trends outside the EEC that
influence the Community's relations with the rest of
the world.
However, it is hardly posible to claim the benefits of
free trade, and thus of healthy and effective
competition, without accepting the constraints,
ranging from fair pricing and advertising to
abstention from agreements and abusive practices
which violate the principles of non-distorted
competition or the specific anti-trust rules of the
Community, individual Member States and regional
areas (1).
Monitoring, therefore, though not an end in itself, is
essential.
Done at Brussels, 30 April 1981.
ropean Communities No C 322/13
A Community competition policy must also safeguard
effective competition between products and services
within the common market. But, particularly in
relations with the rest of the world, it must also
preclude abnormal competition, dumping,
malpractices, concealed protectionist retaliation and
any distortion of the terms of competition.
At international level, steps should be taken to ensure
that anti-trust rules in non-EEC countries do not
distort competition. Cooperation between the
Member States would be helpful here.
Generally speaking, an intelligent Community policy
— based on a close and continuing review of changes
in the international division of labour and resources
— can do much to contain inflationary pressures and
high unemployment, and leave adequate room for
competition and collaboration between firms both in
and outside the Community.
With this end in mind, effective coordination of the
different Community policies must be a priority to
ensure compliance with the aims of the Treaty and
mutual consistency; national sectoral policies should
show similar convergence and compatibility (2).
Finally, the Commission's resources should be
boosted so as to improve the efficiency of its services.
The Commission will then be able to play to the full
its vital, unique role in the construction of a forward-
looking Europe.
The Chairman
of the
Economic and Social Committee
Tomas ROSEINGRAVE
(l) Opinion of the ESC on the report on certain structural
aspects of growth, point 2.2.2.1. (OJ No C 146, 16. 6.
1980, p. 11).
(2) European Parliament resolution on the seventh
Commission report on competition policy (OJ No
C 261, 6. 11. 1978, p. 50, point 20).


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