Competition Policy 2002: Globalisation and Decentralisation

The fifth “European Competition Day” held on 26 February in Madrid, focused on competition policy and the consumer. In 2002, the EU’s agenda will include the discussion of a multi-lateral framework on competition policy, a review of the merger control regulation and the decentralisation of the implementation of competition policy.

Three key issues on the EU’s agenda for 2002 are: the discussion of a multi-lateral framework on competition policy, a review of the application of the merger control regulation and the modernisation of the system for implementing competition policy.

  • A multi-lateral framework on competition

The declaration adopted by the WTO (World Trade Organisation) Ministerial Conference in Doha, in November 2001, established for the first time, the objective of creating a multi-lateral framework on competition policy. The debate is still open as to whether the WTO remains only a trade institution, or whether it should also shoulder other global responsibilities. Nevertheless, a preparatory phase of discussions will go ahead during 2002.

The EU is confident that the elements of such a competition framework would correspond to its own proposals: non-discrimination, transparency and an an undertaking to treat hard-core cartels as a serious breach of competition law.

The decision on the opening of full negotiations will be taken at the Fifth Ministerial Conference, next year. Supported by global leaders such as the US, it will be dependent upon the EU’s ability to win round the developing countries. Several of these have made it clear that their support will be contingent on the developed world’s ability to deliver on promises related to technical assistance and capacity building in third countries.

Also during 2002, the first annual conference of the International Competition Network will be held in Italy, in the autumn. Launched in 2001, with the strong support of the US and EU, this network will provide national and multi-national authorities with a forum for maintaining regular contacts and addressing practical competition issues. The 2002 conference is expected to discuss the multi-jurisdictional aspects of the merger control process, and the competition advocacy role of anti-trust agencies.

  • The review of the merger control regulation

Outside the EU’s borders, the number of countries that now operate merger control regimes has increased dramatically. Merging companies are more frequently obliged to seek regulatory clearance in multiple jurisdictions, and are therefore faced with rising costs, delays and legal uncertainty. The review of the EU’s merger control regulation to be undertaken by the Commission this year, will take this into account.

In particular, the Green Paper published at the end of 2001 to invite comments on the proposed revision, opened a debate on the merits of the competition test enshrined in the Regulation. This prohibits a merger if it “is likely to create or reinforce market dominance”. The Paper asks how effective this test is, compared to other jursidictions. (For further details see the news story

“Green paper to modernise EU’s merger control regime”.)

  • The modernisation of competition rules

Also in an effort to modernise the EU’s competition rules, the Council will this year adopt a Regulation decentralising the application of the rules applying to restrictive agreements between companies and to abuses of a dominant position. The Regulation will conclude a process launched with the publication of a white paper in 1999.

The rule changes will allow the Commission to focus its resources on the cases that most seriously restrict competition on a European level, and will seek to improve consumer protection by allowing national authorities to apply competition law in full. (For further details, see the links dossier

“Modernising competition policy”).

 

On 26 February 2002, Commissioner Mario Monti participated in the fifth "European Competition Day", organised in Madrid. This is the first of two such events that will be held this year to inform the public of the objectives and application of EU competition policy. In his address, the Commissioner focused on the benefits to consumers that have resulted from the introduction of greater competition in the telecommunications and media sectors, and those the Commission expects will follow from the revision of the block exemption for motor vehicles.

This year, however, the EU will apply its consumer protection mandate more widely than ever before: it will respond to the challenges presented by the increasing globalisation of markets and, at the same time, improve the efficiency of competition enforcement within the Union.

2002 will see the conclusion of the EU's efforts to decentralise the application of its competition rules, increasing the role of national authorities in enforcement. It will also launch in earnest the much-debated drive to establish a world-wide approach to competition policy.

 

  • 31 March 2002: Deadline for comments on green paper on merger control regulation, Commission proposals to be published during 2002.
  • Autumn 2002: First annual conference of International Competition Network
  • End 2002: Adoption of Council regulation on the modernisation/decentralisation of competition policy (Articles 81 and 82 of the EC Treaty), and adoption of joint Commission and Council declaration describing the operating principles of the network of national competition authorities
  • 2003: Adoption of Commission regulation implementing the Council decentralisation regulation, and publication of Commission notices giving details and timeframes for the network of national authorities, the treatment of complaints, and the adoption of Commission opinions
  • 2003: Decision on formal launch of multi-lateral competition negotiations

 

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