Concern mounts over ‘small print’ in Monti’s competition proposals

Date: 22/02/01

By Peter Chapman

EUROPEAN Commission plans to make the most radical changes to anti-trust policy since the 1960s are set to come under criticism from member states for the first time.

Competition chief Mario Monti wants to slash the red tape that now inundates his officials - giving them more time to tackle price-fixing by the hard-core cartels that rip-off the EU's 365 million consumers.

Under the current regime, the Union executive has sole power to exempt companies from tough rules outlawing collusion if it finds their agreements with rivals too insignificant to damage the single market.

As a result businesses flood the Commission with 'notifications' of small agreements that have little adverse impact on competition.

Monti proposes making companies directly responsible for determining whether their activities comply with EU rules, although the findings could be challenged in court by rivals or consumers.

But dissent emerged the moment business groups started to decipher the Commission's formal proposals. Although they like the general tone of the Monti plan, they have serious reservations when it comes to the small print.

Judges in member states, critics warn, could interpret the same types of agreement in different ways - upsetting the level playing field that the EU's single market is meant to offer companies.

Another potential headache that ministers are likely to target is a clause giving the Commission 'discretionary powers' to ask firms to formally notify it of their agreements. This 'cartel register' proposal raised temperatures to boiling point among some firms who thought they were saying goodbye to the burden of notifying their deals once and for all.

Diplomats say ministers are unlikely to call for the 'cartel register' to be overturned. But they are starting to see the need for a new mechanism by which companies can still be given a preliminary opinion on the legality of their agreements - for example, if the firm's entire future hinged on one deal.

Governments also are likely to seek further clarification of a proposal that would allow the Commission to break up companies if their structure is inherently anti-competitive. Monti claims this 'nuclear option' is merely a clarification of a right that has always existed but never been used.

One other issue likely to irk ministers is a legalistic point in the Monti plan, which if adopted could undermine national laws on competition. In cases dealt with by member state courts, the Commission wants judges to ditch national laws in favour of the EU's own competition rules if the cases involve any cross-border element.

But governments are loathe to permit this attack on their sovereignty over areas subject to specific national laws, such as utilities.

European Commission plans to make the most radical changes to anti-trust policy since the 1960s are set to come under criticism from member states for the first time.