Don’t use ‘dawn raids’ for merger control cases, say MEPs

Date: 10/07/03

By Jeremy Woolfe

DAWN visits by European Commission investigators on companies thinking in terms of mergers look unlikely to take place in Europe.

At least, members of the European Parliament's economic and monetary affairs committee resisted the idea when Mario Monti, competition commissioner, presented his period report, on competition policy reforms in 2002 and 2003.

Dawn raids are part of the drama in the battle against price-fixing collusion. However, the practice should not be extended to merger cases, MEPs said, with the backing of UNICE, the Brussels-based European employers association.

Monti had said that, for mergers, the Commission considered it important to improve its investigative powers. "Against the background of an increased complexity of cases, tight legal deadlines and ever-closer scrutiny of our decisions by the community courts, it is important to ensure that the Commission's investigativon tools remain effective," he said.

The year 2002 was exceptional for the fight against the most serious violations of competition rules, in particular secret cartels, he told the Parliamentary committee.

Through ten new prohibition decisions, the Commission had imposed fines totalling more than €1 billion. He said that the Commission should focus more on its core task of detecting and punishing the most serious infringements. This could be done by decentralizing the application of anti-trust rules and by abolishing the notification system.

Monti said that overall state aid levels were falling, from €102 billion in 1997 to €86 billion in 2001. This was due largely to reductions in aid to the manufacturing and service sectors, and aid to assisted regions.

During the period up to autumn 2004, the remainder of the present Commission's lifespan, DG Competition would look into the regional aid guidelines, a review of the guidelines on aid for rescuing and restructuring companies in difficulty, shipbuilding, and services of general economic interest.

As for regional aid, the situation would change significantly after enlargement. The competition commissioner said that "the greater part of the territory of the accession countries" would receive assisted regional status.

"There will thus be a clear need to look again at our approach," he added.