Employers attack proposals to update Union competition rules

Date: 29/10/1998

By Peter Chapman

EUROPEAN Commission moves to update the rules governing competition probes would give companies a rough deal, the EU employers' federation UNICE claimed this week.

The warning comes in response to proposals drawn up by anti-trust officials for changes to the 1994 rules on the official hearings which the Commission holds to help it decide whether or not to take action against alleged anti-competitive practices.

Officials say the update is designed to simplify the regime for both the institution and firms involved in anti-trust cases, and to reduce some of the paperwork carried out by the Commission's understaffed Directorate-General for competition (DGIV).

But UNICE competition experts have attacked the proposed changes on several grounds, claiming they would add to the burden on companies and fail to redress some of the inequities in the present system.

They say that under the draft rules, the Commission would in future be allowed to publish its lists of objections to companies' behaviour in the EU's Official Journal, rather than sending them a formal letter.

According to the federation, this would apply in cases where there was more than one 'defendant' or where firms had not arranged to present their arguments to the institution jointly.

"The Commission says it has too much work so it will not notify the defendants in anti-trust cases. Instead it says it will put its comments in the OJ," said one expert. "We welcome the Commission's efforts to simplify its regulations, but companies must be notified personally. You cannot have the ridiculous situation where people are scanning every page of the Official Journal to find out if the Commission has objections."

Under the proposals, firms would be given two weeks to respond in writing to any objections raised about their activities. UNICE wants this deadline to be at least doubled, to a minimum of four weeks.

The employers' federation also claims that the new rules would give the Commission, rather than the companies themselves, the right to decide whether or not their chosen legal representatives were suitably qualified for the job.

In addition, it is criticising the Commission for failing to propose changes to parts of the existing rule book which, in its view, do not give firms an adequate right of defence in anti-trust probes.

UNICE claims Commission officials are given too much discretion over the way hearings are conducted and that this is "incompatible with the rights of defence" which are enshrined in EU law.

Commission sources this week sought to allay industry fears over the changes to anti-trust rules, describing the move as a "rather minor update to existing regulations".

Officials confirmed that the institution hoped to adopt the rule changes by the end of this year. They said the Commission had already consulted member states on the issue, but stressed that it would be up to the institution to make a final decision on the new rules.

"It is a Commission regulation which covers purely internal rules. Of course the Commission has consulted with member states at the level of experts. It is now in the final phase," said one.

As the institution contemplates its next move, a new report by a British law firm has revealed worrying levels of ignorance among firms in one of the EU's biggest member states about their rights and obligations under existing Union competition rules.

The survey of 100 leading UK companies by Cameron McKenna found that 57% of firms had taken no action to prepare for a parliamentary bill which will bring British law into line with the latest EU anti-trust legislation.