Governments voice fears over anti-trust shake-up

Date: 04/11/1999

By Peter Chapman

EU GOVERNMENTS have voiced concerns about the European Commission's proposals to hand responsibility for dealing with some competition cases back to member states.

Competition Commissioner Mario Monti hopes to win broad support for the planned new approach, which is designed to reduce his department's mounting workload, at a meeting of Union industry ministers next Tuesday (9 November).

Diplomats say there will be no debate on the reform plan at this stage, and that Monti will simply use the occasion to explain how the proposed new rules would work in practice.

The proposals were drawn up by Monti's predecessor Karel van Miert, who complained that current anti-trust rules were hampering the Commission's efforts to police major anti-trust crimes in the EU, just before he left office.

Van Miert said the existing regime meant his officials were swamped with hundreds of small-fry cases which could be dealt with by national regulators.

But governments are already beginning to see cracks in the proposal, even though most support its aims.

"There are a lot of legal questions related to the change. Everyone agrees that you have to do something but then you get the problem of ensuring coherence of the decentralised system," said one diplomat from a Scandinavian member state. "Maintaining control is legally very tricky."

Such concerns have been echoed by others, including the UK, which fears the proposed approach could lead to widely divergent interpretations of EU law by courts and regulators in different member states, creating legal uncertainty which would pose serious problems for companies planning new ventures.

The current rules, which date back to the 1960s, require firms to seek the Commission's approval for commercial agreements involving trade between member states - such as franchising or licensing arrangements - unless they fall within the scope of existing block exemptions.

The White Paper drawn up by Van Miert recommends that companies and their lawyers should be given initial responsibility for judging the legality of their agreements instead of notifying the Commission first.

If these agreements were challenged later, it would be up to national authorities and courts rather than the Commission to investigate complaints - unless Monti and his officials judged that the case involved a really serious breach of EU competition rules.

As well as devolving some of the Commission's powers to member states, the new approach would put far more onus on complaints from companies and consumers who bear the brunt of anti-competitive practices. It would also set a four-month time limit for the Commission to inform complainants as to whether it intends to investigate their allegations in detail.

EU governments have voiced concerns about the European Commission's proposals to hand responsibility for dealing with some competition cases back to Member States.