Monti to unveil competition reform blueprint

Date: 21/09/00

By Peter Chapman

MARIO Monti will next week reveal his long-awaited blueprint for reforming the EU's antiquated anti-trust rules, which he claims are drowning his overworked cartel-busters in a sea of paperwork.

The move follows the landmark White Paper on the issue published by Monti's predecessor Karel van Miert, which argued that the European Commission should leave minor competition cases to member states so that hard-pressed officials could concentrate on policing 'hard core' Union-wide cartels.

Officials are keeping details of the Monti proposals under wraps, but an aide said there would be few deviations from the Van Miert plan published last year. "The spirit of the White Paper has been preserved," he said.The linchpin of Van Miert's plan was a proposal to abandon the 'notification' system which places the biggest burden on the competition officials.

Under the current regime, the EU executive has the sole power to exempt companies from tough Union anti-trust rules outlawing cartels and collusion if it considers that their agreements with rivals are too small or insignificant to damage the single market.

The result is that businesses inundate the Commission with notifications of minor business deals seeking assurances that their activities pose no threat to competition.

The new regime first suggested by Van Miert would make companies and their lawyers directly responsible for determining whether their activities comply with EU rules, although their findings could be challenged in court by rivals or consumers. The new system would also leave it up to national regulators and courts to hear such complaints, although the Commission would reserve the right to intercede in important cases.

Van Miert's White Paper attracted widespread support from industry and member states sympathetic to the Commission's desire to free up resources for the fight against big cartels. Such major trust-busting investigations can result in huge fines being imposed on the firms involved.

But critics fear problems could emerge once the proposals are transformed from theory into practice. Erik Berggren, a competition expert with European employers' federation UNICE, said firms wanted to retain a system which allows them to seek prior approval of their agreements.

They also fear that member states' courts may lack competition policy expertise and could add to legal uncertainty by interpreting the rules in conflicting ways. "Basically what we are worried about is national courts applying competition law," said Berggren. "We feel that the result will be different decisions."

Before it is put onto the EU statute book, the draft regulation faces a fresh round of scrutiny by governments and MEPs, although the European Parliament will not have a formal right to amend it. MEPs and the Commission will, however, co-host a conference on the issue in Freiberg, Germany, in November.

Officials say the event will bring together a wide range of interested parties and authorities to discuss the reforms. Monti's aides say the Commissioner hopes to make significant progress on the proposals before Christmas so the regulation can be adopted early next year after Sweden takes over at the EU helm.

At the end of September 2000, Mario Monti, the European Commissioner for Competition, will reveal his long-awaited blueprint for reforming the EU's antiquated anti-trust rules.