Radical EU anti-trust reforms spark Community business fears

Date: 28/11/02

By Peter Chapman

EUROPEAN businesses have warned the European Commission and member states to work together to ensure that radical new competition rules do not result in confusion for firms.

The warning follows a deal by EU competitiveness ministers that will let the Commission hive-off swathes of its day-to-day work on cases to national competition authorities and courts.

Mario Monti, the competition commissioner, said the first major reforms to 40-year-old anti-trust rules would allow the Commission to focus its resources on the fight against price-fixing and other agreements that are most harmful tocompetition.

The linchpin of the changes, which do not affect merger policy, is the end of the so-called notification system. This resulted in companies from across the Union flooding the Commission with requests to approve agreements such as joint marketing or distribution deals.

In future, companies will be expected to do the analysis themselves - and run the risk of legal action in member state courts if rival companies or the public think the agreements fall foul of competition law.

Monti says coordination on future anti-trust cases will be guaranteed via a new network of national and Commission watchdogs.

But UNICE, the European business leaders' organisation, warned that the 'risky' reforms could still lead to 'inconsistencies within the system which harm the internal market and reduce legal certainty'.

Its competition advisor, Erik Berggren, said national authorities and courts must ensure they work together with the Commission to avoid divergent decision-making.

He said national authorities and courts should be ready to suspend or end their own proceedings, and agree for the Commission to step in if this would prevent harmful duplication.

National authorities and the Commission should also provide clear and binding rules on allocation of cases to avoid the risk of repetition and 'forum shopping' - where litigants target courts where they think they have the best chance of success.

Under the new system, Monti has also set out in writing the Commission's existing right to break up parts of companies it believes are guilty of breaching anti-trust rules.

He has also claimed the right to raid the private homes of company executives it believes might have vital evidence of price-fixing agreements. Currently, his officials are allowed only to raid firms' premises.

The Commission nearly created a minor diplomatic crisis after officials unveiled a press release welcoming the 'landmark' decision - before ministers had actually began to discuss the issue. The statement was withdrawn, only to be rolled out again a few hours later.

European businesses have warned the European Commission and Member States to work together to ensure that radical new competition rules do not result in confusion for firms.