Ethical requirements. The Monti reform concerning European competition policy applied to agreements and abuse of dominant positions must be successful because it is based on an ethical requirement. Speaking of ethics in such a legal and technical field may seem strange and incongruous, but it is not so if one considers that the main aim of competition rules is to protect consumers, the citizens, against abuse by the powerful: the Davids against the Goliaths of this world. It is obviously out of the question to demonise companies, which are the very fabric of Europe. What is Agence EUROPE, if it is not an enterprise? But it is imperative for there to be rules to prevent them from making abusive use of their power, with authorities that ensure these rules are respected and which penalise any deviation from the rules.
What has happened to EU competition policy? The provisions in force since 1962 are not adapted to the situation in this new millennium, and are no longer effective. Karel van Miert had launched reform with the White Paper of spring 1999. Mario Monti opened the operational phase by proposing the new regulation. From this, however, one must certainly not deduce that the authors of the 1962 regulation were wrong. On the contrary. At the time, most of the Community countries did not have any national competition authority. Several did not even have a law prohibiting agreements or abuse of dominant positions. Anything and everything was allowed, and consumers were not protected. Entrusting the European Commission with the task of banning and directly sanctioning unlawful agreements was a masterstroke in the legal desert of the time. Today, things have changed. Each Member State has its own competition authority. Several regulations or opinions and case law of the Court of Justice clearly show what is lawful and what is not. There is now a "competition doctrine" in Europe. In parallel, the Community's geographical extension, the multiplication of the number of companies and the links between them, globalisation and single currency have radically changed the economic landscape.
From bureaucracy to effectiveness. The compulsory notification to Brussels of all agreements and their individual examination by the Commission services no longer has any significance. Only the agreements which are nearly always obviously innocuous are notified, while the really harmful and banned cartels remain secret. They must be sought out and disclosed. The Commission services spend a large part of their time analysing innocent agreements, and do not have sufficient human or legal resources to ban the cartels. The reform guideline arises quite naturally from these considerations to: abolish the compulsory notification of agreements between companies; entrust national competition authorities with the application of "exemptions to the ban" and the evaluation of agreements that deserve examination; focus the Commission's efforts on cartels and strengthen its powers of investigation. That is what reform is all about. As the head of the "legislation" unit, Emile Paulis, explained, the notification system and the Commission monopoly today "are only bureaucracy". Commissioner Monti noted that "we and enterprise are being weighed down by tonnes of red tape".
If things were simple The guideline is therefore simple, but its implementation is not. How can one prevent competition policy from being "renationalised"? How can one prevent the differences between legal traditions, mentalities and economic situations from resulting in different decisions and judgements? How can one ensure there is consistency between the different national policies? The Commission's response comes under three points: a) by providing for the authorities and the national courts to directly apply the "Community law" as soon as the examination has an influence on intra-Community trade. According to Professor Monti, national laws are becoming increasingly convergent, but this convergence will never be total or perfect. That is why the direct application of Community legislation is preferable to a long and difficult process towards harmonisation; b) by creating a network of national competition authorities, coordinated by the Commission; c) by allowing the Commission to keep the ability to take certain decisions itself, when it considers the time is right, by withdrawing the issue from the national authorities and issuing "opinions" addressed to these same authorities.
Second aspect: How can one ensure enterprises have legal safety and that their rights are guaranteed? First of all, the principle whereby unlawful agreements are fully null and void remains intangible. The enterprises (and their lawyers) have sufficient elements to assess what they are doing. The block exemption rules, the interpretative communications and the "guidelines" which indicate the Commission's guidelines for different kinds of agreement, offer and will offer precious elements on this.
In addition, the enterprises will keep the possibility of asking the Commission for clarification, and the role of the senior official who, within the Directorate-General for Competition, ensures that the rights of companies are always respected, will be strengthened. Mario Monti declared that the legal safety of companies will be greater than what it is at the moment. He added: companies will become aware that, sometimes, with the rules in force, legal security is more apparent than real. At the same time, as we have already said, the Commission is called for its powers of investigation and inspection to be reinforced. Given all the tricks used by certain companies and their decision-makers, the Commission asks to be allowed to place under seal the offices visited in order to prevent documents from being manipulated or from disappearing, and to carry out inspections no longer only at the registered office of the companies but also - under the control of national judges - at the homes of company directors.
A good idea or a concession made to the Germans? It is obvious the new regulation poses many other questions. The suggestion of a "register of agreements" caused a certain amount of emotion. The Commission requests the power to create this register when the compulsory notification of agreements disappears. Opinions differ in the Commission's services themselves: some say it is a good idea while others see it as a "concession" made to the Germans. And it is only a possibility: the register may never see the light of day. At any rate here is an element for the reflections and negotiations to open soon, between the Fifteen and at the European Parliament, and which will be neither simple nor brief. The Commission services are tabling on the coming into force of a regulation early 2003.
An instrument. At any rate, the new regulation will only be the instrument to the service of a policy. What is essential is the policy itself, not only encompassing the two sections covered by reform (ban on agreements and abuse of dominant positions) but also the two other fundamental sections: the prior authorisation of concentrations and the control of State aid. The principles are clear, and Mario Monti recently summarised them: competition policy "favours the quality and the variety of goods placed on the market. It encourages technological innovation and economic performance. It promotes fair pricing for users (…) The competitive game gives European citizens a better quality of life and greater purchasing power".
Behind these simple principles, how many difficult, and sometimes even contradictory, choices must be taken into consideration. How many doubts! The indispensable and inevitable rigour must be accompanied by the requirement of knowing the significance of certain practices, their political and their psychological scope. For two aspects, our personal position is quite clear: - for culture and for sport. Here, the less Commission intervention there is the better. For example, what is this thing about a ceiling for aid to cinema at a level that would not have allowed Belgium to produce the film that won the Palme d'Or in Cannes last year? And yet, for the small national cinema industries, the solution is simple: setting a ceiling for lawful aid in absolute figures and only beyond this figure use the method of percentages. We should put our trust in Jean-Michel Baer to repress certain impulses to take over control by other services. We shall not go into the question of sport now as something is already happening in the right direction, it seems. So much the better - but there is still need for vigilance.
Forgetting Cicero? Other than in the fields of sport and culture for which the Treaty explicitly recognises the specific and partially exceptional nature, nothing is simple. Alongside firmness without complacency, some issues call for special tact and an overall political vision: it will be enough to cite the Landesbanker affair in Germany, which will have a direct influence on the Bundesrat's vote on the Treaty of Nice. What a responsibility!
One can but suggest to Mario Monti, on a general level, that Cicero's maxim, "Summum jus, summa injuria!", should be borne in mind. The depth of this maxim is almost unfathomable: and it should therefore be meditated on continually. Those who study the issues and prepare the decisions can do without it. He who has the ultimate responsibility cannot.
Ferdinando Riccardi