The chemical industry's response and proposals on the Commission's White Paper regarding the Modernisation of the Rules implementing Articles 81 & 82 of the Treaty (23/09/1999)

THE CHEMICAL INDUSTRY’S RESPONSE AND PROPOSALS

ON THE COMMISSION’S WHITE PAPER REGARDING THE MODERNISATION OF THE RULES IMPLEMENTING ARTICLES 81 & 82 OF THE TREATY

23 September 1999

Detailed comments on the White Paper are to be found in the Appendix.

POSITION PAPER – POLICY STATEMENT

The publication of the White Paper regarding the modernisation of the rules implementing Articles 81 & 82 of the Treaty has been considered with great interest by CEFIC. There have been many and significant changes since the common market came into being and it is, therefore, a positive step for the Commission to evaluate the system in place and means at its disposal to exercise the powers granted under Articles 81 & 82 of the Treaty and effectively promote competition within the EU.

The forthcoming enlargement of the EU is an additional major incentive to undertake a review, as it is essential that such a core policy is effectively and coherently managed in the future enlarged Single Market.

CEFIC has already mentioned several times its support to a single regulatory system, the "one-stop-shop" developed over the years by the Commission (See the 1998 CEFIC Position Paper "EU Competition Policy : a blueprint for the chemical industry in the next millennium"). Competition law is one of the areas where the Commission has successfully demonstrated its ability to deploy the powers granted by the Treaty effectively, and to the benefit of all.

The chemical industry understands in general terms the analysis of the Commission on the current situation and acknowledges the problems of administration highlighted in the White Paper. Clearly adaptation of and transfer of resources to the Commission would be increasingly necessary to allow the Commission to meet the challenges.

Nevertheless, CEFIC is unable to accept a number of the remedies suggested by the Commission since, if put in place, these would constitute a backward step in the "construction européenne". This conclusion is prompted by the need to respect the achievements of the EU and the principles regarding the Single Market, the need for coherent application of EU competition law, and legal certainty for companies.

a) Single Market :

The EU competition policy and its management by the Commission has greatly assisted in the establishment of the Single Market which represents an outstanding achievement. CEFIC strongly believes that implementation of the Commission proposals included in the White Paper could undermine the Single Market and represent a backward step by, in effect, nationalising in an excessive and unjustified way the application of Articles 81 & 82.

The chemical industry has always supported the promotion of the Single Market, including the introduction of the Euro. Most of the chemical companies, including SMEs, have taken advantage of the Single Market to organise their markets EU-wide. Therefore, a re-nationalisation of powers as proposed by the Commission will inevitably impact negatively not only upon the Single Market, but also on the competitiveness of the chemical industry located in Europe.

b) Coherent application of EU competition law, throughout the Community :

The Commission should continue to play its key role in ensuring a coherent application of competition law at EU level in a dialogue with European companies, consumers and European citizens.

This means, necessarily, retention of the good and successful single regulatory system, the " one-stop-shop" (for example when dealing with industry agreements). This also means that any new system to be put in place should be effectively and centrally managed by the Commission, in order to maintain cohesion and ensure consistency in decision making, which would not be the case with the current proposals of the White Paper, aimed at introducing a very wide decentralisation of the application of Community rules.

It is the chemical industry’s conviction that the best guarantee for a consistent application of an harmonised set of rules, is to keep such application and control with one management structure. Any opposite approach would raise a vast number of complex questions (for example : who is competent for what ?). The latter approach would also require heavy consultation mechanisms which would, paradoxically, increase bureaucratic burden, whilst losing the necessary legal and coherent application of Community law.

c) Legal certainty :

It is a legitimate expectation of the chemical industry that cases to which Articles 81 & 82 apply, be effectively dealt with at EU level. In addition, any reform should result in a satisfactory level of legal certainty for companies. These two considerations are essential for industry, whatever system be applied.

Unfortunately, the system as proposed in the White Paper would take account of neither of these considerations since it would gradually lead to a system into which European law would no longer structurally prevail, but would move towards a complex recognition system inspired by international private law techniques.

CEFIC proposes for the Commission’s consideration an alternative system to the one outlined in the White Paper. This system is based on the principles listed below which CEFIC would be happy to discuss further in details with the Commission.

In any event, Member States must recognise that, whatever system may apply, including the current one, the Commission needs clear hierarchical and legal procedures, and proper support and resources to operate that system. This is particularly true with regard of the forthcoming enlargement of the EU.

CEFIC’s proposed system is based on the following :

One-stop-shop system and self assessment by companies; therefore, there would no longer be an a priori authorisation system (companies should assess the legality of their agreements under their responsibility and within the guidance of a clear Community set of guidelines and rules). As a consequence, as regards the application of Article 81(3), this means the ending of the current notification system whilst allowing the voluntary presentation to the Commission of agreements in exceptional / important cases for which objective criteria should be defined.

Articles 81(1) & 82 : same application as currently, with a limited role by national authorities under effective control of the Commission.

Intensified ex post control : to be balanced against the rights of defence; need to ensure fairness and due process

Detailed comments on the White Paper are to be found in the Appendix.