Besides being the historic date for the accession of 10 new States to the European Union, 1 May 2004 appears to have a particular significance for European competition policy also. Why? What happened?
Questions for Mario Monti , the European Commissioner responsible for competition!
"The date 1 May ushered in a mature system in which law-abiding companies that do business in Europe will be freed from decade-old legal straightjackets and will benefit from less bureaucracy and a more level playing field in the European single market. Never since the birth of the Union in the 1950s has there been such a radical reform in European competition policy. So, 1 May 2004 was not only "Enlargement Day" but also, dare I say, "Competition Day"! We are talking about a revolution, a smooth revolution of course, in the way competition rules are enforced in the European Union".
Will the reforms give the Commission more power ?
"The reform concerns mainly the enforcement of articles of the Treaty, which require the European Commission to fight cartels and abuses of dominant positions in the market. It profoundly modifies rules, which date back to 1962! Then the Commission had little or no experience in this field and Member States had no national competition authorities. More than 40 years later we know and, more important, the companies also know the Highway Code. They know that meeting secretly in a hotel lobby to fix prices for the vitamins used in everything from cereals to cosmetics and dog food is illegal. They know we can, and do, impose very high fines!"
Is the Commission reactive rather than proactive?
"The reforms give the Commission a greater opportunity to investigate cases on its own initiative where we can see that competition is not working or is working against consumers. One way we can do that is, rather than taking cases against individual firms, to launch investigations on a sector-wide basis. We are doing this in the liberal professions such as architects, dentists etcetera. There is concern that charges in these sectors are very high and that agreements between the professions go beyond what is necessary to ensure professional standards."
That means better protection of consumers?
"Certainly. We want consumer groups to help us here and not just by making complaints against individual firms. If there has been more emphasis in the past on complaints from competitors rather than consumers, we will now be putting the emphasis more on the benefits for consumers. More competition delivers the best deal or consumers."
Do you think the new Member States are ready to shoulder their share of policing?
"Yes. They have all adopted competition laws and enforcement bodies. Let me remind you that in the mid-nineties the Netherlands, one of the EU's founding countries, did not have a system of merger control. Neither did Finland. Now the task of policing anti-competitive behaviour and handling complaints will be better shared by the European family of competition authorities: the national competition authorities and the Commission, linked through the European competition network (ECN)."
What about employment concerns?
"Contrary to a widespread suspicion, aid to rescue and restructure companies is from my point of view not a very socially conscious act. To some extent, it is even antisocial behaviour. This is because one company's problems are simply foisted upon other companies, most often in other Member States. Jobs in one Member State may be saved with public funds, at least for some time, but the labour problem is merely shifted to other Member States. Labour mobility in Europe is still very limited."
Who will benefit most from the new competition laws?
"We are working to ensure that consumers get the best deal in prices and quality. We are naturally not offering the services but ensuring that we create the level playing field so that companies do this on a fair basis. State aid control does not tackle this problem directly but it tries to create fair competition between firms. Those firms who abuse their market power and who deliberately restrict competition at the expense of the consumer are our enemies. Our friends are those who tell us the truth about what is going on and not simply what their own interest is. As a general rule, consumers will tell us that. Our motto must be: competition brings consumers better products, better quality and better services at lower prices."
(Thanks to European Commission Directorate-General for Competition for provision of the information. See for more information about the new competition-rules: http://europa.eu.int/comm/competition )
