The Gazette 1985

GAZETTE

SEPTEMBER 1985

success has been achieved, for example under Articles 12-

17, 30-36 and 95-99 of the EEC Treaty in breaking down

regulatory barriers to free trade within the Community.

In the competition policy sphere too, Article 37 (State

monopolies of a commercial character) has played and

will continue to play a vital role in this respect.

Competition policy cannot succeed if the Member States

distort competition t h r ough their legislative,

administrative and regulatory activities. Article 5 of the

EEC Treaty obliges the Member States to "facilitate the

achievements of the Community's tasks" and to "abstain

from any measures which could jeopardise the attainment

of the objectives of this Treaty". The Member States may

not endanger the full and uniform application of the

principles of competition policy enshrined in Articles 3(0,

85 and 86. This has been confirmed recently by the Court

of Justice in a case concerning French resale price

maintenance in the book trade

Under Article 37, the Commission will monitor and

examine critically the conduct of all subsisting state

monopolies and, where necessary, will not hesitate to call

for changes. New or developing sectors of the economy

will receive particularly close attention and telecommuni-

cations provide a good example of this.

In the air transport sector, the Commission has made

limited and moderate proposals to the Council

and we

await developments. Meanwhile, the Commission has

other legal powers at its disposal to bring about an

opening up of the Community air transport market

should the Council fail to adopt the necessary legislation.

In the area of sea transport too, the Commission has

presented a memorandum to the Council outlining

detailed proposals including and implementing Regulation

and a group exemptions under Article 85(3).

Deregulation in telecommunications is largely a

national issue within the bounds set by Community Law,

but in which competition policy can help to break down

certain impediments to trade between the Member States.

The Commission has begun to act in this area under

Article 86, taking the view that national posts and tele-

communications authorities (PTT's in the Brussels

jargon) are undertakings within the meaning of Articles

86 and 90 of the EEC Treaty and that, for example,

discriminatory practices and attempts to extend a

statutory monopoly to other markets can constitute

unlawful abusive behaviour. The Commission's decision

against

British Telecommunications

which had sought to

prevent telex forwarding agencies in Britain from relaying

messages received from other Member States to final

destinations elsewhere was upheld recently by the Court

of Justice

. This case was unusual in that the appeal

against the Commission's decision against BT was

brought by the Italian Government, while the British

Government intervened as an

amicus curiae

in support of

our decision. The fact that the Court of Justice has upheld

our view of the law is, of course, crucial for our future

policy planning. More recently, the Commission

intervened to oppose plans by the

Bundespost

(the

German PTT) to extend its monopoly to courier services

carrying express mail. The Bundespost agreed to accept

competition from private couriers and gave assurances

that it would not charge below cost for its own express

delivery services

. In another case, the Commission

intervened under Article 37 to ensure that the

Bundespost

did not extend its monopoly to cordless telephones

These cases do not amount to a deregulation policy, but

they illustrate in a particular industry — and an extremely

important one — how the competition rules can be

applied to prevent abusive behaviour in intra-

Community trade. The battle for a competitive, open

common market is waged on a number of fronts —

legislative, deregulatory, sometimes even regulatory. In

all these endeavours, the Community's competition

policy is there to remind the Member States of their

obligations and to promote competitive conditions from

which all stand to benefit. If a regulated industry can

provide scope for competition, I shall not oppose it on

grounds of dogma. My task, as I see it, is to make sure that

scope for competition exists and is maintained and that

actual infringements of the law do not go undetected or

unpunished.

Industrial Property

This area of Community policy has seen important

developments recently with the adoption of the

Commission's long-awaited block exemption Regulation

on patent licensing agreements

. We are confident that

the right balance has been struck between the need to

encourage and facilitate technology transfers and the

requirements of the common market. We shall now set

about applying the Regulation in practice and the

opposition procedure, by virtue of which many

agreements notified to the Commission under the

Regulation, even though they are not automatically

exempt from the provisions of Article 85(1), will obtain

the benefit of the Regulation unless opposed by the

Commission within six months of notification, should

ensure that many more agreements will be dealt with

quickly and will give us the opportunity to resolve

problems raised by border-line cases.

There remain several other industrial property issues to

be dealt with and we are looking in particular at know-

how licensing at present. Goods and technology should

move freely in the common market: these are our goals.

We recognise that they are sometimes difficult to

reconcile and are prepared, as the patent licensing

Regulation shows, to be flexible to ensure that the proper

incentives are provided for the dissemination of

technology.

Mergers

No competition policy worthy of the name can ignore

mergers. In other areas of its activities, the Commission

and other Community institutions have often had to

grapple with the consequences of mergers for social, fiscal

and company law and policy. Yet the Community's

competition policy on mergers is hamstrung. Despite the

Commission's proposals and subsequent efforts, the

support of the Parliament and the Economic and Social

Committee and a widespread consensus that action is

urgently required, the Council has still not adopted a

merger control Regulation. The time will come soon

when, if no Regulation has been adopted, the

Commission will have to carry out its duties under the

EEC Treaty by falling back on the provisions contained in

that Treaty, in particular Articles 85, 86 and 90.

Mergers are not automatically good or bad. The

Commission simply needs to be able to separate the

beneficial from the dangerous as it goes about its task of

instituting and maintaining "a system ensuring that

competition in the common market is not distorted"

(Article 3(0 of the EEC Treaty).

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