The Gazette 1985

GAZETTE

SEPTEMBER 1985

Article 86

The most important recent application of Article 86

was in the

IBM

case in which the Commission's

proceedings were suspended last year following an

undertaking by IBM to modify certain of its business

practices in the EEC. Without going into the complicated

details of this case, I should like to focus attention on its

illustration of two important features of our law and

policy under Article 86. Firstly, we sometimes make

product or service market definitions which are charac-

terised as narrow, in circumstances where an undertaking

attains market power through the placing on the market

of its own products and services. In the

IBM

case the

Commission took the view that IBM had a dominant

position in the supply of the two key products for its

System/370 range (the central processing unit and the

operating system) with the result that it was able to

control markets for the supply of compatible products. In

the car industry, the Commission has taken the view that

a manufacturer may have a dominant position for the

supply of certificates of conformity for its own vehicles

where such certificates are required by national law for

the registration of an imported vehicle for use on the

roads. The second point illustrated by the

IBM

case is the

Commission's concern that technology should be as

widely disseminated as possible, within the limits of

industrial and other property rights, and that companies

seeking to take advantage of the economic opportunities

of the computer age should not be inhibited by the actions

of dominant undertakings.

For the rest the concerns expressed in Article 86 cases

have not varied greatly over the years: dominant

undertakings should not be allowed to abuse their market

power further to reduce or distort residual competition or

to interfere with the market integration goal. By way of

example, the Commission has found abuses to have

consisted in discriminatory, excessive and predatory

pricing, tying by various means, refusals to deal and

interference with trade between Member States. In the

specific field of mergers, regard is had to the extension or

reinforcement of dominance. The Community competi-

tion rules do not object to size or market power: they seek

rather to impose certain obligations on those

undertakings which are shown to have dominant market

power.

Enforcement

The Commission, and particularly its Directorate-

General for Competition, cannot be expected to shoulder

the whole burden of enforcing the Community's antitrust

rules. As developed over the years in the Court of Justice's

case law and the Commission's own endeavours, these

rules now form a large corpus of law applicable to a wide

variety of situations.

Enforcement of Community law is shared between the

Commission, custodian of the Treaties

, and the courts

and tribunals of the Member States which apply directly

effective provisions of Community law. Articles 85 and 86

are applicable by the national courts

and all over the

Community these provisions are frequently raised in

litigation. However, the time has come to decentralise

enforcement further. I shall look briefly at the types of

case which could be dealt with at national level and then

at what needs to be done to provide a legislative

framework for decentralisation to prevent disparity of

treatment and forum shopping as between the Member

States.

274

Firstly, where the law is well-established and no

complicated transnational fact-finding or economic

analysis requiring knowledge of market conditions in

several countries is required, national courts should begin

to assume more of the enforcement burden and the

Commission will have to consider, in appropriate cases,

informing a complainant whose case seems plausible that

the Commission is not the most convenient forum for his

action. This is tantamount to declining jurisdiction, at

least initially. The Commission could not renounce its

jurisdiction definitively and it might be necessary for

various reasons to take up such a case at a later stage. The

Commission would remain available to the national court

for any assistance the Commission might be able to give in

accordance with the law and the Commission's policy of

full co-operation with all national bodies. In certain cases

in which the Commission felt called upon to comment on

issues raised in a case which had implications for the

general Community interest, it could intervene in a case as

amicus

curiae

The Commission would devote its

scarce resources to cases involving policy considerations,

in which the law is not settled, where use of the

Commission's fact-finding powers is more likely than

national discovery procedures to uncover the evidence, or

simply where the Commission considers that in the

Community's public interest it should take up a case. The

Commission would also maintain its monitoring of

competitive conditions in the common market and would

undertake investigations on its own initiative where

appropriate. In addition, the Commission would remain

the only body empowered to grant exemptions under

Article 85(3)

Certain rules would have to be common to all the

Member States before the Commission would view with

confidence any further decentralisation of the enforce-

ment of competition law. In several Member States courts

have decided that an action for damages or an injunction

may be brought for violations of Articles 85 and 86

Plaintiffs throughout the Community should face a

common core of rules relating to procedures, remedies

and the seeking of assistance from the Commission. In

this way, the principle of equal treatment throughout the

Community would be respected and forum shopping

discouraged. I am particularly sensitive to the dangers of

providing better justice for parties with the money and the

time to shop around the Member States for the best

judicial deal. There must be no second-class justice under

Articles 85 and 86. This means in practice that some

harmonisation is necessary in such fields as interim relief,

damages, privilege, discovery and other fact-finding

procedures. This list is far from exhaustive and I am

aware that this is likely to prove a controversial project.

Nevertheless, decentralisation is necessary and a common

framework for the application of Community rules is

indispensable. On top of this whole structure will sit the

Court of Justice, available to national courts via Article

177 of the EEC Treaty. The Court will ensure in the final

alaysis that the law is applied and developed in a uniform

manner. The proposal for a court of first instance on

issues of fact and law in Commission competition

decisions, with final appeals on points of law only going

to the Court of Justice, recently put forward in the

Commission's programme for 1985

, is designed to

alleviate some of the burden placed on the Court of

Justice by the quantity and complexity of cases under

Articles 85 and 86.