ECONOMY

Commission will act as adviser on competition cases

Brussels – The European Commission will be using an expanded arsenal in its fight against cartels and monopolies, which, as was shown in the recent case against Microsoft, is one of its most important, and effective, activities. As Commission officials explain, current anti-trust legislation, passed about 40 years ago, is from a time when «Europe, both its enterprises as well as its authorities, had little experience in competition policies.» A more effective legal framework, now heavily tilted toward consumer protection from monopolies and company collusions, will be put into place on May 1 with the application of Regulation 1/2003. A main feature of this new law is that companies are no longer obliged to report mergers and acquisitions to the Commission. Instead, they must report to a «European Competition Network» within the framework of which national competition authorities and the Commission will cooperate by exchanging information, including proof of monopoly or collusion. If an enterprise applies for a derogation from EU regulations, it can submit its demand to its national competition authorities and not to the Commission. National authorities and courts can also decide upon the demand, within the limits prescribed by Article 81 of the EU Treaty. The criteria on preventing monopolies and collusion remain the same. That is, the main aim is still to protect trade between EU member states. The Commission issued yesterday several explanatory directives for use by the enterprises and national authorities. Commission’s advisory role At the same time, citizens and enterprises can use national courts instead of the Commission to denounce illegal practices. The role of the Commission will be to clarify aspects of EU law. It can also provide guidance to enterprises contemplating a merger or some other form of partnership. The Commission will, in these cases, issue unofficial «letters of guidance» to the enterprises concerned. Dealing with mergers and acquisitions has caused several problems for the Commission in recent years and has overextended its resources. It has also seen several of its decisions overruled by courts. Thus, it has decided to shift the burden to state authorities.