COMPETITION POLICY

by Altiero Spinelli

SUMMARY: The Parliament considers the Commission's periodical report on competition policy, a matter reserved exclusively to the Community. The debate proceeds on the basis of a report

re ared b Mr Damseaux on behalf of the committee on Economic and Monetary Affairs. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 12 October 1978)

Mr President, the Commission's policy on the subject of competition is, traditionally, something which is faithfully carried out and on which that institution reports each year to Parliament and to public opinion. Although there can be a lot of comment on details, the fact remains that the basic purpose of the policy is to maintain a watch on competition and to see that it runs on the right lines. I think policy on competition can be compared with the work of keeping the streets of a city clean and in good repair for the benefit of traffic.

If, however, the city is hit by fire, earthquakes or other disasters, it is more thin ever necessary to clean and maintain the streets, otherwise there may be epidemics of disease and it may be impossible for traffic to circulate. On the other hand it is obvious that in such circumstances, the work of cleaning and maintenance has to be fitted in with the further and more urgent task of rebuilding the city.

In my view, the basic weakness of the policy on competition, as practised by the Commission, is that it goes ahead on its own, without paying much attention to related considerations and now and then even goes against the decisions of the Commission, as on the occasion when the 'crisis cartel' was first authorized by one section of the Commission and then denounced as dangerous by another which goes to show that the Commission's policy is rarely based on an overall view.

I do not intend to continue with these comments, because I should merely be repeating what has been said by other speakers, but I should like to put them into specific proposition to ensure that the resolution of the House reflects them. I shall accordingly move and submit to the vote two amendments which have already been distributed, one dealing with paragraph 1 and the other with paragraph 14. In doing so, I shall endeavour to get it recognized that, while competition policy performs a task which is vital if the market is to function properly, it must at the same time form part of an overall Community economic policy which has been designed to overcome the crisis, promote harmonious development and limit the excessive powers of large undertakings in dominant positions. The inclusion of this in the policy on competition would point it in a direction in which it would never go if those objectives ere ignorea and if the only object were merely to ensure the continued operatwion of the competition rules which

have been laid down.

At the same time, when I see that, further on, in paragraph 14, the Commission is being asked to make the necessary modifications in the services responsible for certain matters so that they may cope with the growing number of cases to be dealt with, I take the view that the question is not merely one of coping with more cases but also one of investigating them in a manner which is different from that normally adopted, i.e., enlisting the help, in their investigations, of departments of the Commissione who view the problems involved from a standpoint other than merely that of compliance with the rules of competition. In the other amendment, I accordingly propose that these cases should be considered in the light of the general economic objectives of the Community. In submitting these amendments, we want to indicate that we are rather dissatisfied with the way in which the Commission has hitherto conceived its task of carrying out competition policy, and we express the hope that this task will in future be co

nceived in rather more comprehensive terms.

I cannot refer to all the paragraphs which deserve approval and support, but here are two other questions on which the Commission must be asked to think in more specific and somewhat different terms.

There is a reference at one point to transnational companies. Of course, the alphabet is everyone's property and everyone can use it as he likes, but, since the expression normally used for these companies is 'multi-national companies', I think we ought to use it so that we know we are talking about them and not about any others. But this is a detail. All that is said about the transnational companies is that they must pursue their activities within the framework of appropriate rules which strike a balance between the obligations that have to be imposed upon them and the need to avoid discrimination against them. This is all very well, but it does not amount to much and falls short of what ought really to be said. Yes, we have to agree that there should be no discrimination against the multinationals (though, in actual fact, I think there is discrimination in their favour), but I should like to see things put more dearly and the paragraph but I should like to see things put more clearly and the paragraph wor

ded like this:

Recalls tbat multinational companies must pursue their activities within the framework of rules which, while a-voiding discrimination against them, make them subject to obligations and controls to eliminate the possibility of abuses arising from their very nature as multinational companies.

I suggest this because what gives rise to concern in the case of these companies is that, in their capacity as multinational companies, they are in a position to escape certain obligations and controls, whereas it is essential that they should be subject to them and, in consequence, further the public aim of economic development and not merely the interests of their shareholders. I think this ought to be said, because the present wording of the paragraph is unsatisfactory.

Finally, I come to paragraph 2 1, in which the Commission is reminded that if the creation of 'crisis cartels' is countenanced, this may jeopardize the ultimate restoration of free competition. I think something more needs to be said about this. The danger undoubtedly exists. In my opinion, the most serious aspect of I crisis cartels' is this: when, in any obvious situations of crisis, an effort is being made to prevent the collapse of an industrial group, there can be no dispute about the need to suspend certain competition rules and to conclude certain agreements which, whether good or bad in themselves, are nevertheless necessary and are designated 'crisis cartels'. When one is ill, one has sometimes to take dangerous medicines, but they have to be taken if one wants to get better. However dangerous they may be, they tend to be in constant use, in one form or another, and, generally speaking, when one is told that they are not to be taken, one gets hold of them by hook or by crook.

I well remember the arguments and discussions I had with the leaders of the German iron and steel industry, who would not agree that, to deal with a crisis situation, the Commission should impose certain restrictions on the free market and on open competition for iron and steel products. They assured us in confidence: 'Don't worry about it, leave it to us: we'll reach some understanding among ourselves without asking the High Authority or the Commission to do it for us'.

This is why I think we ought to do more than say that they are dangerous and say when such agreements are necessary and, if so, under what conditions. In addition, there should be formal authorization for and supervision of them and it must be for the Commission to take the decision to dissolve them in order to provide the best possible guarantee that what began as a 'crisis cartel' will not become a permanent one. I submit therefore that this paragraph should be phrased in the following terms:

Calls upon the Commission to submit urgently a proposal for a regulation based on Article 235 of the EEC Treaty, on the subject of crisis cartels laying down the circumstances and form 5 in which they are admissible and empowering the Commission to authorize them, lay down conditions and time limits and dissolve them.

We want the executive body of the Community to have the power to authorize, lay down conditions and ultimately dissolve: in other words, we want the maximum protection against the dangers inherent in this measure, in case it is required.

If we agreed on the adoption of these four paragraphs we should, I believe, give the resolution a different and less superficial character, as well as a lead to the Commission. If these amendments are accepted, we shall vote for the resolution, otherwise we shall not vote for it.

There is one further paragraph to which I should like to draw attention, though with some reluctance, without proposing any amendment.

In paragraph 15, Mr Damseaux states that a proposal for a directive is in course of preparation on greater transparency in the financial relations between the States and undertakings. It is the right and duty of the Commission to prepare these things. I should like to remind the Commissioner that when his President began his term of office he said to us: we shall treat this Parliament as though it were already an elected Parliament and we shall discuss our proposals with you so that we can secure the greatest possible measure of agreement before forwarding them to the Council. It is clear to me that this proposal is already in the hands of the governments and that you are already discussing it with them. Whether the outocome is good or bad, the fact remains that they are working on them and the only people not taking part, the only people not yet in the picture, the only people who, thanks to hearsay, have a vague idea about them but still know nothing positive are the Members of this European Parliament. I

think that, before we finally agree on the wording of a resolution, it would probably be worthwhile having a full-scale and thorough debate on the issue, which is an important one and, in my view, one of far reaching significance. Unlike Mr Martinelli, I believe the Commission should try to strengthen the powers it possesses (and it would not abuse them when powers it possesses (and it would not abuse them when exercised). Since this is, however, 'delicate ground' where there will be plenty of opposition, the wisest course is to secure early and substantial agreement in this House. But this is a political judgment which goes far beyond the resolution in itself.

We have submitted four amendments, and we shall vote for the resolution only if the amendments are adopted.