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Joaqu í n Almunia
Vice-President of the European Commission responsible for Competition Policy
EU Antitrust policy: the road ahead
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International Forum on EU Competition Law
Tuesday 9 March 2010, Brussels
Dear ladies and gentlemen,
It is a pleasure to join you here for dinner at this great museum. At times during the past two and a half years, experiencing the financial crisis from the heart of the European Commission seemed like a " surreal " experience. But being here tonight puts that into perspective. I refer of course to the paintings …
Indeed, I am delighted to meet such a distinguished group of practitioners, judges and academics in the field of European antitrust and merger law. Together with the European Commission, the National Competition Authorities, European and national courts, you have helped shape a world-class competition regime of which we can be justly proud.
Alexander Italianer spoke to you this morning about the challenges that we face at this point in time. These challenges – in particular from the financial and economic crisis – are significant. But I believe they also present opportunities.
Competition policy - the big picture
Competition policy is a tool that can help us overcome the crisis. In the heat of the crisis it helped minimise the distortions created by government intervention in the markets, preserved the Single Market, and averted protectionist moves at national level.
Going forward, competition policy, and in particular State aid policy, are key to helping achieve an exit from state support, and a return to normal market functioning.
More broadly, competition policy is fundamental to the Commission's new EU2020 strategy to achieve a new period of growth and dynamism in Europe.
The EU2020 strategy aims to focus Member State and Commission action on four key principles: innovation, competitiveness, protection of the environment and social cohesion.
I believe that competition policy can contribute significantly to each of those objectives. Effective competition leads companies to innovate , to adapt their business strategies to customer demands and to make investments for the longer term.
Competition on the merits gives companies the tools to succeed, in Europe and internationally, by enhancing their competitiveness .
Competition and competition rules contribute to the efficient allocation and cost-effective use of increasingly scarce resources – for instance energy sources – helping to preserve the environment and encouraging necessary long-term investments.
And let's not lose sight of the fact that society benefits from effective competition: it helps to create the conditions for long-term growth by companies – including SMEs. It eliminates the "private taxation", which is what the prices practised by companies protected from competition amount to. And it gives consumers the benefit of lower prices, better choice and better quality of goods and services.
EU Antitrust policy: looking ahead
Of course there are more specific challenges – and opportunities – that arise in developing and enforcing European competition policy: I believe that the Commission's success in this field must be built on sound legal and economic analysis, as well as on fair and transparent procedures.
Sound legal and economic analysis
I should say at the outset that I am impressed with the professionalism and quality of the work I see coming out of the Competition Directorate in the Commission.
What we can see is a modern approach to antitrust enforcement, which focuses on preventing or putting an end to consumer harm, rather than protecting "competitors" as such.
This approach leads us, first, to maintain enforcement against cartels as an important priority: these practices are detrimental to customers – be they industrial or final customers – and they prevent the emergence of new and innovative companies on mature markets.
Second, for other antitrust infringements (e.g. abuses) and for mergers, a modern approach to competition enforcement means that our investigations must be based on sophisticated economic analysis, but also on a qualitative knowledge of the market realities and on a good understanding of customer demands. This enables the Commission to focus its enforcement efforts to where they matter most.
Third, our competition enforcement – in particular in the field of mergers – must seek effective, viable, and sustainable solutions to remedying competition problems.
What I have already witnessed is the huge amount of detailed work which goes into the legal and economic analysis that underpins the Commission's work.
Alongside competition enforcement, my first step will be to push through necessary updates to the legal framework – notably to support enforcement at Commission and national level, and provide clarity and legal certainty for business.
We will soon need to finalise the legislative projects on vertical agreements, cars and insurance.
I believe that on "verticals", we can achieve a good compromise between, on the one hand, the need to preserve efficient distribution models, and, on the other hand, the necessity to ensure cross-border trade in the internal market, notably through the development of on-line sales.
And we are now starting an important process on "horizontal agreements", with what I hope will be significant clarifications notably on information exchange agreements and standardisation agreements. The latter I see as a key driver to facilitating innovation.
On top of these projects, we will need to consider what further measures may be appropriate to consolidate the enforcement framework, for instance when reviewing the Antitrust and Merger Regulations. Regarding private enforcement, I will consider very carefully all the opinions on the table since our first draft and the report of the Parliament, before putting forward proposals.
Finally, in terms of cooperation with other competition authorities in the EU, we will examine ways of deepening and extending cooperation with National Competition Authorities in the context of the ECN, for instance through exchanges of know-how or initiatives to promote coher ence in our enforcement system. Merger control is one area which may benefit from closer cooperation and coordination.
And of course I am keen to pursue bilateral and multilateral cooperation with international competition enforcement agencies: it is in the interest of us all to ensure open and fair competition across our jurisdictions and to avoid reaching different solutions to the same competition problems.
Fair and transparent procedures
Let me now turn to the procedures that the Commission is following when enforcing competition rules, as I am fully aware that there has been recent criticism on matters of due process in the field of antitrust.
What we have in the EU, in common with most Member States, is an administrative system under which the Commission investigates cases and, if necessary, takes decisions against companies.
This system has allowed the Commission to build up considerable expertise in different sectors of the economy, so that enforcement can take account of market realities.
But is it fair on the companies under investigation?
I believe that our administrative system compares positively and favourably with many other systems. Indeed, when the Commission decides to act, this decision is not only extensively reasoned and subject to the Courts' judicial review, it also comes after a process that fully involves the companies concerned.
During this process, companies can fully defend themselves on the Commission's concerns: they have the right to be heard both orally and in writing; they have access to the Commission's file and their procedural rights are guarded by the Hearing Officers, who report to me and the College.
Some argue that the parties' evidence sometimes falls on deaf ears – but, in practice, cases are often amended after the parties have been heard on the Commission's concerns. Some cases are even dropped altogether.
And this is for me an essential feature of due process: the Commission must act as an impartial and objective public authority, which entails that its initial views can effectively change once it has heard what the companies have to say.
The Commission's decision-making process is aimed at ensuring such impartiality.
Within DG Competition already, cases involving complex economic analysis gather officials of various profiles: case teams, policy coordinators and members of the Chief Economist Team, on top of the DG's management. Difficult cases are subject to a "peer review" panel and the Commission's Legal Service provides legal advice all along the process.
Additional "safeguards" include a review by national competition experts sitting in the Advisory Committee, and a review by other Commission directorates.
But at the end of this extensive process, Commission competition decisions are adopted not by DG Competition, nor by me, but by the College of Commissioners – 27 appointed Commissioners from across Europe – who have sworn to be and are genuinely independent of national, political and business interests.
And still, I believe that no one considers that a cartel, an abuse of dominance or a merger case is over until the EU Courts in Luxembourg h and down their final judgment.
But there is always the need to consider possible improvements.
This is why I draw your attention about the Best practices guidelines put out to consultation earlier this year, and trust that they will contribute to improving transparency, efficiency and predictability of our procedures, for market players.
This process was also conducted in the field of merger control a few years ago and allowed the Commission to achieve practical but important improvements to the process. I believe that the same can be done in the field of antitrust.
To conclude, while I believe that our administrative system is sound, I am always open to listen to constructive criticism with a view to ensure that our procedures are conducted in an objective and impartial manner.
I hope it is clear to you that I see EU competition policy as an essential tool to achieve the EU's strategic agenda.
Contrary to what is sometimes suggested, there can be no sustainable growth within Europe without effective competition in the internal market. This is what drives companies to innovate and to expand, for the benefit of consumers, businesses, and the European economy as a whole.
I believe that those goals can be achieved through robust – but fair – enforcement policy, a sound legislative framework, and competition advocacy.