SPEECH/07/425
Neelie
Kroes
European Commissioner for Competition
Policy
Competition Policy: Achievements in 2006; Work
Programme in 2007; Priorities for 2008
European Parliament Economic and Monetary Affairs Committee
Brussels,
26th June 2007
Madame le Président,
Honourable Members,
Thank you for inviting me again for our second exchange of views this year on competition policy. As is our tradition, I am also pleased to present to you the 2006 Annual Competition Report, hot off the press. I greatly appreciated the opinion Parliament expressed last week as concerns our 2005 report – and am grateful to Mrs Ferreira and this Committee for the hard work put into it. As I said in Plenary, I have taken careful note of your comments and suggestions. I particularly liked the forward-looking tone of your report. Today we have the opportunity to continue our exchange of views on future priorities, as part of the formal dialogue between our two institutions on the Annual Policy Strategy. This dialogue helps prepare the ground for the Commission's Legislative and Work Programme for next year. I therefore look forward to your input and ideas.
I'd like to start though with a quick word about the outcome of last week's European Council, and in particular the Protocols on the internal market and competition, and on services of general interest.
The Internal Market and Competition Protocol is a legally binding confirmation that a system of ensuring undistorted competition is an integral part of the Internal Market. The Protocol paraphrases the current Treaty provisions: competition is not an end in itself - but it is the best means anyone has found to create the conditions for growth and jobs. Integrating competition into the very concept of the 'Internal Market' clarifies that the one simply cannot exist without the other – which is a fact. The competition rules which have served European citizens so well for fifty years remain fully in force. And the European Commission will continue to do its job as the independent competition enforcement authority for Europe, fairly but firmly.
The Protocol on Services of General Interest, proposed by President Barroso and welcomed by his colleagues in the European Council, reflects the important role that public services play in economic and social life in our Member States. It recalls our shared values on these services, based on the jurisprudence of the Court of Justice. These values have already guided the Commission's approach to these issues, as set out, for example, in the 2004 Communication and in the 2005 package on state aid in the form of public service compensation. Of course the Treaty's internal market and competition rules only apply to economic services of general economic interest. I think it helpful that the Protocol clearly confirms this.
It is not for me to comment on the wider institutional issues at stake last weekend, but all in all I think we can be satisfied with the outcome as an important step forward towards a sound institutional settlement.
I. Achievements in 2006
Turning back to the main business we have here today, please let me give you a quick overview of the three main points in the 2006 Competition Report, which will be published after this meeting.
- First, in 2006 we made significant progress in implementing the State Aid Action Plan. We simplified the approval of regional aid by adopting a block exemption Regulation for regional investment aid. A new State aid framework for Research, Development and Innovation was put in place. New Risk capital Guidelines were adopted. And the new de minimis Regulation exempts more small subsidies from the obligation to be cleared by the Commission in advance. In parallel to these reforms there was a significant increase in the State aid control workload, with 921 new cases registered.
- Secondly, reflecting the Commission's continued efforts in cracking down on cartels, no less than seven cartel decisions were issued in 2006, imposing fines of over €1.8 billion. We also revised the Leniency Notice and adopted our new Guidelines on the method of setting fines.
- And thirdly, 2006 was a record year in terms of number of mergers notified to the Commission with 356 notifications. We identified competition concerns in a little over 6% of cases decided last year, and were able to resolve these through effective remedies offered by the parties concerned.
I look forward to the Committee's own report on the developments in competition policy last year. I hope that you will share my rather positive assessment of the progress we have made, in particular in relation to really making a more refined economic approach a reality throughout all our enforcement and policy instruments.
II. Implementation of the 2007 Work Programme
But there is no time to rest on our laurels: there is still a lot of work ahead. The implementation of State aid reform remains a key priority. This year, we have already presented a draft "General Block Exemption" which will simplify, rationalise, consolidate and increase the possibilities for Member States to grant aid without having to notify it to the Commission. The new regulation will cover additional types of aid, such as aid for research and development, environmental aid and aid in the form of risk capital.
We have also presented renewed environmental aid guidelines for consultation with Member States and stakeholders. The revised guidelines seek a proper balance, so that genuine environmental measures can be supported, while minimising distortions of competition and undesirable spill-overs.
It goes without saying that I would very much welcome your input to the consultation process on both these instruments. I have also launched a public consultation on draft guidelines on the assessment of non-horizontal mergers. The adoption of the final guidelines before the end of this year will provide greater guidance as to how the Commission intends to analyze all kinds of mergers, thereby creating a higher degree of legal certainty for business operators. Again, your input is very welcome.
Sadly, fighting cartels has to remain another ongoing priority for us. So far this year we have adopted three cartel decisions with fines totalling more than 2 billion euros. And I expect to bring several more investigations to an end later this year. In the course of this year we will take forward our thinking on direct settlement, where, under certain conditions, companies under investigation could see a shorter procedure and receive lower fines. This would also free up public enforcement resources for more proactive work: we should not just be responding to leniency applications, important and successful though that tool is.
By the end of 2007 we also need to have made good progress in the follow-up to the sector inquiries. On retail banking, I am looking forward to the report which Mr Pittella is preparing for the attention of the Committee. In this area, effective change will need an active approach at all levels. We are working closely with the national competition authorities and regulators. And I'm pleased to say we've already seen some proactive responses from the industry. But we need to continue raising the profile of these problems and engaging stakeholders in a drive for change – and this House can play a very positive role in driving this.
As for the business insurance inquiry, the comments we received from stakeholders on the preliminary report are of great value for the Final Report, due to be published in September.
And as you are aware, we are following up the energy inquiry through a series of individual competition cases, whilst as concerns the regulatory changes needed, the Commission will present proposals after the summer. With Andris Piebalgs in the lead, the Commission is closely following the ongoing debate here in this House. I read the recommendations of Mr Vidal Quadras' report as approved by the Industry, Research and Energy Committee with great interest, in particular the support given to effective unbundling in the electricity market. In that context I'd like to recall that our sector inquiry found that the problems arising from vertical integration are just as bad for gas and that the need for investment to ensure diversity of supplies is even greater.
Finally, I am grateful - in particular to Mr Sanchez Presedo - for Parliament's stimulating response to the Commission's Green Paper on antitrust damages actions. In line with your recommendation, the Commission is now continuing the reflection around some focused suggestions to improve the conditions for bringing antitrust damages actions. We will present our present our ideas in a White Paper, together with an extensive impact assessment, very early next year.
III. Priorities for 2008
Madame le Président,
Honourable Members,
Looking ahead to 2008, it is clear to me that the overall goal for competition policy is to continue to provide an essential contribution to the strategic objectives set by the Commission in its Annual Policy Strategy which – let me recall – are:
- Prosperity
- Solidarity
- Security and freedom
- Europe as a world partner
- And a firm commitment to better regulation
Competition policy can clearly demonstrate to citizens that our European Union is a Europe of results:
- by ensuring that aid to a company will effectively tackle market failures, instead of counter-productively wasting taxpayer money by distorting competition;
- by uncovering and punishing cartels that act to the detriment of EU competitiveness and consumers;
- by stopping mergers that would otherwise lead to higher prices and less choice for EU businesses and citizens.
I am aware that we are not always good at communicating this. Explaining our work and its added value for consumers in clear, understandable language is an ongoing challenge. I count on the support of the members of this Committee in helping pass the message on to citizens across Europe, in your contacts with your constituents.
So what are the priority areas for work in 2008? Well, we will continue to focus on key sectors for the internal market and the Lisbon agenda, with particular emphasis on:
1) Contributing to stimulating knowledge and innovation, economic growth and job creation, and the promotion of key sectors for European industry such as the recently liberalized sectors. The sector inquiry tool has shown its added value, and should indeed be used again in the future. However, we are still considering in which sector the next inquiry should be launched, and when. Given the importance of careful preparation and analysis of possible candidates, we are not in a position to take a decision on this at present.
2) Enhancing competitiveness and making Europe a more attractive place to invest and work, by helping to shape the regulatory framework in the EU and at international level. On the state aid side, I will propose that in 2008 the Commission adopts in 2008 the final version of the General Block Exemption Regulation and a revised Broadcasting Communication. On the anti-trust side I plan to bring forward new Maritime Transport Guidelines.
3) Ensuring the strict implementation of the acquis, focusing enforcement actions on the most harmful anti-competitive practices and forms of State aid for the European economy. In line with the State Aid Action Plan we will present a vademecum for SMEs to provide better guidance as to how the state aid rules apply to them and what aid is allowed. And of course I have already mentioned the White Paper on damages actions.
President Berès, Honourable Members,
Competition activities and workload increased very considerably in 2006, and have continued to increase in 2007. The trends for 2008 and beyond clearly continue in the same upward direction. This makes it vital to manage priorities effectively. Sometimes very hard choices have to be made, since we certainly cannot do everything we would like. That is one of the reasons why I think this Annual Policy Strategy dialogue is so very useful, since through debate and discussion, I hope that we can reach a common understanding of where the real priorities lie.