Select Committee on European Scrutiny Second Report


SEC(00) 649

30th Commission Report on competition policy — 2000.

Legal base:
Document originated: 7 May 2001
Forwarded to the Council: 8 May 2001
Deposited in Parliament: 26 May 2001
Department: Trade and Industry
Basis of consideration: EM of 20 June 2001
Previous Committee Report: None
To be discussed in Council: Not known
Committee's assessment: Politically important
Committee's decision: Cleared


32.1 The purpose of the EU's competition rules is to prevent the distortion of competition in the Common Market through restrictive practices or the abuse of dominant positions, although certain restrictive agreements considered by the Commission to have a beneficial effect are permitted under the procedure for individual or block exemptions. The EU has given the Commission particularly formidable powers, both legislative and executive, in this area, and the Commission reports annually on competition policy.

32.2 Some aspects of European competition law changed in 2000. New Regulations were introduced governing distribution and purchasing agreements and co-operation agreements on research and development. Our predecessors reported on these in 1998 and 1999.[78] These new rules are important because agreements between companies which do not comply with the new rules, may be declared void and unenforceable and could lead to the companies being fined.

The document

32.3 The Commission's 30th annual report on competition policy[79] covers:

  • legislative and interpretative proposals or changes to EU competition policy. These include new block exemption regulations relating to horizontal agreements, such as those on research and development, and new guidelines on vertical restraints, such as agreements between companies that operate at different levels of the supply chain (for example supplier and distributor or distributor and retailer). Under the new block exemptions, co-operation agreements between competitors will be exempt from the prohibition in Article 81 (anti-competitive agreements), and therefore permitted, if the resulting benefits from co­operation outweigh their actual or potential anti­competitive effects. In the area of car distribution, an example of a vertical restraint, an evaluation report was issued on the present regulation, which expires at the end of September 2002;

  • major cases under Article 81 (anti-competitive agreements) and Article 82 (abuse of dominant position), which included decisions prohibiting cartels in the maritime sector, the animal feed industry and the chemicals industry and other cases relating to car distribution and earth-moving machinery;

  • merger control;

  • general policy on state aid; and

  • international activities.

32.4 The report also includes a chapter on future policy initiatives and legislation, including:

  • the Commission's continuing work on its proposal for a new Council Regulation implementing Articles 81 and 82;

  • a review of the working of the current block exemption regulations on car distribution and technology transfer agreements; and

  • the continuation of the Merger Regulation review.

32.5 On state aid, the Commission's future focus will be on increasing transparency by means such as the establishment of a publicly accessible register and state aid scoreboard.

The Government's view

32.6 According to the Minister for Competition, Consumers and Markets at the Department of Trade and Industry (Miss Melanie Johnson) the most important legislative initiative in the EU in the competition field since the adoption of the Mergers Regulation in 1989 has been the adoption by the Commission of the Regulation to modernise the rules for implementing Articles 81 and 82. She says:

    "The UK fully recognises the potential benefits of modernisation of the rules and is actively participating in the negotiations on the proposed new Regulation."

32.7 The UK also supports the adoption of the new rules on horizontal co-operation agreements, i.e. agreements between competitors, which will allow such collaboration where it contributes to economic welfare without endangering competition. On the state aid rules, the Government supports the Regulations that simplify the procedures for giving state aid in a number of cases where compatibility with the Common Market does not normally pose any problems.


32.8 The report makes clear that competition policy remains one of the main pillars of the Commission's action in the economic field. It is an important report but it is essentially descriptive, with many aspects having previously been considered by the previous Committee. We clear the document accordingly.

78  (19479) 12526/98 (19498) 12311/98; see HC 34-ii (1998-99), paragraph 2 (2 December 1998) and HC 34-xv (1998-99), paragraph 3 (30 March 1999). Back

79  Our predecessors reported on the Commission's Report on competition policy for 1999 (21263) 8402/00; see HC 23-xxi (1999-2000), paragraph 11 (14 June 2000). Back

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