Speech Kroes: "Mededingingswetgeving in breder context - dwarsverbanden en nieuwe trends" (en)

SPEECH/06/382

Neelie Kroes

Member of the European Commission in charge of Competition Policy

Competition Day - Opening Session

Vienna, 19th June 2006

Ladies and gentlemen

I am delighted to be here with you in Vienna today. I always look forward to Competition Day. It is such a great opportunity to bring together the whole spectrum of people who have an interest in competition policy. Vienna is of course well-known for its musical excellence, and this is Mozart's 200th anniversary year. So I hope you won't mind me drawing a musical analogy: gathered here today we really do have the best players of the European competition law symphony, and I know that we all come together in great harmony! And I have particularly been looking forward to today because we have the benefit of two conductors. This is the first time Competition Day has been jointly hosted by the EU Presidencies of the year. I would like to thank both our Austrian hosts and the incoming Finnish Presidency for this opportunity both to reflect on progress made over the last six months and to look forward to what we all hope to achieve during the Finnish Presidency.

Our theme for today is: "competition law and its surroundings - links and new trends". There are two specific policy developments which I would like to raise this morning, because I think that they herald `new and improved' trends in our approach to anti-trust enforcement. Firstly, our Green Paper on private damages actions for breaches of competition law. And secondly, our review of the enforcement of Article 82 - in particular, the Discussion Paper launched in December in relation to exclusory abuses.

But before I turn to this, I see that the first subject on the table this morning is "mergers". There is a well publicised - if perhaps over-exaggerated - trend in this area towards protectionism. I would not call this a "new" trend. It is something that is always lurking in the background of the European Project - but it is something which has had renewed vigour and attention recently. And, seeing as you are looking at "links" today as well as "trends" - I think that this issue quite clearly demonstrates the essential link between competition law and the renewed Lisbon agenda for economic growth and more and better jobs.

We have seen a recent upsurge in cross-border mergers in the EU - in particular in sectors like energy and financial services, which have only recently been liberalised. This is a very welcome trend. It shows that business are taking advantage of the opportunities of open markets and free trade, in areas where such things would not have been thinkable just 20 years ago. In short, it shows that our Single Market is a working reality. Restructuring is a natural part of the business process, as companies adapt to changes and shifts in the global economy. And cross-border restructuring helps business harness the benefits of ever increasing globalisation and create strong groups who are able to face competition at home and abroad. Global champions, based in Europe. As a general principle, cross-border mergers also tend to increase competition - which helps to secure future economic growth and, in turn, more and better jobs for European citizens.

So I am naturally concerned when, in a few well-publicised cases, action has been taken by national governments or authorities to hinder this process. You all know the cases that I am talking about! There is no doubt that the Commission will continue to use the tools available under internal market provisions and Article 21 of the Merger Regulation to tackle any unjustified interference in cross-border corporate restructuring. And, if it is unjustified, we will act decisively. The instances I am referring to are few and far between compared to the vast majority of mergers which are notified each year. And we should not overstate the danger, because the general trend is still towards cross-border consolidation.

But I am convinced that `protectionism' is one trend that we must not embrace - or ultimately we will all suffer: consumers, industry, individual Members States and the EU economy as a whole.

Now let me turn to the Green Paper on private damages claims. Victims of anti-trust infringements have long had the right - under the EC Treaty - to bring claims for the losses that they suffer at the hands of those who breach anti-trust rules. Unfortunately, the reality is that very few actually do so. Our research has shown that this is mainly due to:

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  the costs of bringing a claim in comparison with the prospects of success,
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  and the difficulties that claimants face in getting access to the evidence that they need to prove their case.

I am firmly of the view that private enforcement of competition law is an essential component of a truly effective and comprehensive anti-trust system. If we can encourage an increase in effective private enforcement, this will not only secure compensation for injured businesses and consumers - which they already have a right to after all! But it will also play an important part in encouraging overall compliance with the rules as a complement to the actions of competition authorities. Those are the aims that are at the heart of the Green Paper which was published last December - and the responses we have received show that almost everyone agrees with these objectives!

But we know only too well that the devil is in the detail and practice is always harder than theory! The Green Paper puts forward some ideas, and we have had invaluable contributions through our public consultation and the many debates and conferences which are taking place on this issue. For example, I attended a particularly informative public debate at the European Parliament earlier this month, and I will wait for Parliament's views later this year before deciding on any possible next steps.

There are some very controversial and complex issues here:

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  How do we enable potential claimants to have reasonable access to vital evidence?
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  Should we encourage claims by providing for `double damages' in relation to the most harmful cartels?
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  How do we ensure that people with credible claims are not put off by prohibitive costs?
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  What is the best way to ensure that leniency applications are not discouraged?
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  And should we shift the burden of proof for `follow-on' claims onto the defendant?

We do not have all the answers yet, and are working hard on analysing the responses we have received. But there are three things that I do know already:

Firstly, copying the American style system into Europe is not an option. I will ensure that any possible action is firmly rooted in European legal traditions and values.

Secondly, we will only consider action at European level if this can genuinely add value.

And finally - once we get the balance right - a new `trend' in private enforcement is one that we must all encourage - a true competition culture. I rely on you all to play your part.

Ladies and gentlemen,

Another area where we are refining our thinking is the enforcement of Article 82. In December, we published a discussion paper which suggests a new framework for protecting EU markets from dominant companies who behave in a way which excludes competitors and risks weakening competition. To put my philosophy in a one-liner: we must protection competition, not competitors; and the ultimate aim is to avoid harm to consumers. The Discussion Paper therefore suggests ways of analysing this type of conduct which are firmly rooted in sound economic analysis. This should enable us to identify those practices which are most harmful to competition and consumers. By focusing our enforcement priorities on these abuses we hope to optimise our use of resources and improve the quality of our decisions.

Again, we have seen general agreement on the direction we are moving in, and we are taking careful account of the input we have received on the detail. There are many key areas where we now need to consider the best way forward, on both substantive and procedural questions. For example:

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  How best to ensure sure that we have an efficient, transparent and predictable system but still get the economic assessment right in individual cases?
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  Should we consider having an `initial assessment' stage before moving on to a full investigation?
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  How far should our economic assessment go and who should bear the burden of proof?
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  And what role should "efficiencies" play in that assessment?

The responses to the consultation and the debate which has taken place - particularly in the public hearing last week - have been very helpful. We are already moving closer to striking that difficult balance between encouraging open and competitive markets, and policing the competition boundaries. But we know that we have more work to do and some tough decisions to take. And don't forget that the Discussion Paper is just the very beginning of the new trend - we have only looked at exclusionary abuses so far - there is more yet to come

Ladies and gentlemen.

I hope I have whet your appetite a little! These are just three of the `trends' in competition law that we in the Commission have been focusing on in recent months and which will play a big part in our work in the coming period. I see from today's agenda and the list of expert speakers that you will be discussing an ambitious range of issues from a wide spectrum of perspectives. I am sure these debates will be stimulating and rewarding, and hope that you enjoy the rest of the day!

Thank you for listening so carefully.