The Gazette 1985

GAZETTE

SEPTEMBER 1985

they illustrate in a particular industry — and an extremely important one — how the competition rules can be applied to prevent abusive behaviour in intra- Community trade. The battle for a competitive, open common market is waged on a number of fronts — legislative, deregulatory, sometimes even regulatory. In all these endeavours, the Community's competition policy is there to remind the Member States of their obligations and to promote competitive conditions from which all stand to benefit. If a regulated industry can provide scope for competition, I shall not oppose it on grounds of dogma. My task, as I see it, is to make sure that scope for competition exists and is maintained and that actual infringements of the law do not go undetected or unpunished. Industrial Property 35 This area of Community policy has seen important developments recently with the adoption of the Commission's long-awaited block exemption Regulation on patent licensing agreements 36 . We are confident that the right balance has been struck between the need to encourage and facilitate technology transfers and the requirements of the common market. We shall now set about applying the Regulation in practice and the opposition procedure, by virtue of which many agreements notified to the Commission under the Regulation, even though they are not automatically exempt from the provisions of Article 85(1), will obtain the benefit of the Regulation unless opposed by the Commission within six months of notification, should ensure that many more agreements will be dealt with quickly and will give us the opportunity to resolve problems raised by border-line cases. There remain several other industrial property issues to be dealt with and we are looking in particular at know- how licensing at present. Goods and technology should move freely in the common market: these are our goals. We recognise that they are sometimes difficult to reconcile and are prepared, as the patent licensing Regulation shows, to be flexible to ensure that the proper incentives are provided for the dissemination of technology. Mergers 37 No competition policy worthy of the name can ignore mergers. In other areas of its activities, the Commission and other Community institutions have often had to grapple with the consequences of mergers for social, fiscal and company law and policy. Yet the Community's competition policy on mergers is hamstrung. Despite the Commission's proposals and subsequent efforts, the support of the Parliament and the Economic and Social Committee and a widespread consensus that action is urgently required, the Council has still not adopted a merger control Regulation. The time will come soon when, if no Regulation has been adopted, the Commission will have to carry out its duties under the EEC Treaty by falling back on the provisions contained in that Treaty, in particular Articles 85, 86 and 90. Mergers are not automatically good or bad. The Commission simply needs to be able to separate the beneficial from the dangerous as it goes about its task of instituting and maintaining "a system ensuring that competition in the common market is not distorted" (Article 3(0 of the EEC Treaty). 273

success has been achieved, for example under Articles 12- 17, 30-36 and 95-99 of the EEC Treaty in breaking down regulatory barriers to free trade within the Community. In the competition policy sphere too, Article 37 (State monopolies of a commercial character) has played and will continue to play a vital role in this respect. Competition policy cannot succeed if the Member States distort competition t h r ough their legislative, administrative and regulatory activities. Article 5 of the EEC Treaty obliges the Member States to "facilitate the achievements of the Community's tasks" and to "abstain from any measures which could jeopardise the attainment of the objectives of this Treaty". The Member States may not endanger the full and uniform application of the principles of competition policy enshrined in Articles 3(0, 85 and 86. This has been confirmed recently by the Court of Justice in a case concerning French resale price maintenance in the book trade 31 . Under Article 37, the Commission will monitor and examine critically the conduct of all subsisting state monopolies and, where necessary, will not hesitate to call for changes. New or developing sectors of the economy will receive particularly close attention and telecommuni- cations provide a good example of this. In the air transport sector, the Commission has made limited and moderate proposals to the Council 32 and we await developments. Meanwhile, the Commission has other legal powers at its disposal to bring about an opening up of the Community air transport market should the Council fail to adopt the necessary legislation. In the area of sea transport too, the Commission has presented a memorandum to the Council outlining detailed proposals including and implementing Regulation and a group exemptions under Article 85(3). Deregulation in telecommunications is largely a national issue within the bounds set by Community Law, but in which competition policy can help to break down certain impediments to trade between the Member States. The Commission has begun to act in this area under Article 86, taking the view that national posts and tele- communications authorities (PTT's in the Brussels jargon) are undertakings within the meaning of Articles 86 and 90 of the EEC Treaty and that, for example, discriminatory practices and attempts to extend a statutory monopoly to other markets can constitute unlawful abusive behaviour. The Commission's decision against British Telecommunications which had sought to prevent telex forwarding agencies in Britain from relaying messages received from other Member States to final destinations elsewhere was upheld recently by the Court of Justice 33 . This case was unusual in that the appeal against the Commission's decision against BT was brought by the Italian Government, while the British Government intervened as an amicus curiae in support of our decision. The fact that the Court of Justice has upheld our view of the law is, of course, crucial for our future policy planning. More recently, the Commission intervened to oppose plans by the Bundespost (the German PTT) to extend its monopoly to courier services carrying express mail. The Bundespost agreed to accept competition from private couriers and gave assurances that it would not charge below cost for its own express delivery services 34 . In another case, the Commission intervened under Article 37 to ensure that the Bundespost did not extend its monopoly to cordless telephones 34 A. These cases do not amount to a deregulation policy, but