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On Competition Policy EUROPEAN COAL AND STEEL COMMUNITY EUROPEAN ECONOMIC COMMUNIry EUROPEAN ATOMIC ENERGY COMMUNITY coMMtsstoN Seventh Report on Competition Policy (Published in conjunction with the 'Eleventh General Report on the Activities of the European Communities') LUXEMBOURG April 1978 This publication is also available in the foliowing languages: DA |SBN 92-825-0031-4 DE ISBN 92-825-0032-2 FR |SBN 92-825-003F9 lT tsBN 92-825-0035-7 NL |SBN 92-825-0036-5 A bibliographical slip can be found at the end of this volume @ Copyright ECSC/EEC/EAEC, Brussels and Luxembourg, 1978 Pilnted in Belgium Reproduction authorized, in whole or in part, provided the sourco ls acknowledged ISBN 92-825-0033-0 Catalogue No: CB-24-77-237-EN-C Contents lnlroduc{lon PART ONE _ COMPETITION POLTCY TOWARDS ENTERPRISES 15 Chapter I : Maln devetopmenls In Communlty pollcy 17 S 1 - Price disparitie$ in the Community 17 g 2 - Information agreements 18 S 3 - Exclusive purchasing agreements 21 S 4 - Community-wide guarantee service 24 S 5 - Measures to assist small business 26 S 6 - Supply obligatlons ol undertakings in a dominant position 30 S 7 - Horizontal groups and economic entities 31 policy dumplng u S I - The Commission's on intra-Community S I Findings of the inquiry into the market for naphtha for petrochemical use and - into the behaviour of the oil companies 38 Cbapler tl : General rules applylng to flrms 53 S 1 - Amendment of existing regulations and notices 53 'f . Extension and amendment of Regulation (EEC) No 2779/72 (speclalization agreements) 53 2. Amendment of Regulation No 6/6/EEC (exclusive dealing agreements) 54 3. Amendment of ECSC Decision No 2s67 (exemption from the requirement of prior authorization) c5 4. Amendment of the Commission Notice ot 27 May 1970 concerning agree- ments of minor importance 56 S 2 - New regulations and notices 57 1. Proposed merger control regulation 57 2. Patent licensing agreements 57 g. Subcontracting agreements 58 4. Proposed regulations applying the rules of competition to sea and air transport 58 5. Periods of limitation for ECSC tines 59 COMP. REP. EC IgV CONTENTS Chapter Itl: Cases decided by the Court of Justlce 61 Van Ameyde v UCI 61 NV GB-INNO-BM v ATAB 62 SA G6n6rale Sucriere and Societe B6ghin-Say v Commission and Others 63 Metro v SABA 63 Concordia o3 De Bloos v Bouyer 68 Chapter lV: Restrictive practices ln lnlernallonal lrade 71 OECD 71 UNCTAD Cooperation between the Commission and the competition authorities of non-member States 72 Chapter V : Main developmenls In natlona! competillon pollcles /5 Belgium to Denmark 76 Federal Republic of Germany Id France 80 lreland &t Italy 84 Luxembourg 84 Netherlands 84 United Kingdom 86 Chapter vl : Main declslons and measures taken by the Commisslon 89 S 1 - Article 85(1) applied to horizontal agreements 90 Market sharing, price-tixing and information agreements 90 - Printing paper and stationery manufacturers 90 - Vegetable parchment manufacturers 90 National market protection agreements 91 - Regulation of the Dutch bicycle market 91 - Vegetable growers and dealers 92 Agreements limiting production and sales ozr - Video cassettes and video cassette recorders 93 Export cartels 94 - Necomout 94 S 2 - Encouragement of permitted forms of cooperation 95 - Sopelem/Vickers 95 - JazJPeter 96 - Regulations governing international motor shows 97 - EMI Electronics-Jungheinrich s8 Specialization, ioint buying and joint selling agreements in the coal and - steel sector 99 COMP, REP. EC I97 CONTINTS S 3 - Article 85 applied to distribution 101 Exoort bans and similar measures t0t - Distillers Company Ltd 't01 - BMW Belgium 102 Supply agreements 10:r * Spices (Liebig) 103 - Billiton and Metal & Thermit Chemicals 104 S 4 - Article 85 applied to industrial and commercial property rights 105 Patent and knowhow licenco 105 - AGA Steel Radiators 105 Trademark licence 107 - Campari 107 Use of trademark and business name 108 - Persil washing powder 10E -'Penneys' trademark and business name 110 S 5 Article 86 of the EEC Treaty and Article 66(7) of the ECSC Treaty appll€d - to abuse of dominant Dositions 111 _ ABG 111 - Hugin/Liptons 112 - National Carbonizing Company 113 S6-Jointventures 115 - De Laval/Stork 115 - The General Electric Company Ltd/The Weir Group Ltd 116 - Imperial Chemical lndustrievMontedison 117 S 7 - Merger control (Article 66 of the ECSC Treaty) 1N - Belgian and French steel firms 1m - Hoesch/Herzog 121 PART TWO _ COMPETITION POLICY AND GOVERNMENT ASSISTANCE TO ENTER- PRISES Chapter l: State alds 12 $ 1 - General 125 S 2 - General regional aid schemes 125 Principles of coordination of national regional aid schemes 125 Specific statements on certain national regional aid sch€mes 126 - Federal Republic of Germany 127 - Belgium 127 - Denmark 128 - France 130 - lreland 13il - ltaly 133 - Netherlands 135 - United Kingdom 137 CO/v{P. REP. EC l9Z CONTENTS 138 S 3 - Aid schemes for specific industries Shipbuilding 138 United Kingdom 14'l - Netherlands 14{' - 1M - France - Denmark 145 Textiles 146 Synthetic fibres 147 - Netherlands : Cotton and allied textiles 1€ - Netherlands : Clothing industry 149 Electronics : United Kingdom 151 - Instrumentation and automation industry 151 - Electronic components 153 Ferrous and non-ferrous tounding 155 * Netherlands and United Kingdom 155 Aids financed by quasi-tiscal charges 157 - France: Clock and watch industry 157 S 4 - General aid schemes 158 Significant cases of application of general aid schemes 159 - ltaly 160 - United Kingdom : National Enterprise Board 162 S 5 - Aids to employment 165 lreland : Aids to employment in farming and industry 166 United Kingdom : Employment subsidies for young workers 167 United Kingdom : Temporary Employment Subsidy - TES 167 S 6 - Aids to exports 170 S 7 - Aids to energy 173 Belgium : Oil refining 173 Energy-saving aids 175 - Denmark 176 - Netherlands 177 Aids to diversify sources of energy 178 - ltaly : Solar energy 178 Aids to develop power production from Community coal 175 g 8 Application of the ECSC Treaty to State aids for the steel industry 180 - Belgium 181 Chapter ll : Adfustment of State monopolles ot a commerclal chataclel Chapter lll: Publlc undertaklngr PART THREE _ THE DEVELOPMENT OF CONCENTRATION IN THE EEC 189 lntrpductlon 191 s 1 National and International takeovers and mergers, share purchase and ioint - ventures in the Community from 1973 to 1976 191 - Comparison between national and international operations 191 coMP. nEP. EC 1977 CONTENTS * Breakdown of international operations showing share of firms from non- member countries compar€d with total share ot EEC tirms 195 - Industrial breakdown of national and international operations 199 S 2 The development of concentration in sel€cted industries and sub-industries - in the EEc 199 - General survey of research 199 - Concentration in selected industries 199 - Market concentration n7 - Regional and local concentration : the example of the daily prsss 215 S 3 - The relationship between ths size of a firm and its performance 217 Measures of efficiency 217 - The measure of efficiency appliod to the food Industry in the Western - nations 218 - Profitability and size of firm in the United Kingdom nl S 4 - Ths research programme on distribution and prices: Purpose and rosults 232 - Purpose 232 - Power relationships between manufacturers and consumers 232 - Trends in distribution and concentration in selected Member States zu - France 234 - Germany 235 - United Kingdom 236 - Price differences between sales points 237 - Divergent price movements 241 - Mark-ups 249 g 5 - Summary and conclusions 2fi Ann€x : List of individual Decisions of the Commission and rulings of the Court ot Justic€ made in 1977 concorning the application of Articles 85 and 86 of th€ EEC Treaty and of Articles 65 and 66 of the ECSC Treaty ?s3 COMP. RFP, EC IN q Introd uction The economy of Europe is undergoing a difficult period of transition. Much structural weakness has become apparcnt or become worse following a reduction in demand eccompanied by increased pressure of imports. If structural change is essential in order to reach a new economic balance, it is as well to teaLize that this will be difficult to echieve in a dimate of poor economic growth unless clear perspectives are maintained. The role of the Commission must therefore be to promote and establish structural change within a socially acceptable framework. The illusion must be resisted that enter- prises can protect themselves against those necessary changes by coming to terms with their competitors or by seeking excessive protection frorn narional authorities. Competition policy plays an important role in the application of the basic rules which govefn the integration of markets. The flow of trade creates the need for constant structural adaptation. The maintenance of non-competitive behaviour or anti-competitive practices, on the other hand, leads to partitioning of markets in the sectors directly involved, which then tends to spill over into related sectors in the downstream markets. It is no coincidence that these simple but basic rules should be challenged at a time when the forces of competition s€em to demand excessive sacrifices in certain sectors, particularly so far as employment is concerned, following a lasting slowing-down in the growth of or a switch in demand. Private arrangements for organizins markets or govern- rnent intervention affecting the competitive ability of undertakings have the object of softening the rigours of market forces. If some of these measures are prompted by the market, others on the other hand substitute themselves for the market, the decisions in such cases being centralized, whether they concern production capacities or govern production itself or prices. Vhatever the means chosen to'organize' a sector, that is to say protect it frosr competi- tion, one should bear in mind that the direct or implicit object is always to re-establish et least temporarily an artificial profitability by raising prices. Thus the cost of the coA ?.
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