Abstract
This chapter reviews the possible aims of competition policy and the main aspects of EC developments in this field since the Treaty, instituting the European Economic Community came into operation (1958). Throughout, it tries to give a realistic account of the main (but not all) aspects, emphasizing that competition policy has a pivotal function in a free market economy of European dimensions.
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Guenault, P.H. & J.M. Jackson (1974), The control of monopoly in the United Kingdom. London: Longman (2):9, 58 and 123.
Guenault & Jackson, o.c.:58.
Mestmäcker, E.J. (1980) Competition policy and Anti-trust; come comparative observations, in: Zeitschrift für die gesamte Staatswissenschaft, 387 et seq. Schmidt, I. (1980), Wettbewerbstheorie und-politik, Stuttgart: 108.
Jenny, F. & A.P. Weber (1974), Concentration et Politique des structures industrielles. La documentation francaise, Paris: 163. In the same sense Gobbo, F. (1982), Il controllo dei prezzi in Italia. Bologna, Il Mulino, 151, who stated that the fixed price had the tendency to become a collusion price.
Bork, R.H. (1978), The anti-trust paradox: a policy at war with itself, New York, 57. In Europe, Hoppmann and others represent this line of thinking.
Bork, R. o.c.:50-57 and 81-86. Hoppmann, E. (1972), Fusionskontrolle, Tübingen: 59 et seq. and 80 et seq. E. Hoppmann likewise argued that it is impossible to delimit markets in order to establish a market dominating position.
Again, there are parallels in US and European thinking: in the US, the workable competition school is mainly centred around’ industrial organization’ economists, who follow the trail set by J.M. Clark, E.S. Mason and J.S. Bain. In Europe, the main representative is E. Kantzenbach, whose book’ Die Funktionsfähigkeit des Wettbewerbs’, Göttingen, 1967 (2), provoked an extensive debate and has been influential in West German policy. In The Netherlands, Belgium and France, the workable competition school also has a number of adherents.
See Kanzenbach, E. & H. Kalifass, Das Konzept des funktionsfähigen Wettbewerbs, in: Cox, Jens & Markert, Handbuch des Wettbewerbs, o.c.: 105–127.
Heusz, E. (1965), Allgemeine Markttheorie, Tübingen; De Jong, H.W., Dynamische Markttheorie, Leiden, 1972 (1), 1989 (4); Kaufer, E., Industrieökonomik, München, 1980.
Under the Rome Treaty, a directive is addressed to governments and is binding with regard to the results to be attained but leaves member states free to choose their method of achievement. In contrast, a regulation has general applicability, and is directly binding on nationals (including firms). These regulations have the status of laws. Finally, a decision is binding entirely upon those addressed, be it member states, legal or individual persons.
See a.o. Jacquemin, A.P. & H.W. de Jong, European industrial organization, London: MacMillan, 1977, Chapter 7; W.C. Schlieder & H. Schröder, Europäische Wettbewerbspolitik, in: Cox, Jens & Markert (eds.), o.c., 485-532; and Swann, D. (1983), Competition and industrial policy in European Community, London/New York: Methuen, 1983; Bulletin of the European Communities, supplement 2/90: Community merger control law.
Casual references in Commission of Court Decisions about free, workable, effective or dynamic competition do not mean very much in terms of economic models. These terms were hardly explained, nor was it shown what their operational value was in the cases at hand. Probably the best definition, derived from EC experience would be: The rivalry between independent firms under conditions of uncertainty.
In the ninth report on Competition Policy, the Commission wrote:’ …It is an established fact that competition carries within it the seeds of its own destruction. …Consequently, the second fundamental objective of the Community’s competition policy must be to ensure that at all stages of the Common Market’s development there exists the right amount of competition in order for the Treaty’s requirements to be met and its aims attained’ (p. 10). (The first objective is to keep the common market open and unified.)
Swann, o.c.:72.
This was the famous Atic case, in which the French coal import monopoly, which even the large French steel companies could not surpass, buying directly in the Ruhr area for example, was finally dismantled, It lost its power to veto import contracts.
In July of 1986, the Commission approved of a dominating network of joint ventures and licencies concluded by Corning Glass Works (US), inventor of optical fibres used in transmission cables, with several European firms, which, together, gave corning’s joint ventures a 48% share in the EC’s production capacity. However, the Commission attached severe informational conditions until the year 2001, stipulating that it must be informed every year about production, sales clients and prices (OJ 1986, L1236/30).
Sutherland, D. (1985), Towards positive guidelines on joint ventures, Brussels, 7 November:8.
Jacquemin, A.P. & H.W. de Jong, o.c.:235.
Tenth report on Competition Policy, 1980, No. 152.
Compare, for example the IBM case in the United States and in the EC. In the US, the case was dropped after proceedings lasting more than 12 years. In the EC, the Commission and the Court settled the case — mainly on the Commission’s terms — in 4 years.
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De Jong, H.W. (1993). European Competition Policy: Goals and Achievements. In: Müller-Warmuth, W., Schöllhorn, R. (eds) Progress in Intercalation Research. Studies in Industrial Organization, vol 18. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-1733-3_14
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