Euro-MPs urge EU rethink on competition policy

By Ina Dimireva

A resolution adopted by the EP today, 9 March, highlights the need to assess the effectiveness of Member States' state-aid activities during the crisis, scale back the protectionist reflexes that it triggered and update EU competition rules, inter alia by revisiting the "fines only" policy. The EP lists on-line advertising, and the telecoms, pharmaceuticals and dairy sectors as areas needing further action.

According to the resolution the Parliament must be given a bigger say in plans to reform the motor vehicle block exemption and all other competition policy areas. Even though merger rules must not be relaxed because of the crisis, the Commission’s next competition policy report must take into consideration the difficulties that SMEs experience as a result of the economic crisis.

The resolution declares that competition has been distorted by the extraordinary amounts of state aid recently granted. As a result, it calls for an independent report on the potentially distortive effects of states intervention in the financial sector as well as for a report by the Commission on the effectiveness of state aid granted under the "green recovery" programme and for environmental protection. "Two years ago we were told that the recovery package would bring about the long overdue shift to a sustainable economy.  Has the money brought about that shift? Have state aid beneficiaries become greener?" asked rapporteur Sophia in 't Veld (ALDE, NL), in a debate with the Commission on Monday.
Despite its critical nature, the resolution also backs the idea of a European deposit guarantee system and a European bail-out fund in order to avoid the emergence of unfair competitive advantages after the reduction of state aid to banks.

The resolution criticises the Commission’s “fines only” policy since it can cause job losses. "As a single instrument, high fines may be too blunt", said Ms in 't Veld. Instead, more sophisticated tools should be developed, and in particular the use of individual liability, says the resolution. Its further demands are directed towards the institution of sector-specific inquiries by the Commission, either at Parliament’s recommendation or on its own initiative. Specifically, the resolution calls for comprehensive sector inquiries into online advertising and the dairy product distribution chain. It also calls for more action to prevent the pharmaceutical industry from blocking the market entry of generic medicines and a further inquiry into the telecoms industry.