Beachcroft Stanleys foresees trouble at EC hearing on new competition policy

Beachcroft Stanleys is predicting a ferocious row at a European Commission hearing on 6 and 7 October which is being held in order to find a new competition policy for Europe.

The commission is considering which regulations will replace the current EC competition rules which are due to expire in 1999.

In views canvassed by Beachcroft Stanleys most UK-based businesses, the EC and the Department of Trade and Industry have asked for a liberalisation of EC competition policy.

They would like to replace the current general prohibition on anti-competitive agreements with automatic approval for agreements unless they include certain specified anti-competitive clauses – known as “black clauses”.

Despite this, the commission has allowed room on the conference agenda for discussion of only one option for competition policy – using block exemptions to the general prohibition based on the difficult concept of market share.

Beachcroft Stanleys competition associate Julie Nazerali said: “There is going to be quite a hoo-ha at the conference. They have not put the black clauses option, as suggested by the UK government, on the table.

“They are saying they want to discuss regulation based on the use of a market share measure. The idea of regulation in any other way is not to be discussed. That means they have made up their minds. The point of a public consultation is to find out what the public wants.”

In April Beachcroft Stanleys held a DTI-backed conference with the Institute of Directors to find out the views of British industry on EC competition regulations.

Nazerali followed up the conference with a questionnaire based on consultations being carried out by the DTI and the EC, and received an overwhelming response from about 30 industry delegates supporting a black clauses list over any other option.

She said companies were particularly opposed to using market share measurements as a basis for deciding whether an agreement should be allowed.

“Both at the conference and in the questionnaire results it was clear that people are very against market share in regulations. One director pointed out the assumption that you automatically have market power through market share is wrong. Also, how do companies define market share, how do they define the market? You end up with legal uncertainty again.”

She said the firm would speak at the conference and would ensure the black clauses option got a hearing.