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A proactive competition policy for a competitive Europe

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A proactive competition policy for a competitive Europe

Effective competition in the internal market improves productivity and innovation, thus contributing to the competitiveness of European industry. By implementing a proactive competition policy, the European Commission intends to play an active part in the Lisbon Strategy. To this end it calls for the process of modernising competition rules to be continued and for effective monitoring to be guaranteed.


Communication from the Commission, of 20 April 2004, "A proactive Competition Policy for a Competitive Europe" [COM(2004) 293 final -Not published in the Official Journal].


Strong competition undoubtedly contributes to the European Union's competitiveness and economic growth, two objectives at the heart of the Lisbon Strategy.

As competition policy complements and reinforces other Community policies which are mobilised by the Lisbon Strategy, it is a key instrument in the success of this Strategy. With this in mind, the Commission intends to make competition policy "proactive" and ensure it strengthens the existing regulatory framework and specific measures to remove barriers to free and fair competition.

Competition as a means of achieving competitiveness

Given the slowdown in economic growth in Europe, due largely to slow growth in productivity, strengthening competition is a means of reversing the trend.

Competitiveness measures the productivity of an economy in a globalised world, with a view to raising the standard of living and creating jobs. Effective competition is key to growth in productivity and competitiveness. By imposing rules on cartels, abuse of a dominant position, mergers, liberalisation of sectors or even State aid, competition makes it possible to reward those firms offering the best in terms of price, quality, choice and innovation, thus enforcing continuous structural adaptation for businesses and workers.

A new regulatory framework

In response to the objective of ensuring effective competition in the internal market, the new regulatory framework modernises competition rules, as reflected in the following:

  • a unified legal framework to create a level playing field for enterprises;
  • a more economic approach as a basis for competition rules and their enforcement;
  • a balance between transparency, simplicity and effectiveness for the enforcement of competition rules.

Whilst alleviating the regulatory burden on companies, in particular small and medium-sized enterprises (SMEs), the new framework allows better integration of consumer interests.

In the area of restrictive practices and dominant positions, Regulation (EC) No 1/2003, in force since 1 May 2004, establishes a new system of economic governance in the EU.

The original approval system is thus replaced by a directly applicable exception system. The Regulation also provides for the full and more decentralised application of EU competition rules by the competition authorities and courts of the Member States which now have the power to apply Community competition rules. It also paves the way for a system of closer cooperation between the European Commission and national competition authorities, in the form of the European Competition Network (ECN). The ECN helps to ensure that competition rules are applied consistently in the internal market. Some substantive rules governing the behaviour of undertakings have also been amended in order to strengthen the economic basis.

Merger control is essential to the restructuring of European industry. While Regulation (EC) No 139/2004 maintains in full the "one-stop shop" system for the control of concentrations which have a Community dimension (operations exceeding certain thresholds for worldwide and Community-wide turnover) and the time limits set for Commission checks, it introduces a number of substantive and procedural improvements.

The new Regulation stipulates a criterion for the notification of concentrations based on their effects, thus increasing the Commission's capacity to intervene in any type of operation impeding competition (monopolies and oligopolies). It also provides for a simplified system for the referral of concentrations whereby such cases are referred to the most appropriate authority and the number of cases requiring multiple notifications is reduced.

With regard to State aid, the reforms are designed to refocus policy on a more economic approach in order to eliminate gradually aid that is liable to restrict competition, while leaving the Member States with more flexibility to adopt horizontal measures to support, in particular, the Lisbon objectives. As reducing the overall amount of State aid is a key policy objective in this field, the Commission is planning to renew a large number of existing State aid rules (research and development aid, regional aid, etc.).

Finally, the reformed regulatory framework also helps European enterprises to remain competitive in the global marketplace, where there is growing pressure for the establishment of common standards for competition enforcement.

Proactive enforcement of competition rules

Also in the interests of efficiency, proactive enforcement will strengthen the updated regulatory framework. Such enforcement will be based on:

  • effectively prioritising the enforcement efforts according to the nature and the gravity of the competition problem in order to focus efforts on the most serious distortions of competition;
  • an in-depth analysis of markets and sectors, based on criteria such as the degree of concentration and indications of collusion, the emergence of new competitors, price trends, the level of innovation, etc.;
  • strengthening the European Competition Network (ECN);
  • launching joint initiatives of competition and deregulation.

The new regulatory framework will also help step up antitrust measures. In order to destabilise cartels, the Commission hopes to introduce an effective deterrence strategy resting mainly on three pillars: leniency applications, unannounced on-the-spot investigations, and decisions imposing severe sanctions.

Similarly, the enforcement of competition rules in the liberalised utility sectors (postal services, energy, telecommunications and transport) will be further reinforced.

In addition, areas such as financial services and liberal professions, which are also subject to internal market legislation, will be given particular attention.

Finally, in addition to its enforcement role, the Commission will work on identifying market failures and examine the effectiveness of aid measures. A more thorough analysis of the effects of aid on competition will also be undertaken.


The present Communication is in response to the Council's request, in its conclusions of 11 March 2004, which the Commission report on its new approach to competition by 1 May 2004, the date of the entry into force of the new regulatory framework and, more importantly, the date of accession of ten new Member States.


State Aid Action Plan - Less and better targeted state aid: a roadmap for state aid reform 2005-2009 [consultation document - not published in the Official Journal].

Communication from the Commission, of 20 April 2004, Fostering structural change: an industrial policy for an enlarged Europe [COM(2004) 274 final - Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament, of 21 November 2003, Some Key Issues in Europe's Competitiveness - Towards an Integrated Approach [COM(2003) 704 final - Not published in the Official Journal].

Last updated: 03.04.2006