(2004/C 78 E/0932)

WRITTEN QUESTION E-3929/03

by Stavros Xarchakos (PPE-DE) to the Commission

(19 December 2003)

Subject:   Increase in inflation in Greece

Many EU countries (and particularly Greece) have seen substantial price increases since the introduction of the euro, which have meant a very considerable erosion of consumer income. The Greek press recently announced that fresh increases in the prices of staple goods such as flour are imminent, and this will certainly have a knock-on effect in the market. It should be borne in mind that producers in agricultural regions in Greece, for instance in Thessaly, are complaining that Greece imports wheat from as far afield as Australia, even though agricultural cooperatives have stocks of thousands of tonnes of unsold first-class Greek wheat (to cite but one instance, in one village in the Prefecture of Larissa there are 700 tonnes of wheat which have remained unsold for months).

Is it contrary to Community legislation to impose very heavy fines and other penalties on undertakings which continually put prices up, engage in speculation or trick consumers — for instance by advertising ‘price freezes’ while blatantly increasing prices? What kind of penalties might be imposed and what might the maximum fine be? Could penalties also be imposed on undertakings which announce a given sales price for products (for example, through press advertising or labels on shelves), while charging a different price to consumers? What have been the three largest fines or other most severe penalties imposed on undertakings in the eurozone over the last two years since the introduction of the euro? What is the largest fine or other penalty imposed for the same reasons on a Greek undertaking since 1 January 2002?

Answer given by Mr Monti on behalf of the Commission

(19 February 2004)

It is not, in principle, contrary to Community law for a Member State to fine companies that increase prices to excessive levels, cheat consumers or provide misleading information about prices. Moreover, Member States must make sure that the relevant Community legislation is complied with, viz. the harmonised Community rules on consumer protection and Community competition rules (1).

These rules establish a frame of reference for the actions of firms and prohibit a certain number of practices that are regarded as unacceptable.

Community consumer legislation regulates unfair or deceptive behaviour towards consumers and certain practices regarding the display of prices. The main instrument is Directive 84/450/EEC (2), as amended (3), relating to misleading advertising, which aims to put in place in Member States effective means of monitoring, taking action against and imposing penalties on those who target consumers with misleading advertising. Moreover, Directive 98/6/EC on the indication of prices (4) requires indication of the selling price and the price per unit of measurement of products offered by traders to consumers in order to improve consumer information and provides that Member States must lay down effective, proportionate and dissuasive penalties for infringements of these provisions. Lastly in June 2003, the Commission presented a proposal for a Directive aimed at ensuring full harmonisation of the requirements relating to unfair business practices within the EU (5). The most important element of this proposal is the general ban on unfair practices, as defined in the proposal and which include misleading and aggressive practices.

All of these provisions of Community consumer legislation will, when incorporated into national law by the Member States, ensure that traders who mislead consumers as regards prices are identified.

Community competition law prohibits firms from abusing a dominant position where trade between Member States is affected. It would, for example, be considered an abuse to sell at excessive prices or to give discriminatory advantages to certain customers, thereby putting competitors at a disadvantage.

Community competition law also prohibits restrictive practices and concerted practices between undertakings, with decisions of associations of undertakings ranking as such, that serve to increase prices (6).

It also lays down fines for infringement of its rules. The fine may not exceed 10 % of the firm's global turnover in the preceding business year (Article 15(2) of Regulation No 17/62 (7) and, from 1 May 2004, Article 23(2) of Regulation No 1/2003 (8)).

The three largest fines imposed at Community level for restrictive practices engaged in by firms in the euro zone in the last two years were: EUR 118 125 000 (on Degussa in the Methionine decision) (9), EUR 249 600 000 (on Lafarge in the Plasterboard decision) (10) and EUR 99 000 000 (on Hoechst in the Sorbates decision) (11)… For abuse of a dominant position, the largest fines were: Deutsche Telecom (EUR 12 600 000) (12) and Wanadoo (EUR 10 350 000) (13). No fine has been imposed at Community level in the last two years on a Greek firm.

(1)  From 1 May 2004, the relationship between Community competition rules (restrictive practices and abuse of a dominant position) and national competition law will be governed by Article 3 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles81 and 82 of the Treaty, OJ L 1, 4.1.2003. As regards unilateral acts by companies (as opposed to restrictive practices between companies), the Member States may apply even stricter competition rules than those laid down in Community law.

(2)  Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising, OJ L 250, 19.9.1984.

(3)  Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997 amending Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising, OJ L 290, 23.10.1997.

(4)  Parliament and Council Directive 98/6/EC of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers, OJ L 80, 18.3.1998.

(5)  Proposal for a Parliament and Council Directive concerning unfair business-to-consumer commercial practices in the Internal Market and amending Directives 84/450/EEC, 97/7/EC and 98/27/EC (Unfair Commercial Practices Directive), (COM(2003) 356 final).

(6)  As with abuse of a dominant position, this is prohibited only where the practice in question affects trade between Member States.

(7)  Council Regulation (EEC) No 17/62: First Regulation implementing Articles 85 (now Article 81) and 86 (now Article 82) of the EEC Treaty, OJ Ρ 13, 21.2.1962, p. 204.

(8)  Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003.

(9)  Commission Decision of 2 July 2002, OJ L 255, 8.10.2003.

(10)  Commission Decision of 27 November 2002, not yet published.

(11)  Commission Decision of 1 October 2003, not yet published.

(12)  Commission Decision of 21 May 2003, OJ L 263, 14.10.2003.

(13)  Commission Decision of 16 July 2003, not yet published.