Competition Rules And The Accession Process

Author:Damien Geradin
Profession:Professor of Law at the University of Liège and Director of the Global Competion Centre
Pages:43-46
SUMMARY

The Obligations Imposed to Candidate Countries in the Competition Field. The Mechanisms of Accompaniment and Evaluation in the Competition Law Field.

 
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Among the partner countries, three States (Cyprus, Malta, and Turkey) are engaged in the accession process to the European Union. Two of them will become Members of the European Union on May 1, 2004. This chapter analyses the obligations imposed on these candidate countries in the context of their Association Agreement and the accession process. These obligations are much stronger than the obligations imposed on non-candidate countries and guarantee a relatively high level of effectiveness of the domestic competition regimes of the candidate countries.

Cyprus, Malta, and Turkey are linked with the EC through first generation Association Agreements signed during the 1960s and the 1970s. The objective of the agreements was to create a Customs Union between these countries and the EC. 84 Originally, these agreements did not contain competition rules. Such rules were only subsequently included. The Agreement with Cyprus was thus amended in 1987, among other things, to integrate competition provisions identical to those included in the EC Treaty. 85 As far as Turkey is concerned, the insertion of EC competition law provisions was achieved through a decision of the EC-Turkey Council of Association (EC 1996b). The objective of creating a Customs Union, and the perspective of a possible accession to the EC, required a higher degree of cooperation than with the other partners. 86 This integration of EC competition law provisions imposed on these countries a series of additional obligations. 87

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The difference between these countries and the other MPs became larger when the former were formally recognized as candidates for accession to the EU, and in that capacity, benefited from the accession process. 88 Their entry into the EU involves compliance with the second "Copenhagen" criteria that requires, among other things, that candidate countries put in place a viable, open, and competitive market economy. 89 New obligations were thus imposed on these countries and, in particular, the integral absorption of the acquis communautaire (body of EU laws) in the area of competition law. 90 To make sure that the candidate countries would comply with this requirement, a link of conditionality was established between the transposition of EC competition rules in the domestic legal order and the accession to the European Union. It was indeed considered essential that, before they become members, candidate countries be accustomed to a competitive discipline equivalent to the one existing in the EC. The absence of such a discipline would involve two risks. On the one hand, the undertakings of these countries would not be able to survive in the competitive environment of the EC. On the other hand, if candidate countries could gain access to the internal market at conditions different to those imposed on the current member countries, this could prejudice the "level playing field" existing in the EC. 91

The distinction between candidate MPs and non-candidate MPs having been established, it is now important to reflect on the extent of the obligations imposed on the former. In this respect, an analysis of the actions undertaken by the EC vis-à-vis the CEECs in the competition field is particularly relevant. The candidate MPs are indeed going through a process that is in many ways similar to the accession process imposed on the CEECs. 92 Relying on the experience of the CEECs, the following sections will seek to identify the extent of the obligations imposed on the candidate countries, as well as the mechanisms used to help them achieve these obligations.

The Obligations Imposed to Candidate Countries in the Competition Field

The analysis of the obligations imposed on the CEECs must combine a review of the provisions contained in the Europe Agreements with the two main types of obligations that the accession process imposes on candidate countries: the alignment of their law on EC law, and the implementation of an effective enforcement system. 93

At the substantive level, the bilateral agreements concluded with the CEECs entirely reproduce the competition provisions of the EC Treaty. These agreements prohibit restrictive agreements, abuses of a dominant position and State aids. 94 Such types of conduct are declared Page 45 incompatible with the Association Agreement. A requirement of consistent interpretation is inserted in the agreements pursuant to which their provisions must be applied and interpreted in conformity with the decisional practice of the European Commission and the case law of the ECJ and the CFI. These agreements also provide for obligations of exchange of information between the authorities of each of the parties. The candidate MPs have committed to comply with similar...

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