‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

ACLEFourth Annual Competition & Regulation

Meeting on the specialty topic of ‘EC Competition Enforcement Data’

Eline Poelmans, Research Doctoral Candidate, Catholic University of Leuven, Belgium

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

1. The emergence of a ‘common’ competition policy in the ECSC

2. The competition laws of the ECSC

3. Data Issues

4. Conclusions

5. Acknowledgements

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

1. The emergence of a ‘common’ competition policy in the ECSC

• US: first federal ‘competition law’: Sherman Antitrust Act (1890)• Europe: first ‘European’ competition laws only in the second half

20th century• 1952: foundation of the European Coal and Steel Community

(ECSC) by West Germany, France, Italy, Belgium, The Netherlands and Luxembourg

Analysis of - how the concept of ‘competition’ was perceived- how the ECSC competition laws were implemented in the first 15 years of the ECSC (1952-1967)

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

2. The competition laws of the ECSC

• The obligation of the HA to liquidate any restrictions on the competition principle (articles 2 and 5)

• Article 65: deals with prohibiting ‘anticompetitive agreements’

• Article 66: deals with ‘concentrations’ and ‘misuses’ of economic power

• A ‘notification obligation’ to the High Authority (for article 65 and 66)

• Made law by the HA in July 1953 for article 65 and in May 1954 for article 66

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

3. Data Issues for ‘agreements’ and ‘concentrations’

eg. for ‘concentrations’

• I. Approval Ratio

• 1. Method- # approval requests for ‘concentrations’ submitted to the HA- # approved requests for concentrations

• 2. Sources- ‘yearbooks’ of the ECSC + common yearbook of the ECSC, Euratom and the EEC- other sources (Archives of the European Commission in Brussels)- the authorizations for concentrations made by the HA

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

• 3. Approval ratio (ar) (eg for the ‘concentrations – article 66)

136 [ ie # of approved concentration requests ]

ar = -------------------------------------------------------------------------- = 0.415 ( = 42 %) 328 [ ie # of concentration approval requests]

But ... (see table: Requested versus approved concentrations in the ECSC between 1952 and 1967)

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

Year 52

53

54

55

56

57 58 59 60 61 62 63 64 65 66 67 T

# new procedures requested

0 1 14

38

40

11 12 20 14 14 16 19 31 39 34 25 328

Total # new procedures requested (cumulative)

0 1 15

53

93

104

116

136 150

164

180

199

230

269

303

328

328

# procedures approved

0 1 6 4 9 7 5 7 5 7 6 8 16 22 21 12 136

Total # procedures approved (cumulative)

0 1 7 11

20

27 32 39 44 51 57 65 81 103

124

136

136

# procedures concluded

0 1 13

14

18

15 13 38 18 10 10 10 19 25 28 35 267

Total # procedures concluded (cumulative)

0 1 14

28

46

61 74 112 130

140

150

160

179

204

232

267

267

Pending at the end of the year

0 0 1 25

47

43 42 24 20 24 30 39 51 65 71 61 /

Total # procedures at the beginning of the year (pending + new)

0 1 14

39

65

58 55 62 38 34 40 49 70 90 99 96 /

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

Year 52

53

54

55

56

57 58 59 60 61 62 63 64 65 66 67 T

# requests that weren’t approved (yet) or where it wasn’t necessary to submit a request

0 0 7 10

9 8 8 31 13 3 4 2 3 3 7 23 131

(1) Art 66 not applicable

0 0 1 7 7 3 8 29 12 3 3 2 2 3 3 9 92

(2) Further investigation needed (§5)

0 0 2 0 0 1 0 0 0 0 0 0 0 0 0 0 3

(3) Approval request for concentration that occured before ratification of article 66

0 0 4 2 2 3 0 0 0 0 0 0 1 0 0 0 12

(4) Exemption (§3)

0 0 0 1 0 1 0 2 1 0 1 0 0 0 4 14 24

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

136 [ ie # of approved concentration requests ] • ar = -----------------------------------------------------------------------------------

= 0.596 (= 60%) 228 [ ie # of conclusions (267) - # of pending investigations (3) - # of requests for concentrations already

established before article 66 became law (12) - # of exemptions (24) ]

approval ratio increases from approximately 42 to 60 %

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

• II. Characteristic features of the companies that were successful in having their ‘concentration’ requests approved by the High Authority

• Sources- ‘yearbooks’ of the ECSC + common yearbook of the ECSC,

Euratom and the EEC- other sources (Archives of the European Commission in Brussels)- the authorizations for concentrations made by the HA

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

•Successful approval requests by country (1952-1967)19

5219

5319

5419

5519

5619

57

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

0

5

10

15

20

25

Italy

the Netherlands

Luxembourg

Belgium

Community

France

West Germany

ECSC

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

• Possible questions: concentrations– by country (also ‘cross border’ decisions)– by type of concentration

• simplified: eg coal, steel or coal-steel concentrations• more specific: different subdivisions:

– steel-steelprocessing– coal-carbopetrochemicals– etc…

– by concentration procedure• acquisition of part of the shares• establishment of a new firm• merger• etc…

• Conclusions: biased by big countries (ie West Germany)

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

• Goal: analysis of - how the concept of ‘competition’ was perceived- how the ECSC competition laws were implemented in the first 15

years of the ECSC (1952-1967) were there certain characteristic features of the concentrations in certain countries? can we find a link between the type of approved concentration and the relative importance of the coal and steel industries in the total industry of the different countries? what historical explanations can we find? etc…

‘Agreements and Concentrations’ in the ECSC Countries between 1952 and 1967: Data Issues

4. Conclusions

5. Acknowledgements

Eline Poelmans, Research Doctoral Candidate, Catholic University of Leuven, Belgium