European Competition Enforcement Policy: Integrating Restitution and Behaviour Control

Abstract

This paper takes a fresh look at the problem of penalties and damages for breach of competition law. It argues that current European Union (EU) policy, in trying to add private mechanisms on to existing public sanctions, is bound to produce major complications. Instead, a fresh look at the goals and available mechanisms is needed. First, the fundamental responsibility of an enforcement agency should be maintaining a balanced market. Second, there should be an integrated approach to public and private consequences and enforcement policy. Third, a just solution can only be reached if restitution of market balance (damages) is achieved before imposition of public penalties. Fourth, a public enforcement policy that incentivizes restitution can avoid the delay, cost, complexity and many undesirable consequences of private enforcement. This paper begins by stating the primary policy objectives for enforcement in competition infringements. It then summarizes the historical approach to enforcement, in which the influential system of private enforcement in the United States is contrasted with the public enforcement regime of the EU. That analysis leads to identification of the current conundrum for policy makers of how to 'add on' private damages, hence private enforcement procedures, to the EU public enforcement regime. Since that approach has met with considerable objections and political resistance, the paper attempts to take a step back and proposes a different approach.