Independence in Competition Policy and Enforcement

Abstract

Independence has been a mainstay of competition policy and enforcement in Europe and in many jurisdictions that have followed that model. However, the perception of regulatory failure which led to the financial crisis, the rhetoric of political supremacy over technical expertise, the renewed attention towards the application of “public interest” tests in some jurisdictions and the quest for new tools of enforcement to meet the challenges of the so-called “new economy” in light of the alleged inadequacies of the current antitrust paradigm, all call this principle into question. The principle of political independence of competition authorities is widely accepted internationally. However, in practice it takes a multiplicity of forms in various jurisdictions and it has an impact on a number of dimensions of competition law and policy. This paper looks in greater detail at the experience of the EU and that of the UK with comparative references to other jurisdictions within the EU and elsewhere. The experience in the EU and the UK jurisdictions is interesting for a number of reasons. First, the origin and rationale for independence in competition law enforcement has some peculiarities which derive from the nature of competition law and practice within the institutional framework of the EU. However, as is the case with many aspects of the EU legal order, the principle has evolved beyond its original rationale over the initial decades of application. In light of the interrelation between the EU and the national jurisdictions the principle of independence in competition law enforcement has had an impact on the institutional design of national competition authorities within the EU which have proliferated over the last 20 years and aligned to the EU system with some important distinctions. Moreover the general principles that have emerged within this system have often been looked at and considered elsewhere internationally as a result of organisations such the OECD and the ICN. The comparison with the UK regime is particularly interesting for two reasons. First because, notwithstanding the alignment of the UK substantive regime with the EU, it has maintained a number of interesting distinctive features such as the ability to intervene on public interest grounds in relation to mergers and more widely in relation to markets (with the potentially far reaching ability to impose remedies in case of a negative finding even in the absence of unlawful conduct and competition law infringement). Second because Brexit provides at least an opportunity to consider certain aspects of the institutional design and remit of UK competition enforcement and the strength of the independence of the UK Competition & Markets Authority (the CMA) can be an important consideration. This contribution looks at the principle of independence along two axes: (1) appointment and institutional design, (2) case selection and prioritisation. It then offers some conclusions and reflections on outcome and accountability. It concludes that now more than ever independence in competition law enforcement is required. Independence does not mean that a competition authority should be oblivious of the general political context within which it operates. To the contrary a competition authority must maintain a dialogue with both the executive branch and elected representatives to ensure the relevance of its action as well as to maintain a credible advocacy role in assisting other areas of policy and even legislation when it is afforded those powers. This form of “soft accountability”, if coupled with strong measures to protect an authority from pressure points, is desirable. As a law enforcement agency a competition authority should also subject to hard accountability through the judicial process. This is important and, far from creating a tension, this dimension is a guarantor of independence because judicial oversight of the application of the law has the effect of pushing a competition authority to adopt procedures that would withstand judicial scrutiny and indirectly preserve the integrity of the system.