The Public Consultation on Regulation 1/2003: A Stronger Institutional Infrastructure for Fostering the EU Common Competition Culture

The establishment of the ASEAN Economic Community (AEC) should transform this regional association of states into “single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy” (AEC Blueprint). The present study analyzes the current level of progress in introducing a regional competition law and policy that would create a level playing field for the businesses within the AEC. The paper also addresses the functionality of current “ASEAN way” of coordinating the enforcement of the national competition laws across the ASEAN jurisdictions. The second part of the study outlines the experiences of the decade of decentralized enforcement of competition rules within the Internal Market of the European Union (EU) through cooperation and coordination between the EU Commission and national competition authorities (NCAs) of the EU Member States within the European Competition Network (ECN). Special focus of the research is on the “effect on trade”, which is used as a jurisdictional criterion that determines application of the EU competition rules and national competition rules. The lessons from the functioning of the ECN can be instructive for the development of the regional framework for competition law and policy in the AEC and wider Asia-Pacific region, where the growing number of the national competition law regimes require cooperation and coordination among the NCAs and more generally between the states under the multitude of regional free trade agreements and bilateral investment treaties, which often contain competition enforcement obligations.

The European Competition Network (ECN) was created in 2002 to improve cooperation between the National Competition Authorities (NCAs) and the European Commission (EC). The ECN is, however, not a legal body and thus cannot produce decisions or be held accountable for its actions. It must be conceived as a forum for cooperation meant to operate two main tasks: (i) to improve the case allocation between NCAs and the EC and (ii) to exchange information between the authorities.1 The ECN in its current form arose in a general context of modernisation of competition law enforcement2 that started with Regulation 1/20033 and that took place at a substantive, procedural, and institutional level. A major narrative that has settled in the academic literature of the last decade is that the Commission employed Regulation 1/2003 as a way to dominate competition law enforcement across the European Union (EU) instead of effectively decentralising it. It regarded competition law with a top-down approach that intended to replicate the Commission’s model at the national level.4

The decentralized system of application of the EU antitrust rules made possible the application of the same EU competition rules by different Member States with different procedures and enforcement systems. The role of the European Commission is to ensure that the Articles of the Treaty are enforced in a consistent and coherent manner in all competition cases. Major issues (such as the legal powers that the EU National Competition Authorities (NCAs) are endowed with and the possibility to complete the national tools’ kit where elements are missing) have been addressed within the European Competition Network (ECN) through best practices and recommendations. A significant level of convergence has been achieved through these “soft tools” but greater or even full convergence at the level of all EU Member States requires further work. As for the enforcement priorities within the ECN, it may be said that the European Commission’s priorities and that of the Member States seem to be different. This essentially derives from the fact that the cases of the National Competition Authorities (NCAs) are influenced to a considerable extent by the national economic specificities: all NCAs investigate cartels and other anticompetitive practices, but the priorities are linked to the national economic situation pertaining. On the other hand, cartels are without any doubt the most harmful infringements of competition and the European Commission’s approach in this respect should be a trend for all NCAs. Convergence should be sought not only for the legal powers that the NCAs may have at their disposal and for their enforcement priorities, but also for other competition policy related aspects such as: state aid and advocacy. Having in mind the diversity of the national competition systems within the ECN, this chapter endeavours to provide an overview on the convergence dimensions at EU level from legislative and enforcement perspectives in the competition filed. At the same time, the paper will highlight the convergent aspects with their benefits as well as the critical points that should be improved.

In the late 1990s the European Commission set out on the most radical transformation of the enforcement of European competition law in forty years. The highly centralized enforcement regime where competition law was seen as a key tool in market integration was replaced with a decentralized, self-regulatory model with an emphasis on economic principles. The creation of a network of national competition authorities (NCAs) and the European Commission Directorate General for Competition (DGComp) was a key element in this reform. The European Competition Network (ECN) is the institutional form under which the efficient and smooth enforcement of European competition norms by all NCAs and the Commission is to be achieved, enforcement having been (re)delegated downwards to the national level as part of the modernization process. This chapter reflects on the constitutional implications of the modernization of European competition law with particular reference to the ECN, which as a form of network governance creates a number of constitutional challenges, notably relating to the questions of consistency and accountability. The chapter first addresses the constitutionalization of the EU before moving on to discuss the architecture of competition law enforcement in the EU. It then sets out how, primarily in functional terms, the ECN is seen as successful. The particular constitutional challenges posed by the operation of the network, notably consistency and accountability, are analysed. It then discusses the role the courts have played in endorsing and challenging the competition law enforcement governance structures before concluding.

This paper assesses the functioning of the European Competition Network (ECN) introduced by the EC’s modernisation package of 2004 to replace the European Commission’s enforcement monopoly in the field of competition law. By all accounts, and contrary to the fears of early critics, the modernisation of EC competition policy and the decentralisation of its enforcement have not led to disintegration within the network of competition regulators. The institutional differences between national competition authorities (NCAs) have so far not had a negative impact. The ECN is fuelled by the nature of the increasingly technocratic and expert-driven discipline of competition law, as well as by the Commission’s conscious strategy of ‘soft’ centralisation. The new system is also reinforcing a specific perspective on competition law, focused on market efficiency, and viewed as an autonomous discipline divorced from outside pressures and influence by the Member States. Even though such a conclusion seems counterintuitive, overall the ECN has had, and is likely to have, a unifying effect both in enforcement and in policy formation. There are, however, pressures in the opposite direction, which might become stronger as the NCAs’ experience grows and horizontal communication increases in frequency.

Since the lift and escalator cartel marks one of the highest fines ever imposed in Europe on five companies involved in a cartel in the European countries Belgium, Germany, Luxemburg and the Netherlands and a quite similar cartel in the same market in Austria, which is still the highest fine ever imposed here with around E 75 million, it is undoubted that cartels do not know any boundaries. That is the reason why national competition authorities—on their own as well as in cooperation with other national competition authorities within the European Competition Network (ECN) and the European Commission—play an important role in the enforcement of competition rules. But the situation for competition law enforcers is unequal across Europe. Some national competition authorities suffer from insufficient human resources, low budgets, and limited legal powers. In this regard, efficiency plays an important role. Authorities have to spend their human resources as good as possible and pick up cases with higher priority at first. So, the first thought of this contribution is spent on efficiency. Further on, because of the need to be more efficient, settlements were developed and nowadays are simply a success story. Finally, new challenges for competition authorities arise in the field of digital markets, and their effects on national competition authorities will be part of this article as well. At first, we should take a closer look on the Austrian example. The origins of the Austrian Federal Competition Authority (FCA) date back to the year 2002 when it was founded. Since then, the Austrian authority launched investigations in several economic sectors with a focus on the food sector, the transport and steel sector, and recently the online trade sector. To be more concrete, the FCA enforces competition rules in a national market with more than 400.000 undertakings. In 2014, the FCA conducted investigations in 51 cartel cases, 23 abuse of dominance cases, cleared 322 national mergers, and checked 317 European merger notifications. With 20 conducted dawn raids in the year 2014, the Austrian competition authority is on the fourth position worldwide as far as the number of dawn raids is concerned. The FCA achieves to fulfill its legal obligations with an annual budget of 2.8 million and a staff of 25 case handlers. This situation makes it very important for the FCA to work as efficient as possible because the number of cases is huge but human resources are rare. The main question in this context is: How can this situation be improved for European competition authorities? Of course, national legislative bodies should provide their competition authorities with adequate resources, and their competition policy should focus on this project; but whenever national legislative bodies fail to do so (justified because of other priorities or simply because of reluctance), European legislation could provide alternatives. A legislative body that sets a common European framework and a minimum standard of equipment for a competition authority could be a solution and needs to be found. The second aspect is the one of settlements. When companies do not contest the circumstances of a case and make a settlement statement in which they agree to certain circumstances, they can get a reduced fine. For competition authorities, such settlement decisions shorten the duration of proceedings extremely. It would be a progress if all European competition authorities tried to harmonise their settlement procedures as much as possible to reach common European standards. Digital markets also offer a vast field of competition questions. Many authorities already focus on competition cases, and lots of infringements have been found and judged, for example in the online trade sector. The digital media create two main fields. On the one hand, certain practises like exclusionary agreements in the online industry harm competition, and on the other hand, since the World Wide Web offers many different ways to trade with goods, new phenomena have turned

This chapter assesses the cooperation between the European Commission and national competition authorities (NCAs) in a decentralised system of antitrust enforcement. The recent adoption of a Directive to empower the competition authorities of the Member States to be more effective enforcers (ECN+ Directive) aims at ensuring more effective enforcement and mutual assistance among NCAs throughout the EU by putting in place minimum guarantees and powers to detect and tackle infringements. The chapter then explains the role of the European Competition Network (ECN), how it is organised and governed. The ECN was created in conjunction with the adoption of Regulation 1/2003. It consists of the NCAs and the Commission forming together a network of public authorities applying the EU competition rules in close cooperation.

At the time of the fifth enlargement of the European Union on 1 May 2004, the competition rules of the European Community underwent the most fundamental and significant changes since they came into existence in 1958, both in terms of substantive and procedural rules. These unprecedented changes, called “modernisation” by the European Commission, are characterised by abolishing the prior notification system under Article 81 of the EC Treaty and introducing the decentralised enforcement regime under the new procedural regulation (Council Regulation No 1/2003). The Regulation provides a system under which the competition rules are enforced in co-operation by the Commission and the national competition authorities (NCAs) on the one hand, and by the Commission and national courts on the other.This paper first summarises the background to the introduction of the decentralised enforcement regime, followed by a discussion of the related rules under Regulation 1/2003. It then analyses the decentralised system from a statistical view point, as well as in the light of other related rules (including a series of the Commission notices). The author concludes that the new regime has, until now, worked relatively well under the European Competition Network, composed of the Commission and the NCAs. In fact, some 500 cases were handled under the Network during the first 2 years and 7 months, yet no conflicting cases have been reported.However, it is too early to conclude that the current system leaves nothing to be desired; indeed there remain several questions to be answered. First, the Commission and NCAs are requested to interpret and apply the competition rules in a consistent manner throughout the Common Market. In this regard, it is expected that a uniform leniency programme will be adopted by all NCAs in the near future in order to provide all undertakings with the same opportunity of immunity from fines regardless of the first national competition authority which they report to. Second, the importance of the accountability and legitimacy of the enforcement of the competition rules should not be overlooked under the decentralised regime, where a number of different authorities are, by their nature, liable to be isolated from democratic or parliamentary control.It is hoped that the new decentralised regime will surmount the above obstacles and realise the effective enforcement of the competition rules throughout the enlarged Union.

For a competition agency to be visible and successful, it needs a face and a voice that are known and recognised beyond its remit as an authority in competition advocacy and sound economic judgement. Until not so very recently, it would have been unusual for the President of a national competition authority in the European Union (EU) to be well known beyond its jurisdiction. An exception to this rule—in the past—may have been the case of Italy, where a former Prime Minister was appointed as President of the authority in 1994. But even a number of years later, it would have been rare for competition law practitioners in a given country to be acquainted with the policies of other national competition authorities, let alone their staff. With the installation of the International and the European Competition Networks, this has now changed and this is, in particular, the merit of a small number of very well-known and charismatic personalities at the top of these agencies. One of these outstanding competition chiefs is Prof. Jacques Steenbergen, the President of the Belgian competition authority. He has now turned 65, and for this occasion, his friends and colleagues have put together an impressive Festschrift, which is called Mundi et Europae Civis. In recognition of Steenbergen’s exemplary professional track record as a leading academic, a private practitioner, a legal secretary at the European Court of Justice, and from 2007 onwards as the head of the Belgian competition authority, a further subtitle of the book in 21st century parlance could have been: Curriculum portarum versatilium. The 19 pages of bibliography collating the publications of Jacques Steenbergen place on record that competition law practice should not be isolated from other legal disciplines. Jacques Steenbergen has contributed articles on topics as varied as corporate restructuring, product liability, consumer protection, foreign trade law, constitutional law as well as on all aspects of Belgian and EU competition law. With hindsight, an article published in 1984 sounds almost prophetic: ‘The Court of Justice and governance in an Economic Crisis’, which Steenbergen co-authored with Mertens de Wilmars, the then President of the European Court of Justice. In the last almost 10 years of his professional career as the head of the Belgian competition authority, Steenbergen has been instrumental in making this authority an important hub in the network of European competition authorities, always somewhat of a primus inter pares given it’s not only geographic proximity to the European Commission. Three contributions in the Liber Amicorum authored by Bruno Lasserre, Andreas Mundt, and Wouter Wils are dedicated to this topic. There are further contributions on the institutional role of a national competition authority by Roger Witcomb on the situation in the United Kingdom as well as by Chris Fonteijn and Annetje Ottow on the independence of competition authorities from a global and from a Dutch perspective. The book provides an excellent panopticum of most of the current topics around competition policy and practice as well as other key issues on the EU political agenda such as political governance in the Euro crisis (contribution by Frans Vanistendael) and of the challenges of a new trade policy (contribution by Hugo Paemen). Other articles cover issues of procedure such as the contribution by Koen Lenaerts on the interplay between regulation number 1049/2001 and competition law-specific rules on access to documents alongside the contribution by Piet Van Nuffel on whether confidential business information enjoy the specific protection of a fundamental right. The book takes a keen interest in the prospective development of competition policy and practice into new areas of the law such as the inter relationship between sustainable development and competition law (articles by Jan Wouters/Laura Beke, David D’Hollander/ Kolja Raube, and Rene Smits). The book is rich in linguistic variety with articles in English, in French, and also in the Dutch language. It is an important source of reference and an ideal lectuur for a relaxing yet edifying extended weekend in the Hautes Fagnes.

The EU Member States are essential partners of the European Commission for enforcing the EU competition rules. Since 2004, the national competition authorities of the EU Member States (NCAs) are empowered by Council Regulation (EC) No 1/20031 to apply the EU competition rules alongside the Commission. Indeed, the NCAs are obliged to apply the EU competition rules to agreements or practices that are capable of having an effect on trade between Member States. For over a decade both the Commission and the NCAs have enforced the EU competition rules in close cooperation in the European Competition Network (ECN). The ECN was created expressly for this purpose and is now recognised as a successful and innovative model of governance for the complementary implementation of EU law at both European and national levels. Enforcement of the EU competition rules is now taking place on a scale which the Commission could never have achieved on its own. Since 2004, the Commission and the NCAs took over 1,000 enforcement decisions, with the NCAs being responsible for 85 per cent. Action by a multiplicity of enforcers is a much stronger, more effective and better deterrent for companies that may be tempted to breach the EU competition rules. The Commission typically investigates anticompetitive practices or agreements that have effects on competition in three or more Member States or where it is useful to set a Europe-wide precedent. The NCAs are usually well placed to act where competition is substantially affected in their territory. NCAs have the expertise on how markets work in their own Member State. That knowledge is of great value when enforcing the competition rules.

European Commission - White Paper: Damages Actions for Breach of the EC Antitrust Rules

The European Competition Network: Structure, Management and Initial Experiences of Policy Enforcement

The European Union(EU) is more than a common market and an economic union. Nevertheless, implementing the internal market is still one of the core goals of the EU. It aims to accomplish a highly competitive social market economy, protected against distortion of and interference with competition. The European competition law has gained increasing influence over the past years. One reason is the changed system of enforcement which gives national competition authorities and courts more competences to interpret and enforce European competition law. Another reason in the constant nominal thresholds which separate the scope of European and national competition law. Due to inflation and market concentration they are de-facto decreasing in the course of time. Furthermore, European cartel and merger control has to be observed not only by European companies but by any undertaking worldwide having small but not negligible turnover in the European Union. This has been illustrated by the take-over of the Californian computer producer AST Research by Samsung. Samsung marketed only marginal quantities in the EU and AST had a European market share of only 2.5% at that time. The companies failed to file a merger notification with the Commission. Though the Commission imposed comparatively small fines in that case, companies should be aware of higher fines in the future as the Commission might take the Samsung/AST case as precedent and might presume a greater awareness of European competition law.

Combining historical, conceptual, and empirical approaches, this article studies one of the most fundamental, yet underexplored, questions surrounding Regulation 1/2003: What limits European Union (EU) competition law places on the adoption and application of national competition and other laws? The relationship between EU competition and national laws was supposedly settled with the adoption of Regulation 1/2003. There are two exceptions to the rule in Article 3(1), under which national competition authorities and courts must apply EU competition law when applying their national competition laws, with primacy for EU provisions: Article 3(2) leaves room for ‘stricter’ national competition rules on unilateral conduct, and Article 3(3) for national rules pursuing a ‘predominantly different objective’. The solution offered by Article 3 is not workable. Through a historical study of the political discussions preceding Article 3’s adoption, a conceptual analysis of potential interpretations, and a systematic content analysis of French and German practice, this article reveals the lack of a dividing line between the notions of national competition laws and other laws. It calls for reform of Article 3 to ensure that conduct that should be governed by EU law is not assessed under national rules and standards that differ from one Member State to another.

The Illumina/Grail and Towercast rulings of July 2022 and March 2023 create new avenues for the control of concentrations below the European Union (EU) and national turnover thresholds. These new avenues concern (i) a referral to the European Commission by a national competition authority (NCA) and (ii) a review under the EU provision on abuse of dominance by an NCA. In both cases, the rationale seems predominantly based on the need to have effective competition law oversight on the so-called killer acquisitions of emerging competitors and undertakings that aim to extend their dominance by acquiring existing (small but) effective or particularly innovative competitors. The obvious drawback of increasing possibilities of the ex-post merger control is that this comes at a cost to legal certainty and the one-stop-shop principle that has characterized the EU merger control so far. Especially the Towercast judgment calls into question the structure, purpose, and merits of merger control in the EU over the past 35 years. Looking forward, much will depend on how the NCAs and the European Commission will use their new-found powers; some reorganization of merger vetting procedures at the national level may be required. However, it appears likely that the system of merger control in the EU will come to focus more sharply on mergers that raise serious competitive concerns and less on providing a system of comprehensive administrative review, based mainly on size. This may also provide opportunities to rationalize the application of public enforcement capacity.