Enforcement Of Competition Rules Research Articles

Rights of Complainants Before the European Commission—a Critical Analysis

Third-party complainants play a crucial role in the enforcement of competition rules.1 As the European Commission itself noted, ‘[t]he complainant can help the Commission in supplying evidence of the anticompetitive practice and thus in establishing the infringement’.2 Given the authority’s limited resources, which result in a limited ability to conduct an ongoing screening of several markets, complaints are the most important source of information for the Commission. Unsurprisingly, the landmark decisions issued in recent years, e.g. Google Shopping, were driven by complaints filed by several market participants.3 ... Against this background, one should expect the legal position of complainants during antitrust proceedings before the Commission to be effectively protected. A lack of such protection can result in reduced incentive to file a complaint. This is even more relevant for less affluent victims for whom it is sometimes difficult to obtain specialised legal support or to make successful private enforcement claims and who are therefore even more dependent on the enforcement by the Commission. On the other hand, there are arguments for limiting the procedural rights of complainants, which are focused on the efficiency of proceedings and good management of resources.4 In theory, a balance is struck between incentivising complaints and the usage of the Commission’s resources through prioritising cases or choosing criteria to reject specific complaints.5 We would like to take a critical view of this balance through the lens of effective judicial protection of complainants’ rights.6

National Development Antitrust Enforcement against Tech Companies in Italy: Novel Developments and Implications

Tech companies have lately become the target of vigorous antitrust enforcement in Italy. In the course of 2021 alone, the Italian Competition Authority (‘ICA’) conducted four antitrust investigations, three of which ended up with findings of anticompetitive behaviour and heavy fines (i.e. Google/Enel, Amazon/Apple, Amazon Logistics)1, and one with a referral to the European Commission (‘EC’) (i.e. Google Advertising). In this article, we briefly review these decisions and the underlying theories of harm as well as discuss the wider implications. We argue that these decisions may have far-reaching implications going beyond the local regulatory risk, for they further stretch the fashionable theories of harm the Commission has been lately enforcing against tech companies and lower the threshold for intervention in the IT space; they are inspiring other national competition agencies (‘NCA’) across the European Union (‘EU’), and, last but not least, they contribute to a worrisome, ever increasing fragmentation trend in the enforcement of competition rules against tech companies.

Should Wealth and Income Inequalities Be a Concern for Competition Law

Economic inequality is on the rise around the world. The gap between rich and poor has been widening steadily, with the covid-19 pandemic further reinforcing the trend. Differences in how much people own and earn have become so pronounced that they are causing serious economic, political and moral concern. As a result, academics, policy makers and politicians have been asking what generates these differences and how they could be curbed.This Research Paper investigates that whether the competition law enacted by the country, is miserably contributing to the observed inequality trends. While the link between competition law and inequality has historically been given little prominence in the inequality literature, on existing work by providing a comprehensive investigation of the relationship between competition law and income inequality across a wide range of jurisdictions over an extended time period.This paper seeks to build widespread acceptance of a prior relationship between effective competition law and inequality, the exact nature of the relationship between competition law and inequality remains largely unexplored empirically.A major source of wealth and income inequality appears to be the immense economic power enjoyed by large multinational corporations. Against this backdrop, prominent scholars have argued that a more equal society could be ensured through enforcement of competition rules, not least in labor markets. Yet, the precise extent to which competition law can and should be concerned with distributive issues remains unclear.

The Role of (In)formal Governance and Culture in a National Competition System: A Case of a Post- Socialist Economy

Research increasingly suggests that the effectiveness of competition laws and policies could be enhanced if their implementation is linked with a better understanding of the cultural influences on competitionrelated decisions.Moreover, the lack of competition culture has been considered one of the main barriers to the enforcement of competition rules. But the studies examining this interplay of competition policy and national culture appear to be rather limited. Based on interviews with key actors of the Croatian competition system, this study examines the interaction of the competition system and the national culture through the governance perspective of a European (post)transitional society. Our findings indicate three key features that are unlikely to support the competition system development: first, collectivism and high power distance in the society; second, a strong influence of planned economy legacy; and third, a clash between the process of Europeanization and inherited collusion-friendly (in)formal governance mechanisms. Based on a unique set of empirical evidence, the contribution of this article lies in the analysis of the relations between modes of governance, national culture, and competition system development in a postsocialist society. This study is expected to have broader resonance for other post-transitional countries and for other developing countries with similar cultural features. competition law, competition culture, informal governance, trade associations, postsocialist countries, national culture, Central and Eastern Europe, South-East Europe, planned economy legacy, Europeanization

Lundbeck v Commission: AG Kokott’s Opinion gives guidance on the enforcement of competition rules on pay-for-delay agreements

<i>Lundbeck v Commission:</i> AG Kokott’s Opinion gives guidance on the enforcement of competition rules on pay-for-delay agreements

Фармацевтический рынок ЕС: проблемы конкуренции

The paper reviews recent developments in the enforcement of competition rules in EU pharmaceutical sector. Based on a number of antitrust cases dealt with by the European Commission, it concludes that even big and developed markets with a large number of independent actors, such as the European Union, need regulation in order to tackle anticompetitive agreements and behavior. In the first section of the text, major parameters of the industry are examined, including current production value, employment, labor productivity and trade figures. Additionally, the importance of R&amp;D for pharmaceutical companies is emphasized especially in the light of improving global competitiveness. The second part critically discusses several most significant antitrust investigations launched by the EC over the past decade. The list of competition law infringements include price fixing, false or misleading representations, abuse of a dominant position and market or customer allocation. The method of setting fines and offering reductions is also considered. The article highlights that the goal of these investigations is not to damage the economic viability of an offender but to make antitrust violations unprofitable and thus to prevent them. The final chapter stresses that companies have the right to appeal to a court against the decision of a competition authority. The fines imposed by the European Commission are reviewed by the Court of Justice of the European Union. There have been successful appeals, but the trend is to gradually expand the definition of restriction of competition. In summary, the existing regulation framework is necessary to promote competition and protect consumer rights. The EU policy on antitrust strives to strike a balance between the interests of original pharmaceutical companies and generic producers. The former are supported by patents, government subsidies and the demand for new treatment options; for the latter, it is crucial how efficiently the authorities control attempts to preserve exclusivity by unfair market practices since the fact that patents expire is their major source of income. The European experience in this area is especially important today when the single market for medicines in the Eurasian Economic Union has entered its final stage.

Analysis of market concentration in creative industry

For the companies the situation in the industry is important in terms of identification opportunities and threats that occur in the industry. Given the increasing competition should be monitored as concentration develops in the industry in which it operates. This article examines the use of the Herfindahl-Hirschman index and Concentration ratio in selected sectors of the creative industry. The development and degree of concentration in the sector is an essential factor characterizing the level of the competitive environment and its exact definition is based on the system of quantitative characteristics that are part of the analytical materials of the institutions dealing with the enforcement of competition rules in most developed economies.

Will Bus Operators Beat a Path to Damages Claims in Competition Enforcement? The Experience From the Czech Republic

We may currently be witnessing a slow but significant shift in the enforcement of competition rules. With the latest legal developments in the Czech Republic, in addition to public enforcement led by the competition authorities the ability of parties to seek recovery of damages arising from the infringement of competition rules before the civil courts has become progressively more imminent and realistic. The change is driven by modification of the legal framework as well as by progressive changes in jurisprudence, and the Czech courts’ willingness to hear damages claims appears promising for future success in private enforcement cases. The number of claims for damages in the civil courts in the Czech Republic by private entities that have suffered harm from the infringement of competition law is not significant.1 Surprisingly, almost none of the claims has arisen from a cartel agreement but has been based on abuse of dominance rules and often combined with other legal grounds, such as unfair competition under civil rules. The claimants have mostly been unsuccessful and the claims withdrawn or settled between the parties; exceptionally, however, they have been recognised in part.2

Commitment Procedure under Serbian Competition Act

The Serbian Competition Act1, which has been in force since November 2009, was amended in 2013 in order to improve the effective enforcement of competition rules by the Commission for Protection of Competition (hereinafter, the Commission or Competition Commission), and to further harmonise national regulations with the EU acquis in the area of protection of competition. The 2009 Competition Act (hereianfter, the Act), which introduced some modern competition protection concepts into the Serbian legal system, had certain deficiencies which hindered the practical application of the statute and, consequently, effective enforcement by the Commission. In addition to the existing provisions of the Act, the legislator introduced a novelty that will, beyond any doubt, produce considerable effects on the Commission’s actions in deciding on competition infringement cases. The novelty concerns the introduction of the so-called commitment procedure, which allows the Commission to close a competition infringement case by accepting commitments offered by the undertakings concerned, without establishing whether there has been an infringement. The instrument has turned out to be exceptionally effective in closing proceedings before the competition authorities of the EU and the Member States. The concept ensures procedural economy, as the Commission need not to establish the existence of the infringement, which makes the proceedings shorter and more appropriate particularly for more dynamic sectors of the economy, while the actual concerns about the market are effectively addressed. Further, the concept is favourable for the undertakings concerned as it enables them to propose measures they believe will resolve suspicions of competition law infringement, thus bringing proceedings to an end without finding the infringement, allowing them to avoid high fines and potential actions for damages.

Recent Competition Policy Developments in Hungary Unfair Commercial Practices, Cartels and Abuse of Dominance

This article introduces the most important Hungarian competition cases decided between the beginning of 2012 and May 2013. The paper presents legal novelties and issues which might prove interesting for an international readership in light of recent developments and focus of competition policy. Shown are both developments concerning unfair commercial practices and the UCP Directive 1 as well as anticompetitive agreements and abuse of dominance. Hungary has an enforcement system where the national competition authority, the Gazdasagi Versenyhivatal (hereafter, GVH) is responsible for the enforcement of competition rules. Within the GVH the Competition Council is responsible for taking substantive decisions on infringements. The GVH is headed by a president and there are two vice-presidents supervising the operation of case handlers, while the other acts as the chairman of the Competition Council. The Competition Council consists of lawyers and economists who enjoy a quasi-judicial status. Decisions are made in proceeding councils composed of three or five members selected by the chairman of the Competition Council.

Strengthening the Powers of National Competition Authorities: The Austrian View

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

Groupement des Cartes Bancaires: Reshaping the Object Box

The recent judgment issued by the European Court of Justice in Groupement des Cartes Bancaires v Commission (C-67/13 P - CB v Commission) has clarified the application of competition rules in two-sided markets. However, the main contribution of this judgment is the attempt to clarify the boundaries of the concepts of restrictions of competition by object and restrictions by effect. The Court used insights from recent advances in the economic analysis of two-sided markets to conclude that the measures from Groupement did not have an anticompetitive object and that a detailed analysis of the possible anticompetitive effects on competition was required. This paper analyses the Court’s reasoning and tries to anticipate the practical implications for the enforcement of competition rules.

Abuse Regulation and the Financial Sector in the Wake of the Financial Crisis

It is customary to break the analysis of the financial sector into three sub-sectors, namely banking, insurance and capital markets. This exercise, which serves the analytical purpose of identifying the three major types of financial institutions and the corresponding financial services they provide – in spite of the growing interpenetration of such areas – is equally useful for the purpose of reviewing the application of competition rules to the financial sector which is the overriding goal of this paper.The importance of the financial sector can hardly be overstated as recent events have once again reminded us. The financial crisis that broke out in 2007, first in the US triggered by subprime mortgage sector but rapidly extending to Europe, where its effects were compounded by real estate bubbles and excessive debt levels in certain Member States, leading somehow to a vicious circle of banking crises and sovereign debt crises that have threatened the existence itself of the Euro area, proved once again the economic importance of the financial sector. In fact, the 2007-2009 financial crisis has, to some extent, lasted to this day as a consecutive economic crisis, involving, in the EU, a crisis of sovereign debt markets intertwined with the crisis of the banking sector and, in the US, at least in a first stage, slow growth, and, with the return to higher levels of growth, persistent high levels of unemployment. Although it would be beyond the scope of this Paper to delve into the causes of the financial crisis, there is one that is worth recalling as it connects directly to our topic: deficient and inadequate regulation and supervision of the financial sector – largely due to an insufficient perception of risks incurred by financial institutions – combined with a selective application of competition rules. While the most dramatic stages of the banking crisis appear to be over and the need for remedial intervention, most notably under the shape of State aid, is rapidly subsiding, it comes as no surprise that the European Commission’s present focus is on preventing a repetition of the financial crisis. Part of the effort involves the introduction of a new regulatory framework, but reinforcing or at least rethinking antitrust enforcement is an equally necessary step towards prevention. The link between the financial crisis and antitrust infringements in the financial sector accounts for the renewed impetus of antitrust enforcement in the field of financial services. Antitrust enforcement is a much needed supplement to the new regulatory framework if one is truly committed – as the Commission seems to be – to bring about a radical change in the way the financial sector has operated so far. Considering that lack of competition in the financial sector and antitrust infringements were part of the events leading up to the 2007 financial crisis, one may legitimately question whether it is all a question of more forceful antitrust enforcement. The alternative would be to argue that the matter is not simply one of quantity but also of quality, as the existing legal framework may not be sufficient to address all the challenges posed by the financial sector. The case in point is the need for reinforced interaction between regulation and supervision of the financial sector and the enforcement of competition rules applied to the latter. This paper will argue in favour of the second option. While the general topic of this paper is the application of EU competition rules – most notably Articles 101 and 102 TFEU – to the financial sector, it will nevertheless focus on the prohibition of abuse of dominance and its interaction with the regulation and supervision of the financial sector. Our purpose is to provide a general, albeit succinct, overview of the recent evolution of competition rules in the financial sector as it has emerged from a number of high-profile cases concerning the banking, insurance and capital market sub-sectors. This overview will serve as the background against which we propose to reappraise abuse regulation in the financial sector through a combined perspective of the applicable competition rules and the existing regulatory framework.

Enforcement of EU Competition Rules in Estonia: Substantive Convergence and Procedural Divergence

A decade of decentralized enforcement of EU competition rules under the procedural framework of Regulation 1/2003 has produced a diverse enforcement record that varies among Member States. While the numbers of notified investigations and infringement decisions based on Articles 101 & 102 TFEU are impressive, some EU jurisdictions have demonstrated an only negligible participation in the direct enforcement of EU competition rules. After joining the EU in 2004, Estonia has harmonized its competition legislation with EU standards and pursued active criminal enforcement of antitrust rules. At the same time, EU competition rules are absent from the enforcement practice of the Estonian competition authority and national courts. The present paper provides an overview of the specifics of the Estonian legal system including its substantive, procedural and institutional components. This overview demonstrates how the diversity and complexity of the procedural framework for the enforcement of competition rules (administrative, misdemeanour and criminal proceedings) effectively prevented EU competition rules from penetrating the national legal system.

Enforcement of Competition Rules in the Association Agreement between the EU &amp; Ukraine

This article analyzes the legal preconditions for the harmonization of Ukrainian legislation in the field of competition law with the law of the European Union. Due to its evolution, it is noticeable that competition law has been, and remains, a priority in the harmonization process of Ukrainian legislation. This paper provides a detailed analysis of competition related provisions of the Association Agreement. The latter contains norms on the obligatory approximation of substantial competition law provisions and sets out the necessity to transform their enforcement system. Special attention is paid to the analysis of state aid which currently remains unregulated in Ukraine.

How to Facilitate Damage Claims? Private Enforcement of Competition Rules in Croatia – Domestic and EU Law Perspective

Ever since the Croatian Competition Agency started functioning in 1997, public enforcement of competition law has been the norm. Civil actions for breaches of competition law have been the exception in Croatia. The existing legislation in the area of competition law makes no effort to incentivise private enforcement. There are no specific rules in the Competition Act 2009 dedicated to civil actions, except a single provision that assigns jurisdiction over damages claims to commercial courts. General tort law is applicable in order to prove damages. A number of issues arise here mostly due to the complexity of competition cases. These issues were described in the European Commission’s White Paper on Damages Actions for Breach of EC Antitrust Rules (2008). The level of uncertainty as regards the outcome of the claim is high. It seems that special rules need to be adopted in Croatia in order to improve the position of the injured side. The paper deals with a number of procedural and substantive law issues relevant to the facilitation of civil proceedings for antitrust damages. A domestic law perspective is applied taking into account recent developments in EU competition law and policy.

Trends and Problems of the Antitrust of the Future

The evolution of competition law has traditionally been driven by the US and EU systems. Over the years, the EU system has emerged as a primary model of antitrust enforcement. However, in the coming years, we will likely experience a gradual shift from a bipolar scenario to a multi-polar one, characterized by the increasing role of new players, such as China, India, and Brazil. In such an enlarged scenario, in order to continue to play a primary role in the transnational dialogue on antitrust enforcement, the EU needs to continue to develop and refine substantive principles of antitrust analysis through sound and consistent case law, as well as to improve the effectiveness of its enforcement system. However, some characteristics of the EU antitrust system could limit its capability to develop and refine its tools. The standard of review frequently adopted by the EU courts, based on the judicial deference doctrine, and the trend toward administrative and negotiated enforcement of competition rules, have limited the development of case law in the last few years. The increasing focus on consumer welfare seems to have translated, in some cases, into a consumerist approach, which is not consistent with sound antitrust principles. Furthermore, it is still controversial as to whether the EU should enhance the effectiveness and deterrence of its enforcement system by introducing criminal sanctions.

After the global financial crisis: key competition law developments in Australia, the United States, the EU and the UK

This article has been written by way of follow-up to an article entitled ‘The Impact of the Global Financial Crisis on Competition Policy in the Australian Banking Sector' (2009) 3 Law and Financial Markets Review 449. As discussed in that article, responses to the global financial crisis included government bailouts of institutions (largely but not limited to those in the banking and financial sector); the provision of cash injections into financial systems to keep credit flowing; the encouragement of mergers in the financial sector resulting in the creation of “mega banks”; requiring competition authorities to “relax” enforcement of competition rules in the interest of financial stability. This meant that political pressure became increasingly influential for the implementation of competition law and policy. For example, the European Commission was essentially forced to shift its policy on the application of state aid rules in relation to financial institutions in response to rescue measures taken by European governments to support their financial sectors. Australia was luckier than most countries, in that the strength of its domestic economy and banking sector helped it to withstand the severity of the impact of the crisis. However, Australian markets were also affected. This article now examines how Australia and other key jurisdictions (notably the United States, the European Union and the United Kingdom) have responded to the global financial crisis, and focuses particularly on competition law responses to the crisis.

Book Review: Towards an Optimal Enforcement of Competition Rules in Europe. Time for a Review of Regulation 1/2003?, edited by Global Competition Law Centre, Massimo Merola &amp; Denis Waelbroe

Book Review: <i>Towards an Optimal Enforcement of Competition Rules in Europe. Time for a Review of Regulation 1/2003?</i>, edited by Global Competition Law Centre, Massimo Merola &amp; Denis Waelbroe

Enforcement of Competition Rules in Croatia – Challenges and the Way Forward

The intention of this paper is to present selected issues which relate to the application of competition rules in Croatia, in particular in light of the quasi-direct application of EC competition rules prior to membership of Croatia in the EU. After twelve years of experience in enforcement of competition rules we see an established system in terms of legislative and institutional framework. However there is still some of room for improvement both in terms of legislative change and in terms of a more effective and aggressive enforcement by the competent authorities. Main characteristics of the way competition rules are applied in Croatia will be presented, and some challenges for the future will be identified.