European Competition Network Research Articles

Sped-Pro v Commission: Beware of the Rule of Law

Case T-791/19 Sped-Pro v Commission, Judgment of the General Court (Tenth Chamber, Extended Composition) of 9 February 2022 With its judgment of 9 February 2022, the General Court annulled a Decision of the European Commission rejecting an antitrust complaint submitted on the grounds of systemic or generalised deficiencies in the rule of law in one Member State. According to the judgment, there should be a limit to the principle of mutual trust and cooperation among Member States within the European Competition Network. This judgment created not only a precedent, but also a powerful protection tool to be used in the future to safeguard of the rule of law.

How to tame the beast: the diverse development of European networks regulating finance and competition

ABSTRACT European regulatory networks are increasingly becoming crucial venues for European governance. They typically emerged as relatively loose groups of national authorities in charge of meta-regulating sectoral policies. However, in the medium term, they experienced dissimilar developmental patterns. On the one hand, some networks (such as the Committee of European Securities Regulators – CESR) have been progressively institutionalized, transformed into European agencies, and acquired considerable regulatory powers, including enforcement. On the other hand, other networks (such as the European Competition Network – ECN) remained more flexible networked organizations embodying a soft coordination approach. This article aims at mapping these divergent patterns and explore their determinants. To do so, we investigate the cases of CESR and ECN with a documentary and interview-based comparative inquiry. Results indicate that agencification has also been a strategy enacted by European institutions, using the financial crisis as a window of opportunity, to regain control over a powerful network – CESR – that came to constitute an increasingly autonomous layer of governance. Contrariwise, as ECN did not spin out of control, its trajectory exhibits a remarkable stability.

Rejection of Complaints. Lessons for National Competition Authorities on the Eve of the Implementation of ECN+ Directive.

Directive 2019/1 provides for a harmonisation of important procedural aspects related to the enforcement of competition law by National Competition Authorities. The power to set priorities, stipulated in art 4 of ECN+ Directive, is one of particular practical implications for both NCAs as well as undertakings concerned. This power allows NCAs to reject a complaint lodged by a complainant due to the lack of sufficient interests in pursuing an investigation. Such right is strongly intertwined with the procedural rights granted to complainants. While the current legal framework for setting priorities and safeguarding complainant?s rights diverge significantly among Member States, a minimum legal standard should be guaranteed in order to ensure coherent model of applying EU competition law within European Competition Network. In order to protect and enhance the process of lodging complaints, such prioritisation has to be counterbalanced by rights granted to complainants and obligations imposed on the Institutions. In this regard, similar legal frameworks and established requirements should exist in national law as the obligations imposed on the Commission. In particular, NCAs and national legislators should learn lessons from the mistakes committed by the Commission which were verified by the European Courts. The importance of providing a proper statement of reasons and obligation not to omit relevant evidence shall be remember and properly implemented by NCAs. At the end of the day the goal is to cause that the rejection of complaint would not be a mere formality.

Competition Policy in Action: Regulating Tech Markets with Hierarchy and Experimentalism

AbstractAlthough experimentalist governance – presented as a novel alternative to conventional hierarchical governance – has attracted attention over the past 15 years, we still know little about its real spread and scope conditions. Examining the application of competition policy to the digital sector, the article reveals that the European Competition Network and the procedures modernized in the early 2000s actually host a variety of governance processes, ranging from hierarchical development and enforcement of stable solutions at one extreme to experimentalist discretion of local actors, review of their implementation experiences, and central revisions in their light at the other. Futher, shifts from hierarchy to experimentalism might reverse. As for explanations, variation in governance processes cannot be explained by formal distributions of power, which were the same. Instead, the greater the uncertainty about solutions and the weaker the readily available coalitions in their support, the more actors favored experimentalist governance, and vice versa. The broader implications thus caution against general claims, challenge the influence of legal factors, and suggest that far from being necessarily antitethical, functional and political factors may bear together on the spread of distinct forms of governance.

The Commission’s vision for Europe’s digital future: proposals for the Data Governance Act, the Digital Markets Act and the Digital Services Act—a critical primer

The author discusses the EU Commission’s triad of proposals in the Digital Services Package of Winter 2020, i.e. the proposed Data Governance Act (DGA), Digital Markets Act (DMA) and Digital Services Act (DSA). These bills represent the hitherto most ambitious and broad regulatory project in the field of data and digital services regulation worldwide. While the DGA and DSA are also critically discussed, specific emphasis is paid to the DMA Proposal. This Proposal represents a hybrid approach to specific regulation of gatekeeper platforms, which in substance makes perfect sense. The main desiderata concern the co-ordination with European and national competition law and the introduction of further and more differentiated provisions in the area of enforcement. In fact, this latter aspect is partly linked to the former since e.g. contextual integration in competition law would allow to make use of the European Competition Network under EU Regulation 1/2003 to enforce the DMA Proposal’s provisions and in particular to coordinate EU and national enforcement, based on both, the DMA Proposal and EU or national competition law. Apart from that, a European legal framework for private remedies and enforcement in regard to the obligations laid down in the Proposal seems of paramount importance, since otherwise there is a danger of considerable disharmonization and inefficiency in regard to diverse private remedies according to the different Member States’ respective national contract, tort and unfair competition laws.

The Commission’s vision for Europe’s Digital Future: Proposals for the Data Governance Act, the Digital Markets Act and the Digital Services Act – A critical primer

The author discusses the EU Commission’s triad of proposals in the Digital Services Package of Winter 2020, i.e. the proposed Data Governance Act (DGA), Digital Markets Act (DMA) and Digital Services Act (DSA). These bills represent the hitherto most ambitious and broad regulatory project in the field of data and digital services regulation worldwide. While the DGA and DSA are also critically discussed, specific emphasis is paid to the DMA Proposal. This Proposal represents a hybrid approach to specific regulation of gatekeeper platforms, which in substance makes perfect sense. The main desiderata concern the co-ordination with European and national competition law and the introduction of further and more differentiated provisions in the area of enforcement. In fact, this latter aspect is partly linked to the former since e.g. contextual integration in competition law would allow to make use of the European Competition Network under EU Regulation 1/2003 to enforce the DMA Proposal’s provisions and in particular to coordinate EU and national enforcement, based on both, the DMA Proposal and EU or national competition law. Apart from that, a European legal framework for private remedies and enforcement in regard to the obligations laid down in the Proposal seems of paramount importance, since otherwise there is a danger of considerable disharmonization and inefficiency in regard to diverse private remedies according to the different Member States’ respective national contract, tort and unfair competition laws.

The Ecn+ Directive and the Next Steps for Independence in Competition Law Enforcement

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

Brexit and Competition Law: The Future Relationship Between the UK and EU Competition Law Regimes

The United Kingdom’s withdrawal from the European Union and its impending departure from the latter, place the UK and EU competition law regimes in a situation of great uncertainty. From a well-anchored position in which these two regimes have been intertwined and their key actors – the Competition and Markets Authority and the European Commission – enjoy a strong and close association (principally within the European Competition Network), the two regimes are now supposed to go separate ways. This transition could not be more powerful and its implications could not be more serious. Yet, hardly any proper attention has been given to assessing the future relationship between the two regimes especially from a policy perspective. The present article engages in such assessment. In addressing a number of key issues – notably the relationship between UK and EU competition law and authorities – the article offers a vision and critical analysis of the kind of future relationship the two regimes should have. Brexit, Competition and Markets Authority, European Commission, cooperation, European Competition Network, UK and EU competition law regimes

Mutual trust as a backbone of EU Antitrust Law

The article is an attempt to analyse to what extent a close cooperation between competition authorities belonging to the European Competition Network is based on the mutual trust principle. The fundamental importance of the principle of mutual trust was underscored in Opinion 2/13 on the Accession of the EU to the European Convention of Human Rights (ECHR), where the Court of Justice found that: “it should be noted that the principle of mutual trust between the Member States is of fundamental importance in EU law”. However, as it was emphasised by the CJEU. mutual trust does not amount to a blind trust, as it is illustrated in the case law of the CJEU in cases concerning the European Arrest Warrant. The CJEU imposes more and more obligations on executing Member States in verifying whether there are no irregularities issuing the European Arrest Warrant (EAW) in comparison to the early days of its functioning, leading towards a regulated or conditioned trust. This development mutatis mutandis is particularly interesting to analyse while referring to the functioning of cooperation of competition authorities within the EU. The research statement of this article is that based on the outcome of CJEU case law in cases concerning EAW such as e.g. Aranyosi and Caldararu the trust in institutional cooperation such as provided by Regulation 1/2003 and Directive 2019/1 should not be blind so as not to allow the non-noticing of irregularities occurred in other Member States or before the European Commission. We will begin by framing what the concept of trust englobes and showing how it is normatively framed in EU law. Then, the analysis concentrates on where there are boundaries to mutual trust in the decentralised application of art. 101 and 102 TFEU. Subsequently, the questions of how this trust works in practice and what the boundaries are that limit its application are addressed. As the concept of mutual trust is complex itself, this article does not aim to propose detailed solutions de lege ferenda. Its ultimate objective is rather to provide a conceptual framework of de lege lata analysis of mutual trust in the application of EU competition law.

Internal network structures as opportunity structures: control and effectiveness in the European competition network

ABSTRACT European Administrative Networks (EANs) are well-studied platforms of collaboration between national authorities. To understand EANs, the literature typically relies on few explanatory variables: network origins, objectives, and outputs. This external view of EANs leaves important questions unanswered, notably concerning power redistribution and regulators’ perception of EANs. This article highlights the importance of network internal structures as an explanatory variable for understanding EANs. We contend that internal structures are ‘opportunity structures’ for regulators to set agendas and share resources. We investigate the case of the European Competition Network (ECN) – a highly structured, hierarchical and formalized enforcement network – drawing on structured interviews with 15 National Competition Agencies (NCAs) carried out in 2014. We find that the ECN’s formal internal structures afford all NCAs access to the agenda, foster perceptions of effectiveness, and promote informal sharing of expertise outside the network. Future research should incorporate internal structures into analyses of administrative networks.

Fundamental Procedural Rights and Effective Enforcement of Articles 101 and 102 TFEU in the European Competition Network

This article deals with the fundamental procedural rights of companies that are targeted in the enforcement of Articles 101 and 102 Treaty on the Functioning of the European Union (TFEU) by the European Commission or the competition authorities of the EU Member States. The paper first provides a (non-exhaustive) list of such rights as applicable to the enforcement of Articles 101 and 102 TFEU by the European Commission, and explains the source of these fundamental rights in the EU legal order. The paper then examines the relationship between fundamental procedural rights and effective enforcement of Articles 101 and 102 TFEU. It argues that procedural rights often contribute to effective enforcement, but not always. The interplay between fundamental rights of legal persons and competition enforcement remains a balancing exercise, and this balancing exercise is not the same as in traditional criminal law. Finally, the paper examines the question whether or to what extent EU Member States can, for the enforcement of Articles 101 and 102 TFEU by their national competition authorities (NCAs), provide for a lower or a higher level of procedural rights than the level of fundamental procedural rights applicable to the enforcement of Articles 101 and 102 TFEU by the European Commission.

Competition Law Networks and the Challenge of Transparency

Networks of competition agencies are now a central feature of international competition law enforcement and policy. The nature of these networks varies from little more than occasional talking shops, to arrangements for knowledge exchange and technical assistance, through to the European Competition Network which is a highly integrated and institutionalised network of agencies enforcing common rules. One question that emerges is how do these networks and transparency as a tool of good governance intersect? To what extent is there a need for balance between effectiveness and transparency? In order to shed light on the challenge of transparency for competition networks, this chapter draws on insights from the literature on transparency and competition networks.

Competition Law Enforcement in Italy after the ECN+ Directive: the Difficult Balance between Effectiveness and Over-enforcement

Almost fifteen years after its adoption, the system of decentralized enforcement laid down in Regulation 1/2003 has shaped competition law in a way that could hardly be predicted, in terms of both magnitude and quality of the activities of National Competition Authorities. More recently, the so-called ‘ECN+ Directive’ was adopted to address the shortcoming of such system, namely a perceived lack of independence and accountability of several NCAs and a certain degree of divergence within the European Competition Network. In this scenario, the Italian Competition Authority has frequently been depicted as a well-equipped, independent and effective enforcer and – with a few notable exceptions – the international debate concerning such reform has mostly overlooked its possible impact within the Italian legal system. This paper aims to assess whether, and to what an extent, the ECN+ Directive should affect the enforcement of competition law in Italy and, in particular, those fundamental guarantees of independence and effectiveness that form the core of the rule of law in the field of EU competition law.

The draft provisions on antitrust fines in the Commission’s ECN+ Proposal

Abstract On 22 March 2017, the Commission released its Proposal for a directive to empower the competition authorities of the Member States to be more effective enforcers (COM(2017) 142 final). With this effort to harmonise national public enforcement regimes, the Commission enters uncharted territory. Effectiveness is deemed to be fostered by the introduction of the economic entity doctrine as a unitary sanctioning concept throughout the Member States. As a complementing measure, the Proposal prescribes a more coherent standard for leniency in the European Competition Network. The present article ventures to evaluate these remedies. A preliminary hypothesis is that the Commission’s conviction of the economic entity doctrine to become the gold standard for antitrust enforcement is possibly based on tenuous ideas of effectiveness. Moreover, the introduction of a 10 % fine cap for any National Competition Authority irrespective of the size of the Member State can lead to highly disparate relative fining powers throughout the internal market. As to the leniency aspect, the present article will attempt to assess whether the Proposal taps the full potential for enhancement. As an alternative to the Commission’s suggestions the article elaborates on a one-stop-shop leniency principle. Such would go beyond the current Proposal in that it would render multiple leniency filings obsolete within the EU.

Overview of the National Enforcement of EU Competition Law

This article provides a practical overview of the most recent and interesting developments arising from the national enforcement of EU competition law. It is not only the preliminary rulings by the Court of Justice of the European Union that highlight interesting competition cases taking place at national level. For example, as will be discussed in this article, other important developments such as the recognition of compliance programmes and the first pricing algorithm case also occurred at national level. It appears that national competition authorities (NCAs) are more opened to ensure consistency between competition and other policies, such as the protection of personal data (eg the Facebook case in Germany) and the promotion of small and medium sized enterprises. NCAs can more rapidly adapt to the changing competition policy context, as can be seen, for example, in their treatment of mergers involving targets not possessing high enough turnover but having significant market potential. The ECN+ Directive provides NCAs with a minimum common tool-kit and effective enforcement powers for the implementation of EU antitrust rules in many important areas. However, there are still significant areas (eg regarding the admissibility of criminal evidence and multiple filings) where further improvements would be desirable in the future. Keywords: Data Driven Economy, Multiple Merger Filing, Admissability of Criminal Evidences, European Competition Network (ECN), Cross-Border Enforcement of Competition Fines

The European Competition Network in the European Administrative System: Theoretical Concerns

The public administration of the European Union (EU) is a sui generis multi-level structure under constant development. After five decades of successful functioning, the European Union still lacks a coherent and comprehensive set of codified rules of administrative procedure at all levels. The existing acquis related to European administration and administrative procedures is fragmented, sector specific and although it is based on the constitutional principles of the democratic traditions of its Member States, such coincidence is often insufficient for the present requirements of good administration. The EU basically relies on indirect administration, while a growing number of cooperation forms exists of the competent authorities that aims to ensure efficacy of execution and to overcome diversity of non-harmonised legal areas. The aim of this paper is to place the European Competition Network (ECN) in this structure, explore and examine its legal nature as it is probably the most advanced example for such cooperation. The ECN incorporates and reveals the major procedural law questions of European administration; it is a rather successful form of cooperation, and although its core issues fail to correspond to the fundamental requirements of European administrative procedures, there seem to be positive changes in the evaluation of soft law and the functioning of the system.

Proposal for a Directive to Empower National Competition Authorities to be More Effective Enforcers (ECN+)

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.

Parallel Enforcement and Accountability: The Case of EU Competition Law

EU competition law is enforced parallel by the EU Commission and 28 national competition authorities (NCAs) in a multi-level governance system composed of EU and national procedural laws. Regulation 1/2003 established the European Competition Network (ECN) in order to coordinate parallel proceedings between the Commission and the NCAs. This chapter analyses the shared enforcement of EU competition law from the perspective of political and judicial accountability. The chapter focuses on the accountability of the Commission, the NCAs and the ECN in their role of/as main actors of the shared enforcement. Two jurisdictions are used to illustrate the role and powers of the NCAs: the Netherlands and Hungary. After analysis of the powers and roles of the three respective actors (the Commission, the NCAs and the ECN) of parallel enforcement, section 3 examines judicial and political accountability and section 4 concludes.

Building regional competition policy in ASEAN: lessons from the European Competition Network

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 Bottom-Up Approach on Competition A Study on How Institutional, Procedural and Sanctionatory Frameworks Touch on the Very Substance of the EU Antitrust Desideratum

One of today’s main policy concerns for the competition community in Brussels is the way in which national institutional, procedural and sanctioning frameworks have the aptitude and are sufficiently harmonized to guarantee a coherent application of the substantive aspects that European Union competition theory and law imply. As competition policies between the still twenty eight Member States have long been harmonized as the legal substantive similarities reflect this matter of fact, it is for the institutional and procedural set-ups to be assessed, in order to perceive the level of enforcement effectiveness that each European Competition Network party is able to deliver. With this regard, domestic instruments and procedures must exist and be interpreted in accordance with the Treaty objectives, so as to avoid any potential vulnerability for the complete achievement of the Union antitrust desideratum.