Effective enforcement of competition law is vital for the functioning of competitive markets. As competition authorities are constrained by scarce financial and human resources, it is neither possible, nor desirable, to enforce every possible competition law infringement. Hence, the power to set priorities – that is the competition authorities’ legal competence and de facto ability to choose which cases to pursue and which to disregard - is a precondition for preserving society’s resources to tackle the most harmful infringements. Credible enforcement priorities build independent and accountable competition authorities. A degree of discretion to set enforcement priorities, therefore, serves a double purpose of effective allocation of scarce resources and the concretisation of the open-ended and broadly formulated competition law norms. At the same time, the exercise of such discretion is subject to external and internal constraints and influenced by substantive, procedural, and institutional rules guiding the authorities’ course of action. Despite its importance, the theoretical foundations and practices underlying the setting of enforcement priorities in competition law are vastly unexplored in Europe: they remain largely overlooked by policy and decision-makers; there is no clear set of definitions or criteria to guide prioritisation; and effective accountability mechanisms to evaluate and reform prioritisation choices remain underdeveloped or are completely absent. In particular, the question of priority setting had limited relevance in the enforcement of EU competition law for many years. Under the pre-2004 notification based and centralised regime, the Commission had devoted much of its resources to respond to notifications, leaving only limited room to devise its enforcement strategy. Even after the shift to the decentralised enforcement regime, which enabled the Commission and national competition authorities to set their priorities, there are few EU law provisions to guide the priority setting principles and practices of the competition authorities. This remains valid even after the implementation period of the ECN+ Directive has ended. This Policy Report fills this gap by offering four main contributions: first, it introduces a new theoretical framework, developed by the authors to establish a common typology to guide the analysis of priority setting rules and practices. More specifically, the Report identifies seven different legal, economic, and political aspects of setting priorities for competition law enforcement, each of which may be subject to external or internal control. Those seven aspects include: (i) setting an enforcement agenda; (ii) legal (de jure) competence to prioritise; (iii) (de facto) ability to prioritise; (iv) procedural rules framing the prioritisation decision; (v) substantive criteria that determine which cases are priority and which are not; (vi) alternative enforcement mechanisms: instrument and outcome discretion; and (vii) impact assessment. Second, the Report provides a systematic and comprehensive mapping of the procedural and substantive priority setting rules and practices guiding the competition authorities of the 27 EU Member States, the United Kingdom, and the EU Commission according to the proposed typology. Pointing to a great divergence in this regard, it demonstrates that each competition authority’s priority setting powers and practices are deeply embedded in, and directly shaped by its respective administrative law systems and constitutional and political order. Accordingly, the Report classifies the competition authorities into four representative models on the basis of their specific rules and practices to set their enforcement priorities. Third, the priority setting rules and practices are evaluated against a set of administrative law principles of good governance, including effectiveness, efficiency, independence, transparency, and accountability. The Report demonstrates that each of the four representative models entail a different trade-off between those administrative law principles. Fourth, based on the above, the Report provides policy options (a “checklist”) on how legislators and CAs could review and if necessary, reform their existing practices or design new priority setting rules and practices to meet the administrative law principles of good governance. Notably, the Report does not intend to provide a single best model for priority setting. Rather, it offers competition authorities legal and practical solutions on how to design and apply priority setting in a way that fits their respective legal framework and mandate, thereby offering country-specific trade-offs.
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Jul 1, 2021
Cary Coglianese 
Open Access
