Public Enforcement Of Competition Law Research Articles

Competition Law Enforcement and Household Inequality in the United Kingdom

Abstract Using a comprehensive database of all the decisions made under European and U.K. competition laws over the 15-year period to 2020, alongside households’ consumption and market data, we estimate the level and distribution of the savings from enforcement across the United Kingdom. We find that competition law enforcement generated greater proportional savings for lower- and average-income households relative to the wealthiest households. Our estimations indicate average savings of 2.5 percent of the annual household budget for the lowest-income households, 2.1 percent for the average household, and 1.8 percent for the highest-income household. While proportionally greater savings for lower- and average-income households from competition law are observed in most years, in some years, higher-income households saved more. Our results bring to light the variables that affect the distribution of savings. Among them are the enforcement tool applied, the sectors in which enforcement action took place, and the enforcement body. We further illustrate how the public enforcement of competition law affects economic disparity and could potentially be used in a more structured, transparent, and systematic way to address societal concerns about increasing inequality.

Enhancing leniency programme in public markets

Abstract The article focuses on the leniency programme, the key mechanism to strengthen the public enforcement of competition law, and its compatibility with the debarment mechanism and self-cleaning measures, which are both procurement remedies. As the article will show, procurement remedies interfere with cartel enforcement and the debarment mechanism undermines leniency in public procurement. The fact that firms may be banned from bidding, where there are plausible indications for their participation in agreements aiming at distorting competition, discourages infringing companies from coming forward and self-reporting. Even the self-cleaning measures under the current procurement Directive 2014/24/EU, which aim to help debarred firms to avoid exclusion or minimize its risk, undermine leniency in public procurement. This is particularly true after the recent judgment of the European Court of Justice in c-124/17 Vossloh Laeis GmbH v Stadtwerke München GmbH case. In this case, it was held that a contracting authority must be able to ask a leniency applicant to provide the decision of the competition authority concerning it. This must apply even if there is a pending private action for damages for breach of competition law by the contracting authority against that leniency applicant. In view of the above conflicting policy objectives, a number of proposals are discussed in order to better align leniency programmes with the mechanism of debarment and self-cleaning policy in public procurement. In this way, the article contributes to the optimal design of enforcement policies.

‘Responsive’ Remodelling of Competition Law Enforcement

Abstract Over the years, regulators have sought to improve the effectiveness of both private and public competition law enforcement. In EU competition law, recent debates have concerned damages actions for competition law violations and the empowerment of national competition authorities. These debates are often premised on a clear dichotomy between public and private competition law enforcement, each pursuing a distinct set of aims. This article employs a novel holistic approach, which is informed by the theories of responsive regulation and restorative justice, and argues in favour of a ‘responsive’ remodelling of competition law enforcement. Such a ‘responsive’ remodelling advocates flexibility in enforcement mechanisms, with the consensual participation of the affected stakeholders and the adoption of remedies to restore the inflicted harm. The article discusses the current system and its respective aims and problems, and highlights an emerging hybridisation of remedies. Building on this emerging practice, it then constructs the ‘responsive’ remodelling benchmark for effective compliance. It discusses how this benchmark can inform competition law enforcement and it considers its potential to increase compliance, countenance various legitimacy and accountability concerns, increase consumers’ access to markets and bring benefits to the affected parties.

The Temple of Leniency

This short article mourns the loss of Laura Guttuso, celebrates her contributions and accomplishments as a scholar, and comments on one of her final publications which appeared as a chapter in a fascinating book entitled Anti-Cartel Enforcement in a Contemporary Age: Leniency Religion (‘Leniency Religion’). In this article, I discuss many of the general themes presented in the book as a whole and then turn to the specifics of Laura’s chapter on the role of leniency and the intersection of private and public enforcement of competition law.

Direct Consumer Influence—The Missing Strategy to Integrate Data Privacy Preferences into the Market

Abstract In view of a growing number of competition law investigations into the gathering and use of personal data by digital platforms, this article discusses the extent to which consumer sovereignty can be given greater weight in concentrated marketplaces where firms employ multi-sided business models and compete along quality dimensions such as privacy rather than price. The article explores the concept of direct consumer influence as a novel approach vis-à-vis switching or choosing differently in the public enforcement of competition law. Direct consumer influence constitutes a distinct avenue for embedding consumers’ choices into the market when consumers have few possibilities to act and holds the potential to shape digital markets in unanticipated ways. Using the example of the German Federal Cartel Office’s investigation into Facebook’s data-gathering practices, the article illustrates how direct consumer influence may clarify the relationship between data protection, consumer rights, and competition law.

Direct Consumer Influence – The Missing Strategy to Integrate Data Privacy Preferences into the Market

In view of a growing number of competition law investigations into the gathering and use of personal data by digital platforms, this article discusses the extent to which consumer sovereignty can be given greater weight in concentrated marketplaces where firms employ multi-sided business models and compete along quality dimensions such as privacy rather than price. The article explores the concept of direct consumer influence as a novel approach vis-a-vis switching or choosing differently in the public enforcement of competition law. Direct consumer influence constitutes a distinct avenue for embedding consumers’ choices into the market when consumers have few possibilities to act and holds the potential to shape digital markets in unanticipated ways. Using the example of the German Federal Cartel Office’s investigation into Facebook’s data-gathering practices, the article illustrates how direct consumer influence may clarify the relationship between data protection, consumer rights, and competition law.

Multilingualism in the EU and Consistency of Private Enforcement of Competition Law: Two Examples from CEE Countries

Abstract This paper attempts to address the question of how multilingualism in the EU might affect the consistency of private enforcement of competition law. In the literature, there have been concerns raised about the consistency of public enforcement of competition law, so in this paper attention has shifted to concerns about consistency of private enforcement. For the purposes of this paper, a distinction is drawn between rule-making and the application of competition law. The latter falls outside the scope of this paper. The article starts by going straight into aspects of public versus private enforcement of EU competition law and consistency of private enforcement of competition law. Next, by looking at examples of national rules implementing the EU Damages Directive, the author is going to discern what challenges for consistency of private enforcement of competition law are associated with the multilingualism in the EU.

Collecting Evidence Through Access to Competition Authoritiess Files Interplay or Potential Conflicts between Private and Public Enforcement Proceedings?

Information asymmetry between claimants seeking damages for competition law violations and the alleged infringing undertaking(s) is a key problem in the development of private antitrust enforcement because it often prevents successful actions for damages. The Damages Directive is a step forward in the facilitation of access to evidence relevant for private action claims. Its focus lies on, inter alia, 3rd party access to files in proceedings conducted by national competition authorities (NCAs). The harmonization was triggered by the inconsistencies in European case-law and yet the uniform rules on access to documents held in NCAs’ files proposed in the Damages Directive seem to follow a very stringent approach in order to protect public competition law enforcement. The article summarizes the most relevant case-law and new provisions of the Damages Directive and presents practical issues with respect to its implementation from the Polish perspective.

Grounds for Private Enforcement of Albanian Competition Law

Infringements of competition law can cause serious harm to both consumers and undertakings. Aside from the development of public enforcement of competition law, much focus has been placed in recent years in the European Union on private competition law enforcement. Lawsuits raised by undertakings that sustained damages from anti-competitive practice concerning the compensation of such damages have historically not been widespread in Europe. No such cases have been recorded in Albania at all yet, despite the fact that its competition protection legislation has provided this possibility since 1995. The main causes of the lack of private competition law enforcement in Albania include the absence of judicial practice and doctrinal approaches in this area. Relevant here is also the inability of Albanian businesses and consumers to react to competition protection cases as they still lack competition law knowledge and as a result of the absence of an appropriate legal framework for class actions. The scope of this article is to analyze the current situation of private competition law enforcement in Albania. The paper emphasizes the current legal framework including existing obstacles to private competition law enforcement and improvements that should be introduced in the context of its competition law, the law of civil procedures and the law of obligations.

Grounds for Private Enforcement of Albanian Competition Law

Infringements of competition law can cause serious harm to both consumers and undertakings. Aside from the development of public enforcement of competition law, much focus has been placed in recent years in the European Union on private competition law enforcement. Lawsuits raised by undertakings that sustained damages from anti-competitive practice concerning the compensation of such damages have historically not been widespread in Europe. No such cases have been recorded in Albania at all yet, despite the fact that its competition protection legislation has provided this possibility since 1995. The main causes of the lack of private competition law enforcement in Albania include the absence of judicial practice and doctrinal approaches in this area. Relevant here is also the inability of Albanian businesses and consumers to react to competition protection cases as they still lack competition law knowledge and as a result of the absence of an appropriate legal framework for class actions. The scope of this article is to analyze the current situation of private competition law enforcement in Albania. The paper emphasizes the current legal framework including existing obstacles to private competition law enforcement and improvements that should be introduced in the context of its competition law, the law of civil procedures and the law of obligations.

Integrating Public and Private Enforcement of Competition Law in Europe -- Legal and Jurisdictional Issues

For the purposes of discussing the idea of a possible integration of public and private enforcement of competition law in the Europe it is useful, on the one hand, to perceive how the idea of private enforcement of EU competition law has developed over recent years and, on the other hand, to purport to provide a systematic and analytic understanding of the so called ‘private enforcement’ ‘vis a vis’ public enforcement of competition law, that has clearly represented the cornerstone of the EU system of competition law. That brief introductory overview, in turn, will lead us to perceive and critically debate three contrasting views that may currently be sustained in the context of the gradual, albeit so far very limited, emergence of forms of private enforcement of competition law in the EU. These, in short, correspond to the following: (i) A view sustaining a fully integrated framework of enforcement of competition law, integrating public and private enforcement techniques in a distinctively European way (basically different from the American way) and drastically reviewing the theories and/or foundations underlying enforcement of competition rules; (ii) A view sustaining a fully autonomous or independent system of private enforcement of competition law, largely based on adequate mechanisms that allow for collective redress for claimants with small and dispersed losses to recover damages for losses they have suffered on account of anticompetitive conduct; whilst admitting that such private enforcement based on collective redress may, in some limited forms, complement public enforcement of competition law (particularly as regards the so-called follow-on cases to which we shall refer infra), according to this view, private enforcement anchored in collective redress is basically independent of enforcement by public bodies and requires no coordination with that sphere of public enforcement; (iii) According to a third possible view, public enforcement of competition law is to remain a prevailing feature of the EU system of enforcement of competition rules and private enforcement may perform a strictly complementary and subsidiary role, which will require some forms of coordination between the two areas (but always keeping in mind the dominant role of the public sphere and without requiring a fundamental shift of the theories and/or foundations underlying enforcement of competition rules). This paper basically follows such third, alternative, view, for reasons that will be put forward throughout the paper (however briefly). The paper also deals, however briefly, with the rather protracted Commission Proposals presented on 11 June 2013 and leading to a new directive on private antitrust damage actions and a non-binding recommendation on collective redress mechanisms, covering beside infringements to competition law, relief for violations of consumer protection, environmental and other laws.

Corporate Behaviour: Enforcement, Support or Ethical Culture?

How does law affect corporate behaviour? This article first examines the empirical evidence supporting theories of deterrence and economic rational acting, and finds little support for their effectiveness in affecting behaviour in private enforcement in USA and public enforcement of competition law by the European Commission. It then summarises findings of behavioural psychology and empirical socio-legal research supporting responsive regulation theory, and notes widespread adoption of those approaches in the enforcement policies of many British public regulators. A shift is noted in much regulatory 'enforcement' towards provision of advice and support, including through co-regulatory architectures. It is also noted that systems for delivering redress are shifting from tort liability in courts to regulatory oversight mechanisms, ombudsmen or other alternative dispute resolution systems, and compensation schemes. Further, it is noted that many regulatory systems can only function effectively if they can be integrated with in-firm compliance systems, rather than operating adversarially; that the financial crisis has highlighted the need for internal culture and ethics in traders, rather than regulation alone; that civil aviation only delivers safety if reporters are assured of a no blame culture?Does the Emperor of legal theory have any clothes? Is it time to jettison deterrence and economic rational calculation theories in relation to tort law and public enforcement? The article proposes a new policy for public enforcement: ethical regulation.

The Blanket Prohibition of Disclosure of Corporate Statements Contained in Article 6(1) of the Proposed Directive for Actions for Antitrust Damages: Proportional Safeguard of Public Enforcement or Insurmountable Burden for Claimants?

The present paper will examine whether the blanket prohibition of disclosure of corporate statements contained in Article 6(1) of the draft proposal on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union is necessary to safeguard the attractiveness of the Commission's leniency programme or whether it represents an insurmountable burden for claimants that will in the long run severely hamper the private enforcement of EU Competition law (a most unfortunate outcome considering the main objective of the proposed Directive is precisely the opposite). On the one hand, excessive protection of leniency applicants' clemency submissions may lead to useless litigation and ultimately render the private enforcement of competition law in the EU pointless, as claimants are denied (purportedly) essential evidence for building stout damages cases. On the other hand, a more permissive approach towards the disclosure of such information may cripple the public enforcement of Competition law by discouraging cartelists to come forward in the first place. Given the fact that follow-on claims constitute a lion's share of current actions for antitrust damages brought in the EU, such a result would almost certainly have catastrophic consequences for individuals' right to compensation for the harm caused by infringements of Article 101 of the Treaty on the Functioning of the European Union as recognised by the European Court of Justice in the Courage and Crehan and Manfredi and others judgments. We conclude that the Commission seems to be privileging immunity recipients at the cost of injured parties by imposing remedies that are too far reaching for the protection of the effectiveness of the leniency programmes, especially taking into consideration the lack of conclusive evidence proving that disclosure of corporate statements would discourage potential leniency applicants from collaborating with the competition authorities in the first place. In light of this, we contend that a case-by-case approach such as the one envisaged by the European Court of Justice in Pfleiderer is more adequate to strike the balance between the injured parties’ right to redress and the effectiveness of the leniency programmes – at least for the time being.

The Interaction of Public and Private Enforcement of Competition Law in Lithuania

This paper provides a study of the interaction between public and private enforcement of Lithuanian antitrust law. The study refers to the Damages Directive. It has been found that private enforcement depends greatly on public enforcement of competition law. Therefore, their compatibility and balance are of great importance to antitrust policy. The Lithuanian NCA prioritises cases where an economic effect on competition does not have to be proven. This creates uncertainty about the outcome of private enforcement cases. Private enforcement in Lithuania is also in need of detailed rules on the identification of harm and causality. The analysis reveals how challenging it can be to estimate and prove harm or a causal link in private enforcement cases. Support from the NCA is therefore exceedingly needed. Moreover, even though the use of the leniency programme helps, it remains insufficient to solve the problem of under-deterrence. However, measures introduced by the Damages Directive do not make the leniency programme safe.

Collecting Evidence Through Access to Competition Authorities’ Files – Interplay or Potential Conflicts Between Private and Public Enforcement Proceedings?

Information asymmetry between claimants seeking damages for competition law violations and the alleged infringing undertaking(s) is a key problem in the development of private antitrust enforcement because it often prevents successful actions for damages. The Damages Directive is a step forward in the facilitation of access to evidence relevant for private action claims. Its focus lies on, inter alia, 3rd party access to files in proceedings conducted by national competition authorities (NCAs). The harmonization was triggered by the inconsistencies in European case-law and yet the uniform rules on access to documents held in NCAs’ files proposed in the Damages Directive seem to follow a very stringent approach in order to protect public competition law enforcement. The article summarizes the most relevant case-law and new provisions of the Damages Directive and presents practical issues with respect to its implementation from the Polish perspective

Who Does What in Competition Law: Harmonizing the Rules on Damages for Infringements of the EU Competition Rules?

After a long preparatory process, a Directive harmonizing certain national rules on private enforcement of competition law has been adopted by the European Parliament. In this contribution it is investigated whether harmonization of these rules was desirable and whether the main objectives of the directive, the improvement of the possibilities for victims to obtain damages and of the interaction between public and private competition, are likely to be achieved. With regard to the aim of increasing the possibilities for victims of antitrust infringements to obtain compensation, we can conclude that the Directive indeed increases this possibility, although various obstacles to private action are likely to remain. This includes obstacles in relation to (lacking) possibilities for collective action, the requirement to prove negligence or intent, and rules on disclosure of evidence. With regard to the interaction of public and private enforcement of competition law a crucial issue is finding the right balance between using the leniency program (which the European Commission needs in order to be able to effectively trace cartels) in the public enforcement of competition law and compensating victims via enforcement of private law. Whether the Directive has chosen the most desirable option to achieve this balance is debatable.

Umbrella effects and the ubiquity of damage resulting from competition law violations

The compensation of victims of competition law violations is often considered an important private enforcement complement to the public enforcement of competition law. In the last few years, several theoretical and applied studies investigating the fundamental economic principles and empirical-econometric methods to determine damage have been presented with the aim of guiding the courts on how to quantify damage and what amount of damages to ultimately award. This debate has led to the European Commission’s proposed Directive, currently debated by the European Parliament. It aims to facilitate damages claims through setting out how damage claims should be treated by National Courts in a common European framework. This paper focusses on the question of when and under what circumstances victims of competition law violations should be compensated. Section II starts by recapitulating the economic definition of damage and the multitude of victims typically affected as a result of competition law violations. This is in stark contrast to the typical focus of damages claims on direct and indirect purchasers within a vertical chain. Section III presents umbrella effects and the effects of a cartel on producers of complementary products as examples. The economic harm in both examples may be substantial and easily quantifiable despite the fact that the harm does not arise within a vertical chain. Section IV discusses causality and foreseeability that have often been proposed as justification for limiting damages claims to the vertical chain. It is suggested that a narrow interpretation of these principles threatens the very policy goal of full compensation for any individual harmed. While the goal of regulating claims is explicitly acknowledged, a wider interpretation of these general tort principles would allow claims to be regulated by the merits of the evidence presented. Section V concludes arguing that this would render private enforcement in line with the more economic approach followed in the public enforcement of competition law.

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.

Continental Drift in the Treatment of Dominant Firms: Article 102 TFEU in Contrast to § 2 Sherman Act

In this paper we compare the concepts of monopolization and abuse of dominance as in §2 of the Sherman Act and Article 102 of the TFEU, respectively. After identifying a number of distinctive features in wording and interpretation - including the special responsibility of the dominant firm, competition of the merits and protection of the competitive process - we discuss three lines of argument to explain these differences. The first builds on ordo-liberalism, with its concern for the absence of market power and for the resilience of competitive markets, which influenced EU competition law from the very beginning. The second line of argument derives from the observation that public competition law enforcement is fallible, which self-enforcement could remedy. The third argument explains some of these differences via innovation, whereby Article 102 would reflect a European perspective on innovation. We subsequently return to the underutilized EU category of exploitative abuses and argue that economic techniques developed in the context of damages litigation could open it up for future enforcement in a way that would be in line with ordo-liberal principles, properly understood.

Interaction between Leniency Programmes and Damages Actions in Antitrust Law: Perspectives for Collective Redress

This article addresses the effectiveness of private antitrust enforcement and its relationship with public enforcement of competition law. In light of the recent initiatives taken by the European Commission, it is suggested that soft law instruments are incapable of guaranteeing a coherent approach, especially taking into consideration the need to balance the public and private interests involved in antitrust proceedings. This is particularly evident when appraising the links between actions for damages based on Article 101 TFEU and leniency programmes. The analysis of the case law of the EU courts and national tribunals reveals the tensions between the focus on cartels and the rights of competing undertakings and consumers to claim redress. The situation is hardly satisfactory given the differences in national regulations, on the one side, and the lack of binding EU measures, on the other. Hence, as advocated by the Commission in its Work Programme 2012, it appears preferable, and in line with the principle of subsidiarity, to harmonize domestic laws in this field via the adoption of a directive based on Article 103TFEU.