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European Competition Network (ECN)
The Commission and the competition authorities in the European Union (EU) countries, operating within the European Competition Network (ECN), are urged to cooperate in a close and complementary manner in ensuring effective application of the competition rules within the European Union.
Commission Notice on cooperation within the Network of Competition Authorities [Official Journal C 101 of 27.4.2004].
Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules of competition laid down in Articles 81 and 82 of the Treaty creates a system of parallel competences in which the Commission and the European Union (EU) countries' competition authorities can apply those articles. Together, the national competition authorities and the Commission form a network of public authorities that act in the public interest and cooperate closely in order to protect competition. The network is called the "European Competition Network" (ECN).
The structure of the national competition authorities varies between EU countries. In some of them, one body investigates cases and takes all types of decisions. In others, the functions are divided between two bodies, one is in charge of the investigation of the case and the other, often a collegial body, is responsible for deciding the case. Lastly, in a number of EU countries, prohibition decisions and/or decisions imposing a fine can be taken only by a court. Subject to the general principle of effectiveness, Article 35 of the Regulation allows EU countries to choose the body or bodies that will be designated as national competition authorities and to allocate functions between them.
Allocation of competences: one or more national competition authorities or the Commission
Cases may be handled by one or more national competition authorities acting in parallel or by the Commission.
In most cases, the authority receiving a complaint or starting an ex officio procedure will remain in charge of the case. An authority is regarded as being well placed to act where there is a material link between the infringement and the territory of the EU country on which the authority depends in order for it to effectively bring the entire infringement to an end. Re-allocation of a case would be envisaged only at the outset of the procedure where either the authority concerned considered that it was not well placed to act or where other authorities also considered themselves well placed to act. In addition, even if several authorities can be considered to be well placed to act, the action of a single authority is sometimes appropriate in that it is sufficient to bring the entire infringement to an end.
Parallel action by two or three national competition authorities may be appropriate where an agreement or practice has substantial effects on competition mainly in their respective territories and where the action of only one authority would not be sufficient to bring the entire infringement to an end and/or to sanction it adequately. The authorities dealing with a complaint as part of a parallel action will endeavour to coordinate their action to the extent possible.
By contrast, the Commission is particularly well placed if one or more agreements or practices affect competition in more than three EU countries. It is also particularly well placed to deal with a case if the case is closely linked to other Community provisions which may be exclusively or more effectively applied by the Commission or if the Community interest requires the adoption of a Commission decision to develop Community competition policy when a new competition issue arises or to ensure effective enforcement.
At any event, re-allocation should be a quick and efficient process and should not hold up ongoing investigations. In this connection, the Regulation proposes a series of cooperation mechanisms for case allocation:
- Information at the beginning of the procedure: Article 11(3) of the Regulation stipulates that the competition authorities of the EU countries must, when acting under Article 81 or 82 of the Treaty, inform the Commission in writing before or without delay after commencing the first formal investigative measure. It also states that this information may be made available to the other competition authorities. This machinery allows the network to detect multiple procedures and address possible case re-allocation issues as soon as an authority starts investigating a case.
- Suspension or termination of proceedings: If the same agreement or practice is brought before several competition authorities, Article 13 of the Regulation provides a legal basis for suspending proceedings or rejecting a complaint on the grounds that another authority is dealing with the case or has dealt with it. Article 13 can also be applied to part of a complaint or to part of the proceedings in a case, with the rest of the complaint being dealt with in an appropriate manner. The Commission may similarly reject a complaint for lack of Community interest or other reasons pertaining to the nature of the complaint.
A key element of the functioning of the network is the power of all the competition authorities to exchange and use information that has been collected by them for the purpose of applying Article 81 or 82 of the Treaty. Article 12 of the Regulation states that the exchange of information may take place not only between a national competition authority and the Commission but also between national competition authorities.
Initiation of proceedings
When the competition authorities in EU countries initiate proceedings, they must inform the Commission not later than thirty days before the adoption of a decision implementing Article 81 or 82 of the Treaty and requiring that an infringement be brought to an end (Article 11(4)); they may also make this information available to the other members of the network. By contrast, where it is for the Commission to initiate proceedings under Article 11(6), it will relieve the competition authorities of the EU countries of their competence to apply Articles 81 and 82 of the Treaty. The initiation of proceedings is a formal act that can occur at any stage of the investigation of the case by the Commission.
Two situations can arise: firstly, where the Commission is the first competition authority to initiate proceedings in a case for the adoption of a decision under the Regulation, national competition authorities may no longer deal with the case; secondly, where one or more national competition authorities have informed the network pursuant to Article 11(3) of the Regulation that they are dealing with a given case. During the initial allocation period (indicative period of two months) the Commission can initiate proceedings with the effects of Article 11(6) of the Regulation after consulting the authorities concerned.
After the allocation phase, the Commission will, in principle, apply Article 11(6) only if one of the following situations arises:
- network members envisage conflicting decisions in the same case;
- network members envisage a decision which is obviously in conflict with consolidated case law;
- one or more members are unduly drawing out proceedings in the case;
- there is a need to adopt a Commission decision to develop Community competition policy, in particular when a similar competition issue arises in several EU countries or to ensure effective enforcement;
- the national competition authority or authorities concerned do not object.
If a national competition authority is already dealing with a case, the Commission will explain the reasons for applying Article 11(6) in writing to the national competition authority concerned and to the other members of the network. The Commission will announce to the network its intention of applying Aricle 11(6) in due time so that network members will have the possibility of asking for a meeting of the Advisory Committee. The Advisory Committee is the forum where experts from the various competition authorities discuss individual cases and general issues of Community competition law. It is consulted at the request of the Commission or an EU country.
In order to ensure maximum cooperation, the members of the network inform one another and, where necessary, discuss decisions rejecting complaints, decisions closing an ex officio procedure or decisions ordering interim measures. Such mutual collaboration also concerns the power of investigation. Under Article 22(2) of the Regulation, the Commission may request a national competition authority to carry out an inspection on its own behalf and for its own account.
Position of applicants claiming the benefit of a leniency programme
The Commission considers that it is in the Community interest to grant favourable treatment to undertakings which cooperate with it in the investigation of cartel infringements. In the absence of an EU-wide system of fully harmonised leniency programmes, it is in the interest of the applicant to apply for leniency to all competition authorities which can be regarded as being well placed to act against the infringement in question. Where a national competition authority deals with a case that has been initiated as a result of a leniency application, it must inform the Commission and may make the information available to other members of the network pursuant to Article 11(3) of the Regulation. Except in a number of specific cases, information voluntarily submitted by a leniency applicant will be transmitted to another member of the network pursuant to Article 12 of the Regulation only with the consent of the applicant.
This notice replaces the Commission notice of 15 October 1997 on cooperation between national competition authorities and the Commission in handling cases falling within the scope of Articles 81 and 82 of the Treaty.
- For a more thorough treatment of the above, please consult the ECN's website