Brussels, 30 March 2004
Commission finalises modernisation of the EU antitrust enforcement rules
The European Commission adopted today a series of documents which complete the landmark modernisation of the European Union's antitrust enforcement rules and procedures. The documents, which cover such things as treatment of complaints, the issuance of guidance letters and the functioning of the European Competition Network linking the European family of competition authorities, will come into effect on the 1st of May at the same time as the new antitrust enforcement regulation.
The new documents complement Regulation 1/2003 (the new 'antitrust enforcement regulation') which enforces the EU Treaty rules banning restrictive agreements such as cartels Article 81 and abuses of dominant positions Article 82. The entire exercise is commonly referred to as the 'Modernisation Package' and will come into force on the 1st of May.
"The reform is designed to give the Commission new antitrust powers and procedures for an enlarged and more mature European Union. It replaces legal texts, rules and instruments adopted more than 40 years ago when there was little experience in Europe with competition policy both on the part of the industry and the public authorities", said Competition Commissioner Mario Monti.
The new antitrust enforcement system is designed to ensure more effective enforcement of the EU competition rules in the interest of consumers and businesses while reducing bureaucracy for companies that operate in Europe.
Regulation 1/2003 abolishes the notification to the Commission of business agreements, a system which had been created in 1962 but had become unnecessarily bureaucratic as companies operating in Europe are now familiar with competition rules(1). Incidentally, no such notification exists in the United States either.
Significantly, the reform also enables Member States' courts and competition authorities to make a greater contribution to the enforcement of the European competition rules. At the same time, it brings about a more level playing field for businesses as all enforcers will be under an obligation to apply the EU competition rules to cases that affect trade between Member States.
The Commission Regulation and six Notices adopted today complement Regulation 1/2003 and complete the new legal framework that will come into effect on May 1st.
The European Competition Network (ECN)
One of the central elements of the package is the Notice on Cooperation within the Network of competition authorities. This cooperation is already a reality as the Commission and Member States' competition authorities launched the European Competition Network (ECN) more than a year ago(2).
But the Notice reflects a new quality of close cooperation between public enforcers in the European Union. The entry into force of the new legal framework will activate a range of new cooperation mechanisms between the Commission and the Member States' competition authorities. The Notice provides guidance, among other things, on the work-sharing between the public enforcers, the mutual information about pending cases at different stages of the procedure and the exchange of information for the use in evidence.
Particular attention has been given to the issue of leniency applications in cartel investigations in order to preserve the efficiency of the EU and national leniency programmes where they exist. The Notice particularly indicates that information will not be shared with the network without the consent of the leniency applicant, except in cases where the receiving authority ensures the protection of the leniency applicant. The Commission has received written commitments from the vast majority of Member States in this respect and will soon publish a list of these national competition authorities that have signed a declaration to the effect.
Abolition of the notification system
Regulation 1/2003 removes the centralised notification and authorisation system for the application of Article 81(3) of the Treaty, the provision under which an agreement that has anticompetitive effects can nonetheless be found legal, if it produces sufficient countervailing benefits that are passed on to consumers. Under the new Regulation, Article 81(3) can be directly invoked by undertakings before a national court or national competition authority; no Commission statement is needed to do so. The agreement, decision or conduct in question must be found legal if the party can show that it fulfils the conditions set out in Article 81(3).
Against this background, Member States and industry have called upon the Commission to issue guidelines on the application of Article 81(3). The Guidelines on the application of Article 81(3), adopted today as part of the Modernisation package, respond to these requests. In order to promote coherent application and provide guidance to businesses, the draft Notice sets out the methodology for the application of Article 81(3). The Notice does not replace but complement the extensive guidance already available in Commission Guidelines on particular types of agreements, in particular the Guidelines on horizontal cooperation agreements and the Guidelines on vertical restraints.
The other documents of the Package
The 'Modernisation Package' further comprises:
The new Commission Regulation on the conduct of antitrust procedures
The Commission Regulation contains detailed rules on a series of important aspects of the Commission's procedures such as hearings, complaints and access to file.
Guidelines on the effect on trade concept
The effect on trade concept is the jurisdictional criterion which determines the reach of the EU competition rules. It is of particular importance in the new enforcement system which obliges Member States' courts and competition authorities to apply the European competition rules to all agreements and practices which may affect trade between Member States. Against this background, the Guidelines adopted today summarise the extensive case law of the Community courts in order to provide guidance to enforcers and businesses.
The Notice on the co-operation between the Commission and the national courts
The competition rules of the Treaty can be invoked by undertakings and citizens before national courts. The abolition of the notification system brought about by the new enforcement system removes an important obstacle to private enforcement. In this context, the new Notice on co-operation between the Commission and national courts is intended to serve as a practical tool for national judges where they apply the EU competition rules. It explains in particular the tools for cooperation foreseen in Regulation 1/2003, which include i.a. the possibility for the national courts to ask for information and opinions from the Commission on cases pending before them that concern the application of the Community competition rules.
The Notice on informal guidance to business (guidance letters)
While the abolition of the notification system for the application of Article 81 is the central element of the new enforcement system, the Commission will remain open to discuss specific cases with undertakings where appropriate. The Commission is in particular prepared to provide guidance to businesses where novel questions of EU competition law make it difficult for them to assess their agreements or conduct under the EC competition rules. For this type of situation, the Notice adopted today sets out the possibility to issue guidance letters to business. Guidance letters will be reserved to cases where a genuinely novel question concerning Articles 81 or 82 arises and will be subject to the Commission's enforcement priorities. They will be reasoned and published.
The Notice on the handling of complaints by the Commission
The Notice explains both the possibility to provide market information to the Commission in an un-bureaucratic way and the procedures applicable to formal complaints. It is intended to encourage citizens and businesses to come forward with information on suspected infringements of the competition rules.
The Modernisation reform of the enforcement system for Articles 81 and 82 was formally launched by the Commission by means of its White paper on modernisation of the rules implementing articles 81 and 82 of the EU Treaty in 1999. Subsequently the Commission presented, in September 2000, its proposal for a new Regulation replacing Regulation No. 17. After more than two years of intensive work in the Council, this proposal led to the adoption of the new Regulation 1/2003 on 16 December 2002. The Regulation was published in the Official Journal of the European Union in January 2003.
(1) The texts adopted today do not concern state aid or merger control
(2) The national competition authorities of the future new Member States have been fully involved in this process from the outset.