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European Commissioner for Competition
The C. Peter McColough Series on International Economics, The Council on
Ladies and gentlemen
I am delighted to be here today to share with you my thoughts on parallel developments in anti-trust policy and enforcement here in the US and in the EU.
Co-operation between the US anti-trust authorities and the European Commission is long-established. We share information and co-ordinate our activities on individual cases – where confidentiality permits – but we also share best practice and discuss key elements of our respective policies. This happens not just on a bilateral basis but also now through the International Competition Network – a forum which brings together competition enforcers from across the world. So it is not just our enforcement and anti-trust policies that are world-leaders – it is also the strength, depth and breadth of our ongoing co-operation, which sets an example to help enforcers across the world to promote a global competition culture. And there is no doubt that that is what the future requires: as markets become more global, and as anti-competitive behaviour takes place on an increasingly global scale – so must our competition policy and anti-trust enforcement.
But in the midst of this ever-expanding global perspective, it is the duty of competition authorities to remain firmly and clearly focused on the interests of individual consumers. I'm pleased that this is something on which EU and US enforcers are in complete harmony - because it is at the heart of effective competition policy, whether we are dealing with cartels which directly harm consumers, or unilateral conduct which inhibits innovation and economic growth.
I would like to talk to you today about three particular areas where recent developments in competition policy and enforcement on both sides of the Atlantic stand to bring substantial benefits for consumers and for the economy: first – cartels; second - unilateral anti-trust behaviour; and third - private damages actions for breaches of competition law.
I will start with cartel enforcement. Your Assistant Attorney General here in the US – Thomas O’Barnett – described the objectives of the anti-trust division of the Department of Justice as being to “pursue vigorously the most harmful violations, to increase transparency and to reduce the time and costs associated with our investigations”. Our objectives in the European Commission are identical. Cartels are the most damaging form of anti-competitive behaviour, they are notoriously hard to detect, and they increasingly take place on an international scale. That is why we must join in a rigorous action and be equipped to overcome those same geographical boundaries that the cartelists have conquered!
During my first two years in office, I have taken a number of measures to that effect:
First I have created a dedicated cartel Directorate of around 60 officials that has already delivered an increased number of concluded cartel cases this year. Furthermore, it provides a central contact-point for the outside world – including our colleagues in the US. A worthwhile infrastructure investment, I hope you'll agree!
Second, I have presented to the Commission new guidelines on fines which are designed to increase fines further so as to better deter offenders, and in particular repeat offenders who will now be subjected to a 100% fine increase. This ‘deterrent effect’ was at the heart of the decision to increase criminal penalties here in the US. We in the Commission can’t threaten cartelists with a spell in prison – although some of our Member States can - but our very tough attitude to administrative fines aims to achieve a similar effect.
Third, just as the US has an 'amnesty' scheme, we too have a ‘carrot-and-stick’ approach through our leniency programme. In 2002 we improved the programme to make it more attractive and to facilitate cooperation with other enforcers including in the US. Since then we have received around 170 applications for leniency covering companies based in over 20 different countries. But we are looking again at our leniency system and will make soon some further improvements notably to ensure a "one stop shop" leniency within our European Competition Network of National Competition Authorities.
I would like to turn now to ‘unilateral’ anti-competitive behaviour. This is what we in the EU call “abuse of a dominant position” further to Article 82 of our Treaty, which broadly equates to section 2 of your Sherman law.
As we all know, there are some significant differences between the two jurisdictions in this field. In the EU, we regulate the conduct of firms who have a ‘dominant market position’. The Sherman law talks about conduct of companies who acquire or maintain monopolies. It's of course true that ‘dominance’ requires a lower market share than a ‘monopoly’, and some people like to make much of this difference.
But let's not overstate things. Our respective enforcement approaches are in fact rather convergent on a number of very important things:
I think that, when you look at the terms of both our reviews in this area, we are focused on a very similar goal - improving the economic basis that underpins both the rules themselves and the way they are enforced. And the reason for doing so is to ensure that we strike the right balance between preventing abusive behaviour, and preserving full competition on the merits.
Private damages actions
Finally, ladies and gentlemen, I would like to say a few words about the ongoing debate in Europe as concerns private damages actions for breaches of competition law. You in the US have travelled much further down this road than we have in Europe! Whilst in theory European citizens have long been entitled to compensation for the damage caused by anti-competitive behaviour, the fact is that theory and reality are two very different beasts. That is why I launched a public consultation on a Green Paper on this issue last year.
I am pleased to say that we had a number of responses to our Green Paper from organisations and firms who are based here – in particular a very useful paper from the American Bar Association.
I will outline just a few of the questions we are addressing:
Our debate in Europe remains open, and as yet I have no firm view on how we should respond to these questions – or even if any further action is indeed needed on any of them. But watch this space because we'll try to draw some conclusions from the debate early next year.
Ladies and gentlemen,
For me there is no doubt that the competition systems in Europe and the US have more similarities than differences. And, most importantly, enforcers on both sides of the Atlantic are firmly headed in the same direction, with policies which increasingly go hand-in-hand. And there is so much we can achieve by consulting and co-operating with each other – and by continuing to recognise that listening to our stakeholders and benefiting from their experiences is important too. So I look forward to our discussion today, and to hearing your views on how we can all benefit from the parallel developments I have briefly outlined today.