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Enforcement of arts.101 and 102 - Coggle Diagram
Enforcement of arts.101 and 102
Modernisation of Reg 1/2003
introduces “more economic thinking” (more focus on market shares
Parallel application
of national and EU competition law Art.3
National courts or NCAs that apply national competition law must also apply 101-102 TFEU if trade between MS affected
enforced by 'best placed authority'
Decentralisation is limited; EC still exercises the most influence
Concern especially for ‘under-enforcement’, not for ‘over-enforcement’
‘Spill-over’ effect of EU law on national law, also in areas where the EU has no competence
Directly applicable exception system
Notifications abolished (self-assess)
decentralized approach to the enforcement
self-assessment
NCA and courts can apply arts. 101 and 102
Block exemption system not changed
EC can adopt decisions making commitments binding on undertakings (Art. 9(1))
More powers for EC to gather information and organize inspections
More powers for EC to conduct 'on-site' investigations
Directive 2019/1
to empower the competition authorities of the Member States to be more effective enforcers
Goals:
More investigative powers for NCAs
Counteract uneven enforcement across EU27 by NCAs
Instate guarantees of independence, resources, and enforcement and fining powers for NCAs
Fining Procedure
Stages
pre-investigation phase ~ 6mo
Info comes to COMM via sector inquiries, complaints etc
investigation phase (2-3y )
special: commitment / settlement
“secret” investigation
(actual) procedure ~1y
statement of objections (SO; possibly SSO)
access to file
written / oral procedure, incl hearing
preparation Decision
special: commitment / settlement
Decision
Appeal
Timing: could be 7.5-9years
Example
Google Shopping
: 14.5 years
EC Guidelines on the method of setting fines (1.9.2006)
1) determine basic amount
2) Basic amount adjusted up or downwards for
aggravating/mitigating circumstances
3) Legal Max: fine should not exceed 10% of total turnover of preceeding business year
COM has discretion - fine can be appealed but barely granted
Negotiated solutions
Leniency
Immunity from fines if 6 cumulative conditions are fulfilled
undertaking first to submit contemporaneous, incriminating (information and) evidence, enabling EC to carry out targeted inspection or to find infringement (“whistleblower”)
Disclose participation in cartel
EC did not already have sufficient evidence + no other undertaking was granted conditional immunity
Undertaking cooperates genuinely, fully, on a continuous basis and expeditiously (not destroy, falsify or conceal relevant information or evidence, not disclose leniency application except to other authorities)
Flexible termination of involvement in infringement
Not having coerced other undertakings to participate or to remain in cartel (but reduction of fine is then still possible)
Reduction of Fines: If you don't fulfil all cumulative criteria, you don't get full immunity but can receive reduced fines
Commitment decisions: Promise to end an infringement and never infringe again
no need to confess
EC had intention to order an end to an infringement, no intention to fine
In reality, this also happened when it was planned to impose fines
no right of undertakings to such a decision
Settlement
Acknowledgment of participation in anti-competitive behavior + acceptance of liability in exchange for 10% reduction in fines (and cannot appeal)
-> EC already knew of the behaviour and had evidence
no right to settle - EC discretion
ONLY FOR CARTEL CASES; NOT FOR 102
Private Enforcement
mode possible through modernisation of Reg 1/2003
National courts
Damages claims
Right to Damages
: Case C-453/99 –
Courage Ltd v Crehan
For everyone: consumers, retailers -> if they both claim damages, manufacturer must pay 2x
Case C‑557/12 – Kone AG and Others v ÖBB-Infrastruktur AG
Can consumers claim damages from manufacturers participating in cartel for an increased price from a manufacturer that does not participate in cartel? Yes
Focus is on the victim who paid more, not the manufacturers
Remedies
:
Actions for damages
Actions for nullity/enforcement of contract
Actions for injunctive relief
Damages Directive 2014/104/EU
Objectives
Effective redress under uniform conditions across the MS vs «astonishing diversity and total underdevelopment» [Ashurst Report, 2004]
→ principle of full compensation (Arts. 3, 11)
Coordination between public and private enforcement
Deterrence (but NO punitive or multiple damages)
Scope
Damages actions
Limitation: min 5 years starting from end of infringement
Rebuttable presumption that cartels cause harm (Art. 17(2))
Main dev leading to more procedures
Collective proceedings
all techniques aimed at deciding multiple individual claims into one single action.
Third-party funding
Digital markets
Representative action = action for the protection of the collective interests of a group or the individual interests of multiple individuals
class actions
Regulatory redress = redress delivered by public authorities