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The fundamentals of EC competition law Overview, institutions and procedure Karen Williams Hearing Officer for competition proceedings European Commission ABA Antitrust Section Spring Meeting 2005
The EU: expansion in scale and scope ■ Originally 6 Member States now grown to 25, with 450 million European citizens ■ Only designated competences, but for those competences has primacy over national law ■ Main focus initially on internal market objectives. Now much broader eg environment, research, plus monetary union and elements of political union
Fair competition – a basic objective from the start ■ Competition rules included in the Treaty (basic constitutional instrument) from the outset to provide level playing field within the internal market ■ Competition policy was also used as a tool to achieve the internal market goal ■ Main focus now : consumer welfare
Basic Treaty rules ■Prohibition of anticompetitive agreements (Article 81) ■ Prohibition of abusive behaviour (Article 82) ■ Regulation of state aids ■ Merger control not explicitly covered or regulated at EU level until secondary legislation (Merger Regulation) adopted in 1989 ■ Antitrust rules were sufficiently clear to be directly applicable by national courts. However, Commission played the central role
European Commission ■Executive of EU • Guardian of the Treaty - through recourse to the European courts - through direct enforcement (own decisions) • Shapes and manages a number of common policies • Initiates EU legislation ■ Coexists with • Legislative power : Council + Parliament • Judicial power : Court of First Instance (CFI) and European Court of Justice (ECJ)
Commission as competition regulator ■ Since 1960s Commission has had main authority to enforce 81 and 82 in individual cases – power of investigation, decision and fines (Reg. 17/62) ■ Since 1990 has also specific decision-making powers in merger control ■ Commission has also directed policy at EU level: • Regulating certain behaviours or sectors of the economy through “group” exemptions • Issuing guidelines (notices) • Main interlocutor in international cooperation
Modernisation of antitrust ■ In 1999 Commission launched major policy debate on reshaping regulation of antitrust within EU. ■ Aims of modernisation: • Giving Member States powers and obligation to apply Articles 81 and 82 where interstate trade is affected leading to more and better directed enforcement at Commission and national level • Enforcement to be based on investigation and complaints, rather than “voluntary” notifications with immunity from fines ■ New legislation adopted May 2004 (Reg 1/2003)
New legal framework for antitrust ■ Three enforcers of Articles 81 and 82 • Commission : • National Competition Authorities (NCAs) • Private persons through National Courts ■ Substantive rules are the same but national procedures remain • NCA’s however must guarantee same fundamental protection. Some “soft” harmonization in progress ■ National laws still applicable but very conditioned by EC law
Commission’s procedure ■ Decisions on cases proposed by Commissioner for Competition Policy, adopted by College of 25 Commissioners ■ Administrative procedure ■ Commission (DG Competition) investigates and decides ■ Right to be heard (due process) : a fundamental right ■ Procedure heavily rule-based with specific provisions for rights to be heard ■ Checks and balances : other Commission services (especially Legal Service), NCA’s and Hearing Officers
Role of Hearing Officer ■ Specific function of the Hearing Officer : guarantee due process by Commission ■ Independent of DG COMP and reports directly to the Commissioner for Competition policy ■ Organises and conducts oral hearings ■ Decides certain areas of dispute, eg access to documents on the Commission’s file, confidentiality ■ Can make observations to the Commissioner on any aspect of the case at any stage ■ Provides final report on due process to the College before decision adopted (report published)
Judicial review ■ Final and most significant guarantee of due process and substantive legality ■ Court of First Instance - reviews facts and law. Broad scope for review - unlimited review of fines ■ Ultimate appeal to European Court of Justice (ECJ) on issues of law