The Modernisation of EU competition policy: Making the network operate (original) (raw)

This paper does not seek to evaluate whether decentralisation of the implementation of Art. 81 ECT is desirable but simply analyses how the network of enforcers envisaged in the White Paper would operate. We identify two issues. We observe that in the proposed framework, simultaneous enforcement by several authorities is likely to occur and that each member states will have little incentive to take into account in its decision the interests of other member states. We show that such system of enforcement can have a "disintegrating effect", to the extent that it does not allow for a balancing between positive and negative net benefits across member states. We suggest that in order to avoid these effects, some coordination between the members of the network should be organised. In particular, we advocate the reemergence in the intra-EC context of a 'positive comity' obligation and we suggest that a formal procedure for coordination between different institutions should be laid down (as in the US). We further observe that the accountability of antitrust authorities could deteriorate in the White Paper era. In order to address this concern, we suggest that institutional constraints like accountability and independence standards should be imposed on member states. Finally, drawing on the US experience with multiple enforcement, we argue that the role of the Commission should be as much to manage regulatory innovation (arising from the enforcement activity of member states) as to resolve conflict. 3 Section 1: Introduction and overview This paper focuses on the decentralization of enforcement of European Community (EC) competition law as spelled out in the EC White Paper of April 1999 on Modernization of EC competition law (hereinafter 'the White Paper'). 1 At the outset, it may be worth emphasising what the White Paper does not do. In particular, the White Paper does not put into question the allocation of competence as laid down in Art. 81 of the EC Treaty (ECT), which is an exclusive competence. The Commission through the White Paper simply proposes that competence with respect to competition policy which has been transferred to the Community could from now on be exercised by both Community and national authorities (national competition authorities and national courts). Consequently, it is inappropriate to subject the White Paper to Art. 5 ECT (subsidiarity) and to its legal consequences. The White Paper is thus not concerned with the allocation of competence. It reorganises enforcement; what is envisaged in the White paper is a limited work sharing where the Commission retains the monopoly over individual exemptions (see § 92, p 32-see also Elhermann (2000)). Some of the implementation 2 of Art. 81 is entrusted to at least 3 16 players, rather than one. 1 See, European Commission, The White Paper on Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty, Commission Programme No 99/027, 28 April 1999. We recognise that there is some complementarity between decentralization of enforcement and other aspects of the modernisation contained in the White Paper in particular the treatment of vertical restraints. In a sense both endeavours aim to take off some of the burden from DG Comp's shoulders. More fundamentally, the issue of who will be applying EC competition law is not independent from the design of the laws themselves. In what follows, we abstract from this issue. 2 Arguably, rather limited responsibilities are delegated to member states under the current proposal. 3 In each member state, both the antitrust agency and courts could implement Art 81 ECT.