Abstract
The decentralisation of the public enforcement of Articles 101 and 102 TFEU under Regulation 1/2003 altered not only its institutional setup by delegating enforcement responsibilities to national competition authorities (NCAs) and courts, but also the possibilities for Member States to implement their respective national competition policies and the domestic interest considerations embedded therein. In the multilevel governance framework established by Regulation 1/2003, the enforcement of EU competition law takes place exposed to the national political, institutional and procedural context. In particular, national laws and legal and administrative practices, which bind NCAs and national courts, directly influence the application of Articles 101 and 102 in the national territory. This chapter examines examples of such national measures and practices and assesses their impact of re-nationalising EU competition law and policy.
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Notes
- 1.
Council Regulation (EC) 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, [2003] OJ L1/1.
- 2.
Regulation 1/2003, Article 16 and preambles 1 and 22; European Commission (1999), points 11, 24.
- 3.
It consists of Regulation 773/2004 on details of its competition law procedures as well as six Commission Notices aimed at providing guidance on a range of aspects that were of particular significance in the decentralised enforcement system. With the aid of these soft law instruments, the Commission explained the application of the Treaty articles and provided guidance to assist undertakings and national competition enforcers in assessing the compatibility of a specific practice with EU competition law. Regulation (EC) 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, [2004] OJ L123/18; Commission Notice on cooperation within the Network of Competition Authorities, [2004] OJ C101/43; Commission Notice on cooperation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, [2004] OJ C101/54; Commission Notice on informal guidance relating to novel questions concerning Articles 81 and 82 of the EC Treaty that arise in individual cases (Guidance Letters), [2004] OJ C101/78; Commission Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty, [2004] OJ C101/65; Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty, [2004] OJ C101/81; Guidelines on the application of Article 81(3) of the Treaty (“Article 101(3) Guidelines”), [2004] OJ C101/97.
- 4.
The analysis of the national practices of the five NCAs is based on the empirical database developed by Brook (in press).
- 5.
Council Regulation 17/62 (EEC) First Regulation implementing Articles 85 and 86 of the Treaty, [1962] OJ L13/204.
- 6.
This position was widely shared by members of the competition epistemic community. For example, Claus-Dieter Ehlermann, former Director-General of DG COMP until 1995, described the Commission’s monopoly as “almost a religious belief”, and noted that “Not to adhere to it was considered heresy, and could lead to excommunication”, Ehlermann (2000), pp. 537–538.
- 7.
A relatively recent and comprehensive study on the issue of the formal independence of NCAs by Guidi revealed extensive variations in independence among the NCAs, Guidi (2014). The study also raised the question of whether an NCA’s de iure independence reflects its de facto independence. The Commission has recently started to plead for more independence for NCAs in order to enhance further the enforcement of EU competition law, European Commission (2017), p. 17.
- 8.
See Recital 8 of Preamble and Article 3 of Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty and amending Regulations (EEC) No 1017/68, (EEC) No 2988/74, (EEC) No 4056/86 and (EEC) No 3975/87 (Regulation implementing Articles 81 and 82 of the Treaty), COM(2000) 582 final. Article 3 stated that “where an agreement, a decision by an association of undertakings or a concerted practice within the meaning of Article 81 of the Treaty or the abuse of a dominant position within the meaning of Article 82 may affect trade between Member States, Community competition law shall apply to the exclusion of national competition laws”. This provision was not reproduced in the Modernisation White Paper.
- 9.
However, in accordance with Articles 3(2) and 3(3), the convergence rule does not apply for unilateral conduct and national merger laws.
- 10.
Supremacy of EU competition law over national competition law was originally established in Judgment of 13 February 1969, Walt Wilhelm v Bundeskartellamt, Case 14/68, EU:C:1969:4, but only for cases where an exemption under Article 101(3) has been granted. See also more recently Judgment of 14 February 2012, Toshiba, C-17/10, EU:C:2012:72.
- 11.
Paragraph 33 of the “Article 101(3) Guidelines” stipulates that “the aim of the Community competition rules is to protect competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources.”
- 12.
Paragraph 42 of the “Article 101(3) Guidelines”.
- 13.
Article 7(1) of Schedule 3 provides: “If the Secretary of State is satisfied that there are exceptional and compelling reasons of public policy why the Chapter I prohibition ought not to apply to—(a) a particular agreement, or (b) any agreement of a particular description, he may by order exclude the agreement, or agreements of that description, from the Chapter I prohibition.”
- 14.
Three orders concerned the defense industry: The Competition Act 1998 (Public Policy Exclusion) Order 2006 (2006 No. 605), which exlcudedany agreement aimed to enable the parties to provide or receive maintenance and repair services for surface warships; The Competition Act 1998 (Public Policy Exclusion) Order 2007 (2007 No. 1896), which excluded agreements between members of Team Complex Weapons relating to complex weapons or supporting technology; The Competition Act 1998 (Public Policy Exclusion) Order 2008 (2006 No. 1820), which excluded agreements relating to nuclear submarines developed or manufactured for the Secretary of State. The fourth defence policy order has been repealed (The Competition Act 1998 (Public Policy Exclusion) (Revocation) Order 2011 (2011 No. 2886) with respect to Team Complex Weapons). Another order concerned arrangements for the supply of oil and petroleum products in the event of significant disruption to normal supply (The Competition Act 1998 (Public Policy Exclusion) Order 2012 (2012 No. 710)).
- 15.
This is confirmed by the justification given in the Explanatory Memorandums of the orders. The Secretary of State explained that the orders are not incompatible with Article 101 TFEU given the provisions of Article 346 TFEU (1)(b) which hold that provisions of the Treaty shall not preclude the application of the rule that “any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material”.
- 16.
Case Vj-62/2012 (watermelon).
- 17.
Act No. CLXXVI of 2012 on inter-branch organisations and on certain issues of the regulation of agricultural markets adopted on November 19, which amended Act CXXVIII of 2012.
- 18.
The new Section 18/A(1) provides that: “The infringement of Section 11 of the Competition Act cannot be established in case of agricultural products if the distortion, restriction or prevention of competition resulting from an agreement according to Section 11 of the Competition Act does not exceed what is necessary for an economically justified, fair income, provided that the actors of the market affected by the agreement are not debarred from benefiting from such income and that Article 101 TFEU was not applied.” English translation from Tóth (2013).
- 19.
Section 18/A(4).
- 20.
Vj-62/2012 (watermelon), paragraphs 13–15, 42–46 and 56–57.
- 21.
Vj-50/2009 (sugar cartel), paragraph 132. The new rule was also retroactively applied to Vj-69/2008 (wheat mill products I). Prior to the adoption of the amendment, the NCA imposed a fine with respect to a bilateral and multilateral agreement on the allocation of the Hungarian flour and other wheat mill product market and on the application of minimum prices and on (the extent and timing of) intended price rises. In judicial review, decided after the introduction of the new measure, the NCA was instructed to its decision under the new legal circumstances (2.K.31.793/2011/90 (wheat mill products I) and 2.Kf.649.964/2013/20 (wheat mill products I)).
- 22.
E.g., Vj-199/2005 (egg cartel), upheld in judicial review in 7.K.30.838/2007/33; Vj-89-2003/58 (hunting cartel), upheld in judicial review in 3.K.33.949/2010/17; Vj-132/2003/37 (Council for Wild Animals Products and Services), upheld in judicial review in 3.K.31.984/2005/30.
- 23.
Vj-62/2012 (watermelon), paragraph 70–72.
- 24.
When threatened by an infringement procedure for inserting the exemption into the Hungarian competition act, the law clarified that the NCA may impose sanctions, including fines, when the agreement infringes EU competition law. Article 39/A of the Hungarian competition act provides that the special exception for agriculture “shall only apply to a case, if the necessity of the application of Article 101 of the TFEU does not arise. The necessity of the application of Article 101 of the TFEU shall be established by the Hungarian Competition Authority in its competition supervision proceeding pursuant to Article 3(1) of Council Regulation (EC) No 1/2003, before making the final resolution.”
- 25.
In Vj-67/2014/59 (waste materials), the NCA examined the conduct of the group of Hungarian undertakings that won the bid for the operation of the newly established national waste management scheme. The NCA closed its investigation after the Hungarian parliament adopted Act XCIX of 2014 on the financial grounding of the central budget, which established retrospectively that no infringement of the national prohibition on cartels could be established in respect of actions carried out in the execution of public procurement procedures published in 2012–2013 for the implementation of the National Waste Plan. The NCA closed the investigation noting that there was no public interest in continuing the case in light of the new law. Also see Varju and Papp (2016), p. 1661.
- 26.
- 27.
Judgment of 9 July 1969, Völk v Vervaecke, Case 5/69, EU:C:1969:35.
- 28.
Commission Notice of 2 June 1970 concerning agreements of minor importance which do not fall under Article 85 (1) of the Treaty establishing the European Economic Community, [1970] OJ C64/1. The notice was revised over the years. See Commission Notice of 19 December 1977 concerning agreements of minor importance which do not fall under Article 85 (1) of the Treaty establishing the European Economic Community, [1977] OJ C313/3; Commission Notice on agreements of minor importance which do not fall under Article 85 (1) of the Treaty establishing the European Economic Community, [1986] OJ C231/2; Commission Notice on agreements of minor importance which do not fall within the meaning of Article 85 (1) of the Treaty establishing the European Community, [1997] OJ C372/04; Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community (de minimis), [2001] OJ C368/07; Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union (de minimis notice), [2014] OJ C291/01.
- 29.
In addition to a low market share, the exception had set a limit on the turnover of the undertakings.
- 30.
Commission Notice on agreements of minor importance which do not fall within the meaning of Article 85 (1) of the Treaty establishing the European Community, [1997] OJ C372/04. Yet, the notices still refer to SMEs and hold that the exception is based on the assumption that agreements between SMEs are rarely capable of significantly affecting competition within the common market. Consequently, as a general rule, they are not caught by the prohibition of Article 101(1). See Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union (de minimis notice), [2014] OJ C291/01, footnote 5; Commission Notice on agreements of minor importance which do not fall within the meaning of Article 85 (1) of the Treaty establishing the European Community, [1997] OJ C372/04, paragraph 19.
- 31.
See the Appeal Court of Paris in 2009/05544 (online travel sales), 10–11.
- 32.
If the undertakings are not potential or actual competitors, the turnover of these undertakings is not more than EUR 5.5 million where the core activity is the supply of goods, or EUR 1.1 million in all other cases. If the undertakings are potential or actual competitors, their combined market share shall not exceed 5%, and their combined turnover is not higher than EUR 40 million.
- 33.
Section 78(8) of the Hungarian competition act.
- 34.
Article L-464-9 of the Commercial Code provides that where the anticompetitive practice affects a market that is regional in dimension and is not likely to affect trade between Member States, the individual turnover of the undertakings does not exceed EUR 50 million and the cumulative turnover is less than EUR 100 million, the Minister of the Economy can order the undertakings in question to cease the infringing behavior and impose on them a fine of an amount not exceeding EUR 75,000 or 5% of the last known turnover for France, whichever is smaller. Also see Vogel (2012), p. 171.
- 35.
Article 3(1) of the Act provides: “Agreements between competing undertakings and decisions by associations of undertakings, whose subject matter is the rationalisation of economic activities through cooperation among enterprises, fulfill the conditions of Section 2(1) if: a) competition on the market is not significantly affected thereby, and 2) the agreement or the decision serves to improve the competitiveness of small or medium-sized enterprises.” Also see Klees (2006), p. 403. This was applied in decisions B1-25/04 Verta/Danzer (2004); B3-06/05 OTC medicines—Land pharmacist associations (2007); B2-90/01-4 Timber (2008); B2-90/01-2 Timber (2009); B2-90/01-3 Timber (2009); B2-90/01-1 Timber (2009).
- 36.
Judgment of 13 December 2012, Expedia Inc. v Autorité de la concurrence and Others, C-226/11, EU:C:2012:795, paragraph 29.
- 37.
Restrictions of the commercial freedom of undertakings were not only seen as harmful to competition, but also to market integration. A broad interpretation of Article 101(1) allowed the Commission also to control agreements that hinder market integration, irrespective of the actual impact on competition interest. See Odudu (2006), pp. 89–99.
- 38.
As early as Grundig-Consten, it explained that “the decisive criterion for the coming into force of the prohibition mentioned in Article 85(1) (…) consists of the finding that the agreement interferes with the freedom of action of the parties or with the position of third parties on the market”. In particular, the prohibition “applies virtually automatically to (…) agreements which establish absolute territorial protection for exclusive distributors. This point is central to Commission policy.” Emphasis added. The Commission’s position was presented in the Report for the Hearing in appeal in Judgment of 13 July 1966, Grundig-Consten, 56 and 58/64, EU:C:1966:41. As well-known, using Article 101(1) as a jurisdictional provision meant that all agreements had to be notified to the Commission, even when the undertakings had no significant market power or when the agreement had an insignificant effect on competition and this created a serious administrative backlog. See, for example, Van Bael (1986), pp. 62–63; Temple Lang (1998), p. 3; Ehlermann (2000), p. 541; Riley (2003), p. 614; Wils (2013), p. 5; Sufrin (2006), p. 917; Jones (2010), p. 789; Goyder (2009), pp. 52 and 613–615; Temple Lang (2014), p. 3.
- 39.
Judgment of 21 September 1988, Van Eycke, Case 267/86, EU:C:1988:427, paragraphs 15–16.
- 40.
The Law on the Bar of 23 June 1952, adopted pursuant to Article 134 of the Constitution of the Kingdom of the Netherlands.
- 41.
Judgment of 19 February 2002, Wouters, C-309/99, EU:C:2002:98, paragraph 97.
- 42.
CP/0090/00/S MasterCard (2005), paragraphs 426–430.
- 43.
08-D-06 (specialist physicians overcharging fees), paragraphs 94–96; 10-A-10 (chartered accountants), paragraphs 110–111; 15-A-02 (regulated professions).
- 44.
30525 International Energy Agency (1983).
- 45.
34493 37366 37299 37288 37287 37526 37254 37252 37250 37246 37245 37244 37243 37242 37267 DSD (2001).
- 46.
Emphasis added.
- 47.
Paragraphs 50, 59.
- 48.
Paragraph 33. Emphasis added. In parallel, they discarded market integration as a goal of EU competition policy.
- 49.
B8-113/03-1 long-term gas supply (2006), paragraphs 24–26; B7-22/07 basic encryption of TV programmes—commitments (2012), paragraph 41; B7-1/13-35 Sennheiser (2013), paragraphs 1–2; B3-137/12 Adidas (2014), paragraphs 6–7; B2-98/11 Asics (2015), paragraphs 613–622; B6-81/11 ARD/ZDF online platform “Germany’s Gold” (2013); B7-46/13 Telekom and Telefónica (2014), paragraphs 88–89.
- 50.
B4-152/07 coordination of tenders for sales packaging waste collection services by compliance schemes (2010), paragraph 6.
- 51.
In November 2011, the Dutch Minster of Agriculture submitted a letter to the Dutch House of Representatives demanding the consideration of animal welfare and environmental interests in NCA’s proceedings relating to agreements in the agricultural and nutrition sectors, Dutch Minister of Agriculture (2011).
- 52.
According to Article 5 of the Dutch Competition Act, the Minister of Economic Affairs can lay down policy rules, in particular, to instruct the NCA on how to take into account general interests other than economic interests in its assessment of restrictive agreements.
- 53.
The document deliberately left the term “sustainability” undefined. It provides that the term could include a wide range of policies, including environmental protection, public health, fair trade production, and animal welfare, ACM (2014), paragraph 6. The Vision Document also served as the basis of a shorter policy instrument of the Minister of Economic Affairs published on the same daym see Dutch Government Gazette, Decision of the Minister of Economic Affairs of May 6, 2014, No. WJZ/14052830, Containing the Policy Rule Regarding the Application by the Netherlands Authority for Consumers and Markets of Section 6, Paragraph 3 of the Dutch Competition Act in Anticompetitive Arrangements that have been made for the Purpose of Sustainability (8 May 2014).
- 54.
ACM opinion: Coal power plants (2013).
- 55.
ACM/DM/2013/205913 De troomversnelling (2013).
- 56.
ACM/DM/2014/206028 Chicken for tomorrow (2015), paragraphs 5–6.
- 57.
See Varju and Czina in this volume.
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Brook, O., Cseres, K.J. (2019). Member States’ Interest in the Enforcement of EU Competition Law. In: Varju, M. (eds) Between Compliance and Particularism. Springer, Cham. https://doi.org/10.1007/978-3-030-05782-4_7
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