Enforcement of European competition law

European competition law and amicus curiae briefs

Council Regulation (EC) 1/2003[1] has led to the decentralization of the enforcement of European competition law, thereby increasing the powers of national competition authorities (NCA’s) and national courts with regard to articles 101 and 102 TFEU. Although a decentralized system has advantages in terms of the efficient application and enforcement of European competition law, there’s a downside too: decentralization carries with it the risk of divergence which, given the Union’s aim and goals,[2] is highly undesirable. In order to ensure and promote the consistent and uniform application of competition rules, the European Commission can use the tools provided for by Regulation 1/2003, one of which is the ability of the Commission to act as amicus curiae in national antitrust proceedings under article 15.[3] This possibly has implications for the independence and the autonomy of national courts.[4]

Background of Council Regulation 1/2003

Before the entry into force of Council Regulation 1/2003, the task of enforcement of competition law was –for the greatest part- concentrated with the Commission.[5] The fact that the Commission could act as a single regulator (although the Member States remained competent to apply articles 101 and 102 TFEU as long as the Commission had not initiated any procedure), had the advantage that a uniform approach to European competition law was more or less guaranteed.[6] However, the concentration of enforcement with the Commission had some serious drawbacks, one of which being the Commission’s limited resources to deal with all the competition problems that were brought to its attention; a problem that got worse with every enlargement of the European Union.[7]

European Commission can become involved in a national antitrust proceeding

In an attempt to tackle this, the European Commission came up with an extensive modernization programme, of which decentralization is a key element. The NCA’s, national courts as well as private parties were encouraged to enforce EU competition law in national antitrust proceedings,[8] since, according to the Commission, national authorities had a common task of protecting competition and regulating the market, thereby allowing the Commission to concentrate on hard core infringements.[9]

Although decentralization may seem as a loss of control for the Commission, this is certainly not the case. The NCA’s arelinked through the European Competition Network (ECN), which works by virtue of rules for case allocation and consistent application of Union competition law.[10] When it comes to national courts, such a mechanism doesn’t exist. In order to minimize the risk of divergent application in national antitrust proceedings, the Commission may use the tools provided for in article 15 of Regulation 1/2003.[11] Under this article the Commission can become involved in a national antitrust proceeding in a number of ways, one of which being the submission of ‘observations’ as amicus curiae.[12]

Nature of the amicus curiae briefs

In order to determine whether the role of the Commission as amicus curiae will have serious consequences for the autonomy and independence of national judges, it is essential to take a closer look at the nature of the Commission briefs.

Nature of the Commission amicus curiae briefs

Article 288 TFEU, concerned with the hierarchy of legal acts of the Union, states that ‘Recommendations and opinions shall have no binding force’ and despite the fact that the Masterfoods-rule[13] suggests otherwise, there is no formal hierarchical relationship between the national courts and the Commission as an institution.[14] It would be therefore up to the national courts to decide whether to take notice of the Commission amicus curiae briefs.[15] However, while a community instrument may not have binding force, it can still have legal significance.[16]

Treaty on the Functioning of the European Union (TFEU)

This would be even more so for the Commission briefs: given the duty of sincere cooperation the TFEU (Treaty on the Functioning of the European Union) confers upon the Member states under article 4(3), the cooperation duties as formulated in Regulation 1/2003 and the Cooperation Notice, [17] It is very likely that the briefs will have persuasive force. Furthermore, although the effect of a Commission opinion is somewhat uncertain, one should take into consideration that the non-binding briefs of the Commission could easily become binding through a national judgment by virtue of a judge using the ‘good advice’ of the Commission as an interpreting mechanism for the obligations arising from EU competition law.[18]

Restriction of the parties’ right to a fair trial

Of even greater importance is the fact that the Commission refrains from hearing the parties to a national proceeding before formulating its opinion.[19] This could be problematic: as the process may not be in front of the parties, the national court may rely on the Commission’s opinion without cross-examination. This could lead to a restriction of the parties’ right to a fair trial, as they may have no possibility of challenging the way in which a national court presents the facts of the case to the Commission and- consequently- have no influence at all on the circumstances on which the Commission bases its opinion.[20] This certainly is a blow to democratic legitimacy and legal certainty.

[1] Also known as the ‘Modernisation Regulation’

[2] See for example art 3(3) TEU, and article 26 jo 114 TFEU: the Union is to establish an internal market of which approximisation of laws is an important aspect.

[3] See also Wright (2008), p. 1

[4] Which is an important principle of public international law. See e.g.: article 10 of the Universal declaration of Human rights, article 5 of the European Convention on Human Rights, article 14 of the International Convenant on Civil and Political Rights

[5] See Regulation 17/62, especially article 9 and recital 7-9: the commission had a great deal of power to apply articles 85 and 86 of the Treaty. (Although even then the ‘cooperation of the competent authorities of the Member States’ was required). Also of importance in this respect: First Report on Competition Policy (Rep. Comp. 1971) points 129-131, p. 105-107: emphasizes the primacy of European Competition law and Commission decisions over decisions by national authorities. According to point 129, national authorities are bound to respect the effects of a Commission decision whenever it precedes a national one. If the Commission decision occurs after a national decision, the national authorities should take appropriate measures in order to ensure compliance with the Commission decision.

[6] See article 9(3) of Regulation 17/62; Chalmers, Davies and Monti (2010), p 941

[7] Not to mention the fact that the Commission could act in a politically motivated manner and that the regulation failed to provide legal certainty. See Chalmers, Davies and Monti (2010), p 942 and Venit (2003), p. 550

[8] Recital 7 of Regulation 1/2003

[9] Chalmers, Davies and Monti (2010), p 943, Wish and Bailey (2012), p. 296, Venit (2003), p.552

[10] Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities, (2004) OJ C101/43.

[11] Venit (2003) sees this as a form of ‘controlled diversity’ which the author considers to be a stimulus in the development of European competition law, p. 546

[12] Article 15(3) Regulation 1/2003

[13] See case C-344/98, especially paras 45-54 in which the Court ruled that the Commission cannot be bound by a decision given by a national court in application of articles 101 and 102 TFEU. Therefore, the commission is free to adopt a decision under article 101 or 102 which conflicts with a decision of a national court. Furthermore, national courts must avoid giving decisions which would conflict with a decision contemplated by the Commission in the implementation of articles 101 and 102 TFEU. See also Komninos (2007), p 1388-1389

[14] Wright (2010), p. 740

[15] Which is expressly confirmed by para 19 of Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities, (2004) OJ C101/43

[16] See Case C-322/88, Grimaldi v Fonds des Maladies Professionnelles [1989] ECR 4407, at para 19 and also Wright (2010), p. 744, who also refers to this case.

[17] See articles 11-16 of Regulation 1/2003 and Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities, (2004) OJ C101/43

[18] See Wright (2008), p. 37 and Wright (2010), p. 745

[19] Para 19 of Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities, (2004) OJ C101/43

[20] Wright (2010), p. 750-751