National Enforcement [EU]

National Authorities

Directive (EU) 2019/1 empowering EU countries’ competition authorities to be more effective enforcers and to ensure the proper functioning of the EU’s internal market,

The legislation:

• guarantees EU countries’ national competition authorities the necessary independence, resources and enforcement and fining powers that are necessary to tackle effectively agreements and practices by companies that restrict competition within their jurisdiction;
• applies specifically to when anti-competitive agreements prohibited by Articles 101 (cartels*) and 102 (abuse of dominant position*) of the Treaty on the Functioning of the European Union (TFEU) are applied either on a stand-alone basis or in parallel with national competition law to the same case;
• provides for mutual assistance between competition authorities to ensure that companies cannot escape from enforcement in order for the EU’s Single Market to operate smoothly.

Powers

National competition authorities have the power to:

• carry out unannounced company inspections, including the right to enter premises, examine records, seal buildings and question staff;
• search the homes of company directors, managers and employees if they suspect that they will find relevant books or other records there;
• require companies to provide all necessary information within a specified and reasonable time;
• compulsorily summon a company representative to appear for an interview;
• order any illegal practices to stop and take appropriate action, including imposing structural or behavioural remedies, order interim measures or make commitments offered by companies binding, to achieve this;
• impose effective, proportionate and dissuasive fines in their own proceedings, or seek these be imposed in non-criminal judicial proceedings not only for infringements of Articles 101 and 102 TFEU but also when companies intentionally or negligently fail to cooperate with their investigative powers;
• also impose effective proportionate and dissuasive periodic penalties in order to compel compliance with their investigative and decision-making powers.

They must have

• effective leniency programmes in place which encourage companies to report cartels throughout the EU;
• provide each other with mutual assistance so that, for example, companies with assets in other EU countries cannot escape from paying fines.

Constitution of Authorities

All staff involved must:

• act independently from any political or other external influence;
• neither seek nor take instructions from government or any other public or private entity;
  refrain from action that is incompatible with their duties;
• refrain from dealing with proceedings that could give rise to conflicts or interest for a reasonable period after leaving the national competition authority.

The persons who take the main enforcement decisions must be protected from arbitrary dismissals and may only be dismissed if found guilty of serious misconduct or if they no longer meet the requirements of the job.

Members of a competition authority’s decision-making body must be selected, recruited or appointed in a clear and transparent way.

Enforcement

EU countries must ensure competition authorities:

• respect the rights of defendants, including the right to be heard and the right to an effective remedy before a tribunal;
• conduct enforcement proceedings within a reasonable time;
• have a sufficient number of qualified staff and sufficient financial, technical and technological resources to do their job;
• provide assistance to colleagues from other EU countries in order to notify procedural acts or ensure the payment of fines cross-border.

Fines on one or more companies for illegal behaviour must:

• reflect the gravity and duration of the infringement;
• be able to reach a maximum that is not less than 10% of the company’s worldwide turnover in the business year preceding the decision imposing them.

A leniency programme offers a company disclosing its involvement in a secret cartel:

• immunity from fines if it is the first to submit evidence which either enables competition authorities to carry out targeted inspections or is sufficient for the competition authorities to find an infringement;
• reduced fines if it submits evidence which represents significant added value for the purpose of proving an infringement relative to the evidence already in the competition authorities’ possession

By 12 December 2024, the European Commission must present a report to the European Parliament and the Council on the transposition and implementation of the directive.

It has applied since 3 February 2019 and has to become law in the EU countries by 4 February 2021.