{"id":10008,"date":"2022-07-03T17:04:23","date_gmt":"2022-07-03T17:04:23","guid":{"rendered":"http:\/\/legalblog.ie\/eu-competition-enforcement\/"},"modified":"2022-11-20T09:08:20","modified_gmt":"2022-11-20T09:08:20","slug":"eu-competition-enforcement","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/eu-competition-enforcement\/","title":{"rendered":"EU Competition Enforcement"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Enforcement_System\" title=\"Enforcement System\">Enforcement System<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Cooperation_Mechanism\" title=\"Cooperation Mechanism\">Cooperation Mechanism<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#EU_Law_Supremacy\" title=\"EU Law Supremacy\">EU Law Supremacy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#EU_Enforcement_Action\" title=\"EU Enforcement Action\">EU Enforcement Action<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Investigation\" title=\"Investigation\">Investigation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Powers\" title=\"Powers\">Powers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Decision\" title=\"Decision\">Decision<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Undertakings\" title=\"Undertakings\">Undertakings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Fines\" title=\"Fines\">Fines<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/eu-competition-enforcement\/#Challenge_Commission_Decisions\" title=\"Challenge Commission Decisions\">Challenge Commission Decisions<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Enforcement_System\"><\/span>Enforcement System<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The European system of enforcement of competition law is provided by EU Regulations.\u00a0 The\u00a0 Commission\u2019s Competition Directorate is central to enforcement.\u00a0 It has significant powers and may impose very significant administrative fines. Enforcement will generally arise from an investigation, arising on foot of a complaint or by the authority acting its own initiative.<\/p>\n<p>The 2003 Regulation represented a significant modernisation of the competition enforcement rules. The reforms provided a decentralised network of national competition authorities, which assisted the Commission in enforcing EU competition law. The European competition network includes the Commission and the national competition authorities.<\/p>\n<p>The core prohibitions are directly applicable law in all member states. Under the reformed system of enforcement, the Commission&#8217;s role is more focused on the coordination and development of policy.\u00a0 It is still central in enforcing the more serious breaches of competition law.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cooperation_Mechanism\"><\/span>Cooperation Mechanism<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are cooperation mechanisms between national competition authorities and the Commission, which facilitate the exercise and coordination of their powers.\u00a0 There is provision for sharing and exchange of information and for consultation.\u00a0 There are provisions to avoid duplication, by which a national competition authority or the Commission may suspend proceedings where the matter is being dealt with by others.<\/p>\n<p>Cases are generally dealt with by the originating authority. The Commission will generally deal with matters which affect more than three States or where the matter is of importance to EU competition policy development. Enforcement may be by a single competition authority, by several in parallel or by the Commission.<\/p>\n<p>Cases should be dealt with by the authority that is better placed to do so. Reallocation is possible where there is a better-placed authority. Where a matter is being dealt with by one authority, other authorities may close their investigations.<\/p>\n<p>The Commission retains powers to call in investigations where it believes that it is the appropriate body in accordance with the above criteria. Under the revised system, national competition authorities deal with the majority of complaints so that the Commission&#8217;s role is limited to the more important complaints.<\/p>\n<p>There is provision for the exchange of information between national competition authorities.\u00a0 NCA&#8217;s may make requests for assistance to other Authorities. Information sent to the Commission may be shared with other national competition authorities. Information, including confidential information, can be exchanged.<\/p>\n<p>National competition authorities must keep the Commission informed of their activities. They must give notice of the commencement of investigations and give prior notice of proposed decisions.<\/p>\n<p>When conducting investigations, national competition authorities use their own domestic law. Many member states have adopted national substantive and procedural rules equivalent to those under EU law.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"EU_Law_Supremacy\"><\/span>EU Law Supremacy<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>European Union law is supreme under the EU doctrine of supremacy.\u00a0 National courts are bound to give effect to it and to give precedence to it over conflicting national law.\u00a0 The European Court of Justice has indicated that national authorities must, in imposing penalties under equivalent national rules, have regard to the fact that penalties may also be imposed by EU authorities.<\/p>\n<p>If the decision of the national competition authority is incompatible with the Commission&#8217;s decision, the authority must take account of the Commission&#8217;s decision and must avoid any conflict.\u00a0 National rules may be applied provided that they do not prejudice the uniform application of EU rules.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"EU_Enforcement_Action\"><\/span>EU Enforcement Action<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The commission may take action on its own initiative, on foot of a complaint or disclosure by persons involved in the alleged infringement. The Commission has power to carry out investigations of alleged competition law infringements. There were three phases in the Commission investigation, the investigatory phase, the decision-making phase and possible judicial review.<\/p>\n<p>The Commission publishes a form for complaints.\u00a0 Any person with a legitimate interest is entitled to make a complaint.\u00a0 Complaints may be refused on the basis that there is no Community interest in the matter or where it considers that a national authority is more appropriate or is already dealing with the matter.<\/p>\n<p>Entities and undertakings may approve the Commission requesting a finding that a particular agreement or practice does not breach competition law.\u00a0 Most commonly, it will give informal guidance on the issue.\u00a0 This informal guidance or clearance is not legally binding but may create legitimate expectations.<\/p>\n<p>The Commission has published a leniency program, which allows for potential immunity or leniency.\u00a0 The leniency programs is designed to encourage cartel members, who would otherwise have no incentive to leave the cartel. Prompted disclosure may be afforded a reduced level of fine. Where a member of an alleged price-fixing cartel \u201cwhistle-blows\u201d or approaches the Commission, it may qualify for more lenient treatment.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Investigation\"><\/span>Investigation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Commission has wide-ranging investigatory powers.\u00a0 It may gather information from the parties concerned and from third parties.\u00a0 \u201cDawn raids\u201d may be made simultaneously against members of an alleged cartel. The Commission may request states to carry out investigations and undertake investigatory powers on its behalf.<\/p>\n<p>The Commission has the power to require information.\u00a0 An informal request or simple request does not involve a penalty for noncompliance. \u00a0However, it is an offence to provide incorrect or misleading information.\u00a0 This power may be appropriate for requests to third parties who have relevant information. In the case of a mandatory request, sanctions for failure to comply.\u00a0 A penalty of up to 5% of daily turnover may be imposed for each day of failure.\u00a0 It is also an offence to furnish false or misleading information.<\/p>\n<p>The Commission may take statements and interview persons in the course of investigations.\u00a0 Verbal statements may be taken in less serious cases. They may have the advantage of not being discoverable in antitrust litigation outside the European Union.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Powers\"><\/span>Powers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Commission has the power to undertake inspections.\u00a0 This may be done in cooperation with national competition authorities.\u00a0 Officials of national competition authorities may assist the Commission. If a warrant is required, national authorities must assist.<\/p>\n<p>The Commission has powers to enter premises and vehicles.\u00a0 They may examine books and records.\u00a0 They may take copies and extracts from the records.\u00a0 They may seal records for later inspection.\u00a0 They may require members of staff and other representatives of the undertaking concerned to furnish explanations of facts and documents.\u00a0 Their answers may be recorded.<\/p>\n<p>Residential premises, including those of directors of the undertaking concerned, may be searched.\u00a0 Reasons to justify the same must be given to the appropriate judicial authority in order to obtain a warrant. A warrant is not generally required for searching business premises.<\/p>\n<p>The European Courts have recognised professional privilege, in the context of competition investigations.\u00a0 It is broadly similar to that which exists under the common law.\u00a0 It covers documents passing between a lawyer and client for the purpose of defence.\u00a0 It also covers communications between a lawyer and client.\u00a0 It does not appear to cover communications with in-house lawyers, although this view is controversial.<\/p>\n<p>The privilege against self-incrimination arises in the context of questions in the course of investigations, which carry sanctions if not answered.\u00a0 The privilege has been limited to direct admissions of infringement.\u00a0 Controversy arises as to whether this is overly narrow. It is not clear whether the privilege against self-incrimination is enjoyed by corporate entities at all.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Decision\"><\/span>Decision<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Interim measures may be taken, where necessary, at an earlier stage of the investigation.\u00a0 Where there is a risk of serious and irreparable damage to competition, then provided that there is a prima facie case, the Commission may take interim measures. \u00a0It must comply with basic procedural requirements under the Regulation.\u00a0 The counterparty must be notified and given the opportunity to be heard.<\/p>\n<p>On the conclusion of the investigation, the Commission will make a decision as to whether to take further action.\u00a0 If it considers there has been a breach, it may commence proceedings for an infringement. Infringement proceedings are commenced by way of a statement of objection,\u00a0 which is given to the undertaking.\u00a0 It must set out the relevant facts and the application of legal principles to them.\u00a0 The period of infringement must be set out if a fine is proposed.<\/p>\n<p>The statement of objections sets out the parameters of the complaint.\u00a0 The party against whom the complaint is made and interested third parties may request a hearing.\u00a0 Representations may be made verbally or in writing. The hearing is conducted by an officer who must ensure fair procedures.<\/p>\n<p>Following the hearing, the hearing officer consults with the Advisory Committee on Restrictive Practices and Dominant Positions. The Commission may then make a formal decision. The decision may require termination of the breach of competition law.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Undertakings\"><\/span>Undertakings<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Remedies may be imposed in order to terminate the infringement.\u00a0 So-called structural or behavioural remedies may be applied.\u00a0 Structural remedies are applied if there is no equally effective behavioural remedy or where an equally effective behavioural remedy would be more burdensome.<\/p>\n<p>The 2003 Reforms allow for the acceptance of commitments or undertakings given by entities who have been found to be in breach of completion law.\u00a0 They may be given without a finding of infringement. Undertakings may be innovative and may propose solutions.<\/p>\n<p>The role of commitment\/undertakings has increased significantly. The Commission has the power to impose administrative sanctions\/fines for a failure to comply with a commitment.\u00a0 \u00a0The Commission has accepted commitments related to a range of very serious infringements, including those involving certain alleged infringements by Google and Microsoft.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Fines\"><\/span>Fines<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Commission has the power to impose a fine of up to 10% of annual turnover in the preceding year.\u00a0 Periodic payment fines may be imposed for ongoing infringements. The \u00a0Commission has wide discretion in relation to the imposition of penalties.\u00a0 It will take into account the seriousness of the behaviour, its duration, the size of the market and its \u00a0effect.<\/p>\n<p>The Commission has published a notice regarding the criteria for the imposition of a fine.\u00a0 The fine is set primarily with reference to the level of gravity.\u00a0 Serious infringements may be subject to fines of \u20ac20 million or greater. \u00a0Very serious infringements could be greatly in excess of this. Price-fixing arrangements and those which seek to divide the internal market are likely to be treated as very serious infringements.<\/p>\n<p>Aggravating factors may increase the level of fine.\u00a0 The refusal of cooperation may be an aggravating factor. \u00a0The duration of the infringement is a significant factor and may lead to a significant uplift in fines. There may be an uplift, generally at a 10% rate for each year the infringement continues. Correspondingly, mitigating factors may reduce the fine that would otherwise apply.<\/p>\n<p>Fines will be based on percentages of turnover in the sector per year of participation.\u00a0 An additional tariff may be imposed in respect of serious and grave infringements.\u00a0 Repeat offenders may be subject to increased fines. The level of fines imposed by the EU Commission is high, being of the order of three billion Euro annually.<\/p>\n<p>Whistle-blowers may be avail of leniency programs. The first entity, which brings sufficient information to the Commission to allow it to take proceedings for an infringement, will generally receive complete immunity.\u00a0 Others who cooperate may receive the benefit of reduced fines.\u00a0 Fines may be reduced if there is an admission of liability.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Challenge_Commission_Decisions\"><\/span>Challenge Commission Decisions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Decisions of the Commission may be reviewed by the General Court.\u00a0 There is a further appeal on the point of law to the EU Court of Justice. General Court was established as the Court of First Instance in 1989.\u00a0 The General Court reviews the competition decisions of the Commission.<\/p>\n<p>The review is in the nature of a judicial review rather than a re-hearing on the merits.\u00a0 The Court will consider whether the relevant procedures have been followed and whether there has been a manifest error or abuse of powers. It has been argued that this may not be sufficient to satisfy the European Convention on Human Rights.<\/p>\n<p>The Treaty provides a \u00a0procedure for a review of the legality of acts of the institutions.\u00a0 It may be available where the act is of direct and individual concern to the party who seeks its annulment.\u00a0 An act covers decisions and informal decisions.<\/p>\n<p>The grounds are lack of legal competence and authority, infringement of essential procedural requirements, infringement of the Treaty or rule of law, failure to give a hearing, inadequate reasoning, decision-based on inadequate evidence or based erroneous application of the law. An application for an annulment may be combined with an application for review of a Commission fine.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10008\" data-postid=\"10008\" class=\"themify_builder_content themify_builder_content-10008 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Enforcement System The European system of enforcement of competition law is provided by EU Regulations.\u00a0 The\u00a0 Commission\u2019s Competition Directorate is central to enforcement.\u00a0 It has significant powers and may impose very significant administrative fines. Enforcement will generally arise from an investigation, arising on foot of a complaint or by the authority acting its own initiative. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[161],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10008"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10008"}],"version-history":[{"count":6,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10008\/revisions"}],"predecessor-version":[{"id":20570,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10008\/revisions\/20570"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}