EC Competition Law Reform
Published in October 2002
Book
Hardback
580 pages
978-1-57823-116-4 (ISBN)
Description
This volume includes selected chapters from the annual proceedings of the Fordham Corporate Law Institute. The general subject is the reform of EC competition law enforcement. This has been the subject of many Fordham conferences over the years. Indeed, EC Commission officials have stated that the modern reform proposals presently being considered had their roots at Fordham. The present volume includes seminal articles and critiques of the EC competition law regime as well as very recent discussions of the Commission's proposal for reform. Because much of the literature on EC competition law reform is scattered, the present volume should be useful in including in one place a broad selection of articles and roundtable discussions. The chapters cover not only institutional and jurisdictional issues like decentralization and sharing of powers between the Commission and the EC member states, but also substantive issues like the scope of Article 81 and the rule(s) of reason. These and other issues are examined from both an analytical and historical perspective which greatly facilitates understanding of the future implications of the reform measures presently being debated. In sum, the chapters are not merely of historical interest, but problems and questions of ongoing importance are discussed as well.
More details
Language
English
ISBN-13
978-1-57823-116-4 (9781578231164)
Content
Introduction
Chapter 1
THE APPLICATION OF THE MODERNISED RULES IMPLEMENTING ARTICLES 81 AND 82 EC TREATY IN INJUNCTION PROCEEDINGS: PROBLEMS AND POSSIBLE SOLUTIONS
by August J. Braakman
I. Problems
A. The Present System
B. The New System
1. The Enhanced Importance of an Evaluation by the National Courts of the Economic and Legal Circumstances of the Case
2. Rules on Evidence
3. Rules on Damages
4. The Scope of Articles 81 and 82
5. The Ex Post Supervision by the Commission to Ensure that the Competitive Rules Were Respected
C. Conclusion
II. Possible Solutions
III. Conclusions
Chapter 2
DEREGULATION OF EC COMPETITION POLICY: RETHINKING ARTICLE 85(1)
by Christopher Bright
I. Introduction
II. Is The Scope of Article 85(1) Exorbitant?
A. The Commission's Approach to "Prevent, Restrict, Distort"
B. The Commission's Sense of Proportion
C. Community Interest and Article 85(1)
III. Why Are We Where We Are?
IV. What Problems Arise From the Commission's Approach?
V. Is There Hope?
A. The Court's Approach to "Prevent, Restrict, Distort"
B. The Commission Responses to the Problem
VI. What Solutions Are There?
VII. Conclusion
Chapter 3
THE LAICIZATION OF COMMUNITY LAW - SELF-HELP AND THE RULE OF REASON: HOW COMPETITION LAW IS AND COULD BE APPLIED
by lan S. Forrester/Christopher Norall
I. Introduction
II. The Early Choices
III. The Early Solutions and Subsequent Mitigations of Them
A. The Literal Interpretation of Article 85(1)
B. The Issuances of Notices and Group Exemptions
C. Offences Held Not To Be Sinful
D. Restrictions on Post-Sale Competition by the Seller of a Business
E. Selective Distribution Systems
F. Obligation of Licensee To Procure Components or Materials from Licensor
IV. The Actual Operation of the System Today
A. Notification
B. Complaints and Competition Law in National Courts
C. Compliance
D. Summary
V. A Rule of Self-Sufficiency (or of Reason) in Practice
VI. The Way Forward
A. The Interpretation of Article 85(1)
B. Exemptions Should Still Be Available
C. Community Law in National Courts
VII. Conclusion
VIII. Postscript
A. Comfort Letters
B. Recent Commission Decisions and Proposals
C. The Position of Community Law in National Courts
Chapter 4
MODERNISATION OF EC COMPETION LAW
by lan S. Forrester
I. Introduction
II. What Was the Problem?
III. Why Is Change Happening Now?
IV. The New Enforcement World
A. New Roles and Responsibilities
1. The Commission
a. Notices, Guidelines and Block Exemptions
b. Decisions
c. Notification
2. National Competition Authorities
3. National Courts
B. New Relationships
1. Coordination Between National Authorities
2. Cooperation Between the Commission and National Authorities
3. Coordination Between the Commission and National Courts
4. References for Preliminary Rulings
V. The Putative Reform: Vertical Restraints
VI. Human Rights and Extended Powers of Investigations
A. The Commission's Extended Investigation Powers
B. The European Court of Justice's and the Commission's Interpretation of the Commission's Investigation Powers
C. The So-called Duty of Active Cooperation
D. Effectiveness of the Investigation and the Protection of Human Rights
1. The Relationship Between the Convention and EU Law
2. Article 6 ECHR and the Commission's Extended Investigation Powers
3. Is the Commission a "Tribunal" for the Purposes of the ECHR?
4. The "Criminal Charge"
5. How the European Court Interpreted Ozturk
6. The Privilege Against Self-incrimination
7. Is There a Right to Silence in Competition Cases?
8. The Response of the Luxembourg Courts: No Infringements
9. Does the Procedure Before the Commission Comply With Article 6? Is the Commission an Independent and Impartial Tribunal?
10. Public Hearing
11. The Right to an Adversarial Trial
12. Fair Hearing by an Independent and Impartial Tribunal
13. Can the Possibility of Appeal to the European Courts Remedy a Breach of Article 6?
VII. Final Remarks
Chapter 5
EEC COMPETITION PRACTICE: A THIRTY-YEAR RETROSPECTIVE
by Donald L. Holley
I. Introduction
II. The Challenges of the Notification Process
III. Mixed Comfort From the Block Exemptions
IV. Looking for a Rule of Reason
V. Some Turning Points in Case Law that had an Impact on Practice
VI. Sources of Law and Precedents
VII. The Practitioner and the Commission
A. Interaction of Counsel with the Commission Staff
B. Procedure Before the Commission
VIII. The Role of Economics and of Economics
IX. EEC Competition Law in National Courts
X. The Merger Regulation
XI. Concluding Remarks
Chapter 6
ROUNDTABLE ON REFORM OF EC COMPETITION LAW
by
Frédéric Jenny
Jonathan Faull
Patrick Massey
Alberto Pera
Amadeo Pititbo Juan
Dieter Wolf
Panel Discussion
Chapter 7
THE COMMISSION'S WHITE PAPER ON MODERNISATION: THE NEED FOR PROCEDURAL HARMONISATION
by Stephen Kon
I. Jurisdiction
II. Disclosure/Discovery
III. Reliance on Public Documents
IV. Expert Reports
V. Legal Professional Privilege
VI. Standard of Proof
VII. Double Jeopardy
VIII. Costs
IX. National Competition Authorities
X. Conclusion
Chapter 8
EC COMPETITION SYSTEM: PROPOSALS FOR REFORM ROUNDTABLE
by
Jeremy Lever
Damian Collins
Frank Montag
Alexander Schaub
Giuseppe Tesauro
Michael Waelbroeck
Panel Discussion
Chapter 9
REFORM OF EC COMPETITION LAW: SUBSTANCE, PROCEDURE AND INSTITUTIONS
by Patrick Massey
I. Introduction
II. The Basic Philosophy Behind EU Competition Law
A. The Role of Competition Policy
B. Theoretical Foundations
C. The Equity/Efficiency Trade-Off
D. Competition Versus Market Integration
III. The Treaty Rules
A. The Basic Prohibitions
B. Regulating Abuse of Market Power
C. Vertical Restraints
D. Competition Law and High-Tech Industries
IV. Institutional Issues
A. EU Law and the National Authorities
B. The Proposal Independent Competition Office
V. Conclusion
Chapter 10
THE MODERNIZATION OF EC COMPETITION LAW: THE NEED FOR A COMMON COMPETITION CULTURE
by Erik Mohn Mersing
I. Introduciton
II. Main Characteristics of the Modernization Reform
A. "Concentrate of the Essentials"
1. Vertical Restraints
2. Self-governance
3. Decentralization
B. Development of a Common Competition Culture
III. The Need for a Common Competition Culture
IV. Means to Develop a Common Competition Culture
A. National Authorities' Application of EC Competition Law
B. National Authorities' Application of National Competition Law
C. Emphasis on "Concentrate-on-the-Essentials"
D. Division of Work Between the Commission and National Competition Authorities
E. Involvement of the National Courts
V. Conclusion
Chapter 11
THE CASE FOR A REFORM OF REGULATION 17/62: PROBLEMS AND POSSIBLE SOLUTIONS FROM A PRACTITIONER'S POINT OF VIEW
by Frank Montag
I. Introduction
II. The Need for Reform
A. Infringement Procedure
B. Notification Procedure
III. Proposals for Reform
A. Non-institutional Reforms
1. Infringement Procedure
a. Strengthening the Rights of Defense
b. Duration of the Proceedings
c. Restructuring within DGIV
2. Notification Procedure
a. Reducing the Notification Requirements
b. Fixed Timetable for Decisions
c. Decentralization
d. Extending the Powers of the Competition Commissioner
e. Administrative Fees for Exemption Decisions
f. Strengthening the Position of the Parties' Representatives
B. Institutional Reforms
1. The Creation of an Independent European Cartel Office
2. Infringement Decision by the Court of First Instance
IV. Outlook and Perspectives
Chapter 12
EUROPEAN COMPETITION FOR THE 21st CENTURY
by Mario Monti
I. Competition Policy in an Integrating Continental Economy
A. Integration and Competition: The Challenges
B. Modernising the Tools
II. The New Economy and Competition: Monitoring a Potential Ally
III. Competition Authorities and the Governance of Globisation
A. Bilateral Cooperation
B. Multilateral Cooperation
Chapter 13
ENFORCEMENT OF EC COMPETITION RULES: NEED FOR A REFORM?
by Alberto Pera Mario Todino
I. Introduction
II. The Shaping of EC Competition Policy
III. The Shift in EC Competition Law and Policy
A. A Success Story: Enforcement of Article 86
B. Enforcement of Article 85: Evolution Towards a More Pragmatic Approach
IV. Rethinking the Decisionmaking Process
V. Conclusion
Chapter 14
EC COMPETITION LAW - THE MILLENNIUM APPROACHES
by Alexander Schaub
I. Introduction
II. Present Role of Competition Policy in Europe
III. The Time Has Come for Re-examination and Modernisation of Rules
A. Fundamental Change in Our Environment
1. Globalisation/Liberalisation of World Trade/Trend Towards Concentration
2. Technological Change and the Information Society
3. Single Market
a. Single Market
b. Liberalisation
c. Countervailing Tendencies
4. EMU
5. Accession of New Member States
B. Experience of the Past and New Legal Developments
1. EC Past Experience
2. New Legal Developments Inside and Outside the Community
a. Member States
b. Outside the Community
C. Third Reason for Reform: Mass Problem of Increasing Workload
D. How to Proceed
IV. Priority Areas of Reform
A. Not so much: Merger Control and Article 90
B. More Particularly: Article 85 and State Aid Control
V. Objectives of Reform
A. Three Major Directions
B. Some Illustrative Examples of Projects Under Way
1. Update Existing Rules
a. Relevant Market Definition
b. Vertical/Horizontal Restrictions
2. Concentrate on Core Issues to Allow a More Pro-Active Policy
a. De Minimis
b. Critical Assessment of Community Interest
c. State Aid Group Exemption
3. Decentralise Without Jeopardising Coherence
a. EC vs. National Law: Application of Community Law by National Authorities
b. Further Steps for Article 85(3)
c. Strengthened Cooperation Between the Commission and National Authorities
VI. An Important Additional Dimension: Reinforce International Cooperation
A. Logical Consequence of Globalization
B. Conceptional Approach: The van Miert Report
C. Bilateral Perspectives
1. The EU-U.S. Case
a. Very Favourable, Working Relationship
b. Outlook
2. Future Member States in Central and Eastern Europe
D. Multilateral Perspectives
1. The OECD
2. The WTO
VII. Final Remarks
Chapter 15
EC COMPETITION SYSTEM: PROPOSALS FOR REFORM
by Alexander Schaub
I. Introduction
II. The Basic Orientation of Our Reform Efforts
A. Our First Basic Orientation: The Commission Has to Concentrate on the Essentials
1. What Are the Essentials?
2. How Can the Commission Better Concentrate on These Essentials?
B. Our Second Basic Orientation: The Reformed System Must Ensure More Efficient Enforcement
C. Our Third Basic Orientation: The Reformed System Must Guarantee a Coherent Application of the Rules and a Reasonable Level of Legal Certainty for the Benefit of Economic Operators
III. The Application of These Basic Orientations of Reform in Different Areas of EC Competition Law
A. State Aid
1. The Objectives and the Projects
2. The Instrument of Regulations Based on Article 94 of the EC Treaty
3. Group Exemptions for State Aid
a. The Mass Problem
b. Decentralization
c. Limited Shift to a Posteriori Control
d. De minimis rule
4. The Regulation on State Aid Procedures
B. Merger Control
1. The Amendment of the Merger Regulation of March 1, 1998
2. Referrals by the Commission to a National Competition Authority
3. Possible Reforms in the Long Run
C. International Cooperation
1. The Bilateral EU-U.S. Relationship
2. The Multilateral Perspective
3. The Relationship Between the European Union and Its Future Member States in Central and Eastern Europe
IV. The Most Sensitive Reform: The Enforcement of Articles 85 and 86
A. Ongoing Reforms
1. Vertical Restraints
a. Substance
b. Implementation
2. Horizontal Restraints
B. The Orientation of Further Reforms
C. Increased Decentralization in the Application of EC Competition Law and Closer Cooperation Between the Commission and National Competition Authorities/Courts
1. National Authorities' Power to Apply Articles 85(1) and 86
2. One Single Set of Substantive Rules for Cases with Effect on Interstate Trade, i.e. the EC Competition Rules
3. Instruments to Ensure Coherence in the Application of the EC Competition Rules
D. The Central Open Question: Modernisation of Regulation 17
1. The Remaining Problems
a. The Commission Works Far Too Reactively
b. The Current System of Regulation 17 Is Becoming Inappropriate
2. What Are Possible Solutions?
a. "Rule of Reason" Approach in Interpreting Article 85(1)
b. Simplification of Procedures
c. Power to Exempt also for National Cartel Authorities
d. Other Solutions
V. Conclusion
Chapter 16
MODERNISATION OF EC COMPETITION LAW
by Alexander Schaub
I. Introduction
II. Why Do We Need a Reform of Regulation No. 17?
III. Options for Reform of Regulation No. 17
A. The First Option
B. A Second Model
C. The New System Proposed by the Commission's White Paper
IV. Details of the Commission's Reform Model
A. Our Proposal is Based on Four Pillars
B. The Competence of Commission, National Competition Authorities and National Courts in the New System
1. The Commission
2. National Competition Authorities
3. National Courts
4. Case Allocation in the New System
V. Advantages of the New System for Industry
VI. Criticism Expressed Against the New System
A. Compatibility of the Commission's Reform Model With the EC Treaty
B. Effectiveness of Competition Protection
C. Uniform and Coherent Application of EC Law
D. An Adequate Level of Legal Certainty
VII. Conclusion
Chapter 17
A CRITICAL REVIEW OF THE WHITE PAPER ON THE REFORM OF THE EC COMPETITION LAW ENFORCEMENT RULES
by Mario Siragusa
I. Executive Summary
II. Introduction and Background
A. The Current Notification System and Its Shortcomings
B. The Commission's Reform Package
III. Discussion of the Commission's Proposal
A. Ending the Authorization System is a Positive Step and Is Permitted by the Treaty
B. The Commission's Proposal Reduces Legal Certainty
C. Inconsistent Application of Community Law
IV. Proposal for a Revised System
A. Outline of the System
B. Effects of the Proposed System
V. The Complementary Reforms Proposed by the Commission
A. Increased Investigative Powers for the Commission
1. The Commission's Proposals for Oral Questioning of Company Officials are Disproportionate and Unnecessary
2. Centralization of Authorization for Dawn Raids Would Require a Treaty Amendment
B. Recognition of In-House Counsel Legal Privilege
Chapter 18
RETHINKING ARTICLE 85: PROBLEMS AND CHALLENGES IN THE DESIGN AND ENFORCEMENT OF THE EC COMPETION RULES
by Mario Siragusa
I. Introduction
II. Current Interpretation of Article 85
A. The Commission's Approach
B. Reasons for the Current Approach
1. Initial Unfamiliarity with Competitive Rules
2. Completion of the Single Market
3. The Difficulty of Making a Market Analysis in Individual Cases
III. Criticisms of the Commission's Approach
A. Excessive Compliance Burden
B. Discouragement of Commercial Innovation
C. Huge Commission Workload
D. Failure of the Commission's Attempt to Reduce its Workload
1. Loss of Flexibility Through Group Exemption Regulations
2. Lack of Legal Certainty Through Comfort Letters
3. Limited Enforcement Powers of National Courts
IV. The Rule of Reason and Procedural Improvements
A. Rule of Reason Approach
B. The Residual Role of the Exemption Process Under Article 85(3)
C. Advantage of the Proposal System
D. The Adoption of a "Rule of Reason" Approach by the Italian Antitrust Authority
E. Procedural Improvements
1. Guidelines and Notices
2. Block Negative Clearances
3. Improved Cooperation Between the Commission and National and International Courts and Authorities in the Enforcement of Competition Rules
4. Further Development of Informal Settlement of Cases
V. Conclusion: Practical Applications of the Rule of Reason Approach
A. Rule of Reason Applied to Interpret Context of Agreement
B. Rule of Reason Applied to Interpret Terms of Contract
Chapter 19
THE MODERNISATION OF THE ENFORCEMENT OF ARTICLES 81 AND 82 EC: A LEGAL AND ECONOMIC ANALYSIS OF THE COMMISION'S PROPOSAL FOR A NEW COUNCIL REGULATION REPLACING REGULATION NO. 17
by Wouter P.J. Willis
I. Introduction
A. The Provisions of the EC Treaty
B. Regulation No. 17
C. Main Difference Between the Proposed New Regulation and Regulation No. 17
D. Fundamental Dimensions of Law Enforcement-Outline of This Paper
II. The Timing of Legal Intervention: Ex Ante Enforcement Through Prescreening or Ex Post Enforcement Through Deterrence?
A. The Two Alternatives and the Current Situation
1. Two Methods of Enforcement
2. The Current Situation
a. Merger Control
b. Article 82
c. Article 81
B. Which Enforcement Methods is Best Suited?
1. Criteria For Choosing Between the Two Enforcement Methods
2. First Factor: Credibility of Deterrence
a. Application to Merger Control
b. Application to Articles 81 and 82
3. Second Factor: Relative Knowledge and Predictability of the Substantive Rule
a. Errors
b. Uncertainty and Risk-Bearing Cost
c. Summing Up On the Second Factor
d. Application to Merger Control
e. Application to Articles 81 and 82
4. Third Factor: Enforcement Costs
a. Application to Merger Control
b. Application to Articles 81 and 82
5. Fourth Factor: Specific Problems with Voluntary Prescreening Adverse Selection and Distortion of Enforcement Priorities
a. Application to Merger Control
b. Application to Articles 81 and 82
6. Conclusion as to Articles 81 and 82
C. The Proposed New Regulation
1. A Clear Choice for Ex Post Enforcement
2. Block Exemptions
3. Guidelines and Notices
4. Non-infringement Decisions
5. Reasoned Opinions
6. Register of Restrictive Agreements
III. The Respective Roles of the Commission and the Competition Authorities of the Member States
A. What the Proposed New Regulation Does Not Do, and What it Does
1. No Sharing of the Exemption Monopoly
2. Multiple Ex Post Enforcement
B. Why Should National Authorities Prosecute Violations of Articles 81 and 82?
C. Criteria for Allocating Cases
D. Possible Problems with Multiple Ex Post Enforcement
1. Duplication
2. Conflicting Decisions
3. National Bias
4. Forum Shopping
IV. The Role of Private Complainants and National Courts
A. The Role of Private Complainants in Public Enforcement
B. Private Enforcement and the Role of National Courts: What the Proposed New Regulation Will Not Change, and What It Will Change
1. Impact on Private Enforcement and on Contractual Litigation
2. Agreements Which Fulfill the Conditions of Article 81(3) Will No Longer Be Void
3. National Courts Will Be Able to Apply the Four Conditions of Article 81(3) Themselves
4. No Declaratory Judgments
C. Possible Problems with the Application of Article 81(3) by National Courts
1. Complex Economic Assessments
2. Forum Shopping
3. Inconsistent Judgments
V. Sanctions
A. Fines
1. Only Pecuniary Sanctions Imposed on Undertakings
2. The Criminal Law Nature of Fines
3. The Maximum Amount of Fines
4. Publication of Fining Decisions
B. Remedies
1. Termination Orders
2. Consent Decisions
VI. Conclusion
Chapter 20
COMMENT ON THE WHITE PAPER ON THE REFORM OF EC COMPETION LAW
by Dieter Wolf
Chapter 1
THE APPLICATION OF THE MODERNISED RULES IMPLEMENTING ARTICLES 81 AND 82 EC TREATY IN INJUNCTION PROCEEDINGS: PROBLEMS AND POSSIBLE SOLUTIONS
by August J. Braakman
I. Problems
A. The Present System
B. The New System
1. The Enhanced Importance of an Evaluation by the National Courts of the Economic and Legal Circumstances of the Case
2. Rules on Evidence
3. Rules on Damages
4. The Scope of Articles 81 and 82
5. The Ex Post Supervision by the Commission to Ensure that the Competitive Rules Were Respected
C. Conclusion
II. Possible Solutions
III. Conclusions
Chapter 2
DEREGULATION OF EC COMPETITION POLICY: RETHINKING ARTICLE 85(1)
by Christopher Bright
I. Introduction
II. Is The Scope of Article 85(1) Exorbitant?
A. The Commission's Approach to "Prevent, Restrict, Distort"
B. The Commission's Sense of Proportion
C. Community Interest and Article 85(1)
III. Why Are We Where We Are?
IV. What Problems Arise From the Commission's Approach?
V. Is There Hope?
A. The Court's Approach to "Prevent, Restrict, Distort"
B. The Commission Responses to the Problem
VI. What Solutions Are There?
VII. Conclusion
Chapter 3
THE LAICIZATION OF COMMUNITY LAW - SELF-HELP AND THE RULE OF REASON: HOW COMPETITION LAW IS AND COULD BE APPLIED
by lan S. Forrester/Christopher Norall
I. Introduction
II. The Early Choices
III. The Early Solutions and Subsequent Mitigations of Them
A. The Literal Interpretation of Article 85(1)
B. The Issuances of Notices and Group Exemptions
C. Offences Held Not To Be Sinful
D. Restrictions on Post-Sale Competition by the Seller of a Business
E. Selective Distribution Systems
F. Obligation of Licensee To Procure Components or Materials from Licensor
IV. The Actual Operation of the System Today
A. Notification
B. Complaints and Competition Law in National Courts
C. Compliance
D. Summary
V. A Rule of Self-Sufficiency (or of Reason) in Practice
VI. The Way Forward
A. The Interpretation of Article 85(1)
B. Exemptions Should Still Be Available
C. Community Law in National Courts
VII. Conclusion
VIII. Postscript
A. Comfort Letters
B. Recent Commission Decisions and Proposals
C. The Position of Community Law in National Courts
Chapter 4
MODERNISATION OF EC COMPETION LAW
by lan S. Forrester
I. Introduction
II. What Was the Problem?
III. Why Is Change Happening Now?
IV. The New Enforcement World
A. New Roles and Responsibilities
1. The Commission
a. Notices, Guidelines and Block Exemptions
b. Decisions
c. Notification
2. National Competition Authorities
3. National Courts
B. New Relationships
1. Coordination Between National Authorities
2. Cooperation Between the Commission and National Authorities
3. Coordination Between the Commission and National Courts
4. References for Preliminary Rulings
V. The Putative Reform: Vertical Restraints
VI. Human Rights and Extended Powers of Investigations
A. The Commission's Extended Investigation Powers
B. The European Court of Justice's and the Commission's Interpretation of the Commission's Investigation Powers
C. The So-called Duty of Active Cooperation
D. Effectiveness of the Investigation and the Protection of Human Rights
1. The Relationship Between the Convention and EU Law
2. Article 6 ECHR and the Commission's Extended Investigation Powers
3. Is the Commission a "Tribunal" for the Purposes of the ECHR?
4. The "Criminal Charge"
5. How the European Court Interpreted Ozturk
6. The Privilege Against Self-incrimination
7. Is There a Right to Silence in Competition Cases?
8. The Response of the Luxembourg Courts: No Infringements
9. Does the Procedure Before the Commission Comply With Article 6? Is the Commission an Independent and Impartial Tribunal?
10. Public Hearing
11. The Right to an Adversarial Trial
12. Fair Hearing by an Independent and Impartial Tribunal
13. Can the Possibility of Appeal to the European Courts Remedy a Breach of Article 6?
VII. Final Remarks
Chapter 5
EEC COMPETITION PRACTICE: A THIRTY-YEAR RETROSPECTIVE
by Donald L. Holley
I. Introduction
II. The Challenges of the Notification Process
III. Mixed Comfort From the Block Exemptions
IV. Looking for a Rule of Reason
V. Some Turning Points in Case Law that had an Impact on Practice
VI. Sources of Law and Precedents
VII. The Practitioner and the Commission
A. Interaction of Counsel with the Commission Staff
B. Procedure Before the Commission
VIII. The Role of Economics and of Economics
IX. EEC Competition Law in National Courts
X. The Merger Regulation
XI. Concluding Remarks
Chapter 6
ROUNDTABLE ON REFORM OF EC COMPETITION LAW
by
Frédéric Jenny
Jonathan Faull
Patrick Massey
Alberto Pera
Amadeo Pititbo Juan
Dieter Wolf
Panel Discussion
Chapter 7
THE COMMISSION'S WHITE PAPER ON MODERNISATION: THE NEED FOR PROCEDURAL HARMONISATION
by Stephen Kon
I. Jurisdiction
II. Disclosure/Discovery
III. Reliance on Public Documents
IV. Expert Reports
V. Legal Professional Privilege
VI. Standard of Proof
VII. Double Jeopardy
VIII. Costs
IX. National Competition Authorities
X. Conclusion
Chapter 8
EC COMPETITION SYSTEM: PROPOSALS FOR REFORM ROUNDTABLE
by
Jeremy Lever
Damian Collins
Frank Montag
Alexander Schaub
Giuseppe Tesauro
Michael Waelbroeck
Panel Discussion
Chapter 9
REFORM OF EC COMPETITION LAW: SUBSTANCE, PROCEDURE AND INSTITUTIONS
by Patrick Massey
I. Introduction
II. The Basic Philosophy Behind EU Competition Law
A. The Role of Competition Policy
B. Theoretical Foundations
C. The Equity/Efficiency Trade-Off
D. Competition Versus Market Integration
III. The Treaty Rules
A. The Basic Prohibitions
B. Regulating Abuse of Market Power
C. Vertical Restraints
D. Competition Law and High-Tech Industries
IV. Institutional Issues
A. EU Law and the National Authorities
B. The Proposal Independent Competition Office
V. Conclusion
Chapter 10
THE MODERNIZATION OF EC COMPETITION LAW: THE NEED FOR A COMMON COMPETITION CULTURE
by Erik Mohn Mersing
I. Introduciton
II. Main Characteristics of the Modernization Reform
A. "Concentrate of the Essentials"
1. Vertical Restraints
2. Self-governance
3. Decentralization
B. Development of a Common Competition Culture
III. The Need for a Common Competition Culture
IV. Means to Develop a Common Competition Culture
A. National Authorities' Application of EC Competition Law
B. National Authorities' Application of National Competition Law
C. Emphasis on "Concentrate-on-the-Essentials"
D. Division of Work Between the Commission and National Competition Authorities
E. Involvement of the National Courts
V. Conclusion
Chapter 11
THE CASE FOR A REFORM OF REGULATION 17/62: PROBLEMS AND POSSIBLE SOLUTIONS FROM A PRACTITIONER'S POINT OF VIEW
by Frank Montag
I. Introduction
II. The Need for Reform
A. Infringement Procedure
B. Notification Procedure
III. Proposals for Reform
A. Non-institutional Reforms
1. Infringement Procedure
a. Strengthening the Rights of Defense
b. Duration of the Proceedings
c. Restructuring within DGIV
2. Notification Procedure
a. Reducing the Notification Requirements
b. Fixed Timetable for Decisions
c. Decentralization
d. Extending the Powers of the Competition Commissioner
e. Administrative Fees for Exemption Decisions
f. Strengthening the Position of the Parties' Representatives
B. Institutional Reforms
1. The Creation of an Independent European Cartel Office
2. Infringement Decision by the Court of First Instance
IV. Outlook and Perspectives
Chapter 12
EUROPEAN COMPETITION FOR THE 21st CENTURY
by Mario Monti
I. Competition Policy in an Integrating Continental Economy
A. Integration and Competition: The Challenges
B. Modernising the Tools
II. The New Economy and Competition: Monitoring a Potential Ally
III. Competition Authorities and the Governance of Globisation
A. Bilateral Cooperation
B. Multilateral Cooperation
Chapter 13
ENFORCEMENT OF EC COMPETITION RULES: NEED FOR A REFORM?
by Alberto Pera Mario Todino
I. Introduction
II. The Shaping of EC Competition Policy
III. The Shift in EC Competition Law and Policy
A. A Success Story: Enforcement of Article 86
B. Enforcement of Article 85: Evolution Towards a More Pragmatic Approach
IV. Rethinking the Decisionmaking Process
V. Conclusion
Chapter 14
EC COMPETITION LAW - THE MILLENNIUM APPROACHES
by Alexander Schaub
I. Introduction
II. Present Role of Competition Policy in Europe
III. The Time Has Come for Re-examination and Modernisation of Rules
A. Fundamental Change in Our Environment
1. Globalisation/Liberalisation of World Trade/Trend Towards Concentration
2. Technological Change and the Information Society
3. Single Market
a. Single Market
b. Liberalisation
c. Countervailing Tendencies
4. EMU
5. Accession of New Member States
B. Experience of the Past and New Legal Developments
1. EC Past Experience
2. New Legal Developments Inside and Outside the Community
a. Member States
b. Outside the Community
C. Third Reason for Reform: Mass Problem of Increasing Workload
D. How to Proceed
IV. Priority Areas of Reform
A. Not so much: Merger Control and Article 90
B. More Particularly: Article 85 and State Aid Control
V. Objectives of Reform
A. Three Major Directions
B. Some Illustrative Examples of Projects Under Way
1. Update Existing Rules
a. Relevant Market Definition
b. Vertical/Horizontal Restrictions
2. Concentrate on Core Issues to Allow a More Pro-Active Policy
a. De Minimis
b. Critical Assessment of Community Interest
c. State Aid Group Exemption
3. Decentralise Without Jeopardising Coherence
a. EC vs. National Law: Application of Community Law by National Authorities
b. Further Steps for Article 85(3)
c. Strengthened Cooperation Between the Commission and National Authorities
VI. An Important Additional Dimension: Reinforce International Cooperation
A. Logical Consequence of Globalization
B. Conceptional Approach: The van Miert Report
C. Bilateral Perspectives
1. The EU-U.S. Case
a. Very Favourable, Working Relationship
b. Outlook
2. Future Member States in Central and Eastern Europe
D. Multilateral Perspectives
1. The OECD
2. The WTO
VII. Final Remarks
Chapter 15
EC COMPETITION SYSTEM: PROPOSALS FOR REFORM
by Alexander Schaub
I. Introduction
II. The Basic Orientation of Our Reform Efforts
A. Our First Basic Orientation: The Commission Has to Concentrate on the Essentials
1. What Are the Essentials?
2. How Can the Commission Better Concentrate on These Essentials?
B. Our Second Basic Orientation: The Reformed System Must Ensure More Efficient Enforcement
C. Our Third Basic Orientation: The Reformed System Must Guarantee a Coherent Application of the Rules and a Reasonable Level of Legal Certainty for the Benefit of Economic Operators
III. The Application of These Basic Orientations of Reform in Different Areas of EC Competition Law
A. State Aid
1. The Objectives and the Projects
2. The Instrument of Regulations Based on Article 94 of the EC Treaty
3. Group Exemptions for State Aid
a. The Mass Problem
b. Decentralization
c. Limited Shift to a Posteriori Control
d. De minimis rule
4. The Regulation on State Aid Procedures
B. Merger Control
1. The Amendment of the Merger Regulation of March 1, 1998
2. Referrals by the Commission to a National Competition Authority
3. Possible Reforms in the Long Run
C. International Cooperation
1. The Bilateral EU-U.S. Relationship
2. The Multilateral Perspective
3. The Relationship Between the European Union and Its Future Member States in Central and Eastern Europe
IV. The Most Sensitive Reform: The Enforcement of Articles 85 and 86
A. Ongoing Reforms
1. Vertical Restraints
a. Substance
b. Implementation
2. Horizontal Restraints
B. The Orientation of Further Reforms
C. Increased Decentralization in the Application of EC Competition Law and Closer Cooperation Between the Commission and National Competition Authorities/Courts
1. National Authorities' Power to Apply Articles 85(1) and 86
2. One Single Set of Substantive Rules for Cases with Effect on Interstate Trade, i.e. the EC Competition Rules
3. Instruments to Ensure Coherence in the Application of the EC Competition Rules
D. The Central Open Question: Modernisation of Regulation 17
1. The Remaining Problems
a. The Commission Works Far Too Reactively
b. The Current System of Regulation 17 Is Becoming Inappropriate
2. What Are Possible Solutions?
a. "Rule of Reason" Approach in Interpreting Article 85(1)
b. Simplification of Procedures
c. Power to Exempt also for National Cartel Authorities
d. Other Solutions
V. Conclusion
Chapter 16
MODERNISATION OF EC COMPETITION LAW
by Alexander Schaub
I. Introduction
II. Why Do We Need a Reform of Regulation No. 17?
III. Options for Reform of Regulation No. 17
A. The First Option
B. A Second Model
C. The New System Proposed by the Commission's White Paper
IV. Details of the Commission's Reform Model
A. Our Proposal is Based on Four Pillars
B. The Competence of Commission, National Competition Authorities and National Courts in the New System
1. The Commission
2. National Competition Authorities
3. National Courts
4. Case Allocation in the New System
V. Advantages of the New System for Industry
VI. Criticism Expressed Against the New System
A. Compatibility of the Commission's Reform Model With the EC Treaty
B. Effectiveness of Competition Protection
C. Uniform and Coherent Application of EC Law
D. An Adequate Level of Legal Certainty
VII. Conclusion
Chapter 17
A CRITICAL REVIEW OF THE WHITE PAPER ON THE REFORM OF THE EC COMPETITION LAW ENFORCEMENT RULES
by Mario Siragusa
I. Executive Summary
II. Introduction and Background
A. The Current Notification System and Its Shortcomings
B. The Commission's Reform Package
III. Discussion of the Commission's Proposal
A. Ending the Authorization System is a Positive Step and Is Permitted by the Treaty
B. The Commission's Proposal Reduces Legal Certainty
C. Inconsistent Application of Community Law
IV. Proposal for a Revised System
A. Outline of the System
B. Effects of the Proposed System
V. The Complementary Reforms Proposed by the Commission
A. Increased Investigative Powers for the Commission
1. The Commission's Proposals for Oral Questioning of Company Officials are Disproportionate and Unnecessary
2. Centralization of Authorization for Dawn Raids Would Require a Treaty Amendment
B. Recognition of In-House Counsel Legal Privilege
Chapter 18
RETHINKING ARTICLE 85: PROBLEMS AND CHALLENGES IN THE DESIGN AND ENFORCEMENT OF THE EC COMPETION RULES
by Mario Siragusa
I. Introduction
II. Current Interpretation of Article 85
A. The Commission's Approach
B. Reasons for the Current Approach
1. Initial Unfamiliarity with Competitive Rules
2. Completion of the Single Market
3. The Difficulty of Making a Market Analysis in Individual Cases
III. Criticisms of the Commission's Approach
A. Excessive Compliance Burden
B. Discouragement of Commercial Innovation
C. Huge Commission Workload
D. Failure of the Commission's Attempt to Reduce its Workload
1. Loss of Flexibility Through Group Exemption Regulations
2. Lack of Legal Certainty Through Comfort Letters
3. Limited Enforcement Powers of National Courts
IV. The Rule of Reason and Procedural Improvements
A. Rule of Reason Approach
B. The Residual Role of the Exemption Process Under Article 85(3)
C. Advantage of the Proposal System
D. The Adoption of a "Rule of Reason" Approach by the Italian Antitrust Authority
E. Procedural Improvements
1. Guidelines and Notices
2. Block Negative Clearances
3. Improved Cooperation Between the Commission and National and International Courts and Authorities in the Enforcement of Competition Rules
4. Further Development of Informal Settlement of Cases
V. Conclusion: Practical Applications of the Rule of Reason Approach
A. Rule of Reason Applied to Interpret Context of Agreement
B. Rule of Reason Applied to Interpret Terms of Contract
Chapter 19
THE MODERNISATION OF THE ENFORCEMENT OF ARTICLES 81 AND 82 EC: A LEGAL AND ECONOMIC ANALYSIS OF THE COMMISION'S PROPOSAL FOR A NEW COUNCIL REGULATION REPLACING REGULATION NO. 17
by Wouter P.J. Willis
I. Introduction
A. The Provisions of the EC Treaty
B. Regulation No. 17
C. Main Difference Between the Proposed New Regulation and Regulation No. 17
D. Fundamental Dimensions of Law Enforcement-Outline of This Paper
II. The Timing of Legal Intervention: Ex Ante Enforcement Through Prescreening or Ex Post Enforcement Through Deterrence?
A. The Two Alternatives and the Current Situation
1. Two Methods of Enforcement
2. The Current Situation
a. Merger Control
b. Article 82
c. Article 81
B. Which Enforcement Methods is Best Suited?
1. Criteria For Choosing Between the Two Enforcement Methods
2. First Factor: Credibility of Deterrence
a. Application to Merger Control
b. Application to Articles 81 and 82
3. Second Factor: Relative Knowledge and Predictability of the Substantive Rule
a. Errors
b. Uncertainty and Risk-Bearing Cost
c. Summing Up On the Second Factor
d. Application to Merger Control
e. Application to Articles 81 and 82
4. Third Factor: Enforcement Costs
a. Application to Merger Control
b. Application to Articles 81 and 82
5. Fourth Factor: Specific Problems with Voluntary Prescreening Adverse Selection and Distortion of Enforcement Priorities
a. Application to Merger Control
b. Application to Articles 81 and 82
6. Conclusion as to Articles 81 and 82
C. The Proposed New Regulation
1. A Clear Choice for Ex Post Enforcement
2. Block Exemptions
3. Guidelines and Notices
4. Non-infringement Decisions
5. Reasoned Opinions
6. Register of Restrictive Agreements
III. The Respective Roles of the Commission and the Competition Authorities of the Member States
A. What the Proposed New Regulation Does Not Do, and What it Does
1. No Sharing of the Exemption Monopoly
2. Multiple Ex Post Enforcement
B. Why Should National Authorities Prosecute Violations of Articles 81 and 82?
C. Criteria for Allocating Cases
D. Possible Problems with Multiple Ex Post Enforcement
1. Duplication
2. Conflicting Decisions
3. National Bias
4. Forum Shopping
IV. The Role of Private Complainants and National Courts
A. The Role of Private Complainants in Public Enforcement
B. Private Enforcement and the Role of National Courts: What the Proposed New Regulation Will Not Change, and What It Will Change
1. Impact on Private Enforcement and on Contractual Litigation
2. Agreements Which Fulfill the Conditions of Article 81(3) Will No Longer Be Void
3. National Courts Will Be Able to Apply the Four Conditions of Article 81(3) Themselves
4. No Declaratory Judgments
C. Possible Problems with the Application of Article 81(3) by National Courts
1. Complex Economic Assessments
2. Forum Shopping
3. Inconsistent Judgments
V. Sanctions
A. Fines
1. Only Pecuniary Sanctions Imposed on Undertakings
2. The Criminal Law Nature of Fines
3. The Maximum Amount of Fines
4. Publication of Fining Decisions
B. Remedies
1. Termination Orders
2. Consent Decisions
VI. Conclusion
Chapter 20
COMMENT ON THE WHITE PAPER ON THE REFORM OF EC COMPETION LAW
by Dieter Wolf