EU Competition Law to be Bolstered by National Antitrust Powers

puzzle internal marketEU’s competition chief Commissioner Vestager says that competition law is enforced in an inconsistent manner by the 28 national antitrust watchdogs. Legislation might be the means to solve this issue for which a public consultation was launched on 4 November 2015.

Commissioner Vestager explained her concerns on 9 November 2015 to the European Parliament. National competition regulators co-enforce EU competition rules but as EU law does not address how, national laws have been left to govern the instruments by which competition rules are nationally applied. As a result, fines differ up to 25% between member states for the same type of anticompetitive behaviour and some national regulators cannot impose fines for the full duration of a cartel. In some EU member states, companies can also avoid fines by undergoing corporate restructuring. Another important concern raised by the Commissioner is the inequality between member states in seizing evidence during surprise inspections. For example, the collection of digital evidence by national regulators, such as the seizure of data stored on remote servers via cloud computing, is not allowed in every member state. This appears out of touch with today’s reality. As Commissioner Vestager pointed out “there is no reason to believe that cartelists should use only snail mail and paper memos”.

The EU competition chief is making a call for greater harmonization. She is set to  guarantee all 28 national regulators can (1) enjoy an effective toolbox, (2) impose effective fines, (3) have effective leniency programmes, (4) have adequate resources and are sufficiently independent. The Commissioner stressed that the Commission’s goal is not to alter the competition culture of EU member states nor to stipulate who should be put in charge of antitrust enforcement. The aim is merely to establish the same  minimum enforcement tools throughout Europe.

According to the Commissioner, guidelines will not be sufficient to resolve the issues. She would prefer to bolster the powers of the national watchdogs with a directive that would require member states to achieve a particular result without dictating the means. If calibrated correctly, a directive should provide minimum guarantees and avoid undue interference in the member states’ legal systems.

In light of this reform, companies are invited to review their compliance programs. Note that the consultation will close on 12 February 2016.

Sarah Cumming is a Consultant in FTI Consulting’s Strategic Communications Competition practice in Brussels.

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