Changes in the enforcement of EC Competition Law

AutorChristian Bulzomi
Cargo del AutorAdministrador de la Comisión Europea. Unidad F-1 Transportes y Servicios postales
Páginas77-118

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1. Introduction

The reforms concerning the enforcement of competition law in the European Union have not yet come to an end as measures aimed at improving the private enforcement of competition law are expected to be

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proposed in a short time. Indeed, the European Commission intends to adopt a White Paper and has therefore launched a call for tender for the provision of a study related to the impact assessment of the White Paper. The Centre for European Policy Studies is to provide the study by the end of this year. Therefore we can expect the Commission to adopt the White Paper during 2008.

Thus, undeniably competition law enforcement in the European Union is heading towards an integrated dual enforcement system, in which private enforcement could play more than just a supplementary role. Nonetheless, contrary to the general impression that private enforcement of competition law is something new in the European Union, the ECJ declared itself in favour of private enforcement and therefore accepted such claims a long time ago 19741. The decision to introduce private enforcement of competition law, the right to award damages for harm suffered as a consequence of a violation of EC competition law and possibly even a general principle of private liability as opposed to state liability for the breach of Community law - although this has still to be confirmed or denied - has been taken, once again, by the ECJ.

The European Commission, with its proposal to modernise EC competition law first and the studies, the Green Paper and the future White Paper on damage claims afterwards, is following the ECJ’s path. Therefore, it is of utmost importance that the achievements of the European Court of Justice will be taken into account by the European Commission while redacting the White Paper and the possible future legislative proposals. This is so, because the White Paper must take into account the procedural and cultural issues which are hampering the enhancement of private claims. Indeed, although the possibilities of claiming damages did has existed since 19742 and no impediment comparable to the monopolization of Article 81(3) subsisted for claims based on Article 82, private litigants scarcely contributed to the enforcement of competition law. The same is true after the Modernization of 1 May 2004, which has not drastically

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increased private litigation, or the ECJ’s judgment of 13 July 2006 in Manfredi3.

For these reasons, this article will outline the evolution of the private enforcement of competition law in the European Union, underlining the precursory role of the ECJ, the - little - change introduced by Regulation 1/2003 and the rights and incentives already available to private litigants in order to find a possible explanation to the lack of private antitrust enforcement across these decades.

However, the analysis of the development of the private enforcement in the European Union will be useful to outline some doubts about the effectiveness of focusing the antitrust enforcement exclusively on corporate sanctions. Indeed, although being a positive and welcome measure and an indispensable means for the pursuit of corrective justice through compensation, the development of private enforcement of competition law might add little to the deterrent effect of competition law even if double damages could be awarded. Consequently, given that the overall aim of competition law enforcement is to prevent any anticompetitive behaviour, the European Commission should consider to propose individual sanctions of civil and/or criminal nature, in combination with the strengthening of private enforcement of competition law.

2. The development of private enforcement trough the ecj

The process of de-centralization of the EC antirust enforcement procedure clearly shows the increased maturity of this system. Evidently, the exclusivity of public enforcement of the competition rules lacks efficiency. Therefore, a well developed set of antitrust provisions requires an improvement of the system through enforcement instruments granted to private parties on which they can effectively rely before their national courts. The abolition of the Commission’s monopoly on Article 81(3) has been invoked for a long time. In fact, the possibility for the Commission to

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rely on the private enforcement to ensure a more effective system of enforcement of the antitrust rules, where the major antitrust authority at EU level is able to concentrate its limited resources on cases entailing a Community interest, is a huge step forward. Furthermore, the private enforcement of public laws grants compensation to the private actors harmed by the anticompetitive behavior of market players. The deterrent effect of private damages claims is another advantage which should not be underestimated.

The new rules on the enforcement of competition law will not allow the Union to reach the U.S. level where an extraordinary litigation culture fills the enforcement gap caused by the impossibility of the public sector to deal with all breaches of the antitrust rules. The American damages actions have contributed to the creation of an effective enforcement system where huge fines - and criminal sanctions - serve as deterrent to potential unlawful actions. Even if the "private attorney general" is a very young figure, the Council Regulation 1/2003 on the implementation of the rules on competition4 is definitely a step in the right direction.

The merits for this progress are once more to be given to the ECJ which has first given direct effect to the antitrust provisions5and secondly effectively granted protection of the antitrust rules6by awarding a damages claim to a co-contractor7.

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2. 1 Private enforcement of competition law in national courts: the direct effect of articles 81 and 82

International treaties traditionally do not impose obligations or confer rights on individuals. However, in the early stages of the European Communities the ECJ showed its intention to underline the special character of the EEC Treaty. "In fact, the rights and obligations created by European Community law had to be enforceable by and against private individuals and not only against Member States"8. Besides its statement of the creation of a new legal order, the ECJ in van Gend en Loos v. Nederlandse Administratie der Belastingen9conferred to individuals the right to rely on the Treaty provisions before national courts conditioned by the provisions ’ capacity to have direct effect. The ECJ outlined the need for the Treaty Articles to be sufficiently precise and unconditional10.

Subsequently, in order to ensure the full effectiveness and the uniform application of directly effective Community law the Court underlined the prevalence of the Community provisions over national legislation11. This means concretely, that a judge facing a conflict between a directly applicable Community provision and a national law has to disapply the national legislation in favor of the Community provision.

These two principles - direct effect and supremacy - are of utmost importance for the present discussion because the ECJ has applied these principles in its innovative judgment in the famous bier-tie case12in which it has awarded a damages claim to a co-contractor, which was apparently unconceivable for the British judiciary because of the strict application of the in pari delicto rule in English law.

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The direct effectiveness of Articles 81(1) and 82 was stated by the ECJ for the very first time in Belgische Radio en Televisie v. SV SABAM and NV Fonior13. Also the obligation of the national courts to protect the rights conferred by these provisions was expressed by the Court in this judgment:

"As the prohibitions of Articles 85(1) and 86 tend by their very nature to produce direct effects in relation between individuals, these Articles create direct effects in respect of the individuals concerned which the national courts must safeguard". "To deny [...] the national courts’ jurisdiction to afford this safeguard, would mean depriving individuals of rights which they hold under the Treaty itself"14.

In Delimitis15 the ECJ restated the Commission’s and the national courts’ shared competence to apply Articles 81(1) and 82 by recalling its previous judgment in BRT v. SABAM.

However, the ECJ has elaborated a second line of decisions contrary to the conclusion that Articles 81 and 82 produce direct effect. Practitioners and academics still have a hard time to explain the reasons for the ECJ’s incoherent jurisprudence. In Bosch16 and Nouvelles Frontieres17 the Court of Justice concluded against the direct effectiveness of the fundamental provisions of EC competition law. The first case created an unbearable precedent which would have permitted to "switch" the direct effect "on" or "off" according to...

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