PURPOSE: to propose new rules to enable the
competition authorities of the Member States to implement more
effectively EU rules on anti-competitive practices.
PROPOSED ACT: Directive of the European Parliament and
of the Council.
ROLE OF THE EUROPEAN PARLIAMENT: the European
Parliament decides in accordance with the ordinary legislative
procedure and on an equal footing with the Council.
BACKGROUND: both the Commission and the national
competition authorities NCAs have enforced the EU competition rules
in close cooperation in the European Competition Network
(ECN). The ECN was created in 2004 expressly for this
purpose.
The national competition authorities of the EU Member
States are empowered by Council
Regulation (EC) No 1/2003 to apply the EU competition rules
alongside the Commission. Since 2004, the Commission and the NCAs
took over 1000 enforcement decisions, with the NCAs being
responsible for 85%.
The NCAs are usually well placed to act where
competition is substantially affected in their territory. NCAs have
the expertise on how markets work in their own Member State.
However, many NCAs do not have all the tools they need to
effectively detect and tackle competition law
infringements.
The Commission considers that a legislative
proposal is therefore needed to empower the NCAs to be more
effective enforcers of the EU competition rules to ensure that NCAs
have the necessary guarantees of independence and resources and
enforcement and fining powers.
IMPACT ASSESSMENT: the preferred option is to take
EU legislative action providing NCAs with minimum means and
instruments to be effective enforcers, complemented by both soft
action and detailed rules where appropriate.
CONTENT: the proposal for a Directive aims to
provide NCAs with all the necessary tools to more
effectively implement the EU competition rules for employment and
growth in order to ensure the proper functioning of the internal
market. It seeks to enhance the effectiveness of the NCAs, while
not imposing one size fits all so as to allow taking into account
Member States legal traditions and institutional
specificities.
The proposal focuses on the following:
Independence and resources: the proposal introduces guarantees aiming to protect
the staff and management of NCAs from external influence when
enforcing the EU competition rules by explicitly excluding
instructions from any government or other public or private
entity. Moreover, it obliges Member States to ensure that NCAs
have the human, financial and technical resources that are
necessary to perform their core tasks.
Investigative powers:
the scope of NCAs' investigative and decision-making powers varies
considerably, which can significantly impact on their
effectiveness. The proposal provides:
- for the core minimum effective powers to
investigate (the power to inspect business and non-business
premises, to issue requests for information) and to take decisions
(the power to adopt prohibition decisions including the power to
impose structural and behavioural remedies, commitment decisions,
and interim measures);
- effective sanctions in
the case of non-compliance of the rules. These sanctions will be
calculated in proportion to the total turnover of the undertaking
concerned, but Member States will have flexibility in how this is
implemented.
Fines and periodic penalty payments: fines can vary by up to 25 times depending on which
authority act. National administrative competition authorities
should have the power to impose effective, proportionate and
dissuasive fines. The proposal:
- provides: (i) that the maximum amount of the
fine should not be set at a level below 10% of its total worldwide
turnover; (ii) that regard should be given to both the gravity and
the duration of the infringement;
- provides the possibility to impose fines on parent
companies and legal and economic successors of undertakings in
order to avoid companies escaping from liability for fines simply
by restructuring.
Leniency: the proposal
seeks to increase legal certainty for companies that wish to
apply for leniency and thus to maintain their incentives to
cooperate with the Commission and the NCAs by reducing the current
differences between the leniency programmes applicable in the
Member States.
It shall ensure that all NCAs can grant immunity and
reduction from fines and accept summary applications under the same
conditions. It shall guarantee that employees and directors of
companies that file for immunity are protected from individual
sanctions, where they exist, provided that they cooperate with the
authorities.
Mutual assistance: when
one NCAs requests another NCA to carry out investigative
measures on its behalf to gather evidence located in another
jurisdiction, officials from the requesting NCA have the right to
attend and actively assist in that inspection. In addition, the
proposal calls for these arrangements to allow NCAs to request and
provide mutual assistance for the notification of decisions and
enforcement of fines when companies have no legal presence in the
territory of the requesting NCA.
The proposal also recalls the importance of the
fundamental rights of companies and obliges the authorities
to respect appropriate safeguards in the exercise of their powers
in accordance with the Charter of Fundamental Rights.
BUDGETARY IMPLICATIONS: an indicative amount of EUR
1 million per year is foreseen to maintain, develop, host,
operate and support a central information system (European
Competition Network System) in compliance with the relevant
confidentiality and data security standards.
Other administrative costs incurred in connection with
the functioning of the ECN, e.g. organisation of meetings,
developing and providing training programmes, issuing guidelines
and common principles are estimated at EUR 500 000 per
year.
The total impact on expenditure is estimated at EUR
6.877 million up to 2020 (including human resources and other
administrative expenditure).