Price Fixing – Competition Law Enforcement

The European Union Treaty prohibits agreements by companies to carve up markets for goods and services and abuse of a dominant position on a market by a company. Such arrangements or conduct is prohibited because it results in distortions of competition such as price fixing, limiting the supply of a good or service, or excluding and eliminating competition. Both forms of conduct are forbidden because they usually harm consumers of the goods and services because they destroy the benefits of the fair and free play of competition on markets. European Union competition law is enforced where the offending conduct has an actual or potential effect on trade between the Member States.

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Office Of Fair Trading

 

 

 

 

 

The Commission of the European Union and national competition authorities have the task of investigating and punishing infringements of the competition rules prohibited by the EU Treaty. The rules on enforcement are set down in secondary EU implementing legislation. The current enforcement rules have been in place for just a decade. Until 2004, in reality, the Commission alone had the task of enforcing the EU competition rules. Individuals could try and directly enforce the EU competition rules in national courts, but rarely did so. Since that date, national competition authorities have also been empowered by EU law to enforce in parallel with the Commission EU Competition Law. However, the new rules were not immediately clear and unambiguous and there was debate in legal circles concerning the way in which enforcement powers have been distributed between the Commission and national competition authorities. Two of the key questions in the debate have concerned first, the issue of whether power is distributed evenly between the Commission and national competition authorities in the revised enforcement system and secondly, the extent to which the Commission can be bound by the findings of investigations by national competition authorities.

ECJNot surprisingly perhaps, disagreements over the precise distribution and delimitation of powers in the EU law governing the matter has resulted in litigation before the European Court of Justice. In a number of very important decisions the European Court of Justice has now clarified the rules on the division of powers between the Commission and national competition authorities and held that while both the Commission and national competition authorities have the task of enforcing the rules, it is the Commission that retains the predominant enforcement role and that it is not bound by the findings of national competition authorities. In essence therefore, the system of enforcement now in operation does not distribute power in an even or indeed symmetrical manner. Thus, no power has been taken away from the Commission and handed over to the national competition authorities. The new system of enforcement has therefore not decentralised the power. It has merely empowered national authorities to enforce the rules but the power to enforce may be taken away by the Commission where it considers it expedient to do so.

DSC_9359Professor Francesco Rizzuto has written extensively and widely on this subject. His characterisation of the enforcement system as asymmetrical and contingent first formulated his work on parallel competence and the power of the Commission according to the General Court has contributed to the clarification of the law on this matter by the European Court of Justice. It was directly cited as supporting academic research by the Advocate General in his Opinion to the European Court of Justice in the Tele2 Polska (now Netia SA) case (Case C-375/09). The Court of Justice followed the Opinion of the Advocate General when it ruled on the case. The Advocate General has the same standing as a Judge of the European Court of Justice. Their role is to submit an independent and thoroughly argued legal Opinion to the Court of Justice on how the Court should rule. In most instances, the Court of Justice follows the Opinion of the Advocate General.