scispace - formally typeset
Search or ask a question
Book ChapterDOI

Member States’ Interest in the Enforcement of EU Competition Law

17 Mar 2019-pp 147-170
TL;DR: In this paper, the authors examine examples of such national measures and practices and assesses their impact on re-nationalising EU competition law and policy, and assess the impact of renationalizing EU competition policy.
Abstract: The decentralisation of the public enforcement of Articles 101 and 102 TFEU under Regulation 1/2003 altered not only its institutional setup by delegating enforcement responsibilities to national competition authorities (NCAs) and courts, but also the possibilities for Member States to implement their respective national competition policies and the domestic interest considerations embedded therein. In the multilevel governance framework established by Regulation 1/2003, the enforcement of EU competition law takes place exposed to the national political, institutional and procedural context. In particular, national laws and legal and administrative practices, which bind NCAs and national courts, directly influence the application of Articles 101 and 102 in the national territory. This chapter examines examples of such national measures and practices and assesses their impact of re-nationalising EU competition law and policy.

Summary (3 min read)

1 Introduction

  • Even though competition law has always formed a core pillar of the European integration process, for several decades EU and national competition laws have developed along each other with little interaction.
  • 1 The Regulation has decentralised the public enforcement of Articles 101 and 102 TFEU by delegating enforcement powers to national competition authorities (NCAs) and national courts.
  • This chapter provides the first critical assessment of the way in which Member States incorporated national interests in the enforcement of Article 101 TFEU.
  • This position was clearly formulated in a 1993 Commission policy report, noting that "the grant of a derogation from the ban on restrictive agreements requires assessment of complex economic situation and the exercise of considerable discretionary power, particularly where different objectives of the EC Treaty are involved.

2.2 The Decentralised Enforcement System of Regulation 1/2003

  • Regulation 1/2003 has fundamentally changed the enforcement system in order to relieve the Commission of its increasing administrative burden and make the overall enforcement more effective.
  • First, the Regulation shifted the enforcement from a notification to a self-assessment regime.
  • Second, it decentralised the enforcement by entrusting the NCAs and national courts with power to apply Articles 101 and 102 TFEU in parallel to the Commission.
  • As such, decentralisation was seen as an important component to provide a stronger and more democratic political support to the EU competition policy (European Commission 1999, points 10, 21).
  • As Riley pointed out in 2003, "[E]ven when institutional and political independence is granted by the state it can find other means of ensuring that a NCA will be directed to protect specific national interests.[…].

European Commission 2017).

  • Industry stakeholders, as well as the European Parliament and the Member States, pointed out that decentralised enforcement should not lead to re-nationalisation of EU competition policy (European Parliament 2016, 16; European Commission 2000, point 6.1; German Monopolies Commission 2000, 37; UK Parliament 2000, paragraphs 11, 150).
  • Rather, the enforcement system must continue to ensure that Article 101 TFEU is applied in a uniform manner throughout the EU, despite differences in national laws and polices (European Parliament 2016, 16).

3.1.1 Substantive National Laws Limiting the Enforcement of Specific Agreements

  • Member States can shield an agreement form the prohibition of Article 101 TFEU by adopting substantive laws that explicitly limit EU competition law in favour of the protection of a national interest.
  • The Hungarian example concerns the adoption of a line of legislations in which the national parliament limited the application of Article 101 TFEU to agreements in certain economic sectors.
  • In the Watermelon case, 16 the Hungarian NCA examined an agreement between large retail supermarkets with the participation of the association of watermelon farmers.
  • The new provision also provided for a special procedure for agricultural products that were not granted an exemption.
  • The Court confirmed the NCA's decision, noting that the amendment could only entail that the federal state's activity does no longer violated German competition law.

3.1.2 Procedural Provisions -National de minimis Rules

  • Finally, also national procedural rules can limit the application of EU competition law in favour of promoting national interests.
  • The so-called de minimis rules in national laws are a good example of how Member States can protect, among others, SMEs from the general application of EU and national competition laws.
  • 34 Commission Notice on agreements of minor importance which do not fall within the meaning of Article 85 (1) of the Treaty establishing the European Community, [1997] OJ C372/04.
  • This table shows that most Member States opted for a de minimis rule that is based on quantitative criteria, identical (France, UK, a presumption in Germany) or similar to those in the Commission's notices.
  • Since the NCAs have a wide margin of discretion to decide if an agreement affects trade between Member States (Botta et al. 2015, 1249 and 1271), the above national de minimis rules may apply in practice to cases that could have been investigated as Article 101 TFEU infringements.

3.2.1 Application of Article 101(1) TFEU

  • The Commission has mostly applied Article 101(1) TFEU as a jurisdictional provision which is confined to determining whether EU or national competition law should be applied (i.e., whether an agreement affects trade between Member States) (Odudu 2006, 101; Goyder 2009, 110-114).
  • Throughout the years, the Court of Justice established in its relevant jurisprudence a balance between Member States powers and EU competition law.
  • Another exception under Article 101(1) TFEU that reflects a balance between competition interests and national interests is the concept of "inherent restrictions".
  • They can decide what type of national interests can justify an exception and determine the applicable balance between competition and other national interests.

3.2.2 Applying Article 101(3) TFEU

  • Similarly to Article 101(1) TFEU exceptions, the manner in which the NCAs apply Article 101(3) TFEU has an impact on the leeway available under EU competition law for giving effect to the national interests of the Member States.
  • As summarised in The first group of NCAs applied Article 101(3) TFEU in a manner that does not leave room for consideration of national interests.
  • Similar to the Commission's approach following modernisation, they argued that the application of the Treaty provision is limited to taking into account economic efficiencies relating to the specific product or service and market.
  • Accordingly, in addition to economic efficiencies, the NCA was willing to consider national industrial policy considerations related to security of supply, bargaining power, functioning of online platforms, and the elimination of "white spots" in internet access.
  • The above overview demonstrates that national application of Article 101(3) TFEU allow for different opportunities for incorporating national interests under competition rules.

4 Conclusions

  • This chapter analysed how Member States interests' may manifest in the enforcement of EU competition law.
  • It provides that the term could include a wide range of policies, including environmental protection, public health, fair trade production, and animal welfare, ACM ( 2014 lie between compliance and particularism with EU legal obligations, the chapter comes to the following conclusions.
  • This chapter demonstrated that the decentralised enforcement system of EU competition law also provides significant opportunities for the Member States to push their particular national interests.
  • Second, some of the NCAs applied Article 101 so as to bring its enforcement in line with their national view on competition policy.
  • This chapter have confirmed that the national rules have led to far-reaching outcomes.

Did you find this useful? Give us your feedback

Content maybe subject to copyright    Report

This is a repository copy of Member States’ Interest in the Enforcement of EU Competition
Law.
White Rose Research Online URL for this paper:
http://eprints.whiterose.ac.uk/142401/
Version: Accepted Version
Book Section:
Brook, O and Cseres, KJ (2019) Member States’ Interest in the Enforcement of EU
Competition Law. In: Varju, M, (ed.) Between Compliance and Particularism: Member
State Interests and European Union Law. International, Foreign & Comparative Law .
Springer , pp. 1-20. ISBN 978-3-030-05782-4
© Springer Nature Switzerland AG 2019. This is a post-peer-review, pre-copyedit version
of a chapter published in Between Compliance and Particularism. The final authenticated
version is available online at: https://link.springer.com/chapter/10.1007/978-3-030-05782-
4_1
eprints@whiterose.ac.uk
https://eprints.whiterose.ac.uk/
Reuse
Items deposited in White Rose Research Online are protected by copyright, with all rights reserved unless
indicated otherwise. They may be downloaded and/or printed for private study, or other acts as permitted by
national copyright laws. The publisher or other rights holders may allow further reproduction and re-use of
the full text version. This is indicated by the licence information on the White Rose Research Online record
for the item.
Takedown
If you consider content in White Rose Research Online to be in breach of UK law, please notify us by
emailing eprints@whiterose.ac.uk including the URL of the record and the reason for the withdrawal request.

Member States’ Interest in the Enforcement of EU Competition Law:
a Case Study of Article 101 TFEU
Or Brook and Katalin J. Cseres
Abstract The decentralisation of the public enforcement of Articles 101 and 102 TFEU under
Regulation 1/2003 altered not only its institutional setup by delegating enforcement responsibilites
to national competition authorities (NCAs) and courts, but also the possibilities for Member States to
implement their respective national competition policies and the domestic interest considerations
embedded therein. In the multilevel governance framework established by Regulation 1/2003, the
enforcement of EU competition law takes place exposed to the national political, institutional and
procedural context. In particular, national laws and legal and administrative practices, which bind
NCAs and national courts, directly influence the application of Articles 101 and 102 in the national
territory. This chapter examines examples of such national measures and practices and assesses their
impact of re-nationalising EU competition law and policy.
O. Brook - K.J. Cseres
University of Amsterdam, Faculty of Law
Amsterdam, the Netherlands
e-mail: k.j.cseres@uva.nl
1 Introduction
Even though competition law has always formed a core pillar of the European integration process,
for several decades EU and national competition laws have developed along each other with little
interaction. EU competition law functioned as a supranational policy in the EU with the European
Commission as the central body of public enforcement. This has fundamentally changed when

Regulation 1/2003 (hereinafter, Regulation) entered into force in May 2004.
1
The Regulation has
decentralised the public enforcement of Articles 101 and 102 TFEU by delegating enforcement
powers to national competition authorities (NCAs) and national courts. The new Regulation paved
the way for a greater role of Member States' courts and NCAs in the enforcement of Articles 101 and
102. Regulation 1/2003 has also introduced various mechanisms of cooperation between the
Commission and the national enforcers, in particular the European Competition Network (ECN) (see
Gauer et al. 2004). The Regulation and the Commission repeatedly emphasised that the multi-
governance enforcement regime should not compromise the creation of a single corpus of rules to
be developed and applied in the same manner throughout the EU.
2
Nevertheless, this chapter will show that the decentralised enforcement system has also opened up
new ways for NCAs to implement their national competition policies. Whereas the combination of
Regulation 1/2003 and the so-called Modernisation Package
3
have stimulated an exceptional process
of Europeanisation, its multi-level governance framework has made the enforcement of EU
competition law subject to to the involvement of diverse national competition enforcers embedded
in different political, institutional and procedural settings. This has given the Member States the
opportunity to implement their own national competition interests within the EU legal and
governance framework, while creating a risk of re-nationalising EU competition law and policy.
In this context, we define national interest as expressed in various measures of the Member States,
such as laws, regulations, soft laws, judicial and administrative decisions and actions. As elaborated
in Sect. 3 below, we will show that national interests can influence the effective scope of Article 101
TFEU by way of the leeway permitted at the national level under the decentralised enforcement
system of Regulation 1/2003 in two distinctive ways: first, Member States can adopt national
measures that limit the enforcement of Article 101 TFEU. Second, NCAs and national courts can apply
the substantive provisions of the Article in ways that bring the enforcement of the Article in line with
their national interest.
1
Council Regulation (EC) 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in
Articles 81 and 82 of the Treaty, [2003] OJ L1/1.
2
Regulation 1/2003, Article 16 and preambles 1 and 22; European Commission (1999), points 11, 24.
3
It consists of Regulation 773/2004 on details of its competition law procedures as well as six Commission Notices aimed at
providing guidance on a range of aspects that were of particular significance in the decentralised enforcement system. With
the aid of these soft law instruments, the Commission explained the application of the Treaty articles and provided
guidance to assist undertakings and national competition enforcers in assessing the compatibility of a specific practice with
EU competition law. Regulation (EC) 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission
pursuant to Articles 81 and 82 of the EC Treaty, [2004] OJ L123/18; Commission Notice on cooperation within the Network
of Competition Authorities, [2004] OJ C101/43; Commission Notice on cooperation between the Commission and the courts
of the EU Member States in the application of Articles 81 and 82 EC, [2004] OJ C101/54; Commission Notice on informal
guidance relating to novel questions concerning Articles 81 and 82 of the EC Treaty that arise in individual cases (Guidance
Letters), [2004] OJ C101/78; Commission Notice on the handling of complaints by the Commission under Articles 81 and 82
of the EC Treaty, [2004] OJ C101/65; Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty,
[2004] OJ C101/81; Guidelines on the application of Article 81(3) of the Treaty (“Article 101(3) Guidelines”), [2004] OJ
C101/97.

Notably, the role of national interest in the enforcement of EU competition law has so far only
received attention in the fields of merger control and State aid rules (see Jones and Davies 2015;
Reader 2016), which are still enforced in a centralised manner by the Commission. This chapter
provides the first critical assessment of the way in which Member States incorporated national
interests in the enforcement of Article 101 TFEU. The chapter aims to identify and analyse the
manifestation of Member States’ national interest in EU competition law by scrutinising the
decisional practices of five NCAs: those in France, Germany, Hungary, the Netherlands and the UK.
4
Accordingly, this chapter is structured as follows. Sect. 2 examines the transformation of EU
competition law enforcement following Regulation 1/2003 and the Commission’s effort to combat
the risks of re-nationalisation of EU competition enforcement. Sect. 3 analyses the Commission’s
efforts to guarantee uniform enforcement of Article 101 and presents illustrative examples of the
two distinctive ways the Member States use to incorporate their interests in the local enforcement of
Article 101 TFEU. Finally, Sect. 4 concludes by suggesting that the national practices analysed are an
expression of the tension between Member States’ obligation of compliance and the particularism of
national economic policies.
2 The Transformation of EU Competition Law Enforcement and its Impact on
the Uniform Enforcement of Article 101 TFEU
2.1 The Centralised Enforcement System of Regulation 17/62
Competition law has been a fundamental area of EU law ever since the establishment of the Treaty
of Rome in 1957. Before its modernisation in May 2004, the Commission had a central role in the
enforcement of EU competition law. This centralised enforcement system was an important
exception to the generally decentralised enforcement framework of other fields of EU law. Its
introduction was justified by the fact that many Member States lacked a proper competition law and
enforcement regime until the 1980s, or in some cases the late 1990s. Until this period, competition
law has not been regarded as an economic policy tool of primary importance in most of the EU
Member States (Gerber 1998, 398).
The centralised nature of the enforcement system was reflected in the Commission’s monopoly over
the application of Article 101(3) under the centralised enforcement framework of Regulation 17/62.
5
The Commission enjoyed a considerable margin of discretion in applying the conditions laid down in
Article 101(3) in order to guarantee its coherent and uniform application throughout the common
4
The analysis of the national practices of the five NCAs is based on the empirical database developed by Brook, Brook
(forthcoming).
5
Council Regulation 17/62 (EEC) First Regulation implementing Articles 85 and 86 of the Treaty, [1962] OJ L13/204.

market. It was feared that if the NCAs would be given powers to apply Article 101(3) they could
incorporate their own national interests into their decisions (European Commission 1999, point 17)
(See also Wils 2005, 67; Gerber 2008, 1239; Ehlermann 2000, 537538; Temple Lang 1998, 3; Jones
2010, 787788; Sauter 2018, 4142). This position was clearly formulated in a 1993 Commission
policy report, noting that “the grant of a derogation from the ban on restrictive agreements requires
assessment of complex economic situation and the exercise of considerable discretionary power,
particularly where different objectives of the EC Treaty are involved. This task can only be performed
by the Commission (European Commission 1993, point 190).
6
2.2 The Decentralised Enforcement System of Regulation 1/2003
Regulation 1/2003 has fundamentally changed the enforcement system in order to relieve the
Commission of its increasing administrative burden and make the overall enforcement more
effective. The change was twofold. First, the Regulation shifted the enforcement from a notification
to a self-assessment regime. Second, it decentralised the enforcement by entrusting the NCAs and
national courts with power to apply Articles 101 and 102 TFEU in parallel to the Commission.
The motive for decentralisation was not purely administrative. Decentralisation also reflected a
political objective of bringing “the decision-making process closer to citizens” through allowing
consumers to address NCAs and national courts in order to improve the European citizens’
perception of competition policy (European Commission 1999, points 910). As such,
decentralisation was seen as an important component to provide a stronger and more democratic
political support to the EU competition policy (European Commission 1999, points 10, 21).
However, bringing the decision-making process closer to citizens carried an inherent risk that NCAs
would incorporate their own economic and political interests into EU competition policy (see Maher
2002, 224; Simonsson 2010, 111).
From the very launch of the Modernisation White Paper (European
Commission 1999), it was feared that the NCAs institutional, personal and financial settings would
allow national governments and parliaments to influence the outcome of the enforcement (German
Monopolies Commission 2000, paragraph 40; UK Parliament 2000, paragraphs 11, 150; Wils 2013,
295). Particularly, given the vague wording of Article 101 TFEU, there was a clear risk of the
enforcement of the Article becoming subject to the discretion of each national enforcer, to its
institutional, procedural and political characteristics and competition culture.
6
This position was widely shared by members of the competition epistemic community. For example, Claus-Dieter
Ehlermann, former Director-General of DG COMP until 1995, described the Commission’s monopoly as “almost a religious
belief”, and noted that “Not to adhere to it was considered heresy, and could lead to excommunication”, Ehlermann (2000),
537538.

Citations
More filters
Posted Content
TL;DR: The European Commission used the term "modernization" in referring to the important set of changes in the institutional structure and procedures of competition law that it introduced in 2004, and it has fundamentally changed important procedures for developing and applying competition law in Europe as mentioned in this paper.
Abstract: In European competition law, the term "modernization" has been a catchword and focus of attention since the late 1990s Usually, the reference is to "procedural" or "institutional" modernization The European Commission used the term "modernization" in referring to the important set of changes in the institutional structure and procedures of competition law that it introduced in 2004, and it has fundamentally changed important procedures for developing and applying competition law in Europe During the same period in which this form of modernization was proceeding, another form of "modernization" was also taking shape that represents a fundamental reorientation of much of the substantive law thinking in European competition law Curiously, little attention has been paid to the relationship between these two processes Yet they have taken place over roughly the same period; many of the same people have been involved in instigating the changes; and they have been driven by many of the same forces and pressures Understanding the relationship between these two processes promises not only to provide a better understanding of each, but also important insights into the current roles of competition law in the further integration of Europe Even more broadly, it helps to reveal the forces at work in this critical period of European legal and political development The Article makes two central claims One is that the two processes are related in important ways and that neither can be fully understood without understanding the other The other is that the relationships between the two reveal changes in the dynamics of European competition law that have so far been little noticed

23 citations

Posted Content
TL;DR: In this paper, the authors examine the policies displayed towards foreign direct investment and cross-border mergers in the EU, focusing on the question of when public policy factors may impact on merger control within the EU and override competition law assessments.
Abstract: In many jurisdictions across the world concern about foreign control of key national businesses appears to be mounting. This article examines the policies displayed towards foreign direct investment and cross-border mergers in the EU, focusing on the question of when public policy factors may impact on merger control within the EU and override competition law assessments. The article notes that not only do EU cases in this area raise the potential for differences in opinion as to how the benefits and costs of merger transactions should be assessed and weighed, and a clash between proponents of the principle of an open market economy and proponents of greater protectionism, but they raise delicate issues relating to the balance of competence between the EU and the Member States. Consequently, it analyses (i) how EU law, especially the free movement rules and the EUMR limit the ability of the Member States either to impose obstacles in the path of foreign mergers (whether from inside or outside of the EU/EEA) or to authorise the creation of national champions, on public interest grounds and (ii) how EU law seeks to balance EU goals against the acutely felt and sensitive national interests at stake. Given concerns expressed about a rising tide of protectionism within the EU, it also examines EU enforcement mechanisms. ​The article concludes that although EU law clearly prohibits national laws that impose unjustified obstacles in the path of investment from other EU Member States, it may not always be able to prevent the authorisation of national champions which may damage competition within the EU and that changes to the EU merger rules would be required to deal with this latter problem. Further, the extent to which Member States are able to control investments from third countries (outside of the EU/EEA) is extremely sensitive, controversial and requires clarification. It also notes that although some problems do lie in preventing Member States from taking protectionist steps and violating fundamental provisions of EU law, enforcement mechanisms are in place which can help to ensure the effectiveness of EU law.

13 citations

References
More filters
Book
26 May 2016

17 citations

Journal ArticleDOI
TL;DR: In this paper, the capability approach is applied to European competition law to balance non-economic goals against the economic goal of consumer welfare, and the capability framework is used to provide a more legitimate theory for the interpretation of EU competition law.
Abstract: European competition law is predominantly focused on maximizing consumer welfare. This overarching purpose (which is supported by economic theory) leaves little place for safeguarding non-economic values, such as sustainability. This makes it difficult to allow cooperation between companies to contribute to such non-economic goals. In this article we explore whether it is possible to establish a different normative framework, in which such goals can be taken into account and can be balanced against the economic goal of consumer welfare. To answer this question, we take four steps. First, we discuss current EU competition law and the difficulty of fitting non-economic goals into the dominant interpretation of that law. Second, we propose a different normative framework, based on the capability approach advanced by philosopher Martha Nussbaum and economist Amartya Sen. Third, we argue that there are good principled reasons to incorporate non-economic goals into competition law. Fourth, we apply both the capability approach and the consumer welfare approach to three (illustrative) cases in which non-economic goals are at stake. Overall, we argue that the capability framework, although not without difficulties of its own, may provide a more legitimate theory for the interpretation of European competition law.

16 citations


"Member States’ Interest in the Enfo..." refers background in this paper

  • ...The Dutch NCA’s approach to sustainability agreements provides an illustrative example of how national application of Article 101(3) can secure a leeway for local interests (ACM 2014, paragraph 2.6; see also Claassen and Gerbrandy (2016), 3)....

    [...]

  • ...65 ICN (2011), 33; ACM (2014), paragraph 2.6; Claassen and Gerbrandy (2016), 3. accepting restrictive agreements that have a positive impact on the competitive structure and process (Heitzer 2008, 4; ICN 2011, 19)....

    [...]

Journal ArticleDOI
TL;DR: The Lisbon Treaty removed the establishment of "a system ensuring that competition in the internal market is not distorted" as an objective of the Union as mentioned in this paper, which is only one among various recent political expressions of defiance towards EU competition policy.
Abstract: The Lisbon Treaty removed the establishment of “a system ensuring that competition in the internal market is not distorted” as an objective of the Union. Even though largely rhetorical, this amendment is only one among various recent political expressions of defiance towards EU competition policy. This essay attempts to address, to a limited extent, those political concerns by taking issue with the so-called “state action doctrine” developed by the EU courts. It argues that, in contrast with current case law, the key test in assessing the legality of State measures limiting competition, i.e., public restraints (as opposed to private practices), ought to be whether they infringe the Union’s internal market rather than competition rules.

14 citations


"Member States’ Interest in the Enfo..." refers background in this paper

  • ...One example of this type of exception under Article 101(1) is the so-called “State action defense” or effet utile doctrine (see Gyselen 1989; Castillo de la Torre 2005; Cruz 2007; Blomme 2007; Gerard 2010)....

    [...]

Posted Content
TL;DR: In this paper, the authors examine the policies displayed towards foreign direct investment and cross-border mergers in the EU, focusing on the question of when public policy factors may impact on merger control within the EU and override competition law assessments.
Abstract: In many jurisdictions across the world concern about foreign control of key national businesses appears to be mounting. This article examines the policies displayed towards foreign direct investment and cross-border mergers in the EU, focusing on the question of when public policy factors may impact on merger control within the EU and override competition law assessments. The article notes that not only do EU cases in this area raise the potential for differences in opinion as to how the benefits and costs of merger transactions should be assessed and weighed, and a clash between proponents of the principle of an open market economy and proponents of greater protectionism, but they raise delicate issues relating to the balance of competence between the EU and the Member States. Consequently, it analyses (i) how EU law, especially the free movement rules and the EUMR limit the ability of the Member States either to impose obstacles in the path of foreign mergers (whether from inside or outside of the EU/EEA) or to authorise the creation of national champions, on public interest grounds and (ii) how EU law seeks to balance EU goals against the acutely felt and sensitive national interests at stake. Given concerns expressed about a rising tide of protectionism within the EU, it also examines EU enforcement mechanisms. ​The article concludes that although EU law clearly prohibits national laws that impose unjustified obstacles in the path of investment from other EU Member States, it may not always be able to prevent the authorisation of national champions which may damage competition within the EU and that changes to the EU merger rules would be required to deal with this latter problem. Further, the extent to which Member States are able to control investments from third countries (outside of the EU/EEA) is extremely sensitive, controversial and requires clarification. It also notes that although some problems do lie in preventing Member States from taking protectionist steps and violating fundamental provisions of EU law, enforcement mechanisms are in place which can help to ensure the effectiveness of EU law.

13 citations

Journal ArticleDOI
TL;DR: In this paper, the authors argue that if the Office of Fair Trading (OFT) pursues consumer welfare as its sole goal, then this is wrong in law, and they argue that Ofcom is unlikely to follow the OFT's lead on this issue.
Abstract: This is a paper about UK competition law’s goals. It focuses on Chapter I of the Competition Act 1998 (CA98). The Office of Fair Trading (OFT), which is a key actor in this area, seems to pursue consumer welfare as Chapter I’s sole goal. The Office of Communications (Ofcom) and the OFT have concurrent powers to apply Chapter I, when the competition issue relates to activities connected with ‘communications matters.’ The High Court can hear private Chapter I actions, too.It is problematic if these actors would decide the same case differently. This could create contradictions in legal duties, making ‘knowing the law’ impossible. It certainly undermines legal certainty for firms and their customers, increasing legal risk. This paper focuses on one potential area of divergence, which goes to the heart of almost every decision in this area, the objectives of Chapter I. I will argue that if the OFT pursues consumer welfare as Chapter I’s sole goal, then this is wrong in law. Furthermore, I believe that Ofcom is unlikely to follow the OFT’s lead on this issue. My focus is on the OFT and Ofcom; but, the High Court could diverge too. Let me start by presenting a factual scenario where a disagreement as to Chapter I’s goals might matter. Public service broadcasting (PSB), for example, regional news, does get made by the market, but not in any quantity. Furthermore, outside the BBC, the UK’s PSB system is under great pressure. Ofcom believes that it is unsustainable; some firms might not renew their PSB licenses in 2014. Given this scenario, how can Ofcom ensure that innovative and original programs, fulfilling public purposes, are delivered? The BBC has offered to set up partnerships with others to enhance PSB. They would help new entrants into the market through horizontal co-operation of some kind. Ofcom welcomed this, principally because of its duty to protect citizens as well as consumers. Is it possible that Ofcom, if applying Chapter I to such arrangements, would accept less competition than the OFT, if it meant that some of these public policy goals to protect citizens (which Ofcom also pursues) would be delivered in this new system?This paper argues that the OFT should consider public policy goals in its Chapter I analysis. Part 2 starts by sketching out the UK’s concurrency regime; I show why I think the OFT pursues the sole consumer welfare goal in Chapter I and why Ofcom is likely (at least sometimes) to disagree. To explain why the OFT should consider wider public policy goals, Part 3 explores Article 101 TFEU’s goals; Chapter I is based upon this EU provision. Many believe that consumer welfare is now Article 101’s sole goal; however, several Court of Justice (ECJ) judgments belie this view. Part 4 unpicks Chapter I’s substantive provisions, looking at internal and external aids to interpretation to see what the UK law’s goals should be. Once again, I argue that public policy is relevant there. Part 5 concludes.

13 citations

Frequently Asked Questions (6)
Q1. What are the contributions in this paper?

The decentralisation of the public enforcement of Articles 101 and 102 TFEU under Regulation 1/2003 altered not only its institutional setup by delegating enforcement responsibilites to national competition authorities ( NCAs ) and courts, but also the possibilities for Member States to implement their respective national competition policies and the domestic interest considerations embedded therein. In particular, national laws and legal and administrative practices, which bind NCAs and national courts, directly influence the application of Articles 101 and 102 in the national territory. This chapter examines examples of such national measures and practices and assesses their impact of re-nationalising EU competition law and policy. 

45 Article 3(1) of the Act provides: “Agreements between competing undertakings and decisions by associations of undertakings, whose subject matter is the rationalisation of economic activities through cooperation among enterprises, fulfill the conditions of Section 2(1) if: a) competition on the market is not significantly affected thereby, and 2) the agreement or the decision serves to improve the competitiveness of small or medium-sized enterprises.” 

the role of national interest in the enforcement of EU competition law has so far only received attention in the fields of merger control and State aid rules (see Jones and Davies 2015; Reader 2016), which are still enforced in a centralised manner by the Commission. 

the Commission objected to this change and noted that the revised rule could have removed hard-core restrictions that affect trade between Member States from the scope of Article 101 TFEU (Dutch Parliament 2010). 

It follows qualitative criteria and requires examining whether an agreement has the effect of rationalising economic activities and serves to improve the competitiveness of SMEs. 

OJ C372/04, paragraph 19.late 1990s, the basis for the application of the de minimis rule changed from the size of the relevant undertaking to its market power. 

Trending Questions (1)
What are the role of national competitiion authoritie in enforcing DMA?

The role of national competition authorities in enforcing the Digital Markets Act (DMA) is not mentioned in the provided text.