Revue des droits de la concurrence Competition Law Review. Article l Concurrences N l pp Wouter P. J. Wils

Transcription

1 Concurrences Revue des droits de la concurrence Competition Law Review The European Commission s ECN+ : Proposal for a Directive to empower the competition authorities of the Member States to be more effective enforcers Article l Concurrences N l pp Wouter P. J. Wils wouter.wils@ec.europa.eu Hearing Officer, European Commission Visiting Professor, King s College London

2 Article Wouter P. J. Wils * wouter.wils@ec.europa.eu Hearing Officer, European Commission Visiting Professor, King s College London Abstract This paper contains my contribution to the panel Competition authorities: Towards more independence and prioritisation? at the 8th International Concurrences Review Conference New Frontiers of Antitrust (Paris, 26 June 2017). It focuses in particular on the European Commission s ECN+ Proposal for a Directive of the European Parliament and of the Council to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market (COM(2017)142 of 22 March 2017). The paper sets out the provisions concerning independence, prioritisation and resources contained in Chapter III (Articles 4 and 5) of the proposed Directive, lists their antecedents, and provides an analysis of the questions of independence, resources and prioritisation in the specific case of the enforcement of Articles 101 and 102 TFEU by the national competition authorities ( NCAs ). Readers who are already familiar with the ECN+ Proposal may want to go directly to the analysis part. Cet article contient ma contribution au panel Compétition authorities: Towards more independence and prioritisation? de la 8e édition de la conférence internationale New Frontiers of Antitrust (Paris, 26 juin 2017). Il se concentre en particulier sur la proposition REC+ de la Commission européenne pour une directive du Parlement européen et du Conseil visant à habiliter les autorités de concurrence des États membres à être des exécuteurs plus efficaces et à assurer le bon fonctionnement du marché intérieur (COM(2017) 142 du 22 mars 2017). Le document expose les dispositions relatives à l indépendance, à la priorisation et aux ressources figurant au chapitre III (articles 4 et 5) de la proposition de directive, énumère leurs antécédents et fournit une analyse des questions d indépendance, de ressources et de priorisation dans le cas particulier de l application des articles 101 et 102 du TFUE par les autorités nationales de concurrence («ANC ). Les lecteurs qui connaissent déjà la proposition REC+ peuvent vouloir aller directement à la partie de l analyse. * Paper presented at New Frontiers of Antitrust 8th International Concurrences Review Conference (Paris, 26 June 2017) accessible at com/author= I am grateful to Elisavet Arsenidou, Daniel Dittert, Céline Gauer, Laurence Idot, Šarūnas Keserauskas, Gero Meessen, Siún O Keeffe, Konrad Ost, Enrique Sepúlveda Garcia, Ailsa Sinclair and Anna Vernet for helpful comments and contributions. All views expressed in this paper are strictly personal, and should not be construed as reflecting the opinion of the European Commission or any of the abovementioned persons. Comments are welcome at wouter.wils@ec.europa.eu. The European Commission s ECN+ : Proposal for a Directive to empower the competition authorities of the Member States to be more effective enforcers I. The provisions on independence, prioritisation and resources in the proposed Directive 1. On 22 March 2017, the European Commission (hereafter also: the Commission ) adopted a proposal for a Directive of the European Parliament and of the Council to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, often referred to as the ECN+ proposal (hereafter: the ECN+ Proposal, the Proposal or the proposed Directive ) According to its Article 1(1), the proposed Directive sets out certain rules to ensure that national competition authorities have the necessary guarantees of independence and resources and enforcement and fining powers to be able to effectively apply Articles 101 and 102 TFEU so that competition in the internal market is not distorted and consumers and undertakings are not put at a disadvantage by national laws and measures which prevent national competition authorities from being effective enforcers. The scope of the Directive covers the application of Articles 101 and 102 TFEU and national competition law provisions applied in parallel to Articles 101 and 102 TFEU to the same case. 1 COM(2017)142 final of The name ECN+ refers to the European Competition Network (ECN) and an addition to Regulation 1/2003; see text accompanied by notes 3 and 5 to 30 below. 60 Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal...

3 3. Article 2(1) of the proposed Directive provides that, for the purposes of this Directive, ʻnational competition authority means an authority designated by a Member State pursuant to Article 35 of Regulation (EC) 1/2003 as responsible for the application of Articles 101 and 102 TFEU. Member States may designate one or more administrative authorities (national administrative competition authority), as well as judicial authorities (national judicial competition authority) to carry out these functions Article 2(3) further provides that ʻEuropean Competition Network means the Network of public authorities formed by the national competition authorities and the Commission to provide a forum for discussion and cooperation in the application and enforcement of Articles 101 and 102 TFEU Chapter III of the proposed Directive reads as follows: CHAPTER III INDEPENDENCE AND RESOURCES Article 4 Independence 1. To guarantee the independence of national administrative competition authorities when applying Articles 101 and 102 TFEU, Member States shall ensure that they perform their duties and exercise their powers impartially and in the interests of the effective and uniform enforcement of these provisions, subject to proportionate accountability requirements and without prejudice to close cooperation between competition authorities in the European Competition Network. 2. In particular, Member States shall ensure that: a) The staff and the members of the decision-making body of national administrative competition authorities can perform their duties and exercise their powers for the application of Articles 101 and 102 TFEU independently from political or external influence; b) The staff and the members of the decision-making body of national administrative competition authorities neither seek nor take any instructions from any government or other public or private entity when carrying out their duties and exercising their powers for the application of Articles 101 and 102 TFEU; c) The staff and the members of the decision-making body of national administrative competition authorities refrain from any action which is incompatible with the performance of their duties and exercise of their powers for the application of Articles 101 and 102 TFEU; d) The members of the decision-making body of national administrative competition authorities may be dismissed 2 See text accompanied by note 31 below. 3 See note 1 above and text accompanied by note 8 below. only if they no longer fulfil the conditions required for the performance of their duties or have been guilty of serious misconduct under national law. The grounds for dismissal should be laid down in advance in national law. They shall not be dismissed for reasons related to the proper performance of their duties and exercise of their powers in the application of Articles 101 and 102 TFEU as defined in Article 5(2); e) National administrative competition authorities have the power to set their priorities for carrying out tasks for the application of Articles 101 and 102 TFEU as defined in Article 5(2). To the extent that national administrative authorities are obliged to consider complaints which are formally filed, this shall include the power of those authorities to reject such complaints on the grounds that they do not consider them to be a priority. This is without prejudice to the power of national competition authorities to reject complaints on other grounds defined by national law. Article 5 Resources 1. Member States shall ensure that national competition authorities have the human, financial and technical resources that are necessary for the effective performance of their duties and exercise of their powers when applying Articles 101 and 102 TFEU as defined in paragraph The application of Articles 101 and 102 TFEU by national competition authorities shall include: conducting investigations with a view to applying Articles 101 and 102 TFEU; taking decisions applying these provisions on the basis of Article 5 of Regulation 1/2003; and cooperating closely in the European Competition Network with a view to ensuring the effective and uniform application of Articles 101 and 102 TFEU. 6. The corresponding recitals 13 to 18 of the proposed Directive read as follows: (13) Empowering [national competition authorities (NCAs)] to apply Articles 101 and 102 TFEU impartially and in the common interest of the effective enforcement of European competition rules is an essential component of the effective and uniform application of these rules. (14) The independence of NCAs should be strengthened in order to ensure the effective and uniform application of Articles 101 and 102 TFEU. To this end, express provision should be made in national law to ensure that when applying Articles 101 and 102 TFEU NCAs are protected against external intervention or political pressure liable to jeopardise their independent assessment of matters coming before them. For that purpose, rules should be laid down in advance regarding the grounds for the dismissal of the members of the decision-making body of the NCAs in order to remove any reasonable doubt as to the impartiality of that body and its imperviousness to external factors. Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal... 61

4 (15) To ensure the independence of NCAs, their staff and members of the decision-making body should act with integrity and refrain from any action which is incompatible with the performance of their duties. The need to prevent the independent assessment of staff or members of the decision-making body being jeopardised entails that during their employment and term of office and for a reasonable period thereafter, they should refrain from any incompatible occupation, whether gainful or not. Furthermore, this also entails that during their employment and their term of office, they should not have an interest in any businesses or organisations which have dealings with a NCA to the extent that this has the potential to compromise their independence. The staff and the members of the decisionmaking body should declare any interest or asset which might create a conflict of interests in the performance of their duties. They should be required to inform the decisionmaking body, the other members thereof or, in the case of NCAs in which the decision-making power rests with only one person, their appointing authority, if, in the performance of their duties, they are called upon to decide on a matter in which they have an interest which might impair their impartiality. (16) The independence of NCAs does not preclude either judicial review or parliamentary supervision in accordance with the laws of the Member States. Accountability requirements also contribute to ensuring the credibility and the legitimacy of the actions of NCAs. Proportionate accountability requirements include the publication by NCAs of periodic reports on their activities to a governmental or parliamentary body. NCAs may also be subject to control or monitoring of their financial expenditure, provided this does not affect their independence. (17) NCAs should be able to prioritise their proceedings for the enforcement of Articles 101 and 102 TFEU to make effective use of their resources, and to allow them to focus on preventing and bringing to an end anti-competitive behaviour that distorts competition in the internal market. To this end, they should be able to reject complaints on the grounds that they are not a priority. This should be without prejudice to the power of NCAs to reject complaints on other grounds, such as lack of competence or to decide there are no grounds for action on their part. The power of NCAs to prioritise their enforcement proceedings is without prejudice to the right of a government of a Member State to issue general policy or priority guidelines to national competition authorities that are not related to specific proceedings for the enforcement of Articles 101 and 102 TFEU. (18) NCAs should have the necessary resources, in terms of staff, expertise, financial means and technical equipment, to ensure they can effectively perform their tasks when applying Articles 101 and 102 TFEU. In case their duties and powers under national law are extended, the resources that are necessary to perform those tasks should still be sufficient. 7. The Explanatory Memorandum of the Proposal adds the following: Chapter III Independence and resources This chapter ensures that NCAs enjoy the necessary guarantees of independence. In particular, it introduces guarantees aiming to protect staff and management of NCAs from external influence when enforcing the EU competition rules by: (i) ensuring that they can perform their duties and exercise their powers independently from political and other external influence; (ii) explicitly excluding instructions from any government or other public or private entity; (iii) ensuring that they refrain from any action which is incompatible with the performance of their duties and exercise of their powers; (iv) prohibiting the dismissal of their management for reasons related to decision-making in specific cases; (v) ensuring that they have the power to set their priorities in individual cases including the power to reject complaints for priority reasons. Regarding this last aspect, the proposal does not interfere with Member States prerogative to define general policy objectives. Most stakeholders during the public consultation process supported action covering all these aspects. Notably, businesses reported that the lack of ability of NCAs to set their priorities in full prevents them from focusing on infringements that cause the most harm to competition. In addition, this Chapter introduces an explicit requirement for Member States to ensure that NCAs have the human, financial and technical resources that are necessary to perform their core tasks under Articles 101 and 102 TFEU. The relevant provision leaves room for Member States to deal with economic fluctuations without risking the effectiveness of NCAs. 4 II. Antecedents 1. Regulation 1/ According to its Explanatory Memorandum, the ECN+ Proposal will complement Regulation (EC) No 1/2003, as empowering the NCAs to be effective enforcers will mean that the full potential of the decentralised system of enforcement put in place by this instrument is realised. In particular, it will give substance to the requirement in Article 35 of Regulation (EC) No 1/2003 that Member States should designate NCAs in such a way that the provisions of the Regulation are effectively complied with. 5 4 COM(2017)142, at COM(2017)142, at Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal...

5 1.1 The decentralisation brought about by Regulation 1/ Regulation 1/2003, 6 which entered into application on 1 May 2004, brought about a radical change in the way in which the EU antitrust prohibitions contained in Articles 101 and 102 TFEU are enforced. The previous enforcement regime, under Regulation 17, 7 which dated from 1962, was characterised by a centralised notification and authorisation system for Article 101(3) TFEU. Regulation 1/2003 abolished this system and replaced it by a system of decentralised ex post enforcement, in which the European Commission and the competition authorities of the EU Member States (national competition authorities or NCAs), forming together the European Competition Network (ECN), pursue infringements of Articles 101 and 102 TFEU The powers granted to the NCAs by Regulation 1/ Article 5 of Regulation 1/2003 reads as follows: Article 5 Powers of the competition authorities of the Member States The competition authorities of the Member States shall have the power to apply [Articles 101 and 102 TFEU] in individual cases. For this purpose, acting on their own initiative or on a complaint, they may take the following decisions: requiring that an infringement be brought to an end, ordering interim measures, accepting commitments, imposing fines, periodic penalty payments or any other penalty provided for in their national law. Where on the basis of the information in their possession the conditions for prohibition are not met they may likewise decide that there are no grounds for action. 11. In the words of the Joint Statement of the Council and the Commission on the functioning of the network of competition authorities, entered in the Council Minutes 6 Council Regulation (EC) No 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. Articles 81 and 82 of the then EC Treaty have since (without any modification) become Articles 101 and 102 TFEU. In this paper I will systematically refer to the current numbers and name. 7 Council Regulation No 17 [1962] OJ 13/204 (Special English Edition , p. 87). 8 For a detailed analysis of Regulation 1/2003, in comparison with the regime preceding it, see my Community Report in D. Cahill and J. D. Cooke (eds.), The Modernisation of EU Competition Law Enforcement in the EU FIDE 2004 National Reports (Cambridge 2004), , also accessible at and my book Principles of European Antitrust Enforcement (Hart 2005). For a reminder of the genesis of Regulation 1/2003 and an overview of its main results, see my paper Ten Years of Regulation 1/2003 A Retrospective (2013) 4 Journal of European Competition Law & Practice 293, also accessible at at the time of the adoption of Regulation 1/2003, 9 the decentralisation of the enforcement of Articles 101 and 102 TFEU brought about by Regulation 1/2003 has strengthen[ed] the position of the NCAs. These [have been made] fully competent to apply [Articles 101 and 102 TFEU], actively contributing to the development of competition policy, law and practice The powers which Regulation 1/2003 has granted to the NCAs are, however, not identical to the European Commission s powers. In particular, Article 5 of Regulation 1/2003 precludes the NCAs from adopting non-infringement decisions similar to the decisions which the Commission may adopt under Article 10 of Regulation 1/ The power of the Commission to adopt non-infringement decisions under Article 10 of Regulation 1/2003, the rule laid down in Article 11(6) of Regulation 1/2003, according to which the initiation of proceedings by the Commission relieves the NCAs of their competence to deal with the same case, and the rule laid down in Article 16(2) of Regulation 1/2003, according to which NCAs cannot take decisions which would run counter to an earlier decision by the Commission concerning the same agreement or practice, differentiate the position of the Commission from that of the NCAs These differences all reflect the fact that, according to the case law of the Court of Justice, Article 105(1) TFEU, which constitutes the specific expression in the area of competition law of the general supervisory role conferred on the Commission (under the control of the Court of Justice) by Article 17(1) TEU, 13 makes the Commission responsible for defining and implementing the orientation of EU competition policy Council Document 15435/02 ADD 1 of 10 December 2002, accessible at consilium.eu.int. According to its paragraphs 3 and 4, this Joint Statement is political in nature and does therefore not create any legal rights or obligations. It is limited to setting out common political understanding shared by all Member States and the Commission on the principles of the functioning of the Network. Details will be set out in a Commission notice which will be drafted and updated as necessary in close cooperation with Member States. The said notice is Commission Notice on cooperation with the Network of Competition Authorities, [2004] OJ C101/43. According to its paragraph 72, the principles set out in that notice have been agreed to by the NCAs. On the Joint Statement, see further judgment in France Télécom v. Commission, T-339/04, EU:T:2007:80, para. 85, and Opinion of Advocate General Mazák in Pfleiderer, C-360/09, EU:C:2010:782, para Idem, para Judgments in Tele2 Polska, C-375/09, EU:C:2011:270, para. 19 to 30, and in Schenker, C-681/11, EU:C:2013:404, para Furthermore, pursuant to Article 105(3) TFEU, only the Commission can adopt block exemption regulations and, under Article 29 of Regulation 1/2003, the Commission has wider powers than the NCAs to withdraw the benefits of such block exemption regulations in individual cases; see further Principles of European Antitrust Enforcement, as note 8 above, section Judgments in Automec v. Commission, T-24/90, EU:T:1992:97, para. 73, and in Limburgse Vinyl Maatschappij and Others v. Commission, T-305/94, EU:T:1999:80, para Judgment in Masterfoods, C-344/98, EU:C:2000:689, para. 46; see also para. 9 of the Joint Statement of the Council and the Commission, as note 9 above: The Commission, as guardian of the Treaty, has the ultimate but not the sole responsibility for developing policy and safeguarding efficiency and consistency. Therefore the instruments of the Commission on the one hand and of the NCAs on the other hand are not identical. The additional powers the Commission has been granted to fulfil its responsibilities will be exercised with the utmost regard for the cooperative nature of the Network. Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal... 63

6 1.3 Why decentralisation? 15. The question could be asked why the enforcement of Articles 101 and 102 TFEU should be decentralised to the NCAs. Why not leave this task exclusively to the European Commission? As I have explained elsewhere, 15 three reasons can be given: The first reason is one of resources. By adding those of the competition authorities of the Member States, substantially more resources can be devoted to the detection and punishment of violations of Articles 101 and 102 TFEU. Given the limited resources of the European Commission, this is certainly to be welcomed. This first reason is, however, not a very profound one, as the same result could be obtained by increasing the resources of the Commission s Directorate General for Competition. The second reason is that for cases where the relevant markets are local, national or regional, the competition authority or authorities concerned are likely to have better access to the relevant information than the Commission. 16 The third reason is that enforcement by multiple authorities is likely to lead to more innovation in the interpretation and application of the law. Enforcement by several authorities is likely to be more creative, innovative and adaptive to change than enforcement by a monopolist authority A great success, with scope for even more 16. As I have argued elsewhere, 18 there can be no doubt that the decentralisation of the enforcement of Articles 101 and 102 TFEU to the NCAs brought about by Regulation 1/2003 has been a major success, beyond expectation. 17. From the start of the application of Regulation 1/2003 on 1 May 2004 until 31 December 2015, the NCAs have informed the Commission and their fellow NCAs of 1,769 investigations under Articles 101 and 102 TFEU, and of envisaged final decisions ordering termination of infringements, imposing fines or accepting commitments in 907 cases See Principles of European Antitrust Enforcement, as note 8 above, section Part of the advantage of national authorities relates to language; see Principles of European Antitrust Enforcement, as note 8 above, section See also E. Fox, Modernization: Efficiency, Dynamic Efficiency, and the Diffusion of Competition Law, in C. D. Ehlermann and I. Atanasiu (eds.), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Hart 2001) 123, and J. S. Venit, Brave New World: The Modernization of Enforcement under Articles 81 and 82 of the EC Treaty (2003) 40 Common Market Law Review 545 at See Ten Years of Regulation 1/2003 A Retrospective, as note 8 above. 19 These and other statistics can be found at ecn/statistics.html. 18. During the same period, the Commission informed the Network of 297 investigations of its own, and adopted 117 final decisions The national competition authorities have thus in quantitative terms become the primary public enforcers of Articles 101 and 102 TFEU, adopting 88% of all decisions. Given that the European Commission s output has not declined, 21 and that under Regulation 17 the number of cases in which the national competition authorities applied Articles 101 and 102 TFEU was negligible, this means that the overall number of decisions ordering termination of infringements of Articles 101 or 102 TFEU, imposing fines or accepting commitments has undergone an eightfold increase The table below shows per Member State, and in descending order, the number of envisaged final decisions submitted by the national competition authorities under Article 11(4) of Regulation 1/2003 in the period from 1 May 2004 to 31 December 2015, as well as the number of final decisions adopted by the European Commission in the same period: France 119 Commission 117 Germany 113 Italy 112 Spain 101 Netherlands 50 Denmark 46 Greece 45 Hungary 39 Romania 34 (since EU accession on 1 January 2007) Slovenia 28 Austria 25 Portugal 23 UK 23 Sweden 22 Lithuania 20 Slovakia 20 Belgium 16 Finland 14 Poland 14 Czech Rep 10 Bulgaria 7 (since EU accession on 1 January 2007) Cyprus 6 Latvia 5 20 The last statistic is based on my own counting on the basis of the list of decisions accessible on the Commission s competition website competition/index_en.html; see also Ten Years of Regulation 1/2003 A Retrospective, as note 8 above, at footnote 21; my paper Ten years of commitment decisions under Article 9 of Regulation 1/2003: Too much of a good thing?, accessible at ssrn.com/author=456087, table 2; and my paper The Use of Leniency in EU Cartel Enforcement: An Assessment After Twenty Years (2016) 39 World Competition 327, also accessible at Annex and footnote See Ten Years of Regulation 1/2003 A Retrospective, as note 8 above. 22 While the number of decisions does, of course, not give a full picture of the performance of a competition authority in the task of enforcing prohibitions like those contained in Articles 101 and 102 TFEU, it nevertheless constitutes, among all available single indicators of performance, the most important one. See also text accompanied by notes 75, 77 and 173 below. 64 Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal...

7 Luxembourg 5 Estonia 4 Malta 3 Ireland 2 Croatia 1 (since EU accession on 1 July 2013) 21. This list table makes visible that the NCAs with the largest output each adopt as many or even more decisions than the European Commission. However, the substantial differences between Member States, which cannot be fully explained by the differences in size between Member States, 23 also show the potential for further increase Article 35 of Regulation 1/2003 and the case law of the Court of Justice 22. Article 35(1) of Regulation 1/2003 stipulates that the Member States are to designate the competition authority or authorities responsible for the application of [Articles 101 and 102 TFEU] in such a way that the provisions of this regulation are effectively complied with. 23. In VEBIC, the Court of Justice has clarified that [t] he authorities so designated must, in accordance with the regulation, ensure that those Treaty Articles are applied effectively in the general interest. 25 Whereas Article 35(1) of Regulation 1/2003 has left it to the Member States to make detailed provisions concerning the powers and functioning of their national competition authorities, such national provisions must not jeopardise the attainment of the objective of the regulation, which is to ensure that Articles 101 and 102 TFEU are applied effectively by those authorities In Schenker, the Court of Justice has, in addition to the requirements of effective enforcement in the general interest already set out in VEBIC, also subjected the enforcement of Articles 101 and 102 TFEU by the NCAs to a requirement of uniform application of those Treaty Articles As already mentioned above, 28 according to its Explanatory Memorandum, the ECN+ Proposal will give substance to the requirement in Article 35 of Regulation (EC) No 1/2003 that Member States should designate NCAs in such a way that the provisions of the Regulation are effectively complied with See for instance the differences between Hungary and Poland, between Denmark and Ireland, or between the Netherlands and Belgium. 24 Indeed, the European Competition Network, with its statistics, creates a basis of comparison which may lead Member States and national competition authorities that perform relatively less well to take measures so as to increase their output; see, for instance, UK Department for Business Innovation & Skills, A Competition Regime for Growth: A Consultation on Options for Reform (March 2011), para Judgment in VEBIC, C-439/08, EU:C:2010:739, para Idem, para Judgment in Schenker, C-681/11, EU:C:2013:404, para. 36, 46 and Text accompanying note 5 above. 29 COM(2017)142, at At least for some of the provisions of the proposed Directive, it could be argued that they do not create any new obligations for the Member States, as the same obligation already flows from Article 35 of Regulation 1/2003, and could thus already today be enforced by the European Commission through infringement proceedings pursuant to Article 258 TFEU. 27. This appears in particular the case for the requirement under Article 5 of the proposed Directive for Member States to provide NCAs with the human, financial and technical resources necessary for their exercise of their powers when applying Articles 101 and 102 TFEU Provisions on independence applicable to the European Commission 28. The Treaties and the EU Staff Regulations contain provisions on independence applicable to the European Commission similar to those proposed for NCAs in Article 4(1) and (2)(a) to (c) of the proposed Directive Article 17(3) EU provides that [i]n carrying out its responsibilities, the Commission shall be completely independent. ( ) the members of the Commission shall neither seek nor take instructions from any Government or other institution, body, office or entity. They shall refrain from any action incompatible with their duties or the performance of their tasks Within the college of commissioners, the Working Methods of the European Commission, laid down by the president of the Commission, provide that the Commissioner for Competition will liaise closely with the Vice-President for Jobs, Growth, Investment and Competitiveness only in defining the general lines of the Commission competition and state aid policies and the instruments of general scope related to them. She will act independently in all competition cases As to the Commission s staff, Articles 11 and 12 of the EU Staff Regulations provide that an official shall carry out his duties and conduct himself solely with the interests of the Union in mind. He shall neither seek nor take instructions from any government, authority, 30 See section of Principles of European Antitrust Enforcement, as note 8 above, referring also to the fact that the adoption and entry into application of Regulation 1/2003 already led at that time a number of Member States to increase the resources available to their NCAs. Compare with the Impact Assessment, as note 72 below, at To be precise, the provision on independence in Article 4 of the proposed Directive apply only to national administrative competition authorities, not to national judicial competition authorities; see text accompanied by note 2 above. For ease of reading, I will ignore this nuance in the remainder of this paper, except where this nuance matters; see text accompanied by note 156 below. 32 Article 245 TFEU adds that Member States shall respect their independence and shall not seek to influence them in the performance of their tasks. 33 Communication from the President to the Commission, The Working Methods of the European Commission , C(2014)9004 of 11 November 2014, accessible at at 15, footnote 6. Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal... 65

8 organisation or person outside his institution. He shall carry out the duties assigned to him objectively, impartially and in keeping with his duty of loyalty to the Union and shall refrain from any action or behaviour which might reflect adversely upon his position EU law requirements applicable to other national authorities 32. EU directives in the areas of electricity, natural gas, electronic communications and railways contain provisions concerning independence and resources of national regulatory authorities comparable to those proposed for national administrative competition authorities in Article 4(1) and (2)(a) to (d) and Article 5 of the proposed Directive. 35 Different provisions on independence exist in various other areas of EU law, for instance for data protection supervisory authorities, 36 and for airport coordinators In a number of Member States the same authority that is the NCA is also the regulator for electricity, natural gas, electronic communications and/or railways. That authority is thus already today, as far as its regulatory tasks are concerned, subject to the requirements on independence and resources contained in the corresponding EU directives In responses to the public consultation preceding the adoption of the proposed Directive, 39 the situation whereby EU secondary law explicitly safeguards the 34 Regulation No 31 (EEC), 11 (EAEC), laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community, [1962] OJ 45/1385, last amended by Regulation (EU) No 423/2014 of the European Parliament and the Council of 16 April 2014, [2014] OJ L 129/ See Article 35 of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity, [2009] OJ L 211/55; Article 39 of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas, [2009] OJ L 211/94 and Commission Staff Working Paper, Interpretative Note on Directive 2009/72/EC and Directive 2009/73/EC The Regulatory Authorities (22 January 2010), accessible at files/documents/2010_01_21_the_regulatory_authorities.pdf; Article 3 of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive), [2002] OJ L 108/33; and Article 55 of Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area, [2012] OJ L 343/ See Article 8(3) of the Charter of Fundamental Rights of the European Union, Article 16(2) TFEU, and Articles 52 and 53 of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation), [2016] OJ L119/1, and judgments in Commission v. Germany, C-518/07, EU:C:2010:125, in Commission v. Austria, C-614/10, EU:C:2012:631, and in Commission v. Hungary, C-288/12, EU:C:2014: See Article 4 of Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at Community airports, [1993] OJ L 14/1, and judgment of the EFTA Court of 10 December 2014 in Case E-18/14 Wow air v. Icelandic Competition Authority and Others. 38 See, in the context of the merger of the electronic communications regulator with the NCA (and other regulators) in Spain, judgment in Ormaetxea Garai and Lorenzo Almendros, C-424/15, EU:C:2016: See (text accompanying) note 56 below. independence of national sectoral regulators but not of NCAs was described as an anomaly that should disappear The Commission s five-year report on Regulation 1/ Article 44 of Regulation 1/2003 required the Commission to report to the European Parliament and the Council on the functioning of Regulation 1/2003 five years after its entry into application. In its 2009 report, the Commission did not mention the issues of independence and resources of NCAs, but it did mention the ability of Member States competition authorities to formally set enforcement priorities as one of the aspects on which divergences of Member States enforcement systems remain, adding that this aspect may merit further examination and reflection The 2010 ECN Resolution on resources 36. In 2010 a Resolution of the Meeting of Heads of the European competition authorities, entitled Competition authorities in the European Union the continued need for effective institutions, was published, affirming that competition authorities need to be adequately equipped for their tasks and be able to act under suitable conditions for the execution of their tasks, in an impartial and independent manner. Such means for effective and sustained operation must be guaranteed, including in times of budgetary constraints The 2013 ECN Recommendation on the power to set priorities 37. In 2013 seven Recommendations of the ECN Competition Authorities were published, concerning key investigative and decision-making powers, including an ECN Recommendation on the power to set priorities. 43 It recommended that: 40 Consultation response by the American Chamber of Commerce to the European Union (AmCham EU), at 3; see also consultation response by the French Competition Authority, at 15 and 20, and consultation response by the Lithuanian Competition Authority, at 13, 15 and 16, all accessible at competition/consultations/2015_effective_enforcers/index_en.html. 41 Communication from the Commission to the European Parliament and the Council Report on the functioning of Regulation 1/2003, COM(2009)206 of 29 April 2009, para Resolution of the Meeting of Heads of the European competition authorities of 16 November 2010, Competition authorities in the European Union the continued need for effective institutions, accessible at index_en.html. 43 ECN Recommendation on the power to set priorities (December 2013), accessible at 66 Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal...

9 1. The Authorities should have the ability to set priorities in the exercise of their tasks. To this end, the Authorities should be able to determine prioritisation criteria which support the definition of their priorities. 2. The Authorities should have the ability to open and close ex officio cases insofar as cases are deemed to be a priority by the Authority concerned. The Authorities should also, to the greatest extent possible, have the ability to decide not to initiate cases and reject complaints if they do not consider them to be a priority. 3. The ability to close or reject non-priority cases and complaints by the Authorities should be exercised in a way that maximises administrative efficiency, primarily by simple closure or informal means. This possibility should not limit or prejudge the ability of the Authorities to adopt formal decisions to close a case where considered necessary and/or appropriate by the Authority concerned. 4. Where applicable, the framework of judicial review of decisions by the Authorities to reject non-priority complaints should, to the greatest extent possible, be designed in a way that preserves the prerogative of the Authorities to set and pursue enforcement priorities. 5. The Authorities should have discretion as to whether or not they publish the priorities they have set, their prioritisation principles, as well as their decisions based on priority grounds, with a view to maximise the efficiency of their action The introductory part of the Recommendation explained inter alia: ( ) Although in different degrees, most Authorities already have the ability to set priorities in their enforcement activities, including the power to initiate new individual cases ex officio. Nevertheless, some Authorities are bound by the legality principle which entails a legal duty to consider all complaints formally filed. Further convergence on the ability of the Authorities to set priorities would help enhance effectiveness and efficiency in the enforcement of competition rules by ECN members by allowing them to focus their action on the most serious infringements/sectors and areas most in need of their action, thereby increasing the impact of their action for the benefit of consumers. At the level of the ECN as a whole, it can contribute to the consistent application of these rules by enhancing the ability of the Authorities to pursue cases which are relevant at ECN level in a more coordinated 44 Idem, at 5 6. The third of these points could be read as an implicit criticism of Article 7 of Regulation 773/2004 (Commission Regulation (EC) No 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 L 123/18) and of the case law of the EU courts according to which complainants whose complaint is rejected on priority grounds by the European Commission are entitled to a formal rejection decision that is subject to judicial review by the EU courts; see text accompanied by note 149 below. It could alternatively be interpreted as merely encouraging the practice of, before starting the formal rejection procedure, informally contacting the complainant in the hope that the complainant will withdraw its complaint; see para. 139, first and second sentence, of the Commission Notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU, [2011] OJ C308/6. way, for instance, further convergence may encourage the launching of joint enforcement initiatives on a multi-jurisdictional level The Commission s ten-year report on Regulation 1/ In 2014 the Commission adopted a report on ten years of Regulation 1/ In this report, the Commission stated that, to enhance EU competition enforcement for the future, the institutional position of NCAs needs to be reinforced while at the same time ensuring further convergence of national procedures and sanctions applying to infringements of EU antitrust rules As to the institutional position of the NCAs, the report stated as follows: EU law leaves Member States a large degree of flexibility for the design of their competition regimes. Despite the lack of specific EU law requirements, the position of the NCAs had evolved in the direction of more autonomy and effectiveness. Many national laws contain specific safeguards to ensure the independence and impartiality of NCAs. For instance, recent reforms in Cyprus, Ireland, Greece and Portugal have strengthened the position of the NCAs. [Footnote: Such changes were underpinned by the Economic Adjustment Programmes.] Reforms have been recommended in other Member States to strengthen the institutional position and resources of NCAs in the framework of the European Semester. [Footnote: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 2014 European Semester: Country-specific recommendations, COM(2014) 400 final.] ( ) To ensure the effective enforcement of the EU competition rules, NCAs should be independent when exercising their functions and should have adequate resources. Challenges in this regard still persist, in particular concerning the autonomy of NCAs vis-à-vis their respective governments, and appointments and dismissals of NCA management or decision-makers. Issues have also arisen with regard to ensuring sufficient human and financial resources. ( ) Furthermore, the achievements made to date remain fragile and can be rolled back at any time. ( ) It is necessary to ensure that NCAs can execute their tasks in an impartial and independent manner. For this purpose, minimum guarantees are needed to ensure the 45 As note 43 above, at Communication from the Commission to the European Parliament and the Council Ten Years of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives, COM(2014)453 of 9 July Idem, para. 25. Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal... 67

10 independence of NCAs and their management or board members and to have NCAs endowed with sufficient human and financial resources. Important aspects in this regard are the grant of a separate budget with budgetary autonomy for NCAs, clear and transparent appointment procedures for the NCAs management or board members on the basis of merit, guarantees ensuring that dismissals can only take place on objective grounds unrelated to the decisionmaking of the NCA and rules on conflicts of interest and incompatibilities for the NCAs management or board As to convergence of procedures, the report stated that it is necessary to ensure that all NCAs have a complete set of powers at their disposal, which are comprehensive in scope and are effective, and mentioned as one of the important elements the right of NCAs to set enforcement priorities The Commission s report was accompanied by a Commission Staff Working Document, which lists priority setting as a key component of the toolbox that authorities should have at their disposal, 50 and which mentions the following: Procedural convergence has been achieved in the context of agreements on financial support from the EU with the Programme Countries. In Greece, a new comprehensive competition law was adopted, which, inter alia, empowered the Greek NCA to reject complaints and set priorities and thereby address its backlog of cases. In Portugal, a new competition law was adopted which provides for major improvements, including the introduction of priority setting Resolutions of the European Parliament 44. In its resolution on the European Commission s 2012 Annual Report on EU Competition Policy, the European Parliament called on the Member States to ensure the independence of all national competition authorities (NCAs) ( ) from national governments, making the nomination of non-political chairpersons and board members with no conflicts of interest essential and to ensure that staff and resources of NCAs ( ) are sufficient and vary according to market-derived needs and those of the effective performance of their duties Idem, para See also Speech by Commission Vice-President Almunia, Weaving Europe s single competition area, European Competition Day, Rome, 10 October 2014, SPEECH/14/678, at 4: Thanks to [Memorandums of Understanding] concluded in the context of [EU financial assistance] programmes, the Irish NCA now has adequate staff and the Cypriot and Portuguese authorities were given more effective investigative powers. 49 Idem, para Commission Staff Working Document Enhancing competition enforcement by the Member States competition authorities: institutional and procedural issues, SWD(2014)231 of 9 July 2014, para Idem, para European Parliament resolution of 11 December 2013 on the Annual Report on EU Competition Policy (2013/2075(INI)), para In its resolution on the 2013 Annual Report, the European Parliament reminded the Commission that the independence of national competition authority should be monitored closely In its resolution on the 2014 Annual Report, the European Parliament mentioned that the independence of national competition authorities is of paramount importance Most recently, in its resolution on the 2015 Annual Report, the European Parliament reiterated that the independence of national competition authorities is of paramount importance, and that this includes ensuring that they have the resources they need to perform their tasks Public consultation 48. From November 2015 to February 2016 the Commission held a public consultation on empowering the NCAs to be more effective enforcers. The consultation questionnaire contained a set of more general questions and a set of more detailed questions. There were 181 replies from a variety of stakeholders As to the more general questions, according to the Commission s summary report of the replies, 85% of respondents agreed that ensuring that NCAs have sufficient resources to perform their tasks would help NCAs to be more effective, and 76% of respondents agreed that having guarantees that NCAs enforce the EU antitrust rules in the general interest of the EU and do not take instructions when doing so would help NCAs to be more effective As to the more specific questions, when asked to identify the three measures they considered to be of most importance to ensure the independence of NCAs, 97% of respondents mentioned guarantees that the top management or decision-making body of the NCA are not subject to instructions from any government or other public or private body; 96% mentioned guarantees ensuring that NCAs are endowed with adequate and 53 European Parliament resolution of 10 March 2015 on the Annual Report on EU Competition Policy (2014/2158(INI)), para European Parliament resolution of 19 January 2016 on the Annual Report on EU Competition Policy (2015/2140(INI)), recital F. 55 European Parliament resolution of 14 February 2017 on the Annual Report on EU Competition Policy (2016/2100(INI)), para. 150; see also para. 155, in which the European Parliament underlined that the independence of DG Competition is of the utmost importance for it to achieve its goals in a successful manner, called on the Commission to reallocate sufficient financial and human resources to DG Competition, requested that the Commission have sufficient technically skilled engineers available when investigating high-tech companies, and urged the Commission to bring in line with practices for other Commission officials the ethical rules for DG Competition s Chief Economist s Team. On the last point, see also my paper The Judgment of the EU General Court in Intel and the So-Called More Economic Approach to Abuse of Dominance (2014) 37 World Competition 405, also accessible at footnote The consultation questionnaire, all the replies to the consultation (some in redacted, anonymised form) and a summary report of the replies are accessible at eu/competition/consultations/2015_effective_enforcers/index_en.html. 57 Summary report of the replies, as note 56 above, at Concurrences N I Article I Wouter P. J. Wils I The European Commission s ECN+ : Proposal...