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15.2.  Foundations of the European competition policy

  1. European competition network
  2. European and national competition law

Protectionist agreements, concentrations, national aids and discrimination in favour of public undertakings are incompatible with the common market. They must be controlled by the European institutions on the basis of European criteria, because the Member States' competition policies, even when they are stringent, are not efficacious at European level. Article 32 of the Treaty on the functioning of the EU affirms that in carrying out the tasks entrusted to it under the Chapter on the customs union the Commission shall be guided, inter alia, by developments in conditions of competition within the Union in so far as they lead to an improvement in the competitive capacity of undertakings. The most important common rules on competition applying to undertakings are: those prohibiting all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States (Article 101 TFEU, ex Article 81 TEC) [see section 15.3]; and those prohibiting any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it (Article 102 TFEU, ex Article 82 TEC) [see section 15.4].

The competition rules of the Treaty are interpreted and applied through  Council regulations or directives (Article 103 TFEU) and Commission regulations (Article 105 TFEU) as well as through general communications and individual decisions of the Commission. Regulation N° 17 of 1972, first Regulation implementing Articles 85 and 86 of the EEC Treaty [Regulation 17/1962], was replaced by Regulation 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the EC Treaty (which have the same content as Articles 85 and 86 EEC and Articles 101 and 102 of the TFEU). Whereas Regulation 17/62 was based on prior notification and centralised Commission authorisation of agreements, Regulation 1/2003 is based on ex post control and on a decentralised application of the competition rules of Articles 81 §§ 1 and 3 and 82 TEC (Articles 101 and 102 TFEU) by the national authorities and courts, thus relieving the Commission of the examination of trivial cases and the industry of the costs connected with notification. On the basis of this regulation, agreements, decisions and concerted practices caught by Article 81 § 1 of the EC Treaty, which do not satisfy the conditions of Article 81 § 3, are prohibited, no prior decision to that effect being required. This is also the case concerning an abuse of a dominant position referred to in Article 82 of the Treaty. On the contrary, agreements, decisions and concerted practices, which satisfy the conditions of Article 81 § 3 of the EC Treaty [see section 15.3.2], are not prohibited, no prior decision to that effect being required.

The basic principle of Regulation 1/2003 is the application by all decision-making bodies of a single set of rules whenever there is an effect on trade between Member States. The administrative constraints on cooperating companies are reduced thanks to the removal of the prior notification requirement. Where their transactions affect trade between Member States, they have to deal only with European law instead of 28 legislative systems, which helps ensure homogeneous conditions of competition. Eliminating the notification requirement also helps the Commission to focus on combating the most serious restrictions and abuses, all the more so since the regulation increases the means at its disposal for detecting and punishing cartels and other infringements. The national competition authorities and the Commission cooperate within a network in order to monitor business agreements and punish infringements of the European competition rules. National courts are enabled to protect the individual rights of citizens under Community law by granting damages and interest or by ruling on the performance of contracts. The decentralisation ensures, by way of information-exchange and cooperation mechanisms, equal treatment for economic players throughout the EU and consistent application of the rules. A Directive sets out rules coordinating the enforcement of the competition rules by competition authorities and the enforcement of those rules in damages actions before national courts [Directive 2014/104].

A series of documents, known as the "modernisation package" and designed to modernise antitrust procedures, supplements Regulation 1/2003. The package comprises a regulation relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the TEC (Articles 101 and 102 of the TFEU) [Regulation 773/2004 last amended by Regulation 2015/1348] and six Commission notices outlining key aspects of the new system for implementing Articles 81 and 82, including the functioning of the network of competition authorities, the new platform for cooperation between the Commission and the national competition authorities. The other documents cover the application of Article 81(3) under the new system, the concept of the effect on trade between Member States, cooperation between the Commission and the courts of the Member States, informal guidance given by the Commission to companies and the handling of complaints by the Commission.

Since 1 January 1994, the competition rules of the European Union have been extended to the whole European Economic Area (EEA). Articles 81 and 82 (TEC), which ban agreements and abuse of dominant position respectively, are therefore now applicable in Norway, Iceland and Liechtenstein in accordance with Articles 53 and 54 of the EEA Agreement [see section 25.1]. Less strict rules of competition are contained in the association and cooperation agreements concluded with the independent States of the former Soviet Union.

An Agreement between the European Commission and the Government of the United States of America is intended to promote cooperation and coordination between the competition authorities of the two parties aimed at combating anticompetitive practices with a global dimension [Decision 95/145]. Cases of common interest are notified between the parties and may give rise to detailed exchanges of information with a view to ensuring consistency between the procedures followed and the remedies applied within the two judicial systems. A supplementary Agreement between the EC and the US aims at the application of positive comity principles in the enforcement of their competition laws [Decision 98/386]. It allows either party to request the other to investigate and take action on anti-competitive behaviour occurring in the territory of the latter. Mergers are not covered by this agreement. Similar agreements on cooperation on anti-competitive activities exist also between the European Community/Union and the Governments of Canada [Decision 1999/445 and Agreement], Japan [Decision 2003/520 and Agreement] and Switzerland [Decision 2014/866 and Agreement]. Such cooperation benefits competition authorities and companies alike, by finding solutions that are compatible with each party's rules.

Following the expiry on 23 July 2002 of the Treaty establishing the European Coal and Steel Community, the sectors previously covered by that Treaty and the procedural rules and secondary legislation derived from it are subject to the rules of the EC Treaty. According to the Commission, the transition and the accompanying modifications and the substantive and procedural differences between the two regimes (ECSC and EC) do not pose any major problems [Commission communication].

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