The Regulation of EU competition Law: Modernisation and decentralisation through the amendments to regulation No. 17/62

Abstract

VIII ABSTRACT In 1999 the Commission of the European Communities issued its White Paper on Modernization of the Rules Implementing Articles 85 and 86 (new Articles 81 and 82) of the EC Treaty. On the basis of the White Paper the Commission intended to confront the all- embracing critique of the EC competition law regime. By the end of the 1990s the system was generally considered to be unworkable. In its White Paper the Commission acknowledged that Community competition policy is now applied in a world which is very different from that known by the framers of the original system. On the basis of the reforms proposed in the White Paper the Commission therefore aimed to modernise the system which was developed in the early 1960s and to bring Community competition policy up to date with the Community realities in the late 1990s. On 27 September 2000 the Commission adopted Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty which, would replace Council Regulation No. 17/62. This proposed regulation is scheduled to be adopted by the end of this year. It is wide ranging and would introduce a novel, and arguably complex regime. The Commission appears to have consulted widely with many people and taken account of their comments on the White Paper. In this thesis, I examine the proposals contained in the Commission's White Paper on the Modernization of competition law and in the Proposed Council Regulation. The proposals in the White Paper and in the Proposed Council Regulation have two key features:IX First, the current authorisation regime for applying Article 81(3) (ex Article 85/3) of the EC Treaty would be replaced by a directly applicable system. In the future, Article 81, as a whole would be applied not only by the Commission as it was before, but also by national competition authorities and national courts. Second, the day to day enforcement of the Competition Rules would be decentralised. Thus, Member States, through their national competition authorities and courts, would take on a greater share in the enforcement of Community competition law. This is to allow the Commission to focus its resources, which are at breaking point, on the most serious infringements of Community law. However, the Commission would still have the power to make block exemption regulations, issue notices, take over cases from national authorities and appear as `friend of court` in proceedings before national courts. It would also play a key role in ensuring a consistent and coherent application of the Competition Rules throughout the European Union. There are many concerns arising from the Commission's proposals, which I examine with all the specifics in my thesis. These include for example the problem of uniformity. When there will be so many national competition authorities applying Community competition rules, it is inevitable that there will be some inconsistency in the results achieved by these authorities. There is also the problem of forum shopping, which arises when complainants choose the most active or passive authority in the Community depending on their needs. Decentralisation is in fitting with the Community's commitment to subsidiarity on Article 5 of the EC Treaty, which puts limits on the Community's powers and increases, the role of the Member States. The Commission believes that decentralisation is attractive, as national authorities are better suited to judging competition in their own markets, and they know their national markets better than the Commission does.However, the Commission has been applying Competition law since 1962, and has built up considerable expertise since then, the national authorities are not used to applying Community competition law and problems could arise. This area is something I examine in more detail in my thesis. Above all, it seems that the White Paper and the Proposed Council Regulation on the whole is a good thing. There is no doubt that a change is necessary to allow the Commission to focus on cartels; which are at the moment going largely undetected. Whether the proposals contained are the right ones, is something I examine in my thesis.