General aspects in the field of competition procedure
| Author | Ovidiu-Horia Maican |
| Position | University Lecturer, Ph. D, |
| Pages | 5-15 |
General aspects in the field of competition procedure 5
ARTICLES (STUDIES, DISCUSSIONS, COMMENTS)
GENERAL ASPECTS IN THE FIELD OF COMPETITION
PROCEDURE
Ovidiu – Horia MAICAN,
University Lecturer, Ph. D,
Academy of Economic Studies, Law Department, Bucharest, Romania,
Abstract:
Competition rules applicable to undertakings are the most important rules of the Community
competition law.
They present a direct effect and apply primarily to enterprises.
But even the Member States must take into account these rules and should not favor prohibited
behaviors.
Prohibition of agreements restricting competition, abuse of dominant position, merger control
and state aid are the pillars of European law (EU) competition.
Keywords: European Union Law, competition, competitive practices, businesses.
1. General aspects
Article 101 TFEU considers incompatible with the single market all agreements
between undertakings, decisions by associations of undertakings and concerted
practices which may affect trade between Member, having as their object or effect
the prevention, restriction or distortion of competition within the single market. 1
European competition law seeks to ensure as a priority the horizontal
restraints of trade inside the European Union, which means the prohibition of
agreements of cartelization (implicit or explicit) between existing businesses or
likely to be present in a market, agreements aimed at satisfying the interests of
those undertakings, to the detriment of communitary general interest.
In case of an agreement, decision or concerted practice (which means
coordination of activities between undertakings which have the result that it affects
trade between Member States) whose object or effect is the prevention, restriction
E-mail: ovidiuszm@yahoo.com.
1 See O. Manolache - Regimul juridic al concurenei în dreptul comunitar, Ed. All, Bucureşti, 1997, p. 28.
Law Review vol. II, issue 2, Jul
y
-December 2015, p. 5-15
6 OVIDIU-HORIA MAICAN
or distortion of competition means that we are dealing with a violation (failure)
101, par 1, TFEU, declaring them incompatible with the common market and
prohibited. 2
It is established the principle of immediate applicability of Articles 101 and 102
TFEU, provided that imposed bans take effect without the existence of
subordination to the decision of the communitary institutions, national courts
being thus competent to apply those prohibitions.
The Court of First Instance held that art. 101, par 1, TFEU provides for a
fundamental prohibition of anticompetitive agreements by their nature.
This legal provision (considered a matter of public policy) is mandatory for the
undertakings concerned, irrespective of any decision addressed by the
Commission with the same character.
This principle does not apply when the Commission adopts a decision.
The agreements and decisions contrary to Article 101, par 1 TFEU, are
automatically considered void, according to article 101, par 2 TFEU, as long as they
were not exempt under Article 101 par 3 TFEU.3
In this regard, the Court stated that where an agreement prior to the
implementation of Article 101 TFEU, was notified, the general principle of
contractual certainty determines that a court may declare the agreement null only
after Commission made the decision.
Using a per a contrario argument, we conclude that despite its provisional
validity of an agreement for the term of its present full effectiveness, both between
parties and against third parties.
2. Commission referral
Till now, the Commission is the main institution enforcing the competition
legislation.4
Commission must act in case of violations of Articles 101 and 102 TFEU.
There are entitled to submit a complaint in this regard the member states, and
natural or legal persons who claim a legitimate interest.
This provided the opportunity for the Commission to sense the default, which
is a very common situation. Self-appraisals are based on information from the
natural or legal person does not necessarily, not implying any time the existence of
a legitimate interest, often the identity being unacknowledged to the public. The
legitimate interest is excluded, the applicant is more profitable considering that the
information is carried out by the Commission, which will act ex officio. 5
2 See O. Manolache – Op. cit, p. 29.
3 See A. Fuerea - Drept comunitar al afacerilor, Ed. Universul Juridic, Bucureşti, 2003, p. 276.
4 See D. Chalmers, C. Hadjiemmanuil, G. Monti, A. Tomkins – European Union Law. Text and
materials, Ed. Cambridge University Press, Cambridge, 2007, p. 940.
5 See D. Chalmers, C. Hadjiemmanuil, G. Monti, A. Tomkins - Op. cit, p. 941.
General aspects in the field of competition procedure 7
Considering the emergence of a complaint, regardless of the existence of a
legitimate interest the Commission may intervene in a discretionary manner, if it
finds an infringement. Since the legal provision makes no distinction regarding
the legal status of the applicant, nor contains any prohibition, there is still the
possibility that a party to the agreement, decision or practice to file a complaint.
This time, the question has a legitimate interest certain and decisive, leading the
Commission to continue the proceedings, taking into account that the complainant
himself wants termination of participation in them, to remove the violation for
which there is no option to remove them.
The scope of the term "legitimate interest" is considered to be unclear. It was
considered that a union concerned about the impact of anticompetitive practices on
jobs has a legitimate interest.
The applicant wishes to not persist in violation of the right, which could
attract even financially unpredictable consequences, such as are found in a state of
legal certainty in the legal relations to be clearly defined and legally. 3
A company entering into an agreement, decision or concerted practice can not
claim that it was pressured by the other participants. The company in question
could advertise the competent authority about pressure and could have brought a
complaint before the Commission.
In this regard, the Court noted that an association of undertakings has a
legitimate interest in the introduction of a complaint even if it is not directly
concerned (such as a company operating in a relevant market versus a commercial
behavior), provided that, in the main, be entitled to represent the interests of its
members and, secondly, the conduct complained to represent spring (source)
negative influence of those interests.
The procedure employed by the Commission is not likely to oppose each
other is the applicant and considered culpable person that infringed Community
law. The procedure is initiated and led by the Commission. The Commission will
represent EU interests, even of particular interests, legitimate the applicant.
In relation to Member States, it is imperative that they demonstrate a
legitimate interest, because the legal text does not impose such a condition that the
natural persons or legal entities.
The complaint may be withdrawn by the applicant if it is redundant or when
the applicant did not make any comments within the time limit, but these obstacles
are not obstacles for the Commission to conduct further proceedings.
3. The phases of the procedure
This procedure has two stages, the preliminary stage and the administrative
stage.
During the first phase, preliminary investigation procedure recognizes certain
individual rights of enterprises, excluding therefore any adversarial procedures.
8 OVIDIU-HORIA MAICAN
Some rights have to be respected, such as those relating to legal representation
and the privileged nature of correspondence between the defender (lawyer) and
client, in order to not reach irreparable damage to the rights of the defense at this
stage. This phase also involves investigations which may be decisive for proving
the illegal nature of the conduct in which the company was involved. 6
During the second phase, the right to defense is totally sure of when
communicate the reasons, which means engaging (starting) procedure.
3.1. Preliminary proceedings
In this phase will take place activities involving request for providing
information, inquiries of economic sectors, investigations (checks) undertaken by
Member States and the Commission.
The Commission has the power to receive information from the governments
and competent authorities of the Member States and from undertakings and
associations of undertakings.
If the Commission makes a request for information to an undertaking or
association of undertakings, it will send a copy to the competent authority of the
Member State in whose territory the undertaking or association. The Commission
may require in a request for information to be communicated documents whose
copies she could not take in a previous investigation. Thus, it may ask at any time
request additional information. 7
The Commission will mention in its demand application purpose, the legal
grounds (rationale) and the penalties specified where information was inaccurate.
The Commission's duty to indicate the object and purpose of a decision to obtain
information is a basic requirement, both for purposes of proof that the information
required by the undertaking in question are motivated, and to enable undertakings
to assess the magnitude of their duty of cooperation. In this way, enterprises
safeguard their rights of defense, hence the justification for the Commission to
require only the disclosure of information that would allow alleged violations
research, which justify the investigation and which are set out in the request for
information.
Commission can not be required to communicate to the addressee of the
decision all available information on alleged violations or to make a precise legal
analysis, although the Commission must clearly indicate the presumed facts which
it intends to investigate (investigate).
The obligation to provide information requested is incumbent to the owners of
the undertakings or their representatives and, in the case of legal persons,
companies or associations having no legal personality, to the persons entrusted to
represent them according to the laws or statutes.
6 See O. Manolache – Op. cit, p. 31.
7 See O. Manolache – Op. cit, p. 31.
General aspects in the field of competition procedure 9
Where an undertaking or association of undertakings does not provide the
information requested within the period prescribed by the Commission or
provides incomplete, the Commission will ask the decision. The decision shall
specify the information required, will set an appropriate time limit within which
the information is provided and indicate the penalties provided and the actions
that can be submitted to the Court of Justice against the decision (currently, the
power belongs Court of First Instance).
The Commission has a number of responsibilities in matters of investigation,
being able to use any necessary investigations into undertakings or associations of
undertakings. The agents, authorized by the Commission have the following
powers: 8
- To examine the books and other business records;
- To make copies or extracts from those documents and records;
- To request oral explanations on the spot;
– To enter in the buildings, land and means of transport of undertakings.
The agents authorized by the Commission to rely on investigations shall
exercise the powers conferred on the basis of a written authority showing the
subject matter and purpose of the investigation, as well as sanction, if the registers
and other commercial documents required to be submitted are incomplete.
In a useful period of time, the Commission will inform the competent
authority of the Member State in which the investigation will be made about the
identity of investigative and authorized agents.
Decisions taken by the Commission in investigations may be attacked by an
action for annulment before the Court of First Instance (art. 263 TFEU). 9
Enforcement of decisions may be suspended by order of the latter instances
(such. 265 TFEU), in the situation of emergency and threat of irreparable damage.
The latter condition is unlikely to be achieved in practice because, where an
investigation was made in violation of the relevant laws, this would lead to the
annulment of the infringement, based on evidence unknown to the Commission,
respecting procedural provisions.
3.2. Administrative phase of the procedure
The Commission must emit a formal communication to the undertakings
concerned in a Statement of Objections. 10
It may call on communication through publication in the Official Journal,
where the facts justify it, especially the absence of common representative, if there
are many enterprises involved. Publication shall take into account the legitimate
interests of enterprises involved, linked to protection of their business. If an
8 See O. Manolache – Op. cit, p. 34.
9 See O. Manolache – Op. cit, p. 40.
10 See D. Chalmers, C. Hadjiemmanuil, G. Monti, A. Tomkins - Op. cit, p. 947.
10 OVIDIU-HORIA MAICAN
association of undertakings, it was decided that it can claim to have been informed
by its members when the complaints refer to the actions of this association.
The content of the communication is made by the Commissioner responsible
for competition, but may be signed by the Director General for competition, as
approved by the Commissioner that the exercise on which the Commission has
delegated.
The Statement of Objections is a measure establishing the final attitude of the
Commission concerning undertakings against which proceedings have been
initiated for breach of competition rules.
The Statement of Objections must show the essential facts on which the
Commission relies, in a concise, clear and acceptable form. In a specific case it has
been shown to be reported as facts, those facts contained in a decision of national
authorities.
At the same time, the Commission will submit undertakings documents and
elements taken into consideration, but if enterprises possess sufficient information
necessary for their defense, the Commission is not obliged to communicate all the
elements and documents. Annexes to the statement of objections that the
Commission did not come to be regarded as supporting documentation on which
the Commission relies. Consequently, these annexes must be brought to the
attention of the addressee in the language of the case, so that it can assess him
alone their interpretation by the Commission, the interpretation which the
Commission has adopted and on which it based its statement of objections (and
after that, the final decision).
The Statement of Objections, documents and elements to support it are
creating opportunities for access to the case file.
Also present were deemed confidential and the following documents: 11
- Purely internal documents of the Commission services;
- Disclosed documents provided confidential nature;
- The documents or parts of documents containing business secrets of other
undertakings;
- The confidential information, such as not disclosing identity of applicants;
- Reports on inspections carried out in third undertakings as are documents
likely to provide evidence of violations from these undertakings.
The Statement of Objections results in circumscribing the procedure engaged
against an undertaking or association of undertakings.
After the Statement of Objections the Commission will give the party
concerned the opportunity to have access to the case file, to examine the evidence
contained on which to express its views effectively.
The hearings are organized and conducted by a hearing officer, who belongs
to the General Directorate of competition administratively. As a general rule, the
11 See O. Manolache – Op. cit, p. 40.
General aspects in the field of competition procedure 11
hearing will be to ensure the conduct of hearings properly, thus contributing to the
objectivity of the hearing. All he would consider to be sure that in the preparation
of draft Commission decisions in competition matters, are taken into account all
relevant facts, even if favorable or not the parties concerned. 12
People will be heard convened personally or be represented by legal or
statutory representatives. Businesses and associations of undertakings may be
represented by an authorized agent appointed under their permanent staff.
Persons heard by the Commission may be assisted by their legal advisers or
other qualified persons whose presence is accepted by the hearing officer.
Hearing does not have a public character. Those involved are heard separately
or in the presence of other persons summoned to appear. If the latter, it will be
considered legitimate interest of undertakings to protect their interests through
non-disclosure of business secrets or confidential information.
Statements by each person heard shall be recorded. Copies of the statements
recorded shall be issued to any person requesting them. Copies will not include
business secrets and confidential information.
3.3. Commission decisions
The Commission may impose procedural fines and main fines.
Procedural fines may be imposed (by a decision of the Commission) to
undertakings and associations of undertakings in an amount not to exceed 1% of
total turnover achieved during the previous social year. 13
These fines may be imposed in cases where those undertakings or associations
of undertakings (intentional or negligent) commit the following offenses:
- Providing incorrect or misleading answers to requests;
- Providing incorrect, incomplete or misleading information in response to
requests made by decision or exceeding the deadline fixed for providing
information;
- Incomplete making available books and records during inspections or
inspections disobedience;
answers to the questions formulated by incorrect or misleading, is omitted
rectification by the deadline set by the Commission an incorrect answer,
incomplete or misleading by a member of staff, or refuses to provide a response;
- Breaking the seals;
Main Fines may be ordered by the Commission by decision require the
undertakings and associations of undertakings where (intentional or negligent)
commit the following:
- Violates art. 101 and 102 TFEU;
- Violates a decision imposing interim measures;
- Implement a commitment not considered binding by a decision;
12 See D. Chalmers, C. Hadjiemmanuil, G. Monti, A. Tomkins - Op. cit, p. 948.
13 See D. Chalmers, C. Hadjiemmanuil, G. Monti, A. Tomkins - Op. cit, p. 949.
12 OVIDIU-HORIA MAICAN
The size of these fines can be of maximum 10% of the turnover of the
undertaking or association of undertakings, the turnover achieved in the previous
social year. 14
If the breach came from an association relates to the activities of its members,
the fine can jump to the threshold of 10% of the total turnover achieved by each
member active in the market affected by the infringement committed by the
association.
When setting the amount of the fine, should be considered concurrently
gravity and duration of the infringement.
In addition to fines, the Commission may impose a penalty payment, which
will not exceed the limit by more than 5% of the annual average daily turnover
achieved under the previous social year.
These penalties are calculated per day of delay from the date stated in the
decision and is intended to compel undertakings and associations of undertakings
commit the following:
- Remedy a breach of art. 101 and 102 TFEU;
- Carrying out a decision ordering interim measures;
- Compliance with a commitment made binding by a decision;
- Provide complete and correct information required by decision;
submitting to an inspection ordered by decision;
4. New evolutions
Regulation no. 1/2003 brought new elements in terms of procedural issues. 15
The powers of the Commission the field of investigation were extended, in five
directions (ways).
In the first way, the Commission has jurisdiction on an investigation into
sectors and about the types of agreements. The Commission may conduct
inquiries in a given sector of the economy or in respect of a particular type of
agreements across various sectors. In the investigation, the Commission may
request information necessary undertakings and associations of undertakings and
carry out the inspections necessary for that purpose.
In particular may require all businesses and associations concerned to
communicate all agreements, decisions and concerted practices. Meanwhile,
publish a report on its survey results specific sectors of the economy or on specific
types of agreements in the various sectors and may invite interested parties to
make observations.
In a second approach, the Commission may request the undertakings or
associations of undertakings (a decision or an application) providing all necessary
information. 16
14 See D. Chalmers, C. Hadjiemmanuil, G. Monti, A. Tomkins - Op. cit, p. 949.
15 See Cosmovici, P. M., Munteanu, R - Înelegerile între întreprinderi, Ed. Academiei Române,
Bucureşti, 2001. p. 343.
16 See Cosmovici, P. M., Munteanu, R - Op. cit, p. 344.
General aspects in the field of competition procedure 13
A copy of the application or the decision will immediately be forwarded by
the Commission competition authority of a Member State in whose territory is
situated the undertaking or association of undertakings. Another copy will be
notified to the competition authority of the State whose territory is affected.
Governments and competition authorities of the Member States shall
communicate to the Commission (on request) all information necessary to perform
the tasks entrusted regulation.
A third way provides for the right of the Commission to take statements of any
natural or legal person accepting queries to gather information on the subject of
investigations. 17
The person may be questioned (with her consent) even at Commission
headquarters.
If the meeting (interrogation) will be held in the premises of the company, this
will be communicated by the Commission competition authorities of the respective
state. At the request of those authorities, its officials may assist the Commission in
the interrogation agents or others designated by the Commission.
In a fourth way, the Commission has the power to do (to accomplish the tasks
entrusted) to all necessary inspections undertakings and associations of
undertakings.
To achieve this, officials and other persons authorized by the Commission to
carry out inspections have the following powers: 18
- May enter any premises, land and means of transport of undertakings and
associations of undertakings;
- May examine the books and other documents relating to business;
- Obtaining copies or extracts from documents or records;
- Application of seals (for more than 72 hours) on all business premises, books
and records for the period and to the extent necessary inspections;
- Can ask any staff member or representative of the undertaking or association
of undertakings for explanations on facts and documents relating to the object and
purpose of the inspection and may record the answers;
The last two are new powers.
Necessarily it must be informed the competition authority of the member state
involved. The agents and other accompanying persons must have a written
mandate.
An active assistance in carrying out inspections will be carried out by the
national competition authorities of the member state. If the agents or other persons
accompanying conclude that undertaking opposes an inspection, the member state
17 See Cosmovici, P. M., Munteanu, R - Op. cit, p. 344.
18 See Cosmovici, P. M., Munteanu, R - Op. cit, p. 345.
14 OVIDIU-HORIA MAICAN
concerned will provide the necessary assistance. This assistance will consist in the
use of public power or authority having the power of coercion equivalent.
If national law requires authorization from a judicial authority, such
authorization should be required (which can be done preventively).
Finally, through a fifth method (a novelty), there is the possibility of
inspecting other places. 19
This inspection can be arranged if there is a suspicion that the subject of
inspection records or documents stored in other premises, land and means of
transport, including the homes of directors, managers or staff members. Decision
adopted by the Commission for this purpose does not require the prior
authorization of the judicial authority of the state. The judicial authority that can
be exercised only authenticity control over the decision and that the coercive
measures included in the decision not to present an arbitrary or excessive.
5. Conclusion
Because EU Member States have the competences to apply Articles 101 and
102 TFEU directly (previously Articles 81 and 82 TEC), that had as effect the
improvement of Community competition law enforcement.
The posibillity to have direct referral to the extensive EU jurisprudence and the
decisions of the European Commission contribute to the quality of domestic
antitrust enforcement. Even if national competition authorities have new rights
and competencies, they were also obliged to observe the general principles of
Community law.
These principles are binding on national authorities in Community
proceedings regardless of whether or not they are part of domestic legal orders.
In this context, the best solution is to create explicit legal reasons for their
application in national legislation on antitrust procedure.
References
[1] Azema, J. (1989) Le droit français de la concurrence, Ed. 2, Paris, Ed. Presses
Universitaires du France;
[2] Cairns, W. (2001) Introducere în legislaia Uniunii Europene, Bucureşti, Ed. Universal
Dalsi;
[3] Chalmers, D. Haddjiemmanuil, C. Monti., G. Tomkins, A. (2007) European Union
Law, Cambridge University Press;
[4] Cosmovici, P. M., Munteanu, R. (2001) Înelegerile între întreprinderi, Bucureşti, Ed.
Academiei Române;
[5] Druesne, G. & Kremlis, G., (1990) La politique de concurrence de la Commmunauté
Economique Européene, Paris, Presses Universitaires du France;
19 See Cosmovici, P. M., Munteanu, R - Op. cit, p. 345.
General aspects in the field of competition procedure 15
[6] Fuerea, A. (2006) Drept comunitar al afacerilor, Bucureşti, Ed. Universul Juridic;
[7] Guedj, A. (2000) Praqtique du droit de la concurrence national et communautaire, Paris,
LITEC;
[8] Manolache, O. (1997) Regimul juridic al concurenei în dreptul comunitar, Bucureşti,
Ed. All;
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[10] Ungureanu, D. (2010) Dreptul Uniunii Europene în domeniul concurenei. Juris-
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