European Commission wants to strengthen national competition authorities

Federal Cartel Authority © Bundeskartellamt

National systems for enforcement of EU competition law have converged thanks to close cooperation between the European Commission and national competition authorities in the European Competition Network (ECN). Nevertheless, there are inconsistencies at many points which make cross-border application of antitrust law more difficult and can lead to divergent investigation results as well as legal uncertainty for companies.

Accordingly, in March 2017 the European Commission published a draft directive on strengthening competition authorities in the Member States with a view to more effective enforcement of competition provisions. This is now being discussed in the Council and European Parliament. The directive, which has also been announced as “ECN+” proposal, sets out to ensure uniform enforcement of European competition law in the European Competition Network. To this end, a common minimum set of instruments and more effective administrative enforcement competences should be created.

Stronger enforcement competences – safeguard companies’ defence rights

For instance, the Commission wants to ensure that all national antitrust authorities not only have the power to search business premises and examine documents but are also given access to electronically stored data. However, a strengthening of antitrust authorities’ enforcement competences must always go hand in hand with proportionate defence rights for companies and the fundamental right to a fair procedure. The draft directive contains only very general statements in this regard.

Group liability irrespective of fault is unconstitutional

In addition, the Commission wants to ensure that proportionate instruments to impose deterrent sanctions are available to all national authorities. In this respect, BDI is critical of the proposal whereby all Member States must provide rules on the liability of parent companies for the infringements of their subsidiaries and on the liability of the legal successor in order to prevent restructuring operations within a group being deployed to avoid fines. The German legislator has recently introduced correspondingly far-reaching provisions in the framework of an amendment of the German law against competition restraints – in the face of great protest from business, which has argued against that the introduction of group liability independent of guilt is unconstitutional under the German legal order and is alien to German company and antitrust law. It is now up to the German courts to decide whether and to what extent the new liability provisions are unconstitutional.

Strengthen legal certainty for leniency programmes

The Commission’s draft directive also provides for uniform minimum rules for leniency programmes which differ between Member States. It is problematic above all that there is not yet any extension effect for these programmes – a leniency applicant who has presented his application to a competition authority in due form loses his privileged status if the case is referred to another authority. BDI has repeatedly argued in favour of coherent procedural rules and of a full extension effect for leniency programmes along the lines of a one-stop shop. The Commission does not yet go this far in its proposal but nevertheless envisages that, where a leniency application has been presented to the Commission, the applicant can file summary applications with other possibly competent authorities, which will be taken into consideration in the case of a subsequent referral. This would institutionalise ECN’s hitherto non-binding Model Leniency Programme. Even if this would still not really constitute a full one-stop shop, the changes could lead to greater legal certainty and simpler management of leniency applications for companies.