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Introduction

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Market Design Powers of the European Commission?

Part of the book series: Munich Studies on Innovation and Competition ((MSIC,volume 13))

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Abstract

The present work analyses remedies that may be adopted by the Commission on the basis of Articles 7 and 9 Regulation 1/03. Broadly speaking, such remedies constitute measures by which a firm that is found or suspected to violate Articles 101 or 102 TFEU can be obliged to act in a way that puts the infringement to an end. Such remedies can for instance consist of a simple obligation to cease and desist anticompetitive conduct, of an obligation to grant access, an obligation to respect a certain minimum or maximum price—or even of an obligation to break up a company. While Article 7 empowers the Commission to impose injunctions against the will of the concerned undertaking subsequent to the finding of an infringement, Article 9 provides the Commission with the opportunity to make binding commitments that are offered by the concerned undertakings with a view to eliminate the Commission’s concerns.

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Notes

  1. 1.

    I will refer to these two provisions as Article 7 and Article 9 hereafter.

  2. 2.

    Jenny (2015).

  3. 3.

    Article 8 Regulation 1/03.

  4. 4.

    Article 10 Regulation 1/03.

  5. 5.

    Article 23 Regulation 1/03.

  6. 6.

    Article 24 Regulation 1/03.

  7. 7.

    Pursuant to Articles 5 and 6 Regulation 1/03, the competition authorities and courts of the Member States have the power to apply Articles 101 and 102 TFEU in individual cases. See generally on the decentralised enforcement system of EU antitrust law eg Ortiz Blanco/Jörgens (2013), 1.41ff; De Smijter/Sinclair (2014), 2.05ff; Jones/Sufrin (2014), 923.

  8. 8.

    See Articles 6(2) and 8(2) Merger Regulation and the Commission’s Merger Remedies Notice (2008). Generally on merger remedies see eg Whish/Bailey (2012), 884ff; Jones/Sufrin (2014), 1245ff; Hoeg (2014).

  9. 9.

    See Article 7(4) Regulation 659/1999. Generally on the Commission’s use of conditions and obligations in state aid decisions see Bleckmann (2004); Ehricke (2006); Becker (2010); critically Ackermann (2014), 152f.

  10. 10.

    Article 8 Regulation 1225/2009. Generally on anti-dumping undertakings see Stegemann (1990); Vermulst (2010), 3-002ff; Van Bael/Bellis (2011), § 6.10ff.

    See also Temple Lang (2009), 133: “As the case law [on Article 9 decisions develops], practising lawyers should remember that there is another part of the Commission that also has regularly to consider whether to accept what are in effect commitments when they are offered, in anti-dumping cases. The Community Courts are likely to see similarities”.

  11. 11.

    See Messina/Ho (2011), 747, who argue that the Alrosa judgment of the CJ will influence the commitment practice in merger control and state aid, “especially with regard to the discretionary power of the Commission, and the consequent effects for the proportionality check and the intensity of judicial review”.

    See also the state aid case ING [GC, T-29/10 (2012)]: During the financial crisis, the Commission declared aid granted by the Netherlands to the bank ING compatible with the common market subject to compliance with certain restructuring commitments. These commitments comprised in particular a reduction of ING’s balance sheets by 45%, a three-year ban on acquisitions, and a prohibition for ING to act as a price leader. In its appeal against the decision, ING argued inter alia that the restructuring requirements infringed the principle of proportionality. The GC did not have to decide the issue because it annulled the Commission’s decision for different reasons. The GC’s judgment was confirmed by CJ, C-224/12 P (ING, 2014).

  12. 12.

    Hjelmeng (2013).

  13. 13.

    Lianos (2012, 2013).

  14. 14.

    Frese (2014).

  15. 15.

    Kellezi (2010).

  16. 16.

    Müller-Tautphaeus (2003).

  17. 17.

    Sofianatos (2009).

  18. 18.

    See Immenga (2011, 2012); Anestis (2012).

  19. 19.

    Sofianatos (2009), 12: “Contrairement aux autres instruments qui n’opèrent qu’une intervention indirecte sur le marché, les injonctions et les engagements mettent en place une intervention directe. Ils influent sur le comportement des opérateurs […] C’est pour cette raison qu’ils acquièrent la qualité de mesures correctives”.

    An exception from this rule must however be made for remedies that involve the disgorgement of illicit profits or restitution; these will be discussed below (Sect. 3.3.4.1.3).

  20. 20.

    See Article 207(1) TFEU.

  21. 21.

    See Wessely (1999), 2.

  22. 22.

    See Stegemann (1990); Kulms (1990), 286f and 303ff; Wessely (1999), 143ff; Theuringer (2003), 40 fn 4; Van Bael/Bellis (2011), § 6.15.

  23. 23.

    See Temple Lang (2011), 214; see also the opinion of AG Kokott in C-547/16 (Gasorba, 2017), 24f, pointing to the differences regarding the respective enforcement systems of antitrust and state aid rules.

  24. 24.

    See GC, T-371/94 (British Airways, 1998), 290: “[…] the legal and practical utility of such conditions of authorisation lies in the fact that, if the recipient undertaking were to fail to observe them, it would be for the Member State concerned to ensure proper implementation of the authorisation decision and for the Commission to assess whether it was appropriate to demand that the aid be repaid […]. It should be borne in mind that […], the Court of Justice held that, if a State does not comply with the conditions imposed by the Commission in a decision approving aid, the Commission is entitled, under the second subparagraph of Article [108(2) TFEU], to refer the matter directly to the Court of Justice by way of derogation from Articles [258 and 259 TFEU]”; Ehricke (2006), 241f; Becker (2010), 213; Sinnaeve (2010), § 31, 52.

  25. 25.

    The Greek Lignite case constitutes a more recent example in which the Commission relied on Article 106(3) TFEU in order to impose specific measures on Greece to remedy the anticompetitive effects of an infringement of Article 106(1) TFEU read in conjunction with Article 102 TFEU. The General Court annulled the decision in which the Commission had found that Greece had infringed Article 106(1) TFEU. In the view of the General Court, the Commission had not shown that there was an abuse [GC, T-169/08 (DEI, 2012)]. Consequently, the General Court also nullified the decision in which the Commission had imposed specific remedies on Greece to stop the abuse [GC, T-421/09 (DEI, 2012)]. Both judgments were reversed by the Court of Justice and referred back to the General Court [CJ, C-553/12 P (DEI, 2014) and C-554/12 P (DEI, 2014)]. For a discussion of the case see eg Graham (2013), 144; Frenz (2014); Kipiani (2014), 423; Sadowska (2014), 30ff.

  26. 26.

    See Jones/Sufrin (2014), 653.

  27. 27.

    CJ, C-141/02 P (max.mobil, 2005), 69; Jones/Sufrin (2014), 653.

  28. 28.

    The section of the Manual of Procedures (2012) that deals with the content of commitment decisions (Module 16, 45) includes references to the Commission’s Merger Remedies Notice (2008) and to the model texts the Commission has adopted for divestiture remedies and monitoring trustees.

  29. 29.

    The dichotomy between structural and behavioural remedies will be discussed in more detail below (Sect. 3.4).

  30. 30.

    Commission, Ten Years of Antitrust Enforcement under Regulation 1/2003, SWD(2014) 230/2, 188; Italianer (2012); Alexiadis/Sependa (2013), 4; Gerard (2013), 21; more carefully Lübking (2011), who points also to the limits of this convergence.

  31. 31.

    See Merger Remedies Notice (2008), 6: “The Commission is not in a position to impose unilaterally any conditions to an authorisation decision, but only on the basis of the parties’ commitments. […] If […] the parties do not validly propose remedies adequate to eliminate the competition concerns, the only option for the Commission will be to adopt a prohibition decision”.

    For the sake of completeness, it should be pointed out that Article 8(4) Merger Regulation empowers the Commission to adopt unilateral injunctions where a concentration has been implemented prior to having been declared incompatible with the common market or where it has been implemented in contravention of a condition, which has found that, in the absence of the condition, the concentration would be incompatible with the common market.

  32. 32.

    CJ, C-413/06 P (Impala, 2008), 49; see also eg C-202/06 P (Cementbouw, 2007), 39; GC, T-151/05 (NVV, 2009), 166; T-79/12 (Cisco, 2013), 109.

  33. 33.

    Eg Oehler (1976); Müller-Tautphaeus (2003); Ducore (2006); Georgiev (2007); Hennig (2010); Kipiani (2014).

  34. 34.

    Eg Pera/Carpagnano (2008); Falconi (2011); Schweitzer (2012); Hinds/Eaton (2014); Frese (2014), 238f. See also, for an international overview of the use of commitment decisions, OECD (2016).

  35. 35.

    See also the corresponding recitals 37 and 39 of directive 2019/1.

  36. 36.

    § 32 ARC.

  37. 37.

    § 32b ARC.

  38. 38.

    The Bundesgerichtshof [KVZ 55/07 (Nord KS, 2008), 18] has ruled that Article 7 Regulation 1/03 provides guidance as regards the interpretation of § 32 ARC.

  39. 39.

    See Bougette/Marty (2012), 14, 18 and 56 with references; also Hovenkamp (2008), 300: “Finding the right remedy for antitrust violations is never easy, and we have never been particularly good at it… .”.

  40. 40.

    See Sect. 3.4.1.2.2.1.2 below.

  41. 41.

    See Zakrewski (2005), 7ff; Lianos (2012), 180ff; Lianos (2013), 372ff.

  42. 42.

    See Zakrewski (2005), 9f: “[The term] remedy is often used in legal discourse simply to refer to any means provided by the law for obtaining redress or relief from a grievance. Where a grievance arises from an actual breach of duty, that which removes the grievance is a corrective remedy. Where it arises from a threatened or apprehended breach of duty, that which makes the claimant better is a preventive remedy”; Van Gerven (2000), 502: “remedies […] are classes of action, intended to make good infringements of the rights concerned”.

  43. 43.

    Lianos (2012), 189ff; Lianos (2013), 376ff; Hjelmeng (2013).

  44. 44.

    Lowe/Maier-Rigaud (2008), 598 and 600; Hellström/Maier-Rigaud/Bulst (2009), 44f.

  45. 45.

    Gray/Lester/Darbon/Facenna/Brown/Holmes (2006).

  46. 46.

    See Sect. 3.4 below.

  47. 47.

    Temple Lang (2013), 2 fn 1, reports that the Commission at first refused to publish the Manual of Procedures and only agreed to do so subsequent to a ruling by the European Ombudsman. The latter held that the Commission was obliged to grant access to the Manual under the rules on access to documents (Regulation 1049/2001).

  48. 48.

    See, for the fining guidelines: CJ, C-189/02 P (Dansk Rørindustri, 2005), 211; for the de minimis notice: CJ, C-226/11 (Expedia, 2012), 28; generally on the Commission’s use of soft-law in the area of competition law eg Ackermann (2010), 10f; Jones/Sufrin (2014), 118f.

  49. 49.

    CJ, C-397/03 P (Archer Daniels Midland, 2006), 91.

  50. 50.

    See also GC, T-297/11 (Buzzi Unicem, 2014), 140f.

  51. 51.

    Wagner-von Papp (2012), 932.

  52. 52.

    See the Notice at the beginning of the Manual of Procedures (2012).

  53. 53.

    Ibid.

  54. 54.

    CJ, C-226/11 (Expedia, 2012), 28: “[…] the purpose of that notice is to make transparent the manner in which the Commission […] will itself apply Article 101 TFEU. Consequently, by the de minimis notice, the Commission imposes a limit on the exercise of its discretion and must not depart from the content of that notice without being in breach of the general principles of law, in particular the principles of equal treatment and the protection of legitimate expectations”.

  55. 55.

    See also Temple Lang (2013), 15f, who argues that the Manual of Procedures binds the Commission in the same way as its other soft-law instruments. In his view, the fact that the Manual is formally designed as a set of instructions to Commission officials “does not seem relevant to the principle of legitimate expectations or the principle of equal treatment”.

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    Korbinian Reiter

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Reiter, K. (2020). Introduction. In: Market Design Powers of the European Commission?. Munich Studies on Innovation and Competition, vol 13. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-60711-4_1

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