Businesses often wonder how competition authorities pick and choose the cases they decide to bring. Companies with operations in Europe now have some guidance as a result of a recent speech by European Competition Commissioner Margrethe Vestager, in which she outlined how the Commission prioritizes its enforcement efforts.
Commissioner Vestager explained that the Commission uses three main criteria in prioritizing which cases to pursue. Not every case needs to satisfy all three criteria, but the Commission tries to keep these three objectives in mind in determining whether to pursue an enforcement action.
- Will the case improve people’s lives?
Consistent with European Commission President Junker’s policy priorities, Commissioner Vestager explained that the Competition Commission currently focuses on three key sectors of the economy: energy, financial services, and the digital economy. She said these sectors were selected because they are essential inputs upon which the rest of the economy depends, and they present issues that can only be addressed at the European, rather than national, level.
- Will the Commission’s action have an impact beyond the case itself?
Although the Commission focuses on certain industries, the Commission also looks for cases that can help improve compliance by giving valuable guidance to businesses. This does not mean that the Commission selects only large cases. To the contrary, in some situations it makes sense for the Commission to select a smaller case if its resolution can provide the business community with guidance more quickly than the time it would take to resolve a larger case. In other words, companies should not assume that smaller cases will necessarily escape scrutiny by the Commission. Commissioner Vestager also noted that although some would prefer that the Commission promulgate guidelines to provide guidance, the Commission believes it often is easier to formulate guidelines after the Commission has pursued enforcement actions in the relevant area, and establishing precedent through enforcement actions can help companies understand how rules apply to new settings. Finally, the Commission sometimes will select a case not to establish new guidelines or precedent, but rather to remind companies of applicable rules.
- Is competition law the right tool?
Commissioner Vestager also identified a touchstone question that she asks herself: “Whether competition enforcement by the European Commission is the right tool for the job.” This is an important question in light of the crucial role of national competition authorities, which since 2004 have issued 85% of all decisions enforcing EU competition law. In addition to the Commission sharing enforcement efforts with national authorities, Commissioner Vestager pointed out that not all cases of unfairness are a matter for competition law; another Commissioner might be in a better position to address the issue with tools other than the competition laws. Of course, a final consideration is that the Commission has limited resources and it cannot pursue some cases even if would like to do so.