On 12 October 2011, the Luxembourg Parliament adopted a new Competition Act, which will enter into force on 1 February 2012.
The new Competition Act introduces the following changes:
- The Competition Inspectorate, a department within the Ministry of the Economy in charge of investigating competition cases, will be integrated into the Competition Council, an independent administrative body that rules on competition law violations. This move is intended to create synergies in terms of resources between the two authorities and improve their effectiveness. The new Competition Council will be headed by a newly appointed chairperson.
The Council of State (Conseil d’État), which must be consulted on all legislative proposals, is strongly opposed to this consolidation, as the Competition Council will now wield both investigative and decision-making powers. In answer to this criticism, the Luxembourg Parliament has guaranteed a functional separation of investigative and decision-making powers within the Competition Council. For instance, members of the Competition Council who head up investigations will not be able to participate in the final decision-making process.
- Undertakings will now be able to ask the Competition Council for an informal guidance letter on new, unresolved questions. This is a very welcome development as specific questions often arise under Luxembourg competition law (e.g., the definition of cross-border relevant markets, the applicability of the provisions on abuse of dominance in the absence of a formal merger control regime, etc.).
- The new Competition Act expressly confirms the powers of the Competition Council to start investigations ex officio and to conduct sector enquiries if there are indications that competition could be hindered (e.g.. in the event of rigid price levels).
- The chairperson of the Competition Council will be able to order provisional measures without issuing beforehand a formal statement of objections, contrary to the requirements of the Competition Act 2004.
It should be noted that the material provisions of Luxembourg competition law on cartels and abuse of dominance remain unchanged. Furthermore, the statutory provisions defining the circumstances under which the Luxembourg government can impose price control measures have been simplified.