At the end of June, at European level the so-called Committee of Permanent Representatives (COREPER) endorsed an agreement between the Council of the EU and the European Parliament on new measures to bring the enforcement of competition rules in line with the digital age and to enable EU Member States’ competition authorities to enforce it more effectively.
This proposal to strengthen the national competition authorities of the EU Member States and their network (European Competition Network (ECN)) dates back to a proposal of the EU Commission of March 2017 for a directive (the so-called “ECN+” initiative).
The new measures aim at a more effective enforcement of antitrust law by national competition authorities and are part of a series of (also non-European) bilateral and multilateral initiatives and agreements, which can be described as an increasing trend towards cross-border cooperation of competition authorities.
At the heart of these developments, in addition to strengthening the powers of the authorities at EU Member State level, are agreements between antitrust regulators to step up the exchange of information and joint deliberations in order to counter the increased international dimension of antitrust issues. Moreover, such agreements aim at enabling the authorities even more effectively than before to cope with the fact that antitrust infringements often have an impact in several countries at the same time.
For companies, this closer exchange between competition authorities increases the risk of antitrust violations at international level, but also has the potential for positive effects, for example when it comes to harmonised leniency regulations, which can create a greater degree of legal certainty for the companies cooperating with the authorities, or in the context of mergers.
“ECN+” initiative at EU level
EU competition rules are enforced by the national competition authorities of the Member States in parallel with the European Commission. The authorities agree on their respective competences in the context of the ECN and exchange their experiences.
At present, however, the differences in the application of these rules partly mean that companies which violate antitrust law are treated differently in specific cases depending on the country in which they operate. There are differences, for example, in questions of succession of liability and the obligation to pay fines in the event of restructuring or also in the concrete setting of fines and with regard to the possibilities for companies to cooperate (leniency programmes).
According to the EU Commission’s proposal for a directive, the national competition authorities should be better equipped to detect agreements, decisions or concerted practices prohibited by competition law and to prevent the abuse of a dominant position. The aim is to ensure at EU level that national authorities have the necessary powers and means to collect relevant information on companies under investigation, while respecting their rights to defend themselves. A level playing field for the sanctionability of antitrust violations is also to be created at European level and the regulations on possibilities for cooperation (leniency applications) are to be harmonised.
The trend towards global cooperation at international level
Beyond the EU and its harmonisation efforts, an increased trend towards cooperation between competition authorities can also be observed on an international level. EU Competition Commissioner Margrethe Vestager and COFECE President Alejandra Palacios recently signed a cooperation agreement in Brussels between the two competition authorities. The agreement is intended to provide a framework for dialogue on competition policy issues and to facilitate the exchange of non-confidential information in individual cases. In addition, the enforcement activities of the two competition authorities will be coordinated in identical or related cases and the possibility of referring cases to the other authority will be created. The cooperation can also play an important role in the competitive assessment of proposed transactions.
The European Commission has been working closely with various competition authorities in third countries for many years. There is now a whole series of bilateral agreements or declarations of intent with non-European competition authorities (in some cases (such as with the USA) these have been in place since the 1990s). The Commission also includes a competition chapter in the negotiations with third countries on free trade agreements, which contains rules and sanctions in the areas of cartels, mergers and state aid (see the relevant table).
Cooperation efforts of the Federal Cartel Office
Also the Federal Cartel Office (Bundeskartellamt, the German competition authority) has recently intensified its international cooperation efforts – also beyond the ECN, in which it is strongly involved. The Bundeskartellamt and the French Autorité de la concurrence – building on a joint working paper from 2016 – have decided to initiate a project together which will further analyse the competitive challenges arising from the use of algorithms (more on the subject can be found here) and in this context identify possible conceptual approaches in dealing with algorithms.
The Bundeskartellamt also cooperates closely with the Austrian competition authority, the Bundeswettbewerbsbehörde. For example, the two authorities recently developed and presented a joint guide on the application of the transaction value threshold in merger control newly introduced in both countries (see also the following link).
Conclusion and outlook
The recent cooperation agreements between the European Commission and a number of national non-European competition authorities, as well as other bilateral agreements and initiatives between competition authorities, are an expression of an increasingly closely interlinked global community of antitrust regulators, which, in addition to existing exchanges within the framework of, among others, the International Competition Network (ICN), the OECD and the ECN, will bring about even closer collaboration between competition enforcers. Initiatives such as ECN+ also aim to give all national authorities in Europe the same enforcement tools to enforce antitrust law prohibitions, which will further increase the sanctionability of antitrust violations at EU level. It must be expected that this cross-border cooperation between competition authorities will even intensify in the future.
This development makes it necessary for companies to protect themselves even better against possible infringements by setting up and implementing effective compliance systems. In the event of an antitrust violation, the risk for globally active market participants increases that antitrust authorities’ investigations – in case of corresponding actual indications – will extend beyond national borders and be taken up in other jurisdictions. Merger control is also expected to involve closer cooperation between authorities, but this could also have a positive effect on transactions if this leads to greater legal certainty.
In any case, internationally active companies are advised to have their antitrust compliance efforts reviewed again to ensure that they already provide sufficient protection and precautions against possible cross-border antitrust violations and official investigations.