On 26 May 2014, the European Commission dismissed the antitrust complaint filed by Federauto (the Italian trade association of car retailers) against Volkswagen Group Italia.
The complainant alleged that the car manufacturer breached EU competition law by unilaterally reducing the profit margins in its car-distribution contracts.
The Commission stressed in its decision that it is not in a position to investigate every alleged violation of EU competition law. Due to its limited resources, it has to determine priorities and focus on complaints which relate to alleged anticompetitive conduct affecting the internal market. It reiterated that it is legally entitled to close a case without conducting any investigation.
The Commission underlined that it was uncertain whether the disputed practice would be contrary to Article 101 (1) of the Treaty on the Functioning of the European Union (TFEU) and would be covered by the individual exemption provided for in Article 101 (3) TFEU. It also noted that its effects would probably not go beyond the Italian territory.
It therefore concluded that the Italian competition authority (Autorita guarante della concorrenza) would probably have been, together with the Italian courts, the most appropriate body to handle the allegedly competition-restrictive practices.
This case shows that the filing of a complaint relating to matters of competition law requires thorough preparation. In this case, we can only imagine which outcome would have prevailed had Federauto filed its complaint with the Italian competition authority.
The following sets out the steps to take if you suspect that a company’s business practice restricts competition:
- The first step is to choose between (i) filing a complaint before a competition authority and (ii) bringing a legal action before a national court.
A procedure before a competition authority can be frustrating as the complainant loses control over the progress of the investigation and the authority may or may not decide to pursue a particular complaint. Moreover, most competition authorities in Europe lack resources, so they may decline to investigate “minor” cases. However, a competition authority is entitled to conduct dawn raids and searches, which can be helpful in collecting evidence.
- If you decide to lodge a complaint before a competition authority, the second step is to decide which competition authority to inform.
If the situation you have encountered is specific and limited to the territory of one Member State, it is wise to contact in the first place the national competition authority. If you think that a larger number of Member States are concerned, you may initially choose to contact the European Commission. As far as the Belgian Competition Authority is concerned, it is recommended that you informally contact the General Prosecutor in order to outline the practice in question and determine their first impression before filing the complaint.
At both the EU and national levels, in order for your complaint to be given priority, it should be carefully prepared and documented. It ought to be sufficiently evidenced and contain a persuasive argument likely to convince the competent investigator to open a formal investigation.