An evaluation of Council Regulation 1/2003 modernising competition law enforcement within the European Union

Abstract

The competition articles of the Treaty establishing the European Community, Articles 81 and 82, are currently implemented by Council Regulation 17 /62. Council Regulation 1/2003 modernises the implementation of Articles 81 and 82 EC Treaty by, replacing the current notification system with a legal exception regime; devolving much of the enforcement of Community competition law to the national competition authorities of Member States and providing for the application of Community law to all cases capable of affecting trade between Member States. The Regulation will redirect the enforcement effort under Community law from processing mostly innocent notifications to rooting out the hardcore cartels that cause so much harm to the economy. By enhancing the role of national courts and national competition authorities in the enforcement of Community competition law to a far greater extent than before, it will bring enforcement closer to the markets concerned. The Regulation will also ensure a level-playing field for business co operation in the Single Market by imposing a common yardstick against which commercial agreements must be measured in all Member States. Together, these changes should have the effect of strengthening enforcement and consequently the Single Market. Chapter I of this thesis examines the deficiencies of a centralised enforcement system. This Chapter illustrates also the Commission's initial attempts at decentralising competition law enforcement in the hope of being able to concentrate its resources in the fight against serious infringements. Chapter I concludes by giving an outline of the objectives behind Regulation 1/2003. Chapter II discusses the network of competition law enforcers, the role of the different enforcers and the mode by which the network is intended to work according to the framework of Regulation 1/2003. This Chapter stresses also the importance of determining proper criteria for case allocation in a system of multiple enforcers as well as the risks which may ensue as a result of multiple enforcement. The role of national com ts will be considerably enhanced under the new Regulation. Chapter III analyses the new role of national courts as well as the advantages and disadvantages of allowing national courts to apply fully Articles 81 and 82 EC Treaty. Chapter IV discusses an important feature of the new Regulation being that of greater co operation between the competition law enforcers in relation to exchange of information. A distinction will be drawn between 'horizontal' exchange of information i.e. exchange of information between the national competition authorities between themselves and 'vertical' exchange of information i.e. exchange of information between national competition authorities and the Commission. Important issue such as the exchange of information covered by confidentiality and professional secrecy will also be discussed. Chapter V analyses the compatibility of Regulation 1/2003 with the Charter of Fundamental Rights of the European Union and the Convention for the Protection of Human Rights and Fundamental Freedoms. Chapter VI attempts at determining the effects of modernisation on Malta in view of imminent accession to the European Union.