Laurence Idot,

Professor, Université Panthéon-Assas(Paris II)

Member of the College, Autorité de la Concurrence (Fr)

GCLC, Brussels, Nov. 2014. All views are strictly personal

Power to set enforcementpriorities

Introduction

Comm., Ten Years of Antitrust Enforcement under Regulation1/2003: Achievements and Future Perspectives (COM (2014) 453); SWD (2014) 231/2, Enhancing competition enforcement by the Member States' competition authorities: institutional and procedural issues

“Divergence subsists for some fundamental questions, e.g. whethercompetition authorities have the power to set priorities” (pt 45)

“The following aspects have been identified within the ECN as forming keycomponents of the toolbox that authorities should have at their disposal:

a. Priority setting: there is a need for further convergence on the ability ofthe authorities to set priorities in the exercise of their tasks andmaximise administrative efficiency when choosing which cases topursue.(…). However, some NCAs still have a legal duty to consider allcomplaints and requests for interim measures received. The ECNRecommendation on the power to set priorities advocates for authoritiesto have greater flexibility to choose which cases to investigate”. (pt 59)

ECN Recommendation on the power to set priorities. Dec. 2013

Introduction (2)

A general concern within the internationalorganisations which work on competition policy andmore precisely on agency effectiveness (OECD(2012), UNCTAD (2013), ICN);

Excellent studies have already been made on thetopic :

* N. Petit, “How much discretion do, and should,competition authorities enjoy in the course of theirenforcement activities? A multi-jurisdictionalassessment”, General Report, LIDC Congress,Vienna, 2009, Concurrences, n° 1-2010

* W. Wils, “Discretion and Prioritisation in Public AntirustEnforcement”, World Competition, Sept. 2011

Introduction (3)

Notion of priority setting. ECN recommendation(pt 2)

Priority setting may be understood at a general level in a policy perspective. In this first meaning, priority setting means “the ability of NCAs to prioritise and plan their work, to formulate strategic plans, decisions on the allocation of resources across all areas of responsibility,

“general strategy priority setting”

Priority setting also refers to the discretion of NCAs to initiate investigations and start proceedings in relation to individual cases.

“individual cases priority setting”

Introduction (4)

It is assumed that such a system enables CA to be more efficient (see the previous works).

Is there is a need for further convergence on the ability of the authorities to set priorities when choosing which cases to pursue?

My personal answer: Doubtful…

Is the diagnosis right?

Are the contemplated remedies suitable?

I. Is the diagnosis right?

1. Reality of divergences?

2. Impact on the functioning of the ECN?

I.1. Reality of divergences (1)

Priority setting in individual cases has two aspects:

a positive one: the ability to take action ex officio with regard to cases identified as a priority;

No legal problem? Art. 5, reg. 1/2003. Mainly a practical issue (human and material means; F example, before 2008 reform)

a negative one: the possibility to reject complaints in relation to cases which are not deemed a priority by the Authorities.

Two systems:

- a prioritisation based system (mainly, B, G, NL, Su, UK).

- a system based on the legality principle which triggers a legal duty to consider all complaints (F, It).

Commission clearly in favour of the first system:

“Progress has been made in this regard in Greece and Portugal, where the NCAs are now able to set their priorities and to reject complaints without the need for a detailed investigation on substance”

I.1. Reality of divergences (2)

A binary classification is too simple.

• Significant differences among NCAs which follow the first system (see the ECN recommendation).

- Legal regime of the complaint (only a source of information or need to have a look; methods of closing a case on priority grounds (informal or formal decisions))

- Transparency of criteria? Prioritisation principles (UK, OFT, CMA 2014) (NL, NMA, 2012) ( Sue., 2010)

I.1. Reality of divergences (3) Need to evaluate the system in its entirety.

The French system: duty to take a formal decision on each complaint (saisine). No change in 2008 but

- specific regime for local anticompetitive conducts (dealt with by the Ministry of Economy under a settlement procedure);

- before the FCA, two filters: a first filter of admissibility (standing, time of limitations, jurisdiction), a second filter, (lack of sufficient elements to prove the anticompetitive conduct.); + de minimisrule.

Comp. F/EU:

EU procedural treatment of complaints more complex: two rounds of exchange, a final decision more motivated, a judicial control more acute.

Only one main difference: the grounds to reject the complaint. Always objective in French No “subjective” grounds such as the lack of Community interest.

I.2. What impact on the functioning of the ECN? (1)

“further convergence on the ability of the Authorities to set priorities would help enhance effectiveness and efficiency in the enforcement of competition rules…”.

It is not confirmed by the statistics!

At the top: F (101), G (100)

It (92)

At the end: UK (16)

I.2. What impact on the functioning of the ECN? (2)

A more qualitative approach

- Numerous and various decisions: both sectors andtype of infringement (not only cartels and abuse of dominantposition, but vertical relations and cooperation agreements)

- FCA, the first one to deal with new topics (jurisdictional:

effect on trade in overseas territories; substantive one: peering intelecoms; discussions on 101,§ 3…);

- Many interesting decisions adopted followingcomplaints (either prohibition decisions orcommitment decisions)

- FCA not prevented to have a proactive attitude insome important fields (payment systems, relationsbetween Internet and distribution, generics, electroniccommunications)

I.2. What impact on the functioning of the ECN? (3)

Prohibition decisions:

14-D-06, Cegedim : The Autorité de la concurrence has imposed Cegedim a 5.7 million euros fine for having abusively refused to sell its medical information database to certain pharmaceutical laboratories

14-D-05, a fine of 45.9 million euros against SFR and its subsidiary in La Réunion SRR, for having implemented and maintained unfair pricing differences between calls made to othercustomers of the SRR network (on net calls), and calls to its competitors' networks (off net calls), that were charged at a higher price.

14-D- has fined the Groupe Amaury for having driven out of the market a new entrant in the sports press – Le 10Sport.com

13-D-21. The Autorité de la concurrence fines the Schering-Plough pharmaceuticallaboratory a total of 15.3 million euro for hindering entry onto the market of the generic of itsoriginator medicinal product Subutex®

13-D-20. The Autorité de la concurrence fines EDF 13.5 million euros for having unjustlyfavoured its subsidiary that operates in the emerging market for photovoltaic solar power

Commitment decisions:

14-D-11, commitments from SNCF allowing travel agencies to compete on an equal footing with voyages-sncf.com.

14-D-09, commitments from Nespresso to lift barriers to entry for othercoffee capsule makers

14-D-04, commitment from the PMU, which will separate its online horserace betting activityfrom its network of points of sale under monopoly.

II. Are the contemplatedremedies suitable?

1. Generalisation of prioritisation?

2. Implementation of proritisation?

II.1. Generalisation of prioritisation (1)

Positive priorities: the power to act ex officio

- OK.

- Two gaps.

* What about the advisory role when the CA is entitled to adopt opinions?

The F. example. Main tool since the 2008 reform to make a proactive policy

* Nothing on interim measures

A very useful tool (F. experience). The French paradox

(duty to deal with all the requests; no right to take interim measures

ex officio)

II.1. Generalisation of prioritisation(2)

Negative priorities: assessment of complaints

More reluctant

- A NCA is not the Commission;

no forum shopping between NCA’s;

only other choice for the complainant: ordinary court

- Spill-over effects: if complaints, mainly becausethey will be examined; useful tool for SME

Navx c/Google, E-Kanopi c/Google

Ethical Coffee Company c/Nespresso

II.1. Generalisation of prioritisation(3)

Tableau 1 : Origine des saisines au fond (Firms)

2005 2006 2007 2008 2009 2010 2011 2012 2013

25 29 32 36 39 32 22 20 18

Tableau 4 : Ventilation des autosaisines

2009 2010 2011 20122013

8 13 12 5 3

Warning: a question of national culture?

II.2. Implementation of prioritisation? (1) Prioritisation criteria.Content? - competition criteria (related to the presumed

infringement) : public interest, effects on consumer welfare,economic impact, structural factors of the market

- strategic criteria (who is well placed to deal with thecase?): alternative venues to take action, likelihood of findingan infringement, resource requirements..

Left to the discretion of the Authorities, Ufex case (C-119/17 P, 1999), there is no exhaustive list of

criteria,« In view of the fact that the assessment of the

Community interest raised by a complaint depends on the circumstances of each case, the number of criteria of assessment the Commission may refer to should not be limited, nor conversely should it be required to have recourse exclusively to certain criteria » (pt 79)

Transparency? Principles?

II.2. Implementation of prioritisation? (2)

Procedural aspects:

Few elements in the recommendation

- Link between the way to reject the complaint (informal means; formal decision) and judicial review.

- Difficult to control the extent of the judicial review.See the EU caselaw; The F. example. Evolution. Turn in 2005.

Agfa.

Conclusions Is it necessary to go further than the

recommendation?

Priority setting shall not be a priority

Soft convergence seems enough

Other issues more important (not only fines, liability…)