On 16 December 2002, the Council adopted a new Regulation on the implementation of the rules laid down in articles 81 and 82 EC: Council Regulation 1/2003 (Regulation), which replaces Regulation 17/62. Regulation establishes a new legal system for more effective enforcement of articles 81 and 82 through direct effect and greater involvement of national bodies. The main elements of Regulation 1/2003 are the abolition of the notification and authorisation system, the strengthened application of articles 81 and 82 at national level, creation of network of competition authorities and new types of Commission decisions. The Regulation 1/2003 will be accompanied by 1 implementing regulation and by 6 notices on the network of competition authorities (ECN), the cooperation with national courts, opinions or guidance letter, complaints, the effect on trade concept, the application of article 81(3).
This new reform is a milestone in competition law enforcement and therefore we would like to briefly present you the reforms regarding the abolition of the notification system, decentralization and the role of the national competition authorities and courts.
Abolition of the notification and authorisation system
The central feature of Regulation 1/2003 is the abolition of the Commission’s exemption monopoly and the introduction of the legal exemption system. The undertaking will no longer be called upon to notify agreements to the Commission with the view to obtaining an exemption decision. Under the new legal system, agreements that fulfill the conditions of article 81(3) are legally valid and enforceable without the intervention of an administrative decision. The direct application of the exception rules gives undertakings and their advisors greater responsibility in assessing their agreements. Undertakings will be able to invoke the exemption rule of article 81(3) as a defence in proceedings conducted by the Commission, national competition authorities and national courts. The Commission will remain open to discuss specific cases with the undertakings where appropriate and for this its preparing a Notice setting out the circumstance under which guidance in the form of written opinions could be provided.
With the new reform, as set out in article 3, the national courts and the national competition authorities have been imposed with two fundamental obligations. Firstly, article 3(1) imposes an obligation to also apply Articles 81 and 82 where national competition law is applied to agreements and abusive practices, which may affect trade between member states. In this regard it is particularly important to take note of the relationship between article 3 and article 11(6) according to which the competence of the national competition authorities to apply Articles 81 and 82 is withdrawn when the Commission opened proceeding in the same case. The only exception is where the application of stricter national competition law is not excluded.
Secondly, article 3(2) obliges the competition authorities and courts of the Member States not to prohibit under national competition law agreements, decision of associations of undertakings and concerted practices, which may affect trade between Member States, but which are not prohibited by Community Law. Nevertheless, as already stated they are free to apply on their national territory stricter national competition laws to conduct engaged in by undertakings. Lastly, agreements and practices that are prohibited by Articles 81 and 82 cannot be blessed by national law.
(a) National Competition Authorities
With the new wave of enlargement it was essential to involve national public enforcement agencies in the application of the rules. In order to facilitate cooperation, a network has been set up the European Competition Network (ECN). The new system which will enter into force on 1 May 2004, will be a system of parallel competences. National authorities can take up any case provided that they are able to collect the evidence necessary, to bring an infringement to an end and to sanction it in an appropriate way. Indications will be given in the future notice of the Commission on the functioning of the network. For the consistent application of Community rules Regulation 1/2003 also creates a mechanism of mutual information and consultation.
Finally, Regulation 1/2003 creates the basis for an increased co-operation between national authorities. It empowers them to exchange and use in evidence information collected but also to conduct investigations on behalf of one-another for the application of Articles 81 and 82.
(b) National Courts
Although, it is settled law that articles 81(1) and 82 have direct effect, national courts are seldomly seen to apply these provisions, mainly because the Commission had exclusive power to apply article 81(3). With the abolition of the Commission’s exemption monopoly, the national courts are empowered to apply articles 81 and 82 EC. In order to assist the national courts in the application to EC competition rules, Regulation 1/2003 confirms the existing forms of cooperation between the courts and the Commission as they follow from Article 10 EC. The national court may ask the Commission for its support in the application of Article 81 and 82 EC. In regards to the cooperation of the national courts and the Commission, a new notice is being prepared that will replace the 1993 notice.
Additionally, the Regulation provides for the possibility both for the national competition authorities and for the Commission to assist national courts as amicus curiae. The national competition authorities may submit written and oral submission to the court on cases pending before it, which will enhance the coherent application of EC competition rules.
Regulation 1/2003 has taken a firm step in the direction of stronger and more efficient enforcement of EC competition rules. The mutli-faced cooperation between the Commission, the national authorities and the national courts will ensure that the new enforcement system produces also coherent enforcement.
In the light of this new Regulation and the creation of the Network of cooperation, our national legislation is currently under legal reform in order to accommodate the new provisions, thus enabling the C.P.C to effectively apply the EC competition rules.