The European Commission's Own ‘Preliminary Reference Procedure’ in Competition Cases?

• Published date: 01 November 2010
• Author: Kathryn Wright
• Date: 01 November 2010
• DOI: http://doi.org/10.1111/j.1468-0386.2010.00531.x

eulj_531736..759

The European Commission’s Own

‘Preliminary Reference Procedure’ in

Competition Cases?

Kathryn Wright*

Abstract: This article considers the implications of the European Commission, as primary

administrative enforcer of competition law in the Union, using its own ‘preliminary

reference procedure’, through observations in national court proceedings under Council

Regulation 1/2003, to minimise the risks of divergent application of EU anti-trust rules

under the decentralised system of enforcement ushered in by that Regulation. It sets the

scene with the relationship between the European Commission and national courts in

competition law, before describing the relevant provisions of the Regulation and its

accompanying Courts Notice. It then discusses the legal nature of the Commission opinion

as a Union instrument. Identifying cases where the Commission has offered observations,

it assesses the implications of administrative intervention in judicial decision making. It

finds that greater transparency is crucial for legitimacy, legal certainty and maximum

impact on consistent application.

I Introduction

Decentralisation of Articles 101 and 102 TFEU enforcement under Council Regulation

1/2003—the Modernisation Regulation1—has led to an increase in the powers and

jurisdiction of national competition authorities (NCAs) and national courts. While

NCAs are closely linked through the cooperation mechanisms of the European Com-

petition Network (ECN), with its rules for case allocation and consistent application of

Union competition law,2no such mechanism exists for national courts, respecting the

* Lecturer in Law, York Law School, University of York. This article was written in my previous position

as a Research Associate at the ESRC Centre for Competition Policy and PhD candidate at UEA Law

School, University of East Anglia. I would like to thank the two anonymous reviewers and Dr Michael

Harker for helpful comments; Oana Andreea S¸tefan and participants in the ECPR Standing Group on the

European Union Fourth Pan-European Conference on EU Politics, Riga, in particular for discussions on

soft law; and the participants in the ESRC Centre for Competition Policy Third Annual PhD Workshop

to whom I presented early ideas. Any remaining errors are my own. The support of the Economic and

Social Research Council UK is gratefully acknowledged.

1Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules of compe-

tition laid down in Articles 81 and 82 [now Articles 101 and 102] of the Treaty, [2003] OJ L1/1, in force

1 May 2004.

2Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities,

[2004] OJ C101/43.

European Law Journal, Vol. 16, No. 6, November 2010, pp. 736–759.

© 2010 Blackwell Publishing Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK

and 350 Main Street, Malden, MA 02148, USA

principles of judicial independence and procedural autonomy. Consistent application is

a central component of the rule of law. Yet, there is a tension with the greater risks of

divergence arising from a decentralised system: differing interpretations of EU compe-

tition law between and within national jurisdictions; inconsistency between EU and

national law; conflict between competition and other policy areas; and different appli-

cation by different types of enforcers—NCAs and national courts, public and private

enforcers.

This situation raises broader questions about the partnership and tensions between

judicial and administrative bodies, potential administrative intervention in judicial

decision making and the role of soft law in the quasi-judicial system of competition

regulation and enforcement. This ‘quasi-judicial’ nature encompasses several elements:

investigative, decision-making and enforcement functions may be carried out by a

single agency;3there are different types and configurations of administrative and judi-

cial bodies making and enforcing the law; and there are different degrees of persuasive

or binding force attached to the rules they apply and make. A further element denotes

the way in which administrative authorities have taken on more judicial characteristics,

in terms of formality, approach to evidence, procedural rights and reporting of deci-

sions. A particular tension is, that while the Court of Justice of the European Union

(CJEU) is the ultimate interpreter of EU law, the Commission, specifically Directorate-

General (DG) Competition, is the primary competition enforcer in the Union. The

expertise of agencies in competition law enforcement, in particular the historical

primacy of the European Commission, may operate as an alternative source of legiti-

macy to formal legal notions such as uniformity. An important question is to what

extent the independence of the judiciary is valued when weighed against the

Commission’s—and NCAs’—potential loss of effectiveness.

The competition regime in Europe has been institutionally led by administrative

agencies pursuing public enforcement of competition law. One objective of decentrali-

sation, and subsequently of the European Commission’s White Paper on damages

actions,4is to increase private enforcement of competition law before national courts,

without it compromising public enforcement through national competition authorities.

Consistent application of EU competition rules will therefore be central for the smooth

operation of the common market if the number of cases increases. The judicial–

administrative relationship at the institutional nexus of public and private enforcement

is important for the overall success of the competition enforcement regime.

The Modernisation Regulation incorporates various tools to minimise divergent

application of EU anti-trust rules. One such tool is Article 15, which provides for the

European Commission’s intervention in national court proceedings. Under that

Article, EU Member State courts may ask the European Commission for information

or for its opinion on questions concerning the application of the EU competition rules

(Article 15(1)). The European Commission and national competition authorities may

also make own-initiative written interventions, and oral submissions with the permis-

sion of the judge, in legal proceedings between private parties (Article 15(3)). This

contribution considers the implications and influence of the European Commission, as

primary administrative enforcer of competition law in the Union, using its own,

3See W. Wils, ‘The Combination of the Investigative and Prosecutorial Function and the Adjudicative

Function in EC Antitrust Enforcement: A Legal and Economic Analysis’, (2004) 27(2) World Competition

201.

4White Paper on damages actions for breach of the EC antitrust rules, COM (2008) 165, 2 April 2008.

November 2010 European Commission Opinions

737

© 2010 Blackwell Publishing Ltd.