Has Regulation 1/2003 Failed?
Giorgio Monti
European University InstituteRegulation 1:
a legal and cultural revolution• Main effects of this Regulation:– Decentralised competition enforcement• National Competition Authorities (NCAs) have a duty toapply EU competition law (Art 3)• Article 101(3) has direct effect (Art 1)– Abolition of notification system• Self‐assessment by parties (Art 1)– Networked cooperation• Information exchange among NCAs
– Art 11: regarding investigations started

Expected results of Regulation 1• Commission is pro‐active in its enforcement
policy• NCAs become EU agencies enforcing competition
law in the interests of the EU• NCAs cooperate actively• Cases are allocated to the best‐placed agency• Uniform application of competition law acrossthe EUQuestion: how many of these objectives havebeen met, and how?

Commission pro‐active?

Why is the Commission not able totake more cases?
• More resources to merger and state aid cases
than Arts 101 and 102?
– Commission has a duty to act in mergers and state aidcases• Commission spends resources coordinating
national enforcement– Amicus briefs, discussions with national authorities• Commission chooses more complex cases orspends more time making case (e.g. Moreeconomic analysis, closer legal scrutiny to avoid
successful appeal)

National Competition Authorities• Commission statistics– Between 2004‐2012• 1344 investigations• 646 envisaged decision• Number of actual decisions? (unreported)– And for the UK (2004‐2013)• 68 investigations• 16 envisaged decisions

UK’s Office of Fair Trading 2002‐2013

Italy’s NCA: decisions 2002‐2012

Qualitative data
• Most cases are ‘local’– Effect on trade is possible, but relevant markets
are national– Most NCAs cannot impose a fine for effects
outside their territory• Result: In EU‐wide cases, decisions are split• Example an cartel in two Member States is prosecutedand fined by both authorities (Belgium and Germany)– Powers to exchange information usedinfrequently– Case allocation discussion infrequentIs splitting up a cartel legal?
• Ne bis in idem: you cannot be prosecuted twice for thesame offence• Toshiba (2012)– Facts: global cartel, fine imposed by Commission & Czech
Republic (before accession)– Question: is Czech decision in breach of ne bis in idem?
– Answer (before accession): no, Commission had no power
to impose fine for effects in Czech Republic– Answer (after accession): no, provided the Commission
imposes a fine for effects in other states and Czech only
for the fine in its country.
• Then the two legal actions protect different legal interests

Judicial control of NCA
design and powers: VEBIC (2010)
Design of Belgian NCA: prosecutor & Council
Appeals to Brussels Court of Appeal
Belgian NCA may not appear in the appeal (1st instanceis a court)
Minister may support NCA
ECJ: absence of NCA in appeal proceedings does notensure effective enforcement because the court may
be ‘captive’ to the arguments of the appellant
No ‘effective’ application of EU competition law possible

Implication• Any aspect of NCA can be tested for effectiveness– Schenker (2013): national leniency programme ‘must
not undermine the requirement of effective anduniform application of Article 101.
– Donau Chemie (2013): access to leniency documents
to be set applying EU standards– What else can make an NCA ineffective?
• Lack of powers to fine firms for conduct outside its territory?
• Lack of resources allocated to NCA by the state?

Further controls of NCAs
• Article 11(6) Commission veto power– Used formally once in ten years– Informal ways of steering NCA decisions possible
under Art 11(4)• Tele 2 (2010): NCA may not issue decisions saying
there is no infringement of competition law.
– Would deprive the Commission of power toinvestigate¾ Decentralisation or centralisation?

Interim conclusions• Commission is not that more pro‐active afterRegulation 1• National Competition Authorities– Not clear that Regulation 1 caused increased
enforcement– Not clear that NCAs take cases which theCommission would have taken (local cartels)– NCA under the control of the Commission (andthe ECJ), so centralisation, not de‐centralisation

European Competition Network• Official tasks– Case re‐allocation– Information sharing platform• Actual role
– Platform for discussion among officials on individualcases– Development of uniform procedures (e.g. Modelleniency policy)• A.M. Slaughter ‘A New World Order’ (2001)– Networks as the new policymakers

Two views of ECN
Experimentalist governance• NCAs reflect on the best
approach to enforce
competition law• Experiments by NCAs,
feedback to ECN,
development of bestpractices• However: also trend touniform application (e.g.
Leniency policyconvergence)

Lack of legitimacy• ECN has no legal
personality: noaccountability• ECN members are notequals: peer review or peerpressure?
• ECN a poor substitute formore procedural rules