COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market
Date: 2017-03-22
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, cartel, competition, competition law, dominant position, economic sector, infringement of EU law, single market

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   EUROPEAN COMMISSION  Brussels, 22.3.2017  SWD(2017) 115 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a  DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market {COM(2017) 142 final} {SWD(2017) 114 final} {SWD(2017) 116 final}  
 
 
EXECUTIVE SUMMARY SHEET 
Impact assessment on enhancing competition in the EU for the benefit of businesses and 
consumers – Reinforcement of the application of EU competition law by national competition 
authorities 

A. Need for action 

What is the problem and why is it a problem at EU level?  

A  decentralised  system  for  the  enforcement  of  the  EU  competition  rules  was  put  in  place  in  2004  by 
Regulation 1/2003. It sought to ensure greater enforcement by empowering national competition authorities 
(NCAs) to be enforcers alongside the European Commission. Although NCAs have significantly boosted the 
enforcement of the EU competition rules in the last decade, they could do more. Each year losses of €181-
320 billion accrue owing to the existence of undiscovered cartels which typically increase prices by between 
17% and 30%. Recent surveys and work in the European Semester process show that a number of sectors 
still suffer from a lack of competition across Europe. There is a clearly established link between the role and 
the ability of NCAs to act and fully enforce the EU competition rules and ensuring competition on markets. 
There are four underlying problem drivers that affect the ability of NCAs to be more effective enforcers and 
the decentralized system put in place by Regulation 1/2003: 
1. 
2. 
3.  divergences in leniency programmes discourage companies from coming clean across Europe 
4. 

lack of effective competition tools 
lack of effective powers to impose deterrent fines 

lack of safeguards that NCAs can act independently when enforcing the EU competition rules and have 
the resources they need to carry out their work. 

If NCAs cannot realise their full potential, this weakens one of the main facets of the single market, namely 
ensuring that competition is not distorted in Europe. Less effective enforcement by the NCAs means that the 
conditions  for  efficiently  functioning  markets  are  not  ensured.  Businesses  cannot  compete  fairly  on  their 
merits and face barriers to market entry. Consumers miss out on the benefits of competition enforcement, 
namely lower prices, better quality, wider choice and product innovation.  

What should be achieved?  

Making the NCAs more effective enforcers would ensure that the full potential of the decentralised system of 
enforcement  put  in  place  by  Regulation  1/2003  is  realised.  This  would  boost  enforcement  of  the  EU 
competition  rules  by  the  NCAs  and  the  functioning  of  markets  in  Europe  (general  objective).This  requires 
the achievement of the following specific objectives: 
1.  Ensuring all NCAs have effective investigation and decision-making tools; 
2.  Ensuring that deterrent fines can be imposed; 
3.  Guaranteeing  that  all  NCAs  have  a  well-designed  leniency  programme  in  place  which  facilitates 

applying for leniency in multiple jurisdictions; and 

4.  Ensuring  that  NCAs  have  sufficient  resources  and  they  can  enforce  the  EU  competition  rules 

independently. 

What is the value added of action at the EU level (subsidiarity)?  

The  EU  should  take  action  to  address  the  problems  identified  because  the  NCAs  are  applying  EU  rules 
which have a cross-border dimension. Enforcement action by one NCA in a Member State may impact on 
competition,  businesses  and  consumers  in  other  Member  States,  e.g.  a  national-wide  cartel  typically 
excludes  competitors  from  other  Member  States.  If  NCAs  do  not  have  the  necessary  means  and 
instruments to enforce (e.g. they lack resources), this may have direct negative consequences for business 
and consumers not only in the Member State of the NCA concerned but also in other Member States, as 
well as on the ability of NCAs to cooperate throughout Europe. Member State Y cannot address the lack of 
means and instruments of a NCA in Member State X, thus only EU action can tackle this problem. 

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If 
not, why?  

Option 1:  no EU action (the baseline scenario) 
Option 2: only soft action 
Option 3:  EU  legislative  action  to  provide  NCAs  with  minimum  means  and  instruments  to  be  effective 

enforcers, complemented by some soft action and some limited detailed rules where appropriate 

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Option 4: EU legislative action to provide NCAs with detailed and uniform means and instruments 
The preferred option is option 3.  
What are different stakeholders' views? Who supports which option?  

All  categories  of  stakeholders  (including  companies  and  industry  associations,  law  firms,  consumer 
organisations and public authorities) consider that action should be taken to empower the NCAs to be more 
effective enforcers. This was confirmed by a public consultation which closed in 12 February 2016 and in 
meetings with stakeholders. 

What are the benefits of the preferred option (if any, otherwise of main ones)?  
Empowering NCAs by giving them minimum means and instruments to be more effective enforcers would 
lead to more effective enforcement of the EU competition rules and further spread the competition culture 
throughout Europe. This would result in more open competitive markets, where companies compete more 
fairly on their merits, enabling them to generate wealth and create jobs and making them more attractive to 
investors.  Greater  competition  boosts  productivity  -  a  key  driver  for  economic  growth.  More  effective 
competition  enforcement  protects  European  consumers  from  business  practices  that  keep  the  prices  of 
goods and services artificially high and enhances their choice of innovative goods and services at affordable 
prices.  Common  minimum  standards  regarding  the  investigation  and  sanctioning  tools  would  reduce 
divergent  outcomes  for  companies  and  make  the  application  of  the  EU  competition  rules  by  NCAs  more 
predictable. Competition authorities in the EU would be able to cooperate better with each other. Costs for 
businesses involved in cross-border activities to adapt to different legal frameworks would reduce or even 
fall.  This  option  is  supported  by  the  majority  of  stakeholders.  The  assessment  of  the  benefits  of  the 
preferred option, both in qualitative and quantitative terms (for example the positive impact on Total Factor 
Productivity  growth-a  key  ingredient  of  GDP)  show  that  the  benefits  will  largely  exceed  the  costs  of 
implementation. 
What are the costs of the preferred option (if any, otherwise of main ones)?  
The  preferred  option  would  largely  entail  implementation  costs  of  the  legislative  initiative  for  public 
administrations,  some  costs  for  training  and  familiarisation  with  the  changes  introduced  and  potentially  a 
limited  increase  of  staff  in  some  NCAs.  Companies  would  face  limited  initial  adaptation  costs  in  terms  of 
familiarisation with the new rules (which would vary depending on the Member State in which they operate). 
Overall,  the  costs  for  businesses  involved  in  cross-border  activities  to  adapt  to  different  legal  frameworks 
would reduce, reinforcing the single market. 
What are the impacts on SMEs and competitiveness?  

More effective competition enforcement results in more open competitive markets, in which all businesses, 
including SMEs and start-ups, can compete fairly on their merits and grow throughout the single market.  

Will there be significant impacts on national budgets and administrations?  

NCAs already have the basic framework in place for the enforcement of the EU competition rules, but they 
face certain gaps or limitations. Implementation costs would be  variable depending on the extent to which 
rules  empowering  NCAs  to  be  effective  enforcers  are  already  in  place.  Costs  would  also  ensue  for  those 
Member States whose NCAs do not have sufficient resources to perform their tasks. 

Will there be other significant impacts?  
Giving NCAs more effective powers would only be done to the extent that it is necessary and proportionate 
and ensures due respect for fundamental rights.  
Proportionality 

Setting minimum standards to empower NCAs to effectively enforce the EU competition rules would ensure 
a  balance  between  meeting  the  general  and  specific  objectives  whilst  not  unduly  interfering  in  national 
traditions. Member States would still be able to set higher standards and adapt rules to national specificities. 

When will the policy be reviewed?  

D. Follow up 

The new EU legislation will be monitored and evaluated during the period of its implementation in national 
law. An ex-post evaluation would be carried out 5 years after its implementation in national law to assess 
whether the objectives have been met.  

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