COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL setting out the conditions and procedure by which the Commission may request undertakings and associations of undertakings to provide information in relation to the internal market and related areas
Date: 2017-05-02
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU competence, EU initiative, administrative cooperation, application of EU law, cross-frontier data flow, data collection, exchange of information, single market, trade information, type of business

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 2.5.2017  SWD(2017) 216 final   Compliance Package COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a   REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  setting out the conditions and procedure by which the Commission may request undertakings and associations of undertakings to provide information in relation to the internal market and related areas  {COM(2017) 257 final} {SWD(2017) 215 final} {SWD(2017) 217 final}  
 
 
Table of contents 

1. 

Introduction .................................................................................................................................... 5 

2.  Problem definition .......................................................................................................................... 6 

2.1.

  What is the problem? .............................................................................................................. 7 

2.2.

  Why is it a problem? ................................................................................................................ 8 

2.3.

  Who is affected, in what ways, and to what extent? ............................................................ 12 

2.4.

Problem drivers ..................................................................................................................... 13 

2.5.

  How would the problems evolve? ......................................................................................... 20 

3.  Why should the Union act? ........................................................................................................... 20 

3.1.

Legal basis .............................................................................................................................. 20 

3.2.

  Necessity and added-value of Union action .......................................................................... 21 

4.  What should be achieved? ............................................................................................................ 23 

4.1.

  Objectives .............................................................................................................................. 23 

4.2.

Consistency with other Union policies .................................................................................. 24 

5.  What are the various options to achieve the objectives?............................................................. 24 

5.1.

Baseline scenario: no Union policy change ........................................................................... 24 

5.2.

  Option 1: Exchange of best practices between Member States and with the Commission . 25 

5.3.

  Option 2: Lifting regulatory limitations to the sharing of firm-level information between the 
Member States and the Commission .................................................................................... 26 

5.4.

  Option 3: Introducing residual investigative powers through national level single market 

information tools ................................................................................................................... 27 

5.5.

  Option 4: Introducing an EU-level Single Market Information Tool (SMIT) .......................... 28 

5.6.

  Option 5: A 'hybrid' approach combining Options 2 and 4 ................................................... 31 

5.7.

  Discarded options .................................................................................................................. 31 

6.  What are the impacts of the different policy options and who will be affected? ........................ 32 

6.1.

6.2.

6.3.

Impacts of Option 1 ............................................................................................................... 32 

Impacts of Option 2 ............................................................................................................... 33 

Impacts common to Options 3, 4 and 5 ................................................................................ 34 

6.4.

  Additional impacts specific to Option 3 ................................................................................ 37 

6.5.

  Additional impacts specific to Option 4 ................................................................................ 39 

6.6.

  Additional impacts specific to Option 5 ................................................................................ 43 

7.  How do the options compare? ...................................................................................................... 43 

7.1.

Comparison of the options .................................................................................................... 43 

2 

 
 
 
 
 
 
 
 
 
 
7.2.

Preferred option .................................................................................................................... 47 

8.  How would actual impacts be monitored and evaluated? ........................................................... 50 

Annex 1: Procedural information .......................................................................................................... 52 

Annex 2: Stakeholder consultation ....................................................................................................... 56 

A2.1. Results of the public consultations .......................................................................................... 56 

A2.2. Results of the targeted consultations ...................................................................................... 63 

A2.3. How the results of consultations were used ........................................................................... 64 

Annex 3: Who is affected by the initiative and how ............................................................................. 65 

Annex 4: Analytical models used in preparing the impact assessment ................................................ 66 

Annex 5: Examples and case studies supporting the problem definition ............................................. 67 

A5.1. Examples of incomplete information in infringement proceedings before the CJEU ............. 68 

A5.2. Examples from the State aid domain ...................................................................................... 81 

Annex 6: Overview of existing policy frameworks ................................................................................ 86 

A6.1. Investigative powers of the European Commission ................................................................ 86 

A6.2. Investigative powers of EU bodies/agencies in the financial services sector ......................... 91 

A6.3. Examples of investigative powers of national authorities in Member States ....................... 101 

A6.4. Examples of information exchange tools between different authorities ............................. 108 

A6.5. Examples of investigative powers of third country authorities ............................................. 110 

Annex 7: Discarded options ................................................................................................................ 114 

A7.1. Reuse of Competition and Consumer Protection tools for coordination in Option 3 ........... 114 

A7.2. Options not discussed in the impact assessment .................................................................. 117 

Annex 8:  Cost-benefit estimation ...................................................................................................... 121 

A8.1. Costs....................................................................................................................................... 121 

A8.2. Benefits .................................................................................................................................. 130 

A8.3. Comparison of costs and benefits ......................................................................................... 131 

A8.4. Sensitivity analysis ................................................................................................................. 132 

Annex 9: Why should the EU act? ....................................................................................................... 137 

A9.1. The legal basis ........................................................................................................................ 137 

A9.2. Subsidiarity ............................................................................................................................ 139 

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LIST OF ABBREVIATIONS AND GLOSSARY OF TERMS 

Term/abbreviation  Explanation 

Body of European Regulators for Electronic Communications 
Billion 
Business-to-Business 
Committee of European Banking Supervisors 
Community Innovation Survey 
Court of Justice of the European Union 
Competition and Markets Authority 
The European Commission 
Consumer Protection Cooperation (Regulation) 
Directorate-General 
Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs  
Digital Single Market 
European Court of Human Rights 
European Banking Authority 
European Competition Network 
European Economic Area  
European Insurance and Occupational Pensions Authority 
European Securities and Markets Authority 
European Union Intellectual Property Office 
Framework Regulation Integrating Business Statistics 
Internal Market Information system 
Breach of the EU acquis 
Intellectual Property Right 
Million 
Market Investigation Tool used by the Commission in the State aid area 
Member State 
National Competition Authorities 
National Statistical Authorities 
Regulatory Scrutiny Board  
Structural Business Statistics 
Communication from the Commission to the European Parliament, the 
Council, the European Economic and Social Committee and the Committee of 
the Regions, 'Upgrading the Single Market: more opportunities for people and 
business', COM(2015)550, 28.10.2015 
Small and Medium-sized Enterprise(s) 
Single Market Information Tool 
Single Resolution Board 
Treaty on European Union 
Treaty on the Functioning of the European Union 

BEREC 
bn 
B2B 
CEBS 
CIS 
CJEU 
CMA 
COM 
CPC 
DG 
DG GROW 
DSM 
ECtHR 
EBA 
ECN 
EEA 
EIOPA 
ESMA 
EUIPO 
FRIBS 
IMI 
Infringement 
IPR 
m 
MIT 
MS 
NCA 
NSA 
RSB 
SBS 
Single Market 
Strategy 

SME 
SMIT 
SRB 
TEU 
TFEU 

4 

 
 
 
1.  INTRODUCTION 

While  there  has  been  considerable  progress  towards  a  more  integrated  single  market  in  recent 
years,  citizens  and  firms  are  frustrated  that  they  still  face  obstacles  to  reaping  its  full  benefits.  In 
addition,  they  consider  that  these  obstacles  are  not  being  addressed  fast  enough  by  the 
Commission, other Union institutions and the Member States. In the words of one stakeholder: 

'The European Commission did not act against the Member State or the process took so long 
that our members had no other choice than to adapt to the situation'1. 

The  Single  Market  Strategy  adopted  in  October  2015  identifies  that  these  barriers  could  be 
addressed more effectively and efficiently if the Commission and the Member States had access to 
timely, comprehensive, accurate, and reliable information. For this reason, the Strategy proposed a 
Single  Market  Information  Tool  (SMIT)  to  collect  quantitative  and  qualitative  information  directly 
from selected market players.  

'It  [the  Commission]  will  propose  a  regulatory  initiative  allowing  it  to  collect  reliable 
information  directly  from  selected  market  players,  with  a  view  to  safeguarding  and 
improving the functioning of the single market'2. 

When the Commission or Member States are alerted of an incidence of malfunctioning in the single 
market, evidence is necessary in order to proceed, particularly evidence in respect of whether the 
underlying cause is a breach of Union rules. Furthermore, sound information on the severity of the 
breach is required, of its impact on individuals or firms, and on how widespread the practices that 
cause the breach are at the geographical, sector, and product/service level.  

Obtaining this information is challenging, particularly in cases with a cross-border dimension, for a 
number  of  reasons.  Firstly,  the  required  evidence  is  often  detailed  and  sensitive  firm-level 
information3,  which  is  not  available  publicly  and  cannot  be  purchased  from  third  party  data 
providers. Secondly, the required information is sometimes available to national authorities in only 
some Member States. Thirdly, the collected data is often not comparable across Member States.  

Given these  challenges, the market  participants  concerned would be the only feasible information 
source.  Unfortunately,  in  most  cases  they  currently  lack  the  incentive  to  share  their  confidential 
information; and in addition there is no mechanism in place to ensure the veracity of any data that 
would ultimately be shared. At present, Union and national mechanisms for information collection 
are  not  sufficient  to  acquire  this  information  from  market  players.  At  the  national  level,  a  large 

1 Submission of a European association of enterprises in reply to the public consultation (See Annex 2). 
2 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  the  Committee  of  the  Regions,  'Upgrading  the  Single  Market:  more  opportunities  for 
people and business', COM(2015)550, 28.10.2015, p. 16. Hereinafter, the 'Single Market Strategy'. 
3 The  required  information  depends  on  a  particular  enforcement  case.  For  illustration  purposes,  such 
information  could  include  factual  market  data  (e.g.  market  size,  geographical  distribution  of  consumers  and 
suppliers), firm data (e.g. cost structure, profits, pricing policy, volumes, actual levels of capital, composition of 
liabilities,  new  products,  ownership  structure  or  supply  contracts,  warehouses  and  distributors)  or  overall 
market  functioning  data (e.g.  regulatory  and  entry  barriers,  costs  of  cross-border  operations, growth  rate  of 
the market or overcapacity). For specific examples see Section 2.2.1. 

5 

 
                                                            
majority  of  Member  States  have  only  sector-specific  information  collection  powers,  and  these  are 
generally ill-suited to request cross-border information or to share the information that is collected 
with the Commission or other Member States. At the Union level, the Commission has investigation 
powers  only  in  the  domain  narrowly  prescribed  by  competition  law  and  trade  defence  policy4.  In 
these  domains,  the  existing  powers  help  the  Commission  to  be  more  precise  in  its  economic 
assessments  and  enable  it  to  adopt  swifter  and  solid  facts-based  decisions.  Nevertheless,  Union 
rules  on  State  aid,  anti-competitive  agreements,  abuse  of  dominant  position,  or  mergers  address 
only  a  subset  of  all  the  possible  instances  of  potential  malfunctioning  of  the  single  market;  and 
information collected using these investigation powers cannot be used for purposes other than the 
application of the competition rules of the Treaty.  

This  impact  assessment  analyses  the  need  for  intervention  allowing  the  Commission,  or  the 
Commission  and  Member  States,  to  collect  information  directly  from  selected  market  players  in 
order to 'improve the Commission’s ability to monitor and enforce EU rules in priority areas', as well 
as 'help the Commission to propose improvements where evaluation shows that enforcement deficits 
are due to flaws in the relevant sectoral legislation'5.  

2.  PROBLEM DEFINITION 

The establishment of an internal market6 is one of the main objectives to be reached by the Union in 
cooperation  with  the  Member  States,  as  set  out  in  Article  3(3)  of  the  Treaty  on  European  Union 
(TEU). This objective is articulated in more detail in Article 26 of the Treaty on the Functioning of the 
European Union (TFEU), which provides for the adoption of measures to both establish and ensure 
the  functioning  of  the  internal  market.  To  that  end,  the  internal  market  is  underpinned  by 
fundamental provisions of the TFEU on free movement of goods, services, persons, and capital; and 
non-discrimination on grounds of citizenship/origin7. Member States' authorities are responsible for 
the implementation of single market legislation into national law and its correct enforcement in their 
respective territory. Additionally, the responsibility of the Commission, defined by the Article 17(1) 
TEU,  is  to  ensure  that  the  Treaties,  as  well  as  secondary  rules  adopted  pursuant  to  them,  are 
correctly applied to, inter alia, make the single market a reality. The Commission is often referred to 
as the 'guardian of the Treaties', and is empowered by the TEU to monitor in all Member States the 
application of Union law.  

The responsibility to enforce market participants' compliance with the Union legislation in the area 
of  the  internal  market  generally  lies  with  Member  States  (except  as  regards  Union  rules  on 
competition,  which  the  Commission  can  enforce).  In  turn,  the  Commission  can  take  legal  action 

4 Details of existing powers are described in Section 2.4.1.  
5 Single Market Strategy, p. 16. The Single Market Strategy indicated that any market information tool would 
be used only once a proper screening of all available evidence had been conducted and once the value added 
of  gathering  information  from  market  players  in  addition  to  existing  information  sources  has  been  clearly 
established. 
6 Throughout  this  document,  we  employ  the  term  'single  market',  but  use  the  term  'internal  market'  when 
referring directly to an article of the EU Treaties, or to the title of an act of Union law where the latter is used. 
7Articles  18-19  (non-discrimination),  34-37  (free  movement  of  goods),  45-66  (free  movement  of  persons, 
services and capital) and 114 (approximation of laws) TFEU. 

6 

 
                                                            
against  Member  States  in  the  form  of  infringement  proceedings  under  Article  258  TFEU8.  Those 
proceedings  allow  the  Commission  to  ensure  that  Union  law  is  correctly  applied.  In  those 
proceedings,  the  Commission  has  the  'responsibility  to  place  before  the  Court  all  the  factual 
information needed'9 to enable the Court of Justice of the European Union (CJEU) to establish that an 
obligation  has  not  been  fulfilled  by  the  Member  State  concerned.  In  addition,  in  cases  where  the 
evaluation  shows  that  enforcement  deficits  are  due  to  shortcomings  of  the  relevant  sectoral 
legislation, the Commission may propose improvements10 aiming at giving effect to the Treaty rules 
in  the  area  of  single  market.  However,  as  mentioned  above,  the  Commission  does  not  have 
investigative powers of its own in the area of the single market and is largely reliant on information 
provided  by  complainants,  by  public  and  private  bodies  and,  particularly,  by  the  Member  State(s) 
concerned.  At  the  same  time,  the  CJEU  has  progressively  become  stricter  with  the  Commission  in 
relation to the volume of factual evidence that it must submit.  

2.1.

 What is the problem? 

The main problem addressed by this impact assessment is the lack of reliable and accurate firm-level 
information for the Commission and Member States in situations when it is necessary to timely (i) 
identify and  measure  the  impact of  practices non-compliant with single market rules;  (ii) prioritise 
enforcement  of  compliance  with  such  rules;  or  (iii)  in  cases  of  enforcement  deficits,  use  the 
information collected to prepare proposals for Union legislative acts or, as appropriate, alternative 
policy  instruments  .  It  is  important  to  emphasise  at  the  outset  that  this  initiative  does  not  aim  at 
creating  new  enforcement  powers  for  the  Commission  (e.g.  procedures  to  pursue  infringements 
against  individual  market  participants).  Rather,  it  complements  existing  enforcement  procedures 
with additional fact-finding ability for a small but significant subset of instances where this is strictly 
necessary. 

Since 1996, the CJEU has, either partially or totally, dismissed the Commission's claims in at least 49 
infringement  cases  stating  that  the  Commission  had  not  submitted  sufficient  factual  evidence  in 
support of all or part of its claims11. This amounts to 16% of the 309 infringement cases lost by the 
Commission on substantive grounds during that period (of the total 1654 judgments on infringement 
cases issued by the CJEU in that period). Furthermore, in at least 17 of those cases the Commission 
could  have  obtained the  missing  information/data  from  private  parties  had  it have  investigative 
powers12. 

8 Action against a Member State for failure to fulfil an obligation under the Treaties. 
9 For instance, judgment of the CJEU in case C-400/08, Commission vs. Spain, paragraph 58. 
10 This mainly refers to legislative initiatives. However, it should not restrict the nature of the potential policy 
proposals. In particular, in certain circumstances, following the examination of the problem,  the Commission 
may consider that proposing a non-legislative initiative would be more appropriate than a legislative initiative. 
However,  in  order  to  simplify  the  presentation  of  this  impact  assessment,  we  herewith  refer  to  legislative 
initiatives only.  
11 For further information see Annex 5. 
12 The missing factual evidence at stake concerned, inter alia, firm-level data on: operational costs of pension 
funds; level of interest paid on bank loans and refinancing conditions; insurance companies' approach to set 
premium  rates  and  actuarial  principles  they  follow;  shareholdings  in  certain  companies;  organisation/ 
allocation  of  powers  issues  within  a  group  of  undertakings;  access  charges  for  use  of  networks;  etc.  It  also 

7 

 
                                                            
 
When  addressing  obstacles  to  the  functioning  of  the  internal  market  -  either  via  infringement 
proceedings or, in case of enforcement deficits, through legislative initiatives - the Commission is in a 
great majority of cases able to acquire the necessary information already. It is collected either from 
the Member States, who are under a duty to cooperate with the Commission as per Article 4(3) TEU, 
or via currently available tools13. Although this information is not always extremely detailed, it is in 
most cases sufficient to clearly support the Commission's decision-making. Sometimes, however, the 
available  information  does  not  allow  to:  (1)  confirm  whether  the  situation  constitutes  a  breach  of 
Union rules, (2) assess how grave the impact of such breach is on the single market (prioritisation), 
and  (3)  how  efficient  a  Commission  action  (regardless  of  whether  in  a  form  of  an  infringement 
procedure  or  actions  to  ensure  the  application  of  the  Union  law)  would  be  in  improving  the 
situation.  In  such  circumstances,  fine-grained  information  would  allow  for  more  rapid  and  precise 
actions.  

The  current  regulatory  framework  as  regards  the  Commission's  powers  to  obtain  information  for 
addressing  obstacles  to  the  functioning  of  the  internal  market  rules  works  efficiently  for  a  great 
majority  of  cases.  Challenges  only  arise  in  extraordinary  situations  where  very  detailed, 
comparable, up-to-date, and often confidential, firm-level data are necessary within a limited time 
frame14.  The  remainder  of  this  section,  and  this  impact  assessment  in  general,  describe  problems 
relating to the latter limited subset of cases. 

2.2.

 Why is it a problem? 

In order to acquire evidence needed for proving the existence of serious obstacles to the functioning 
of  the  internal  market  (including  possible  infringements  of  Union  law)  and  calibrating  the 
Commission's  response  to  such  obstacles,  the  Commission  primarily  relies  on  the  Member  States 
(except in the field of antitrust and mergers). However, in certain cases national authorities may not 
possess  the  required  firm-level  information  or  their  national  rules  on  information  collection  may 
prevent them from sharing it with the Commission or with other Member States (either at all or in a 
sufficiently timely/disaggregated fashion).  

To  complement  the  information  received  from  national  authorities,  the  Commission  relies  on 
voluntary  cooperation  from  interested  parties.  This  may  involve  obtaining  information  from 
complainants  or  through  voluntary  public  or  targeted  consultation  methods.  Such  consultations, 
however,  are  not  designed  with  proprietary  or  confidential  information  in  mind.  Accordingly,  it  is 
frequently  difficult  to  ensure  that  the  information  collected  is  unbiased,  reliable,  complete, 
comparable or timely. In certain circumstances, the Commission and Member States cannot rely on 
official statistics, as there is a time lag in their production and they are often insufficiently detailed or 

concerned wider economic data on distortive effects of national rules (exclusive rights to import and export 
goods; certain tax rules) which could have been provided by those benefiting from such distortion. 
13 For information on existing tools see Section 2.4.1.  
14 Other  factors  may  impede  identification  of  non-compliant  practices  or  render  enforcing  compliance  with 
single  market  rules  difficult  (e.g.  administrative  and  judicial  capacity,  lack  of  resources,  clarity  of  law). 
However,  this  impact  assessment  focuses  only  on  the  reasons  relating  to  the  lack  of  relevant  firm-level 
information. 

8 

 
                                                                                                                                                                                         
disaggregated for enforcement and policy preparation purposes. These underlying problem drivers 
are presented in Fig. 2.1 and are discussed in Section 2.4. 

Fig. 2.1 Problem tree 

Following the Single Market Strategy, this initiative primarily focuses on the problems relating to the 
enforcement  of  Union  internal  market  rules,  particularly  through  legal  actions  (i.e.  infringement 
proceedings against Member States). In case when such legal actions are not sufficient to tackle the 
single market obstacles at stake (particularly if such obstacles are novel, systematic and persistent), 
the information will be used to prepare proposals of legislative or non-legislative nature.  Moreover, 
it  should  be  emphasized  that  these  actions  are  not  easily  separable  as,  for  example,  individual 
infringement  cases  can  evolve  into  new  Union  legislation  (see  the  case  study  on  the  geo-blocking 
initiative in the following section).  

2.2.1.

Illustration of the problem  

This  subsection  presents  examples  illustrating  why  lack  of  information  could,  in  particular 
circumstances,  constitute  an  obstacle  to  the  enforcement  of  single  market  rules.  They  include 
infringement proceedings at the judicial stage, infringement proceedings at the administrative stage 
and  preparation  of  new  single  market  rules  where  evaluation  has  shown  that  systematic 
enforcement deficits are due to gaps in Union legislation.  

These  examples  span  across  different  policy  domains.  They  are  not  meant  to  be  exhaustive,  but 
rather  a  small,  yet  representative,  subset  to  illustrate  that  reliable,  detailed  and  timely  market 
information would have allowed for more effective and efficient enforcement in different areas.  

9 

DriversProblemConsequencesLack of reliable firm-level information for the Commissionfor timely identifying and addressing regulatory and market failures through:Single Market not as efficient as it could beSingle market enforcement impairedMember State behaviour (public barriers)  ContextRemedying single market  failures impededFirms might lack incentives to voluntarily reveal confidential information (e.g. on costs or pricing)It is difficult to verify correctness and representativeness of information  providedSufficiently detailed and timely information is otherwise not availableDirect consultation of market participantsNational mechanisms for information gathering ill-suited  for  collecting or sharing information at the EU levelOfficial statistical sources Obstacles to cross border activity in the Single Market may be caused byBarriers remainLow cross-border activitySuboptimal allocation of resourcesProductive/dynamic inefficienciesConsumer harmCosts in growth and jobsFirm behaviour (private barriers)Market information is necessary for public authorities to act against  such barriers. Itis typically acquired through:Identifying single market  failures impededFor instances where detailed firm-level information is essential the above problem could lead to:Out of scope:This problem does not concern the majority of situations, as usually either:•market information is not necessary for proving the existence of serious obstacles to the functioning of the single market or for calibrating the Commission's response to such obstacles, or•market information is necessary only at an aggregated level, e.g. as provided by Eurostat, or•existing sources of firm level information are sufficiently timely and detailed.Infringement cases against Member StatesIn case of enforcement deficits: Regulatory improvements 
 
 
 
 
Examples of incomplete information in the scope of infringement proceedings 

a) Examples of incomplete information before the CJEU 

As already mentioned, over the past 20 years the Commission has lost at least 17 infringement cases 
in  front  of  the  CJEU  due  to  lack  of  sufficient  factual  evidence  that  could  had  been  obtained  from 
private parties. Moreover, the economic impact of these cases on the single market is significant. 
For instance, in one such case15, the Commission argued that German legislation was discriminating 
against non-resident pension funds since these funds could not deduct from dividends and interest 
received the operating costs incurred which are directly linked to that income (e.g. banking expenses 
and analogous transaction costs; costs linked to disputes on dividends paid by a resident company to 
a  non-resident pension fund; and  expenses  linked  to  human resources  specifically tasked  with the 
acquisition of shares from which dividends may be obtained). The CJEU considered that the evidence 
submitted  by  the  Commission  was  insufficient  and  theoretical,  amounting  to  mere  presumptions, 
and dismissed the action. The Commission would have needed detailed and representative examples 
of operational costs to support its allegations – yet, such evidence could have only originated from 
pension  funds.  In  another  case16,  the  CJEU  dismissed  the  Commission's  claim  that  Portuguese 
legislation  resulted  in  higher  taxation  of  non-resident  financial  institutions  because  of  lack  of 
credible evidence and further stated that 'the Commission could have furnished, inter alia, statistical 
data  or  information  concerning  the  level  of  interest  paid  on  bank  loans  and  relating  to  the 
refinancing  conditions  in  order  to  support  the  plausibility  of  its  calculations'.  Such  missing 
information could have only come from (resident and non-resident) financial institutions. 

b) Examples of incomplete information in the framework of proceedings at an administrative stage 

Enforcement  of  public  concessions  rules  in  the  context  of  large  infrastructure  projects:  Extending 
concessions without opening a call for tender is allowed by Union public procurement rules if certain 
conditions  are  met.  These  conditions  include  compensating  a  concessionaire  for  lost  revenues 
caused  by  a  regulatory  change  or  providing  a  concessionaire  additional  time  to  amortise  its 
investment  costs.  Given  the  nature  of  the  infrastructure  that  is  subject  to  concessions  (e.g. 
railways and ports), the monetary implications and the consequences for citizens of choosing the 
best and cheapest concessionaire are enormous (and were estimated at least at EUR 3 billion in 
one particular case). In order to determine whether an extension of a concession without opening a 
tender  is  justified,  or  more  importantly,  whether  such  a  prolongation  infringes  on  Union  rules17, 
detailed revenue and cost data are indispensable. Since the conditions that justify such an extension 
relate  to  the  concessionaire  not  having  been  sufficiently  remunerated  for  its  investment  and  risk-
taking, detailed data on investment and demand are required for such assessment. These data  are 
mostly business secrets of private firms and the Commission cannot obtain them under the current 
legal  framework.  Buying  these  data  from  commercial  data  sources  is  not  an  option  either  as  it  is 
unavailable. Hence, in the past the Commission has had to rely on estimates.  

15 Case C-600/10, Commission vs. Germany (free movement of capital). 
16 Case C-105/08, Commission vs. Portugal (free movement of capital / freedom to provide services). 
17 In particular Directive 2014/23/EU on the award of concession contracts. 

10 

 
                                                            
Enforcing  public  procurement  rules  in  the  utilities  sector:  If  a  given  utility  sector  (water,  energy, 
transport and postal services) in a Member State is subject to enough market pressure, entities and 
contracting  authorities  operating  in  that  sector  are  exempted  from  the  application  of  the  Utilities 
Directive (Article 34 of the Directive 2014/25/EU). Firms have a clear incentive to be exempted, since 
this  reduces  their  administrative  burden  and  allows  them  to  procure  at  their  own  discretion. 
Analysing  whether  the  degree  of  market  pressure  is  sufficient  to  justify  an  exemption  requires 
micro-level  information  that  is  not  publicly  available,  including  business  secrets,  such  as  data  on 
prices, quantities, and cost structure. Currently, the Commission can neither obtain such information 
from stakeholders other than the applicant, nor question the validity of the evidence presented by 
the applicant. The latter is particularly relevant because the Commission is at a clear informational 
disadvantage regarding the sector information compared to the applicant. Since the applicant has a 
clear  incentive  to  be  exempted,  it  could  present  the  information  in  the  most  favourable  light  to 
being  granted  the  exemption.  Given  the  relevance  of  the  water,  energy,  transport,  and  postal 
service, a precise and timely assessment is extremely important. 

Examples  of  incomplete  information  where  an  infringement  case  evolves  into  a  proposal  for  a 
legislative initiative   

In  July  2015,  following  consumer  complaints  on  discrimination  of  German  and  British  buyers,  the 
Commission  asked  France  to  investigate  Euro  Disney's  online  pricing  practices.  Following  this 
infringement  investigation,  the  Commission  proposed  the  regulation  addressing  unjustified  geo-
blocking specifically addressing price discrimination based on the nationality or residence, including 
services that are delivered in the same location, such as entry tickets to leisure parks18.  

The Council conclusions of 21 November 2016 call for evaluating four years after adopting the geo-
blocking  regulation  whether  it  should  be  extended  to  the  sale  of  copyright  protected  works  in  an 
intangible  formError! Bookmark not defined..  These  works  are  often  licensed  and  distributed  on  a  territorial 
(Member State) basis. Furthermore, producers of premium content often grant an exclusive license 
to  a  single  distributor/broadcaster/service  provider  in  each  Member  State19.  Whether  reasons  for 
such  territorial  restrictions  are  justified20 and  whether  expanding  the  scope  of  the  geo-blocking 
regulation  to  the  sale  of  copyright  protected  content21 would  be  desirable  and  improve  consumer 
choice is not obvious. This will require an empirical quantitative assessment, for which CRA (2014)22 

18 http://data.consilium.europa.eu/doc/document/ST-14663-2016-INIT/en/pdf, see Article 20. 
19 Beyond copyright licensing issues, the limited availability of content online across borders might also be the 
result of decisions taken by service providers (which may be related to regulatory requirements, technological 
or  financial  constraints,  etc.).  As  a  result,  there  are  instances  where  even  if  multi-territorial  licences  are 
granted  by  right-holders  or  even  if  agreements  between  right-holders  and  service  providers  do  not  include 
limitations on territorial exploitation, EU content market might remain partitioned. 
20 One  of  the  most  commonly  invoked  justifications  for  the  territorial  exploitation  of  copyrighted  content  is 
that it is crucial to ensure the funding and sustainability of the European creative industries. 
21 Provided that the trader has the requisite rights for the relevant territories. 
22 Economic Analysis of the Territoriality of the Making Available Right in the EU, Study for the Commission (DG 
MARKT). 

11 

 
 
                                                            
confirmed  that  the  necessary  data  are  not  publicly  available.  In  the  past,  the  Commission  has 
requested these data, but only a handful of anecdotes and aggregated statistics were delivered23. A 
report by the European Parliament and the Council on addressing unjustified geo-blocking24 stated: 
'[…] evaluation of the extension to audio-visual services should be based on detailed price and cost 
data  which  only  service  providers  possess.  Therefore,  these  providers  should  cooperate  in  the 
evaluation  in  order  to  assess  whether  the  inclusion  of  these  services  within  the  scope  of  this 
Regulation  would  lead  to  the  evolution  towards  more  efficient  business  models  than  the  ones 
currently used.' 

A well-informed regulatory decision would be crucial as it could have a significant impact on existing 
business models, industry revenues and content creation. A marginal improvement in the precision 
of measuring a policy change impact might have enormous benefits when a change in revenues for 
a whole industry might be at stake: 1 % of copyright intensive industries revenue constitutes more 
than 9 billion euros25.  

2.3.

 Who is affected, in what ways, and to what extent? 

Obstacles to the Single Market cannot be easily overcome when the Commission lacks data to prove 
what is causing them, how severe they are, and what the impact of potential solutions would be. In 
exceptional  cases,  when  very  detailed,  comparable,  up-to-date,  often  confidential,  firm-level 
information  is  required  within  a  short  time  frame,  such  data  can  only  be  obtained  directly  from 
firms. Not being able to obtain this information and hence, not being able  to overcome the single 
market  obstacles,  affects  firms  operating  in  the  single  market,  citizens  (in  their  capacity  as 
consumers, employees and shareholders) and public authorities, including the Commission. 

Lack  of  evidence  related  to  market  functioning  may  compromise  the  Commission's  response, 
whether in relation to its precision (through insufficiently robust evidence to back up economically 
important  infringement  cases  or  policy  interventions),  its  efficiency  (enforcement  of  cross-border 
cases hampered and/or slowed down due to incomplete evidence), or its effectiveness (insufficient 
grounds to prioritise infringements or assess potential policy interventions). 

The following stakeholders are affected by these issues:  

  Citizens face uncertainty about the extent of protection of their rights due to sub-optimal cross-
border enforcement of single market rules. Lower trust in the single market can dissuade them 

23 Since the whole demand curve and not just an average effect would have to be estimated, buying aggregate 
data from commercial data sources would not solve the problem either. The Commission's e-commerce sector 
inquiry in the antitrust field included a questionnaire on digital content that was answered by 340 firms, which 
did  not  collect  disaggregated  price  and  sales  data.  It  did  review  actual  licensing  agreements,  hence 
understanding better what the current business practices are. The public consultation on the review of the EU 
copyright  rules  held  in  2013/1014  included  qualitative  questions  to  understand  why  firms  geo-block 
copyrighted content. 
24 http://www.europarl.europa.eu/sides/getDoc.do?mode=XML&language=EN&reference=PE595.745  
25 Copyright-intensive  industries  generated  914.6  billion  value  added  or  6.8%  of  EU  GDP.  This  is  an  annual 
average  for  2011-2013  as  reported  by  EUIPO  October  2016  report;  https://euipo.europa.eu/tunnel-
web/secure/webdav/guest/document_library/observatory/documents/IPContributionStudy/performance_in_
the_European_Union/performance_in_the_European_Union_full.pdf  

12 

 
                                                            
from  working,  travelling,  and  shopping  (including  online)  in  other  Member  States.  Consumers 
ultimately  suffer  from  the  limited  competition  resulting  from  sub-optimal  cross-border 
enforcement: they pay higher prices and have fewer choices.  

  Firms  operating  in  the  Union  may  face  legal  uncertainty  and  barriers  when  expanding  cross-
border,  thus  limiting  their  possibilities  for  optimal  allocation  of  resources  and  achieving 
economies of scale. In turn, this negatively affects their international competitiveness and job 
creation.  
Institutions of the Union and national public authorities may not be able to acquire necessary 
data to support infringement procedures or to propose amendments to the existing rules26. This 
may cause less optimal calibration of enforcement actions or policy responses, delays, as well as 
monetary  and  staffing  costs  in  inefficient  attempts  to  acquire  firm-level  information  through 
indirect and potentially less reliable sources27. 

 

2.4.

 Problem drivers 

This  section  singles  out  the  principal  reasons  why  the  current  information-gathering  framework 
might not be sufficient to obtain detailed and timely firm-level information in specific instances28.  

2.4.1.

  National mechanisms for information collection are sector specific and generally ill-suited 

to request cross-border information and/or share information collected  

When  monitoring  and  enforcing  Union  rules,  the  Commission  relies  primarily  on  information 
submitted by the Member States concerned. Pursuant to Article 4(3) TEU, Member States are under 
the obligation to facilitate the Commission in carrying out its tasks, particularly its role as guardian of 
the  Treaties.  In  practice,  this  means  that  Member  States  should  provide  the  Commission,  upon 
request,  with 
investigates  a  possible 
infringement of Union law29.  

information  and  documents  when  the  Commission 

As  mandated  by  Union  law,  competent  authorities  in  Member  States  have  horizontal  (generic) 
supervisory powers in competition policy and consumer protection, as well as several sector-specific 
powers, all of which are relevant  for the single market area. Some of these  powers allow them  to 
collect detailed information directly from market participants. However, those powers are generally 
limited  to  either  a  specific  sector  (e.g.  energy,  transport,  financial  services)  or  to  one  section  of  a 
value chain (e.g. consumer protection)30.  

26 Authorities from three Member States out of ten who replied reported a situation when lack of firm data 
limited their enforcement or legislative activity. 
27 Data  problems  and  a  need  for  better  monitoring  are  e.g.  reported  in  2016  Annual  Growth  Survey  
http://ec.europa.eu/europe2020/making-it-happen/annual-growth-surveys/index_en.htm  
28 The  examples  below  are  for  illustration  purposes.  Many  of  the  quoted  single  market  imperfections  were 
solved either by cumbersome research or by descriptive analysis that allowed the Commission to nevertheless 
proceed with enforcement actions, although arguably at the cost of time/precision. 
29 'It follows that Member States are required to cooperate in good faith with the inquiries of the Commission 
pursuant  to  Article  [258  TFEU],  and  to  provide  the  Commission  with  all  the  information  requested  for  that 
purpose.' - Judgment of the CJEU in case C-494/01, Commission vs. Ireland, paragraph 198. 
30 Investigative powers of national authorities in EU Member States are often based on Union law: e.g. national 
competition  authorities  (NCAs),  financial  supervision  authorities,  consumer  protection  authorities,  national 

13 

 
                                                            
 
In principle, several existing policy frameworks – on the basis of Union sectoral legislation – contain 
mechanisms  for  limited  data  and  information  sharing  between  national  authorities  and  the 
Commission  respectively 31.  However,  unless  specifically  provided  for  under  Union  legislation, 
Member  State  authorities  cannot  share  firm-level  data  and  information  with  the  Commission,  for 
reasons related to professional secrecy obligations, the confidential nature of such information, or 
data  protection.  In  addition,  it  can  be  argued  that  currently,  outside  of  those  areas  regulated  by 
Union  sectoral  legislation,  there  is  no  clear  legal  basis  that  would  require  national  regulatory 
authorities to provide the Commission with firm-level data or information. Only one local authority 
replying to the public consultation, said that it would be possible both to ask companies on behalf of 
the Commission and then to subsequently share with the Commission the information collected. 

Moreover,  none  of  the  Member  States  except  the  UK  possess  horizontal  (generic)  information 
powers adequate for single market enforcement (the notable exception being the UK Competition 
and  Markets  Authority)31.  As  a  result,  Member  States  are  generally  not  able  to  ask  companies  for 
information in the context of a single market infringement case or for preparation of a Union single 
market policy; or they may not be able to get data for evaluation/benchmarking purposes outside an 
investigation procedure (e.g. by asking competitors). In the public consultation, only three out of ten 
responding  authorities  reported  having  powers  to  ask  companies  directly  for  information  (a  UK, 
French and a regional Spanish administration). Three authorities explicitly stated that they have no 
such powers, and two said that the absence of these powers caused problems in enforcement or in 
legislative activity.  

The  UK  Competition  and  Markets  Authority  (CMA)  combines  the  powers  of  initial  and  in-depth 
investigations and it uses criminal and civil means to gather information and conduct cases related 
to competition and consumer protection problems. These powers allow it to examine why particular 
markets  may  be  malfunctioning,  including  reasons  beyond  competition  policy.  The  CMA  can  seek 
firm-level information on a range of matters, including the pricing and quality of goods and services 
supplied in the market under investigation. It can impose sanctions for non-reply. It can also make 
recommendations  to  sectoral  regulators  (e.g.  Ofcom  and  Ofgem)  or  to  the  UK  Government  when 
new legislation might be required. However, the firm-level information collected cannot be shared 
with the Commission or other Member States.  

Extensive market investigation powers are available to over 300 federal-level US authorities as well 
as  to  Australian  authorities,  including  subpoenas,  obtaining  confidential  firm  data  and  imposing 
sanctions for non-compliance (Annex 6). 

Another aspect is the lack of specific information in all Member States, and the incomparability of 
such information due to the different definitions used. 

regulatory  authorities  in  energy,  transport  and  telecommunication  sectors,  as  well  as  national  market 
surveillance  authorities  responsible  for  product  safety.  These  authorities  have  in  their  respective  fields 
extensive investigating powers to access firms’ documents and data, take testimonies from employees, carry 
out on-site inspections, take product samples, etc. They often can impose sanctions for non-compliance with 
information  requests.  These  authorities  cooperate  in  cross-border  cases  through  various  networks  (e.g. 
European Competition Network, Consumer Protection Cooperation network). For details see Annex 6. 
31 For details see Annex 6. 

14 

 
 
                                                                                                                                                                                         
In 2014 the Commission wanted to assess the importance of copyright-intensive sectors to the EU 
economy.  Necessary  detailed  data  on  employment  were  not  available  in  Eurostat.  The  French, 
German and UK governments were the only Member States collecting this type of information at a 
national level. However, the data was not comparable due to different national definitions used. As 
a  result,  the  report  heavily  relied  on  assumptions,  when  measuring  employment  in  the  copyright 
intensive sector. This in turn weakened its value for policy making in the field32. 

Even  if  firm-level  information  is  available  in  one  Member  State,  it  is  by  definition  limited  in  its 
geographic scope. This prevents the use of Member State information tools  – where available – to 
address enforcement cases with a cross-border dimension (i.e. where relevant market data relates 
to  cross-border  value  chains  or  where  there  are  indicators  that  similar  single  market  failures  may 
exist  in  several  Member  States).  At  the  same  time,  such  cases  would  precisely  be  those  that  are 
likely to be a priority for single market enforcement. 

2.4.2.

  Firms lack incentives to voluntarily reveal confidential information 

To  gather  necessary  information,  the  Commission  relies  on  consumer/firm  complaints,  as  well  as 
various consultation methods and tools (both open and targeted), such as questionnaires, surveys, 
meetings,  hearings  and  workshops.  The  most  common  consultation  methods  include  open  public 
consultations, seminars, reports from stakeholders and studies. These information resources always 
rely on voluntary participation by requested stakeholders.  

Complainants  may  have  a  vested  interest  in  submitting  information,  particularly  in  situations  in 
which  they  are  disadvantaged.  Yet,  confronting  this  information  with  (possibly  contradictory) 
information  originating  from  other  parties  may  not  be  an  easy  task.  Firms  replying  to  the  public 
consultation for this initiative stated that they do not/would not provide sensitive information as it is 
costly to extract, it might leak and be used by competitors or public authorities, or it might simply be 
published. 

In addition to complaints, the Commission routinely approaches market participants to request firm-
level  information  (on  a  voluntary  basis).  However,  experience  shows  that  stakeholders  are  often 
reluctant to disclose data with private value, especially when it could be used against their interest 
in  enforcement  actions  or  to  introduce  legislation  that  could  diminish  their  market  power  (e.g. 
through exposure to foreign competition). This is also due to the fact that firms often fear that the 
confidentiality  of  the  information  provided  might  not  be  properly  respected 33.  This  problem 
concerns  also  national  authorities.  For  instance,  one  Member  State  reported  in  the  public 
consultation problems with obtaining data from firms located in other Member States who simply 
did not reply to its requests. 

32 http://ec.europa.eu/internal_market/intellectual-property/docs/joint-report-epo-ohim-final-version_en.pdf   
33 80%  of  firms  responding  to  the  public  consultation  found  protecting  confidentiality  essential  or  very 
important (see Annex 2). 

15 

 
 
 
                                                            
Selected examples of past information requests addressed to private parties demonstrate their lack 
of incentive to provide this information on a voluntary basis: 

 

 

In the context of a recent enforcement case of the Utilities Directive34 in the transport sector, 
the  Commission  requested  the  applicant  to  provide  key  privately-owned  raw  data  concerning 
its  revenues  and  costs35.  The  applicant  refused  to  cooperate  diligently  and  provided  the 
required information long after the deadline, thus limiting the Commission's ability to use this 
data to support its decision. 

In 2016, the Commission had a reasonable suspicion of a frequent absence of published tenders 
for purchasing Computer Tomography scanners in several Member States36. In order to support 
an infringement case for failure to comply with EU public procurement rules, the Commission 
needed firm-level information on contracts and sales. Due to obvious inconsistencies, existing 
sources of information were considered unreliable. The Commission asked a prominent market 
player for this information who, despite having it readily available, replied that it was 'unwilling 
to cooperate in the investigation until the Commission makes a formal request'. 

For  the  reasons  outlined  above,  stakeholders  are  also  often  reluctant  to  provide  sensitive 
information in response to public consultations. That being said, public consultations do give access 
to  empirical 
identify  non-evident  policy 
alternatives  when  taking  a  policy  decision.  They  are  particularly  valuable  as  they  involve  a  wide 
range  of  stakeholders  in  the  regulatory  processes  and  improve  transparency.  However,  standard 
consultations might not be sufficient when the necessary data are sensitive or confidential. 

impacts,  and  they 

indicate  expected 

information, 

Several examples of past public consultations illustrate the lack of stakeholders' incentive to provide 
the requested information, which may present a problem in evidence collection: 

  A 2014 consultation on copyright generated 9581 replies, which took 30 officials and 5 month 
to process. Almost no data on prices, costs, and profits was submitted – even though all were 
of utmost importance37. 

  The 2009 consultation on Accounting Directives resulted in 309 replies, but several questions on 
cost  were  answered  by  only  2  companies38.  This  information  was  necessary  to  assess  the 
burden of reporting obligations to see whether it needed to be simplified. 

34 Application of Article 34 of Directive 2014/25/EU, as described in Section 2.2. 
35 From  the  content  of  previous  submissions  it  was  apparent  that  the  data  was  already  available  to  the 
applicant and that this request was not adding administrative burden. 
36 The reasonable suspicion was based on a large mismatch between the number of the contract awards in two 
public information sources (Tender Electronic Daily and Eurostat) for the period of 2010 and 2015. 
37 European  Commission,  Report  on  the  responses  to  the  Public  Consultation  on  the  Review  of  the  EU 
http://ec.europa.eu/internal_market/consultations/2013/copyright-
July 
Copyright 
rules/docs/contributions/consultation-report_en.pdf.  
38 E.g., only 1 respondent provided an answer to the Question 19 ('If you are a preparer, what is the annual 
cost  of  publishing  your  accounts?').  Only  2  respondents  provided  cost  estimates  under  the  question  'What 
information has to be compiled especially for preparing the disclosures? Can you say anything about the costs 
of 
http://ec.europa.eu/internal_market/accounting/docs/ 
200910_accounting_review_consultation_report_en.pdf. 

information?' 

preparing 

Rules, 

2014, 

this 

16 

 
 
                                                            
identification  of 

  The  recent  public  consultation  on  due  diligence  and  supply  chain  integrity  for  intellectual 
property  asked  right  holders  to  provide,  inter  alia,  information  related  to  their  relation  with 
infringements,  and  auditing  practices. 
suppliers, 
in  the  consultation,  the 
Notwithstanding  the  encouragements  to 
Commission received only 11 replies from companies and business associations. Many told the 
Commission they did not want to provide the information – even if it was in their interest to 
do so – because it was too confidential39.  

intellectual  property 

industry  to  engage 

External studies produced for the Commission and Member State authorities often suffer from the 
same  problem:  study  authors  cannot  oblige  stakeholders  to  provide  the  needed  firm-level 
information.  In fact, it is common  practice that  external contractors request the Commission for a 
recommendation letter to present to interviewees to gain their confidence – signifying even greater 
lack of trust than in front of the Commission.  

  Difficulties in acquiring information and data from firms were outlined in the 2012 RAND report 
on measuring intellectual property rights infringements in the single market40. In this case, the 
point-blank refusal of firms to provide sensitive information (e.g. forecasts and sales data) was 
due  to  the  fact  that,  if  leaked,  their  competitors  or  new  entrants  into  the  market  could 
potentially  make  strategic  use  of  the  information  revealed.  Only  in  two  instances  firms  were 
willing to share data with RAND upon the execution of a nondisclosure agreement.  

  The 2016 study on the distribution in the organic food chain commissioned by the Commission41 
aimed at  providing  deeper  understanding of  the  dynamics  of  the organic  market.  Yet it  could 
not collect the necessary supply chain data due to the reluctance of firms to give up sensitive 
commercial data. 

Occasionally,  contractors  performing  external  studies  succeed  in  acquiring  the  necessary  data. 
However, this is often under the condition of signing a confidentiality agreement with stakeholders 
which  obliges  them  not  to  share  any  firm-level  information  with  the  Commission.  This  situation  is 
problematic for several reasons. The Commission has access only to aggregated data, which makes 
targeted  single  market  enforcement  difficult.  More  importantly,  the  Commission  has  no  ability  to 

technologies. 

39 In particular, the consultation asked respondents for the number of suppliers they know beyond the 1st and 
2nd tiers of their supply chains, type of information they ask from their suppliers, whether they have already 
identified intellectual property infringements in their supply chain, how they addressed this problem, whether 
they implemented auditing practices, what type of auditing practices they use, and whether they use track and 
trace 
http://ec.europa.eu/growth/tools-
the 
See 
databases/newsroom/cf/itemdetail.cfm?item_id=8603  
40 'Measuring  IPR  infringements  in  the  internal  market:  Development  of  a  new  approach  to  estimating  the 
impact  of  infringements  on  sales',  2012,  RAND  Europe:  Stijn  Hoorens,  Priscillia  Hunt,  Alessandro  Malchiodi, 
Rosalie  Liccardo  Pacula,  Srikanth  Kadiyala,  Lila  Rabinovich,  Barrie  Irving.  The  cost  of  this  study  to  the 
Commission was EUR 250 000. 
41 The study was carried out in the context of the implementation of the Communication from the Commission 
to the European Parliament, the Council, the European Economic and Social Committee and the Committee of 
the Regions, 'Action Plan for the future of Organic Production in the European Union', COM (2014) 179.  

consultation: 

report 

of 

17 

 
 
 
                                                            
verify the underlying data submitted by stakeholders and cannot, therefore, judge the correctness of 
the calculations performed by external contractors.  

2.4.3.

It  is  difficult  to  verify  correctness,  completeness  and  representativeness  of  information 
provided voluntarily by firms  

Standard  consultations  typically  rely  on  stakeholders'  willingness  to  participate  and  provide  the 
requested information. Accordingly, these contributions are assessed by the Commission in the full 
knowledge  that  they  cannot  necessarily  be  extrapolated  to  the  whole  stakeholder  community  in 
question  (unless  all  members  of  that  community  reply,  e.g.  all  Member  States).  This  self-imposed 
limitation is mostly due to the fact that the stakeholders who do respond are self-selecting and may 
therefore  over-represent  those  individuals  and  special  interests  who  are  both  the  best  organised 
and who hold particularly strong views on the subject.  

For  example,  the  2014  public  consultation  on  the  review  of  the  Union's  copyright  rules  attracted 
considerable interest from stakeholders, with 9 581 replies, the vast majority of which resulted from 
organised actions, which included 'model responses' and guides for replying (which were circulated 
over the internet)42. Similarly, the 2016 public consultation on the role of publishers in the copyright 
value chain and on the 'panorama exception' produced 6 203 replies, 2791 out of which were similar 
responses sent by an organised campaigner43. The analysis of the responses to the 2013 consultation 
on trade secrets also pointed to a strong mobilisation by special interests (e.g. some groups provided 
multiple  replies  via  affiliated  companies,  while  a  political  party  provided  model  responses  for 
citizens)44. 

The accuracy of targeted consultations and external voluntary submissions from market participants 
cannot be fully relied on either as certain stakeholders may have used the consultation in question 
to present the facts in a particular way, or not to provide certain information at all. 

For  instance,  the  2010  consultation  on  country-by-country  reporting  requirements  targeting  large 
multinational  companies  received  43  answers  from  preparers  of  accounts.  However,  only  three  of 
them  replied  to  the  question  on  the  estimated  cost  related  to  the  introduction  of  such  reporting 
requirements.  Moreover,  the  information  provided  was  aggregated  at  a  corporate  level  (ranging 
from $10M to over $100M), thus not allowing for properly detailed analysis45. 

42 Example  of  a  guide  with  model  responses  by  a  member  of  the  Swedish  Pirate  Party  in  the  European 
Parliament: https://ameliaandersdotter.eu/copyright-consultation-model-responses  
43 European Commission, 'Synopsis reports and contributions of the results of the public consultation on the 
role of publishers in the copyright value chain and on the 'panorama exception'' , https://ec.europa.eu/digital-
single-market/en/news/synopsis-reports-and-contributions-results-public-consultation-role-publishers-
copyright-value 
44 Impact assessment accompanying the document Proposal for a Directive of the European Parliament and of 
the Council on the protection of undisclosed know-how and business information (trade secrets) against their 
unlawful  acquisition,  use  and  disclosure,  SWD(2013)471,  28.11.2013,  http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=SWD:2013:0471:FIN  
45 European Commission, Consultation on Country-by-Country Reporting by Multinational Companies, 
Summary Report, April 2011, http://ec.europa.eu/finance/consultations/2010/financial-
reporting/docs/consultation_summary_en.pdf  

18 

 
 
                                                            
When  selection  bias  is  an  issue,  the  Commission  sometimes  conducts  representative  Union-wide 
surveys, for instance through Eurobarometer. This method, however, is much more expensive than a 
public  consultation.  A  Union-wide  representative  citizen  survey  costs  around  EUR  15  000  per 
question  and  is  even  more  expensive  when  firms  are  involved.  However,  even  Eurobarometer 
surveys are not designed for acquiring detailed or confidential firm-level information.  

2.4.4.

  Sufficiently detailed and timely information from the market is otherwise not available 

The Commission currently has investigation powers only in the domain narrowly prescribed by the 
Union competition rules46. There, the existing powers help the Commission to be more precise in its 
economic assessment and enable it to adopt swifter and solid facts-based decisions, reinforcing the 
basis for infringement actions47). However, these powers are limited by their legal basis to narrowly 
prescribed  areas  and  do  not  allow  for  collecting  and  re-using  the  information  gathered  for  other 
single market related policy purposes.  

A  similar  reasoning  applies  to  data  gathering  under  the  Regulation  on  consumer  protection 
cooperation  (the  'CPC  Regulation')48.  Under  this  Regulation,  consumer  protection  authorities  have 
the power to request information from firms, provided this information concerns a suspected intra-
Union infringement of Union consumer legislation that is listed in the Annex of the Regulation. The 
CPC  Regulation  establishes  a  cooperation  system  between  competent  authorities,  which  has  been 
designed for the purpose of cross-border enforcement of Union consumer laws but remains limited 
to  this  Regulation  and  other  consumer-relevant  legislation.  The  CPC  Regulation  thus  covers  the 
needs of enforcement of Union consumer law in a cross-border context, and is not appropriate to 
support  the  enforcement  of  neither  business-to-business  relations  nor  all  other  single  market 
areas49.  

Last but not least, the Commission also collects a large amount of commercial information available 
through  official  statistics.  However,  such  statistics  are  often  produced  with  a  time  delay  and  at  a 
level of aggregation that does not necessarily match the specific needs of firm-level policy making.  

46 For details on these investigation powers see Annex 6. It also has investigative powers in the trade defence 
policy area (anti-dumping, anti-subsidies etc.), but this policy does not fall under the single market area. 
47 In principle, information collected using those powers could also potentially be used for policy development 
in  the  competition  field:  e.g.  informing  Commission's  Block  Exemption  Regulations,  which  are  non-case 
specific.  
48 Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the  Council  of  27  October  2004  on 
cooperation between national authorities responsible for the enforcement of consumer protection laws (the 
Regulation on consumer protection cooperation), OJ L 364, 9.12.2004, p.1. 
49 The  May  2016  proposal  for  a  new  CPC  Regulation  strengthens  powers  and  cooperation  procedures  for 
national  consumer  protection  authorities to  address  infringements  of Union  consumer law  in  a cross-border 
context. The proposal also foresees an obligation for the Commission to activate the cooperation procedure at 
Union  level  in  cases  where  it  suspects  that  widespread  infringements  affect  a  large  majority  of  Union 
consumers.  

19 

 
                                                            
For  example,  the  Structural  Business  Statistics  (SBS)  provides  the  most  sector  disaggregated 
economic  data  in  Eurostat  (offering  many  economic  variables,  including  auxiliary  dimensions  not 
available  in  national  accounts)  but  no  information  about  individual  firms50.  Moreover,  preliminary 
data  are  published  about  one year  and  final  data  about 20  months  after  the  end of  the reference 
year, thus often being not suitable to inform a timely policy response. In addition, some surveys are 
conducted  infrequently:  for  example,  the  Eurostat  Labour  Cost  Survey  and  Structure  of  Earnings 
Survey  are  conducted  only  every  four  years51,  and  the  Community  Innovation  Survey  (CIS)  is 
conducted every two years52. 

2.5.

 How would the problems evolve? 

Existing  Union  information  tools  may  be  leaving  gaps  in  the  single  market  enforcement.  National 
tools  are  generally  not  designed  for  cross-border  problems.  As  a  result,  the  Commission  and 
Member  States  will  continue  to  be  confronted  by  a  lack  of  access  to  reliable  and  sufficiently 
complete  firm-level  information  where  such  information  is  really  required  for  identifying  and 
addressing  single  market  malfunctions.  The  problems  identified  in  this  impact  assessment  would, 
therefore, remain largely unresolved.  

Further  data  gaps  might  also  arise  in  the  future  (the  'known  unknowns',  as  it  were),  as  new 
economic phenomena appear within the single market (e.g. the collaborative economy or the  – up 
to now – unregulated banking products). The scope of existing information tools may be expanded 
over  time  to  remedy  data  gaps  where  and  when  they  arise.  However,  any  such  change  involves  a 
long legislative process.  

The baseline scenario is described in more detail in Section 5.1. 

3.  WHY SHOULD THE UNION ACT?   

3.1.

 Legal basis 

Article 114 TFEU provides for the adoption of measures for the approximation of the provisions laid 
down  by  law,  regulation  or  administrative  action  in  the  Member  States,  provided  that  they  are 
necessary  for  the  smooth  functioning  of  the  single  market.  The  use  of  Article  114  TFEU  would 
therefore aim at preventing the emergence of obstacles to the functioning of the single market and 
should  be  an  appropriate  legal  basis  for  a  Union  action  entrusting  Member  State  authorities  with 
powers  to  collect  information.  However,  should  the  policy  intervention  require  an  entrustment  of 
the Commission with direct powers to collect information from firms, Article 114 TFEU would need 
to  be  supplemented  by  Article  337  TFEU.  The  latter  entitles  the  Commission  to  collect  any 
information required for the performance of  the  tasks entrusted to it, within  the limits and under 

50 Structural Business Statistics, http://ec.europa.eu/eurostat/cache/metadata/en/sbs_esms.htm  
51 Labour Cost Survey (LCS), http://ec.europa.eu/eurostat/statistics-
explained/index.php/Glossary:Labour_cost_survey_(LCS); Structure of earnings survey (SES), 
http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Structure_of_earnings_survey_(SES)  
52 Community  Innovation  Survey  (CIS),  http://ec.europa.eu/eurostat/web/microdata/community-innovation-
survey  

20 

 
                                                            
the conditions set out by the Union legislator53. Since Article 114 TFEU acts as a default legal basis 
within the single market area, the use of other Articles of the TFEU as additional specific legal basis 
may be appropriate in order to cover single market fields that rely on specific legal basis within the 
TFEU  for  legislative  action:  e.g.  Article  43(2)  TFEU  (agricultural  goods)54,  Articles  91  TFEU  and  100 
(transport), Article 192 (environment) or Article 194(2) TFEU (energy)55. For more details on the legal 
basis, see Annex 9. 

3.2.

 Necessity and added-value of Union action 

An important responsibility of the Commission under Article 17(1) TEU is to ensure that the Treaties 
and  Union  legislative  acts  adopted  pursuant  to  them  are  correctly  applied.  The  Commission  is 
empowered,  as  the  'guardian  of  the  Treaties',  to  oversee  the  application  of  Union  law  in  the 
Member  States.  In  order  to  correctly  perform  this  function,  Commission's  access  to  relevant, 
reliable,  accurate  and  timely  information  is  essential  –  including,  where  necessary,  access  to  firm-
level information.  The CJEU has  progressively been  stricter with  the Commission in relation  to  the 
sufficient factual evidence that it must submit in order to prove 'to the requisite legal standard' the 
elements of the allegations made in infringement proceedings56. Union action is needed to ensure 
that  the  Commission  will  have  access  to  firm-level  information  necessary  to  improve  its  ability  to 
monitor  and  enforce  Union  single  market  rules.  This  objective  cannot  be  sufficiently  achieved  by 
Member  States  alone,  due  to  legal  barriers  to  sharing  firm-level  information  with  the  Commission 
and uncoordinated national approaches in this area (see Section 2.4.1). In addition, possible national 
responses would be limited in their geographical scope, while the obstacles to the functioning of the 
single market are often cross-border57. Therefore, the objectives envisaged can be better achieved, 
by reason of its scale and effect, at Union level. Such Union action would fulfil the necessity test in 

53 Council only, for Article 337 TFEU. It should be noted that Article 114 TFEU, however, provides for legislative 
acts of the European Parliament and of the Council. 
54 ’Agricultural products’ means the products of the soil, of stock farming and of fisheries and products of first-
stage  processing  directly  related  to  these  products.  References  to  the  common  agricultural  policy  or  to 
agriculture,  and  the  use  of  the  term  ‘agricultural’,  shall  be  understood  as  also  referring  to  fisheries,  having 
regard to the specific characteristics of this sector" (cf. Article 38(1), second subparagraph, TFEU) 
55 For an example of a similar join use of some of these articles, see Directive (EU) 2015/1535 of the European 
Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information 
in the field of technical regulations and of rules on Information Society services, OJ L 241, 17.9.2015, p.1. This 
directive is based on Articles 43, 114 and 337 TFEU. 
56 See e.g. Luca PETRE and Ben SMULDERS, 'The Coming of Age of Infringement Proceedings', Common Market 
Law Review 47, 2010, po. 9. These authors (p. 38) refer to several judgments of the CJEU supporting this trend.  
57 In general, the Treaties require the existence of a cross-border dimension for the single market rules to be 
applied.  However,  purely  internal  situations  (e.g.  secondary  harmonising  legislation)  may  also  result  in  an 
infringement of Union law. Such internal situations may be better addressed by the Member State. However, 
this does not exclude that the Commission may need to address them (e.g. in the event of lack of action by the 
Member State concerned) and that, in doing so, it may need to have access (where appropriate and justified) 
to specific firm-level information. It should be noted that CJEU applies a relatively low threshold to show the 
existence  of  a  cross-border  dimension:  it  has  ruled  that  even  when  a  purely  internal  situation  is  concerned 
national  rules may produce effects  outside  the  Member State  concerned (e.g.  joined  Cases  C-159/12  and  C-
161/12,  Venturini,  par.  25–26);  it  has  also  considered,  in  particular  in  cases  related  to  public  procurement 
procedures  that  appeared  a  priori  as  purely  internal  situations,  that  a  discrimination  against  potential 
competitors  from  other  Member  States  would  be  enough  in  that  respect  (e.g.  case  C-231/03,  Coname  v. 
Comune di Cingia de’Botti, par. 17–21; case C-458/03, ParkingBrixen GmbH v. Gemeinde Brixe, par. 55).  

21 

 
                                                            
this regard and would enhance the ability of the Commission to ensure the respect of Union law, in 
particular with regard to infringement proceedings58.  

The  necessity  test  would  also  be  met  regarding  the  collection  of  firm-level  information  for  cases 
where evaluation shows that enforcement deficits are due to flaws in the relevant legislation. As a 
matter of principle (cf. Article 17(2) TEU), Union legislative acts may only be adopted on the basis of 
a  Commission  proposal  (except  where  the  Treaties  provide  otherwise).  As  demonstrated  in  the 
examples in the previous section, there may be instances where the Commission will need to have 
access  to  firm-level  information  to  calibrate  a  regulatory  solution.  Union  action  is  also  needed  for 
this purpose, for the same reasons (e.g. Member States action would not be sufficient) expressed in 
the previous paragraph. It must be noted that since the aim of this tool is better enforcement of EU 
law, there is no sharp distinction between infringements proceedings and the use of legislative acts 
to  address  serious  obstacles  to  the  internal  market  in  case  of  enforcement  deficits,  in  particular 
during the period in which the Commission undertakes preparatory work. When the Commission is 
at the stage of collecting information to assess whether there are obstacles to the functioning of the 
internal market it may conclude that launching infringement proceedings (which is a faculty, not an 
obligation  of  the  Commission59)  would  not  adequately  solve  the  problem  and  therefore  there  is  a 
need to propose a legislative change60.  

In  terms  of  added-value,  Union  action  would  ensure  that  the  Commission  has  access  to  relevant, 
reliable,  accurate,  comparable  and  timely  firm-level  information  in  those  (exceptional)  instances 
where access to such information is necessary and cannot be obtained otherwise (e.g. in situations 
where  national  authorities  cannot  have  access  to  the  relevant  data;  where  they  do  not  wish  to 
cooperate  with  the  Commission;  or  where  firms  do  not  voluntary  agree  to  share  data  with  the 
Commission).  This  would  lead  to  better  informed  enforcement  actions  or  potentially  to  policy 
initiatives (in case of enforcement deficits) by the Commission. Furthermore, when the Commission 
obtained  firm-level  data  in  an  infringement  proceeding,  the  concerned  Member  States  could  also 
access  this data and improve their application of  Union law61. For more details on the subsidiarity 
requirements, see Annex 9. 

58 This is without undermining the role of the Member States in applying Union law and enforcing it vis-à-vis 
individual companies. 
59 'In  exercising  this  role  [N.B.  as  guardian  of  the  Treaties],  the  Commission  enjoys  discretionary  power  in 
deciding whether or not, and when, to start an infringement procedure or to refer a case to the Court of Justice. 
[…] It [N.B. the Commission] will distinguish between cases according to the added value which can be achieved 
by an infringement procedure and will close cases when it considers this to be appropriate from a policy point 
of  view'.  Communication  from  the  Commission,  'EU  law:  Better  results  through  better  application",  OJ  C18, 
19.1.2017, pp. 14 and 15.  
60 'The  Commission  will  exercise  such  discretion  in  particular  […]  in  those  [cases]  where  pursing  the 
infringement  would  be  in  contradiction  with  the  line  taken  by  the  College  of  Commissioners  in  a  legislative 
proposal'. Ibid. p. 15.  
61 E.g.  in  the  public  consultation,  one  national  authority  reported  problems  with  obtaining  data  from  firms 
located in another Member State, as either firms or foreign authorities did not cooperate. 

22 

 
                                                            
4.  WHAT SHOULD BE ACHIEVED?  

4.1.

 Objectives 

The general  objective of the initiative is  ensuring a  better functioning single market through more 
effective application of single market rules and principles. This particularly relates to improving the 
Commission’s ability to monitor and enforce Union rules in areas of key importance. In addition, the 
tool  may  also  help  the  Commission  to  propose  improvements  where  evaluation  shows  that 
enforcement  deficits  are  due  to  shortcomings  of  the  relevant  sectoral  legislation.  This  general 
objective  would  be  achieved  by  providing  the  Commission  with  easier  access  to  firm-level  data 
where  needed  to  detect  and  combat  obstacles  to  the  functioning  of  the  single  market,  including 
misapplication of Union law. This would additionally assist Member States in better applying single 
market rules at national level.  

The specific objectives of the initiative are the following (Fig. 4.1)62:  

Fig. 4.1 Objectives of the initiative 

facilitating access to comparable cross-border data;  
facilitating access to confidential/privileged firm-level information; 

 
 
  ensuring that collected information is correct, complete and unbiased; and 
  ensuring that the information is sufficiently detailed, disaggregated and timely. 

It should be emphasized that these objectives do not concern the majority of situations, as usually 
either:  (1)  market information  is  not  necessary  for  proving the  existence of  particular  obstacles  to 
the functioning of the single market or for calibrating the Commission's response to such obstacles; 
(2)  market  information  is  necessary  only  at  an  aggregate  level,  e.g.  as  provided  by  Eurostat;  (3) 
existing sources of information are sufficiently timely and detailed. 

62 This initiative concerns solely access to firm-level information as one of the factors affecting single market 
acquis  enforcement.  Other  crucial  elements  affecting  the  efficiency  of  enforcement  (e.g.  administrative  and 
judicial capacity, lack of resources, clarity of law) are not tackled here. 

23 

Specific objectives…by granting the Commission access to reliable, accurate and timely information on cross-border activities directly from firms when it is needed to support decision making in high-impact casesGeneral objectiveImprove access to comparable cross-border informationImprove access to confidential firm-level informationEnsure that collected information is correct, complete and unbiasedEnsure a better functioning single market through more effective application ofsingle market rules and principlesEnsure that the information is sufficiently detailed, representative and timelyFacilitate timely and effective enforcement before the CJEU Propose improvements where evaluation shows that enforcement deficits are due to flaws in the relevant sectoral legislationFacilitate timely and effective enforcement at an administrative stage   Out of scope:These objectives do not concern majority of situations, as usually either:•market information is not necessary for proving the existence of serious obstacles to the functioning of the single market or for calibrating the Commission's response to such obstacles, or•market information is necessary only at an aggregated level, e.g. as provided by Eurostat, or•existing sources of firm level information are sufficiently timely and detailed. 
 
                                                            
4.2.

 Consistency with other Union policies 

The initiative is consistent with other Union policies. First and foremost, the initiative will contribute 
to better enforcement of the Treaty principles on fundamental freedoms (Articles 28, 45, 49, 56, 63 
TFEU) as well as single market secondary legislation, in particular in instances which require complex 
economic analysis  and  need to  be substantiated  with economic  data.  Ultimately,  the initiative will 
contribute  to  achieving  the  Union's  aim  of  establishing  and  ensuring  the  functioning  of  the  single 
market and realising its full potential. Pending a final decision by the Union Legislator on the scope 
of the initiative, it would also allow for better enforcement of single market rules with regard to, for 
example, agricultural products and in the transport and energy sectors, thus also contributing to the 
establishment of a common agriculture policy (Article 38 TFEU), a common transport policy (Article 
90 TFEU), as well as Union policy on energy (Article 194 TFEU).  

This  initiative  complements  existing  sector-specific  tools  in  the  area  of  competition  and  consumer 
protection law. Although addressing issues in a different domain, this initiative in many dimensions 
closely corresponds to the Market Investigation Tool (MIT) available to the Commission in the State 
aid  area.  Namely,  the  objectives  of  the  tools  are  similar,  they  involve  the  same  stakeholders  (the 
Commission, Member States, and market participants), and would be used for collecting similar type 
of information under similar extraordinary conditions. Therefore, the anticipated impact of the use 
of the tool could be compared. 

5.  WHAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES? 

5.1.

 Baseline scenario: no Union policy change 

In the baseline scenario, the Commission would continue to rely on current information sources for 
firm-level information necessary for the purpose of ensuring the correct application of single market 
rules. These sources would be voluntary submissions through complaints, open public consultation, 
targeted surveys, reports by stakeholders, commissioned studies, commercial databases, voluntary 
requests  for  information,  and  ad  hoc  submissions  as  well  as  Member  States  submissions.  The 
Commission could enhance the confidentiality provisions of its consultations to try increasing firms' 
willingness  to  provide  information.  More  frequent  use  of  external  polling  organisations  via  a 
Eurobarometer facility could lead to more representative responses, but would substantially burden 
the  European  budget  since  firm  surveys  are  particularly  costly  (compared  to  consumer  surveys). 
However, these external surveys could not gather information on complex and confidential issues, 
like firms' pricing strategies. 

In policy areas where the Commission or Member States have the ability to request the necessary 
information from firms (e.g. in competition, consumer protection law, regulated network industries), 
the  use  of  existing  tools  for  addressing  the  single  market  enforcement  remains  imperfect63.  For 
example, the published results of a sector investigation under Union competition law, like the recent 
e-commerce  one,  can  be  used  to  support  a  single  market  reform  outside  the  narrow  competition 

63 Several  respondents  to  the  public  consultation  called  for  reusing  competition  powers  for  acquiring  the 
information necessary for the enforcement of internal market rules (see Annex 2). 

24 

 
                                                            
policy  domain;  but  using  individual  replies  to  such  investigations  for  purposes  other  than 
enforcement  of  competition  law  will  remain  legally  impossible64.  Furthermore,  existing  national 
information  collection  powers  could  be  potentially  spontaneously  extended  and  used  in  selected 
sectorial  contexts.  However,  sharing  information  between  authorities  and  the  Commission  would 
remain an issue. At the same time, the role of the Commission as guardian of the Treaties may be 
weakened, in so far as infringement proceedings in complex cases would be more difficult, while the 
importance  of  preliminary  rulings  by  the  CJEU65 would  increase.  The  disadvantage  of  relying  on 
preliminary  rulings  for  complex  cases  in  the  single  market  area  is  that  the  CJEU  will,  in  the  vast 
majority of cases, have to take a decision based on exchange of legal arguments with lower levels of 
economic analysis compared to the analysis that the Commission could undertake in the preparatory 
phase of infringement proceedings. 

The  Inter-institutional  Agreement  on  Better  Law-Making66 commits  the  co-legislator  to  consider 
including  monitoring  and  evaluation  provisions  in  all  new  Union  acts.  It  is  likely,  therefore,  that 
sectorial legislation will include provisions on monitoring and that more firm-level data will gradually 
become available. However, monitoring indicators cannot in all cases address very specific problems 
that  may  arise  in  the  course  of  application  of  legislation,  nor  can  they  adequately  foresee  future 
market  developments.  Furthermore,  monitoring  arrangements  cannot  be  designed  to  cover  all 
issues  beyond  the  scope  of  existing  regulations.  Therefore,  this  would  only  partially  alleviate  the 
identified problems. 

5.2.

 Option  1:  Exchange  of  best  practices  between  Member  States  and  with  the 
Commission 

The  Commission  would  recommend  to  Member  States  to  exchange  best  practices  on  collecting 
specific firm-level information. The experience of dedicated authorities at Union and national level 
(e.g.  National  Competition  Authorities,  Consumer  Protection  Cooperation  Network,  Agency  for 
Cooperation  of  Energy  Regulators,  Financial  Supervisory  Authorities  like  the  EBA,  the  European 
Insurance  and  Occupational  Pensions  Authority,  or  the  European  Securities  Markets  Authority) 
would be leveraged to develop guidance and recommendations for collecting firm-level information. 
Best practices to minimise the administrative burden, protect confidential information, treat cross-
border cases, and share information among Member States and the Commission would be devised. 
The Member States would then be encouraged to implement these best practices. 

64 I.e. '[…] information collected pursuant to Articles 17 to 22 shall be used only for the purpose for which it was 
acquired' (cf. Article 28 of Council Regulation No 1/2003 of 16 December 2002 on the implementation of the 
rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003, p.1. 
65 Art. 267 TFEU (upon request of a national court, the CJEU can give preliminary rulings on questions of Union 
law when a decision on such question is necessary to enable the national court to give judgement). 
66 OJ L 123, 12.5.2016, p.1. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016Q0512(01)  

25 

 
                                                            
5.3.

 Option  2:  Lifting  regulatory  limitations  to  the  sharing  of  firm-level  information 
between the Member States and the Commission 

This option consist in Union legislation (a Directive)67 lifting national rules (e.g. professional secrecy 
rules)  that  prevent  Member  States'  authorities  from  sharing  with  the  Commission  and  other 
Member States firm-level information they already possess or could access on the basis of Union or 
national law. This option does not foresee granting specific investigation powers to Members States. 
Nor does it foresee a specific framework for the Commission's requests to Member States. Instead, 
general rules on cooperation under Article 4(3) TEU would apply.  

Launch of requests. Member States would be responsible for ensuring compliance with the requests 
for information. 

Confidentiality and sharing of information. The Commission and the Member States should ensure 
that  the  information  submitted  in  reply  to  a  request  for  information  is  treated  in  a  manner  that 
ensures its confidentiality, following best practices from the competition policy field and taking due 
account of the legitimate interests of the replying firms in the protection of their business secrets68. 
Therefore, they would be subject to appropriate professional secrecy obligations in respect of such 
information69. This should not, however, prevent the Commission from using information necessary 
in the context of infringement proceedings. The Commission could only share information received 
from  one  Member  State  with  other  Member  States  if  the  information-providing  Member  States 
agree.  However,  information  should  be  shared  with  all  Member  States  concerned  in  a  given 
investigation.  Third  party  access  to  confidential  information  would  be  governed  by  the  rules  on 
access to documents held by Union institutions. These rules foresee exceptions to disclosure in cases 
where disclosure would undermine the commercial interests of a person70. 

Use of information. Disaggregated firm-level data shared by a Member State with the Commission 
(and  with  other  Member  States)  could  only  be  used  by  the  Commission  (and  the  other  Member 
States)  to  enforce  single  market  rules  relating  to  the  specific  subject  matter  invoked  by  the 
Commission  when  asking  the  concerned  Member  States  to  share  the  information.  However, 
aggregated and anonymised information could be further used for other purposes. 

67 In principle, a Directive would be the most suitable legislative instrument to give the power in question to 
the  Member  States  considering,  notably,  the  fact  that  it  would  be  necessary  to  adapt  different  pieces  of 
legislation domestically. A directly applicable Regulation would not necessarily add legal clarity with regard to 
the interplay with existing national rules preventing the sharing of information with the Commission. A non-
legislative instrument is not considered for this option as its scope would already be covered by option 1. 
68 80%  of  firms  responding  to  public  consultation  found  confidentiality  as  essential  or  very  important 
preconditions to their participation (See Annex 2). 
69 Information  covered  by  the  obligation  of  professional  secrecy  may  not  be  disclosed  to  the  general  public. 
See  Article  339  TFEU  generally  (as  regards  the  Commission);  see  also  Article  30  of  Council  Regulation  (EU) 
2015/1589 [State aid] for a professional secrecy obligation in secondary legislation on a similar area.  
70 The right of access to the documents of the EU institutions is governed by Regulation (EC) No 1049/2001. 

26 

 
                                                            
5.4.

 Option  3:  Introducing  residual  investigative  powers  through  national  level  single 
market information tools 

This  option  would  build  upon  Option  2.  In  addition,  Member  States  would  be  required  by  Union 
legislation71 to entrust an authority or several authorities with the power to request quantitative and 
qualitative firm-level information directly from market participants operating within their territories, 
where such information is needed for proving the existence of serious obstacles to the functioning of 
the internal market, including possible infringements of Union law in that area, or for calibrating the 
Commission's response to such obstacles – whether through infringement proceedings or, in case of 
enforcement deficits, legislative initiatives. This power would be of residual nature, supplementing 
sector-specific investigative powers already entrusted to Member States by specific Union law72. This 
power would also be without prejudice to the existing investigative powers of national authorities 
pursuant to national law. This option would not, as such, decide which national authority should be 
entrusted with the residual investigative powers. Member States would have the freedom to decide 
which authority or authorities should have that power73. 

Commission's  role.  As  with  Option  2,  the  Commission  would  be  able  to  request  firm-level 
information from the Member State concerned under Article 4(3) TEU and would need to motivate 
its  request  to  show  that  the  requested  information  is  necessary  for  taking  timely  and  informed 
decisions  in  relation  to  possible  obstacles  to  the  functioning  of  the  internal  market.  This  option 
would  introduce  a  coordination  role  for  the  Commission  in  the  event  that  the  Commission  needs 
firm-level  information  from  more  than  one  Member  State  for  the  same  issues,  in  order  to  ensure 
that  the  national  information  requests  address  the  same  issues  and  that  the  addressees  of  the 
requests are comparable. 

Addressees  of  requests  for  information.  Information  requests  would  be  addressed  to  undertakings 
and  associations  of  undertakings  (trade  organisations  and  business  associations)  operating  in  the 
Union.  Large  firms  with  market  power  would  be  the  primary  addressees,  small  and  medium-sized 
enterprises (SMEs) could occasionally be concerned, while micro-enterprises would be exempted74. 
Information  requests  could  be  addressed  to  a  single  or  a  range  of  market  participants.  The 
Commission  and  the  Member  States  would  take  into  account  the  cost  for  responding  parties  and 

71 In principle, a Directive would be the most suitable legislative instrument to give the power in question to 
the Member States considering, notably, the fact that the power would be of residual nature and that the legal 
instrument would not identify the specific national authority that should be entrusted with such power. A non-
legislative instrument is not considered for this option as its scope would already be covered by option 1. 
72 For details see Annex 6. 
73 One  could  conceive  extending  the  scope  of  existing  investigative  powers  of  identified  national  authorities 
already active for specific areas of the single market: i.e. competition or consumer protection. This would allow 
the Commission to channel its request for information through specific existing networks somehow alleviating 
the coordination efforts. However, these options are discarded upfront as existing investigative powers are: i) 
limited to specific and narrowly defined domains; ii) cannot be used to for Commission information request; iii) 
any extension would endanger the coherence of both systems and distract authorities from their core mission, 
with  potential negative  consequences  on  the quality  and effectiveness of  protection against  anticompetitive 
behaviour or of consumers. For more analysis see Annex 7. 
74 Micro entities employ less than 10 employees, while SMEs employ between 10 and 249 employees. For  a 
precise definition, see Commission Recommendation 2003/361/EC. 

27 

 
                                                            
would  request  information  only  from  targeted  market  participants.  The  Commission  and  the 
Member  States  may  also  request  information  to  be  provided  in  specified  formats  with  common 
definitions. Such requests would, where possible, be made through electronic means. 

Launch  of  requests.  This  would  be  as  in  Option  2.  The  addressees  of  information  requests  would 
have the means of judicial redress foreseen at the national level to oppose the national requests for 
information.  The Commission  could  assist Member  States  by  issuing  guidance  on best  practices  to 
launch  requests  for  information,  including  setting  up  appropriate  sanctions  for  intentionally  or 
negligently  supplying  incorrect  or  misleading  information  in  response  to  an  information  request. 
Requests  from  the  Commission  to  the  Member  States  could  be  enforced  through  infringement 
proceedings for failure to comply with Article 4(3) TEU. 

Confidentiality and sharing of information. As in Option 2. 

Use of information. As in Option 2. 

5.5.

 Option 4: Introducing an EU-level Single Market Information Tool (SMIT) 

Under  this  option,  Union  legislation  would  empower  the  Commission  to  use  a  Single  Market 
Information  Tool  (SMIT)  for  requesting  quantitative  and  qualitative  firm-level  information  directly 
from market participants75. SMIT would be used where such information is needed for proving the 
existence of serious obstacles to the functioning of the internal market (incl. possible infringements 
of Union law in that area) or for calibrating the Commission's response to such obstacles – whether 
through infringement proceedings or legislative initiatives in case of enforcement deficits. 

Conditions for the use of SMIT by the Commission. SMIT would not be used routinely, but rather as 
an exceptional, 'last resort' tool following a case-by-case assessment by the Commission. In order to 
issue an information request, the Commission would first need to formally adopt a Decision stating 
its intention to use SMIT and showing that the following main conditions are fulfilled76: 

1.  There is enough information available suggesting the existence of a serious problem with the 
application of Union law undermining the attainment of important Union policy objectives in 
relation to the aim of establishing and ensuring the functioning of the internal market, most 
notably in terms of economic or social impact77;  

75 This  option  would  not  introduce  new  enforcement  procedures  or  obligations  for  the  Commission  (e.g. 
pursuing infringement cases against individual market participants). Instead, it would only provide a tool for 
acquiring information needed for supporting currently available procedures. Moreover, this option is without 
prejudice  to  existing  powers  at  national  level  to  gather  firm-level  information  or  to  additional  powers  that 
Member States may decide to grant to their own national authorities. 
76 Such decision would have a role similar, mutatis mutandis, to that of the Commission Decision declaring a 
State aid formal investigation as 'being ineffective', pursuant to Article 7(2)(a) of Regulation (EU) 2015/1589 as 
regards the MIT in State aid. Only following the adoption of the latter decision can the Commission use the 
powers to request information directly from firms. 
77 To  gauge  the  extent  of  single  market  failures,  several  metrics  are  possible  such  as  limitation  on  the  free 
movement of production factors (goods, services, labour capital) due to the suspect single market restriction 
or a broader assessment such as effect on macroeconomic imbalances. The seriousness test is consistent with 
the  announced  Commission's  policy as  regards  enforcement  action through  infringements  proceedings:  'It  is 

28 

 
                                                            
 
2.  The information to be requested is required for the performance of the tasks entrusted to the 
Commission by the Treaties in the area of the internal market, notably proving the existence of 
serious  obstacles  to  the  functioning  of  the  internal  market  or  calibrating  the  Commission's 
response to such obstacles; and 

3.  The  information  is  not  available  elsewhere,  meaning  it  may  not  be  obtained  or  could  not  be 

obtained timely enough through other means78. 

In  addition,  the  Decision  should  detail  the  criteria  for  selecting  the  addresses  of  the  requests  for 
information. These requests are to be addressed only to market participants that could be expected 
to provide sufficiently relevant information and for whom the information would be readily available 
(i.e. acquiring such information does not require extended research or a major effort to retrieve).  

important  that  the  Commission  use  its  discretionary  power  in  a  strategic  way  to  focus  and  prioritise  its 
enforcement  efforts  on  the  most  important  breaches  of  EU  law  affecting  the  interests  of  its  citizens  and 
business. In this context, the Commission will act firmly on infringements which obstruct the implementation of 
important EU policy objectives, or which risks undermining the four fundamental freedoms […]. In the light of 
the discretionary power the Commission enjoys in deciding which cases to pursue, it will examine the impact of 
an  infringement  on  the  attainment  of  important  EU  policy  objectives,  such  as  breaches  of  the  fundamental 
freedoms under the Treaty which create particular problems for citizens or businesses wanting to move or carry 
out  transactions  between  Member  States,  or  where  there  may  be  a  systemic  impact  beyond  one  Member 
State.'  Communication  from  the  Commission,  'EU  law:  Better  results  through  better  application',  OJ  C18, 
19.1.2017, pp. 14 and 15. 
78 This condition is precisely the one that renders SMIT a tool of 'last resort'. In a recent judgement, the CJEU 
has indeed outlined that a procedure is of last resort when it is not possible to complete a task/carry out an 
activity using the normal procedure within a reasonable time/foreseeable future (cf. CJEU judgement in joined 
cases C-274/11 and C-295/11, §50, as regards the last resort powers of the Council pursuant to Article 20(2) 
TEU on enhanced cooperation). Mutatis mutandis, this criterion is transposed for option 4 which is a last resort 
procedure  to  obtain  certain  information  when  it  is  not  possible  to  obtain  it  from  other  sources  in  a  timely 
fashion. It is noted that under option 4, the Commission would need to provide a reasoned explanation of why 
the relevant information is needed and why other means to obtain it proved ineffective. This is in conformity 
with the conditions that the CJEU set out in §54 of the judgement referred to above as to the need to show 
that the [institution] 'has carefully and impartially examined those aspects that are relevant to this point and 
whether adequate reasons have been given for the conclusions reached by the [institution]'. The conditions in 
Option 4 are also similar to those in Regulation (EU) 2015/1589 as regards the MIT in State aid, which is also a 
last resort investigative power.  
See also for a similar example the last resort investigative powers granted to the European Union supervisory 
authorities in the financial sector: 'In order to carry out its duties effectively, the Authority should have the 
right  to  request  all  necessary  information.  To  avoid  the  duplication  of  reporting  obligations  for  financial 
institutions,  that  information  should  normally  be  provided  by  the  national  supervisory  authorities  which  are 
closest  to  the  financial  markets  and  institutions  and  should  take  into  account  already  existing  statistics. 
However, as a last resort, the Authority should be able to address a duly justified and reasoned request for 
information  directly  to  a  financial  institution  where  a  national  competent  authority  does  not  or  cannot 
provide  such  information  in  a  timely  fashion.  Member  States’  authorities  should  be  obliged  to  assist  the 
Authority in enforcing such direct requests. In that context, the work on common reporting formats is essential. 
[…]' (emphasis added). Cf. recital 45 of Regulation (EU) No 1094/2010 of the European Parliament and of the 
Council  of  24  November  2010  establishing  a  European  Supervisory  Authority  (European  Insurance  and 
Occupational  Pensions  Authority),  amending  Decision  No  716/2009/EC  and  repealing  Commission  Decision 
2009/79/EC, OJ L 331, 15.12.2010, p. 48. Similar powers are granted to the European Banking Authority and 
the European Securities and Markets Authority – See Annex 6 for further detail. 

29 

 
                                                                                                                                                                                         
Commission's  compliance  with  the  above-described  conditions  would  be  subject  to  judicial  review 
before  the  CJEU,  which  could  annul  a  decision  failing  to  show  how  the  conditions  are  met.  The 
judicial review will therefore guarantee the last resort character of the tool. 

Addressees of requests for information. As in Option 3 regarding the type of market participants and 
the possibility to use specified formats and common definitions. The addressee of a request must be 
clearly  informed  about  the  reasons  for  such  request  and  will  have  the  possibility  to  object  to  the 
request.  

Selective  and  limited  nature  of  the  requests  for  information.  Information  requests  under  Option  4 
must  be  limited  to  the  information  which  is  indeed  necessary  for  the  Commission  to  carry  out  its 
tasks, as described in the prior Decision referred to above (cf. conditions). Moreover, the requests 
should be addressed only to a selected and limited number of market participants: such number will 
be low (likely below 5)79 in the context of an infringement procedure, while it could be higher, but 
still  limited  (likely  below  50)  in  case  of  proposing  improvements  where  evaluation  shows  that 
enforcement deficits are due to flaws in the relevant legislation, as benchmarking needs may require 
sending of requests to additional addressees.   

Member States' role. The Commission would inform Member States of the requests for information 
sent to market participants established in their territory.  

Forms of requests for information and compliance. Information requests could take either a form of 
a  simple  information  request  (without  an  obligation  to  reply)  or  a  formal  Commission  Decision 
(compelling the addressee to provide the information)80. The Commission would be vested with the 
responsibility of ensuring compliance with those requests. As in the State aid field, the Commission 
would be empowered (but not obliged) to impose sanctions on the addressee who intentionally or 
through  gross  negligence  supplies  incorrect  or  misleading  information.  In  case  of  an  information 
request by Decision, the Commission could in addition impose sanctions for late or missing replies. 
Those sanctions would be pecuniary (fines or periodic penalty payments) and their amount modelled 
on the established rules in the State aid field, which offer sufficient incentives for parties concerned 
to  comply81.  The  Commission  would  not  impose  sanctions  automatically,  but  would  undertake  a 
case-by-case assessment, with due regard to proportionality and appropriateness, especially in case 
of  SMEs,  and  due  process.  The  Commission  could  waive  any  periodic  penalty  payment  already 
imposed  when  the  addressee  finally  provides  a  reply. The  addressees  of  a  Commission  Decision 
imposing sanctions could appeal to the CJEU, in accordance with Article 263 TFEU. The CJEU could 
cancel, increase or reduce any pecuniary sanction imposed by the Commission. 

79 For instance, in the two cases in which the MIT has been used in the State aid field under Regulation (EU) 
2015/1589 the total number of addressees of requests was six: five addressees in one case and one addressed 
in another case. 
80 This is in addition to the Commission Decision stating its intention to use SMIT (as described earlier). 
81 Cf.  Art.  8  of  Council  Regulation  (EU)  2015/1589:  (1)  fines  not  exceeding  1%  of  the  total  turnover  for 
supplying  incorrect  or  misleading  information  or  for  not  replying  to  requests  made  by  decisions;  and  (2) 
periodic  penalty  payments  not  exceeding  5%  of  the  average  daily  turnover  for  each  working  day  of  delay, 
calculated  from  the  date  set  in  the  decision  in  order  to  compel  them  to  supply  complete  and  correct 
information which has been requested. 

30 

 
                                                            
Confidentiality  and  sharing  of  information. Confidentiality and  professional secrecy  principles  as  in 
Options  2  and  3.  The  Commission  shall  forward  the  answers  received  to  the  Member  State(s) 
concerned by the request where they are relevant for a formal infringement procedure pursuant to 
Article  258  TFEU  against  that  Member  State(s)82.  Should  a  responding  firm  consider  that  its  reply 
contains  information  that  should  remain  confidential  vis-à-vis  that  Member  State,  it  should 
substantiate its claims and provide additionally a non-confidential reply that can be shared with the 
concerned Member State(s)83. Such non-confidential version should follow the same format as the 
confidential version, replacing deleted passages by summaries thereof84.  

Use of the collected information. The Commission would be allowed to use the information collected 
only for the purpose for which it was required. Disaggregated firm-level information could be used 
by the Commission to prove the existence of obstacles to the functioning of the internal market (incl. 
possible  infringements  of  Union  law)  and  for  informing  infringements  proceedings.  When  this 
information  is  used  for  informing  legislative  initiatives,  any  information  included  in  documents 
supporting such initiatives must be in aggregated form or otherwise anonymised such that individual 
respondents cannot be identified. Where a Member State has access to firm-level information in the 
context of infringement proceedings, it could use such information only for the purpose of enforcing 
Union rules.  

5.6.

 Option 5: A 'hybrid' approach combining Options 2 and 4  

Option  5  would  combine  lifting  regulatory  limitations  to  the  sharing  of  firm-level  information 
between  the  Member  States  and  the  Commission  (Option  2)  and  introduction  of  SMIT  (Option  4). 
See above for the details of both options. As described under Option 4, SMIT would be used only if 
the requested firm-level information is not available anywhere else and could not be obtained in a 
timely fashion through other means. In Option 5, this would include information that Member States 
already possess or could already access on the basis of Union or national law. Option 5 would entail 
a coordination mechanism. It would ensure that national investigation powers are primarily used for 
the  targeted  enforcement  of  Union  law  at  national  level  while  SMIT  would  be  available  to  the 
Commission  for  collecting  the  information  required  in  instances  with  a  specific  cross-border 
dimension:  e.g.  enforcing  Union  law  through  a  cohort  of  systemic  infringement  proceedings  or 
calibrating the Commission's response to serious obstacles to the functioning of the internal market 
through legislative initiatives in case of enforcement deficits.  

5.7.

 Discarded options 

Two options contemplated in the inception impact assessment85 (Option 6 – enhancing the coverage 
of European statistics – and Option 7 – introducing regular reporting obligations via the Accounting 

82 This is without prejudice to the rights that the Member State may have to access the relevant information, in 
the context of infringement proceedings. 
83 Exceptionally, should the respondent have reason to believe that their identity should be kept confidential 
from the Member State, it should indicate the reasons why its identity should remain secret.  
84 See Article 7(3) of Regulation (EU) 2015/1589 for a similar procedure in the State aid domain. 
85 http://ec.europa.eu/smart-
regulation/roadmaps/docs/2017_grow_014_single_market_information_tool.pdf 

31 

 
                                                            
Directive) are discarded upfront. These options would only partly address the specific objectives of 
this initiative at the cost of imposing significant administrative burden. Although both options could 
deliver additional representative firm-level information (at least in an aggregate form), they are not 
suited  for  obtaining  specific  confidential  information.  Thus,  protection  of  sensitive  information, 
which is of key importance to the stakeholders, would be compromised. In addition, Option 6 could 
not ensure collecting descriptive information. Furthermore, given that statistics are often based on a 
sample of firms, it could not be guaranteed that firms of interest in a given case would be covered.  

As the time lag in both options is more than one year, they would not meet the timeliness criterion. 
In  addition,  information  obligations  could  not  be  swiftly  changed  as  this  requires  long  legislative 
process.  These  options  would  in  addition  be  disproportionate  –  covering  the  whole  population  of 
enterprises on a regular basis would significantly increase the administrative burden (respectively by 
EUR  68m  and  EUR  1.8bn  annually).  All  firms  responding  to  public  consultations  except  one  were 
against the creation of regular reporting obligations and all respondents cautioned against increases 
in  administrative  burden.  In  the  view  of  those  considerations,  the  detailed  analysis  of  these 
discarded options is discontinued.  More analysis of the discarded options can be found in Annex 7. 

6.  WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS AND WHO WILL BE AFFECTED? 

6.1.

 Impacts of Option 1 

The exchange of best practices between Member States in relation to the collection of cross-sector 
firm-level information to enforce single market rules would face a substantial hurdle. According to 
the  public  consultation,  only  one  Member  State  already  has  a  dedicated  authority  (UK  CMA) 
empowered  to  collect  such  kind  of  information  and  therefore  having  the  necessary  experience86. 
Therefore, all other Member States would need to first grant similar powers to their authorities in 
order to benefit from the UK's specific experience87. This would be a lengthy process. Also, given the 
voluntary  nature  of  this  exchange,  it  is  unclear  how  many  Member  States  would  choose  to  grant 
these  information  powers  to  one  of  their  authorities.  National  authorities  in  sectors  such  as 
competition, consumer protection, financial services or network industries are already organised in 
Union-wide  networks,  where  information  exchange  takes  place  among  them  (but  not  always  with 
the Commission). The scope of these networks is limited to a single sector or to specific policy areas 
(e.g.  competition),  thus  not  all  relevant  requests  could  be  made.  Even  if  all  the  above  restrictions 
were  voluntarily  eliminated,  the  fragmented  nature  of  authorities  entails  a  lengthy  and  costly 
coordination.  This  would  include,  for  example,  finding  relevant  authorities,  negotiation  agreement 
to  launch  information  requests,  creating  common  questionnaires  with  standard  definitions  and 
avoiding double counting. The consequence would be a substantial lag in obtaining results. It must 
be noted that having such powers national authorities would likely use them more often than for a 

86 One  regional  authority  in  Spain  reported  in  the  public  consultation  having  powers  to  inquire  firms  for 
legislation design purpose. 
87 Of course, other national authorities may have experience in the treatment of confidential information, use 
of  investigative  powers  or  exchange  of  information  within  their  limited  remits  of  activities  (e.g.  tax, 
competition etc).  

32 

 
                                                            
few  cases  envisaged  in  this  proposal  thus  significantly  increasing  the  burden  on  companies  which 
was the key concern for firms in the public consultation. 

Summing up, Option 1 could meet the objective in the long run assuming cooperation of all Member 
States,  agreeing  to  create  new  investigative  national  institutions.  Once  they  have  been  created, 
coordination  problems  and  legal  limitations  to  data  sharing  with  the  Commission  and  between 
Member States would need to be solved to tackle cross-border cases.  

The annual Union-wide cost of this option could range from EUR 0  (if no Member State choses to 
participate) up to EUR 0.59m for firms and EUR 0.44m for national authorities88 (in case all Member 
States will follow the recommendation)89.The lower bound for the potential benefits of this option is 
estimated at  EUR 50m,  but the benefits are unlikely to materialise in the short to medium run, as 
explained above (see also Annex 8). 

6.2.

 Impacts of Option 2 

Firms participating in the public consultation preferred using existing information already gathered 
by  different authorities rather than being asked again for the same information (80% of answers). 
They  were  against  any  duplicate  requirements  (being  asked  for  the  same  information  by  different 
authorities). There were also calls for more exchange of information between Member States. 

This option could give the Commission de iure access to firm-level information gathered by national 
authorities. However, the effectiveness of the option largely depends on Member States' capacity to 
cooperate  with  the  Commission,  which  is  limited  for  the  following  reasons.  First,  authorities  will 
often  not  possess  or  be  able  to  obtain  the  kind  of  firm-level,  disaggregated  data  that  would  be 
needed to address single market malfunctioning cases (e.g. firms’ pricing strategy or cost structure). 
Second,  authorities  often  collect  data  over  particular  time  periods  (e.g.  annual  income  taxes)  and 
store  archives  only  for  a  specific  time,  as  a  consequence  such  data  might  not  be  available  to  the 
Commission in a timely fashion or at all. Third, Member States' incentives to share information with 
the Commission might be eroded, given that firms provided the information being unaware that it 
would later be shared with the Commission for a different purpose. If firms were granted the right to 
oppose  to  their  data  being  shared  with  the  Commission,  this  would  render  Option  2  rather 
ineffective; and, if unlimited Commission's access to national databases is secured, this would give 
raise to proportionality concerns. Fourth, Member States could be hesitant or unwilling to provide 
sensitive information in certain instances (e.g. when it could be used for infringement proceedings 
concerning  them)  and  could  potentially  be  inclined  to  challenge  the  need  for  providing  the 
information90. This could lead to submission delays, incomplete information or no submission at all.  

88 In  case  Member  States  decide  to  establish  dedicated  bodies  for  issuing  information  request,  the  cost  on 
authorities would raise to EUR3.5m (see also footnote 101 and Annex 8). 
89 Under assumption of 4 small-scale information requests covering up to five firms and one larger-scale with 
up to 50 firms. Maximum cost of individual reply preparation based on data available to firm is EUR4,400 for a 
large firm, cost of legal advice: EUR4,000. For details see Annex 8. 
90 In the context of infringements proceedings, Member States' failure to achieve full-cooperation during the 
investigation  phase  under  Article  258  TFEU  could  amount  to  an  infringement  of  Article  4(3)  TEU:  cf.  for 

33 

 
                                                            
 
implementing  this  option:  comparability  and 
There  would  be  two  additional  obstacles  to 
proportionality. Data from different authorities may not be comparable across Member States, for 
example due to different definitions applied when collecting the information at domestic level. This 
could lead to the need to recalculate the data according to common definitions, which might require 
additional firm input. There could be additional proportionality concerns when sharing certain types 
of information (e.g. tax returns), although these could possibly be solved by an exemption. 

In  summary,  although  this  option  would  increase  access  to  certain  types  of  firm-level  data,  its 
effectiveness is likely to be limited and it seems to be too intrusive into national competencies, thus 
disproportionate to the objectives at hand. 

The  annual  cost  of  this  option  is  calculated  under  an  assumption  that  between  0%  and  50%91 of 
Commission’s information needs could be met by the national authorities. For firms the cost is then 
between EUR 0 (in case they are not asked) and EUR 0.29m. Expenses of the Member States range 
from EUR 0.006m to EUR 0.27m and of the Commission - from EUR 0.01m to EUR 0.15. The total cost 
is between EUR 0.02m and EUR 0.72m. The lower bound for the potential benefits of this option is 
estimated at EUR 50m. The benefits are moderately likely to materialise due to uncertainty whether 
information could be provided by national authorities (see also Annex 8). 

6.3.

 Impacts common to Options 3, 4 and 5 

The impacts of Options 3 to 5 on market participants, public authorities, and citizens go largely in a 
similar  direction.  However,  there  are  also  differences  in  the  effectiveness  and  timeliness  of  the 
proposed tools and the resulting administrative burden for the Commission and national authorities.  

In the public consultation, two fifths of the firms and authorities and three quarters of the citizens 
and consumer organisations agreed that authorities at the Union or national level should have the 
right to ask for confidential firm-level information when it is crucial for solving breaches of citizens’ 
or  firms’  rights  under  Union law.  One-fifth of  the firms,  two  authorities  and  a  third of  the citizens 
stated that this right should also be granted to prevent future breaches. One seventh of the firms, a 
third  of  the  authorities  and  one  fifth  of  the  citizens  replied  that  such  requests  should  never  be 
possible.  National  authorities  from  two  Member  States  (out  of  ten  who  replied)  expressed  their 
preference for the Commission to coordinate information requests; two opted for direct power to 
ask firms in any Member State without involvement of the Commission. 

Market participants:  

Those  market  participants  having  to  comply  with  the  obligation  to  provide  information  under 
Options 3 to 5 would incur costs for extracting and compiling the requested information. These costs 
are estimated between EUR 1,200 and EUR 4,400 per responding large firm (EUR 300 - EUR 1,000 for 

instance,  judgments  of  the  CJEU  in  C-82/03,  Commission  vs.  Italy,  paragraph  18;  C-494/01,  Commission  vs. 
Ireland, paragraphs 195 and seq.; C-137/91, Commission vs. Greece, paragraphs 5-6. 
91 Please  note  that  due  to  this  assumption  the  costs  of  this  option  cannot  be  directly  compared  to  costs  of 
other options. In case national authorities could provide all the requested information (100%), the total cost of 
this option is the same as for Option 3 – see sensitivity analysis in Annex 8. 

34 

 
                                                                                                                                                                                         
SMEs), increasing by EUR 4,000 for the cost of legal advice92. On average, five firms would be asked 
to  provide  information  in  a  case  of  infringement  proceedings.  In  the  event  enforcement  deficits 
were demonstrated for which a change in the applicable legislation is needed, a higher number of 
firms (up to 50) would be addressed (see also Annex 8). 

Additional  administrative  burden  may  arise  if  market  participants  are  requested  to  provide 
information in a specified format. However, the benefits of having data in a more standard format 
and avoiding methodological shortfalls could outweigh these costs.  

As  requested  by  participants  to  the  public  consultation,  the  Commission  would  take  several 
measures  to  minimise  this  burden,  including  issuing  information  requests  only  in  particularly 
important cases and only requesting information that the firms could easily provide. Electronic data 
submission would reduce the response burden, increase efficiency in acquisition and processing, and 
improve timeliness93. 

In  addition  to  the  aforementioned  administrative  burden,  replying  firms  would  be  differently 
impacted  depending  on  the  role  they  play  in  a  particular  single  market  malfunctioning  instance 
under  examination.  On  the  one  hand,  the  impact  would  be  negative  for  market  participants 
benefiting from the status quo (i.e. 'favoured' by the obstacles to the internal market that need to 
be  addressed,  whether  through  infringement  proceedings  or  legislative  initiatives).  On  the  other 
hand, firms or consumers whose rights are potentially breached would benefit from better informed 
enforcement  of  Union  rules  and  enhanced  access  to  the  single  market.  This  should  have  positive 
effect on firms' competitiveness, facilitate cross-border expansion and increase availability of goods 
and services to customers and firms alike. 

Overall, market participants would benefit from a better functioning single market thanks to more 
targeted enforcement actions by the Commission and the Member States. They would also benefit 
from  better  designed  Union  rules  and  a  more  fitting  regulatory  environment.  In  addition,  more 
robust evidence could prevent the creation of unnecessary or imprecise rules that could potentially 
distort the market.  

Market  participants  would  additionally  benefit  from  enhanced  legal  certainty,  compared  to  a 
situation in which the Member States or the Commission would ask for voluntary submissions, and 
would  be  protected  from  adverse  consequences  resulting  from  providing  data  to  public 
authorities94: i.e. without options 2 to 5 replying firms may face certain legal constraints, including 

92 Cost of EUR 4,400 is based on the cost of preparation of notes to the financial accounts of a large firm. It is 
used as a proxy for the maximum firm cost of replying to information request for all the options in this impact 
assessment (although information requests are unlikely to ever demand the same amount of information as 
notes do, it is used not to underestimate the costs). In the minimum scenario the cost is based on 30 man-
hours reported in the public consultations. The cost of legal advice was reported in the public consultations as 
well. For details of cost calculations please see Annex 8. 
93 Administrative  burden  was  one  of  the  key  concerns  expressed  during  the  public  consultation,  as  well  as 
exceptional usage  of  information  requests  (64% of  firms).  70%  of  responding  firms  said  that  requested  data 
should be easy to extract and compile. Among burden minimising measures electronic replies were suggested. 
94 See  the  example  of  Computer  Tomography  scanners  from  chapter  2.4.2  where  approached  firm  was 
'unwilling to cooperate in the investigation until the Commission makes a formal request'. 

35 

 
                                                            
contractual  disclosure  rules  that  prevent  them  from  disclosing  information  to  authorities,  which 
could result in retaliation measures from their contractors/business partners.  

Including SMEs in the scope of Options 3 to 5 would contribute to ensuring the effectiveness of the 
initiative, although they are not considered the primary addressees. When proving the existence of 
serious  obstacles  to  the  functioning  of  the  single  market  and  calibrating  a  response  to  such 
obstacles,  the  Commission  would  use  firm-level  information  to  assess  how  widespread  the 
behaviour/practice leading to the single market malfunctioning seem to be (across time and firms) 
and what the economic/social damage of the practice is. The behaviour of individual large firms can 
have  greater  impact  than  the  one  of  individual  SME,  given  the  scale  of  their  operations. 
Furthermore,  large  firms  tend  to  have  more  cross-border  operations  than  SMEs.  However, 
depending on the country or industry, SMEs may be very relevant to analyse the extent of a single 
market malfunctioning. For example, in some Member States/sectors medium-sized companies are 
the largest market players. Hence, including SMEs in the scope of Option 3 to 5 would help to ensure 
that a Commission's response to a single market obstacle  will not be detrimental to them and would 
facilitate addressing obstacles impeding SMEs to benefit fully from the single market. As pointed out 
by  a  small  craft  organisation  in  the  public  consultation,  requests  targeting  SMEs  should  take  their 
capabilities into account and minimise the burden through measures such as a concise and precise 
questionnaire. This will be ensured for all firms regardless their size, since they will only be asked the 
strictly  necessary  information.  Exclusion  of  micro-enterprises  from  information  requests,  on  the 
other  hand,  does  not  limit  the  effectiveness  of  the  initiative  since  their  information  could  be 
approximated, if necessary, by that of the smaller SMEs. 

Public authorities:  

The  Commission  would  benefit  greatly  from  being  able  to  access  robust,  timely  and  sufficiently 
detailed  information  directly  from  market  participants.  This  would  facilitate  more  targeted  and 
timely enforcement actions through infringement proceedings and a better informed evaluation and 
preparation of single market policies. The impact of Options 3 to 5 on the national authorities would 
be  equally  positive,  as  enhanced  access  to  information  should  result  in  better-informed  single 
market  enforcement  at  Member  State  level.  This,  in  turn,  could  limit  the  instances  of  formal 
infringement proceedings against Member States. 

Being able to use information collection powers could allow the Commission to reduce the number 
and hence the cost of external evidence-gathering studies or to commission better targeted studies. 
The  estimated  saving  on  external  research  on  a  yearly  basis  ranges  between  EUR  0.7m  and  EUR 
1.6m95. 

These  options  would  require  that  the  Commission  and  the  national  authorities  coordinate  their 
actions,  handling  of  information  requests,  and  the  collected  information  analyses.  The  associated 
additional administrative burden on authorities of gathering and analysing a reply from a single firm 
is estimated at between EUR 1,700 and EUR 6,10095.  

95 See Annex 8. 

36 

 
                                                            
Options  3  and  5  entail  an  additional  coordination  cost  and  time,  as  discussed  in  the  following 
sections. 

Citizens/social impact:  

Having  robust  information  on  single  market  malfunctioning  would  allow  the  Commission  and 
national  authorities  to  ensure  a  higher  degree  of  compliance  with  single  market  laws,  as  well  as 
better  designed  Union  policies,  thus  contributing  to  a  more  frictionless  functioning  of  the  single 
market. This would enhance consumer trust in the single market, resulting in wider participation in 
and use of the single market possibilities such as cross-border working, shopping or access to online 
content.  Moreover,  benefits  such  as  e.g.  better  use  of  public  resources  (i.e.  lower  taxes  or  better 
public  services)  thanks  to  well-functioning  public  procurement  or  financial  stability  due  to  better 
oversight  of  financial  institutions  (i.e.  safe  deposits  and  investments)  bring  additional  benefits  to 
citizens.  

6.4.

 Additional impacts specific to Option 3 

Under  Option  3,  collecting  information  may  in  some  situations  require  complex  and  lengthy 
coordination  efforts  between  Member  States  and  the  Commission.  Such  efforts  would  be 
particularly high in instances with a strong cross-border dimension involving many stakeholders from 
several  Member  States.  These  coordination  efforts  would  significantly  increase  the  administrative 
burden placed on the Commission. Furthermore, ensuring a timely access to the information may be 
impeded. Administrative burden would also be placed on national administrations who would issue 
and process information requests. 

Member States replying to public consultation were advocating need for a strong cooperation in any 
data collection activities and some suggested that they are best placed to handle it. 

Until  2014,  Member  States  were  obliged  by  the  Procurement  Directives96 to  collect  and  submit  to 
the Commission annual statistical reports on awarded public contracts. Decades of experience have 
shown  that  the  quality  and  soundness  of  these  reports  varied  widely97;  problems  like  missing  or 
contradictory data, non comparability across Member States despite providing them with commonly 
agreed  templates,  and  substantial  delays  of  up  to  three  years  or  even  non  submission  of  reports. 
Hence, in spite of hiring external consultants to clean the data, its inherent quality was so low that 
no  meaningful  Union  wide  analysis  was  possible.  As  a  consequence,  since  2014  a  centralised  web 
portal  run  by  the  Commissions  became  the  principal  source  of  data  on  European  public 
procurement98. 

Under  Option  3,  Member  States  would  be  responsible  for  ensuring  compliance  with  information 

96 Starting in 1977 with Directive 77/62/EEC of 21 December 1976 coordinating procedures for the award of 
public supply contracts.  
97 Impact Assessment on Amendments to Procurement Directives: http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52011SC1585&qid=1480680545446&from=EN  
98 Directive 2014/24/EU on public procurement; Directive 2014/25/EU on procurement by entities operating in 
the water, energy, transport and postal services sectors. 

37 

 
 
                                                            
requests. Therefore, potential sanctions for missing, late, incomplete or misleading replies would not 
necessarily  be harmonised across the  Member States. This  could lead  to several problems. First, a 
potential  lack  of  sanctions  for  non-compliant  firms  in  some  Member  States  may  reduce  the 
effectiveness of the initiative as market participants may have no incentive to provide the requested 
information. Second, it would be difficult to ensure that the data is provided on time and that the 
information is correct and reliable. Third, this could lead to unfair treatment of market participants, 
particularly  in  cross-border  cases  where  firms  are  placed  in  different  Member  States  and  are, 
therefore, under different regimes of potential sanctions.  

Similar to Option 2, an additional obstacle limiting the effectiveness of Option 3 is the potential lack 
of  cooperation  of  Member  States,  who  may  not  be  willing  to  request  and  share  information  in 
sensitive  cases.  Indeed  negotiating  authorities’  agreement  to  issue  information  requests  on  their 
territory especially in cross border cases is considered one of major drawback of this option. 

the 

requests  would  be  handled  by 

A  further  element  reducing  the  efficiency  of  Option  3  (and  of  Option  2)  is  the  likely  dispersion  of 
national authorities with regard to investigative powers, increasing the difficulty of the coordination 
efforts.  In  Option  3,  the  entrustment  of  the  new  residual  information  collection  powers  to  an 
appropriate authority (or a ministry) would be left to Member States. The most likely scenario is that 
information 
relevant  authority/ministry,  but  as 
authorities/ministries would differ depending on the case and the Member State, any cross-country 
coordination may be extremely complicated. One could argue that Member States' voluntary use of 
existing  authorities  and  their  coordination  networks99 could  overcome  this  coordination  difficulty. 
Such  use,  however,  proves  problematic.  For  instance,  if  Member  States  were  to  empower  their 
national  competition  or  national  consumer  protection  authorities  to  gather  information  for  the 
Commission  in  the  single  market  area  generally,  such  empowerment  is  likely  to  endanger  the 
coherence of both the competition and consumer protection systems and distract those dedicated 
authorities from their core responsibilities100, with potential negative implications on the quality of 
their  services  (e.g.  competition  authorities  may  be  involved  in  long,  complex  and  resource-heavy 
investigations). For  these  reasons,  the  reuse  of  existing  coordination  mechanisms  and  procedures 
from other policy domains does not appear to be a viable alternative and remains unlikely to happen 
in  practice.  Furthermore,  the  voluntary  creation  by  Member  States  of  new  dedicated  national 

99 E.g.  national  competition  authorities  (NCA)  with  European  Competition  Network  or  consumer  protection 
authorities  with  the  Consumer  Protection  Cooperation  Network.  In  other  sectors  (notably  in  the  financial 
services or network industries), the involvement of specific Union bodies would be needed (e.g. EBA, EIOPA, 
ESMA, Agency for the Cooperation of Energy Regulators, etc.). 
100 As  regards  the  competition  law  domain,  NCAs  are  currently  not  empowered  to  issue  requests  for 
information on behalf of the Commission neither in merger (Regulation 139/2004), antitrust (1/2003) nor state 
aid  (2015/89)  regulations.  .  Moreover,  Union  rules  empowering  NCAs  to  apply  the  Union  competition  rules 
alongside  the  Commission  do  not  allow  the  use  of  information  collected  for  purposes  other  than  the 
enforcement of the Union competition rules. Similarly, in the  consumer protection area, the CPC Regulation 
does  currently  not  empower  the  Commission  to  channel  information  requests  through  national  authorities. 
Moreover,  the  CPC  Regulation  allows  addressing  only  intra-Community  infringements  of  Union  consumer 
legislation  listed  in  the  Annex  of  the  Regulation  and  does  not  cover  business-to-business  legislation. 
Stakeholders  have  recently  rejected  any  extension  of  its  scope  to  cover  business-to-business  practices  (see 
proposal 
112: 
p. 
http://ec.europa.eu/consumers/enforcement/cross-border_enforcement_cooperation/index_en.htm). 

2006/2004, 

Regulation 

25  May 

replace 

2016 

CPC 

the 

to 

of 

38 

 
                                                            
authorities/bodies with the specific task of using those residual powers does not appear as a likely 
outcome as it would add considerably to the burden while the new authorities would remain largely 
low  number  of  requests  per  year 101 .  Moreover,  the  creation  of  those 
idle  due  to  a 
authorities/bodies,  by  themselves,  would  not  solve  the  coordination  problem.  Another  potential 
issue is that the use of national-level investigative powers could not be limited by a Union legislation 
(as  it  is  the  case  in  Option  4).  Therefore,  firms  might  be  addressed  more  frequently,  which  would 
significantly increase their administrative burden102 (an issue of key importance to firms replying to 
public consultation). 

The estimated annual Union-wide cost of this option for firms ranges between EUR 0.36m and EUR 
0.59m.  The  projected  cost  to  Member  States  ranges  from  EUR  0.35m  to  EUR  0.52m  and  to  the 
Commission – from EUR 0.07m to EUR 0.26m. Total cost ranges between EUR 0.78m and EUR 1.37m. 
The  expected  benefits  of  the  option  range  from  EUR  50m  to  EUR  6bn  for  enforcement  cases  and 
around  EUR  9bn  and  more  in  cases  when  firm-level  information  collected  is  used  for  informing 
legislative initiatives, with a high likelihood that they will materialize, subject to limitation described 
above (see Annex 8). 

6.5.

 Additional impacts specific to Option 4  

Option  4  would  facilitate  the  enforcement  of  single  market  rules,  whether  through  infringement 
proceedings  or,  in  case  of  enforcement  deficits,  through  proposals  of  legislative  initiatives.  This 
option would: 

  ensure  full  geographical  coverage of  the issue  under  investigation (including  the  whole  Union 

 

 

territory, where necessary in view of the situation at stake); 
facilitate  efficient  collection  of  information  in  situations  with  a  cross-border  dimension  (i.e. 
where information from market participants placed in more than one Member State would be 
necessary), avoiding complex and lengthy coordination efforts with and among Member States; 
circumvent  methodological problems  that may  otherwise  be  created by  uncoordinated  action 
from national authorities (e.g. using different definitions or merging the information with a risk 
of double counting); 

  allow for a more timely access by the Commission to the required information.  

Cost-benefit ratio for Option 4 

101 Based  on  experience  with  CPC  Network  the  running  cost  of  a  single  competent  authority  employing  on 
average 4.4 persons  is  around EUR 130,000  annually. With EU  wide cost  of EUR 3.5m for 27 Member  States 
without  such  dedicated  authorities  (UK  has  CMA).  The  total  cost  of  Option  3  in  case  new  authorities  are 
established is between EUR 3.9m and EUR 4.4m (See Annex 8). 
102 This is not reflected in the administrative burden of this option, as for maintaining comparability of options, 
calculations for all options are based on the same number of firms. 

39 

 
 
                                                            
Benefits: 
  The  equivalent  investigation  powers  in  the  State  aid  domain  have  since  2013  allowed  the 
Commission to collect indispensable firm-level information in two large impact cases, resulting 
in a recovery of unpaid taxes to the tune of nearly EUR 50 million103. 

  Only in the public procurement case introduced in Section 2.2.1104, the potential savings on a 

one concessions case could exceed EUR 3 billion. 

  Evaluating the extension of the geo-blocking regulation to copyrighted content more precisely 
could  have  great  implications,  since  1%  revenue  in  copyright  intensive  industries  amounts  to 
EUR 9 billion.  

Costs: 

The  yearly  cost  of  firm-level  data  collection  and  analysis  for  5  SMIT  requests  is  estimated 
between EUR 0.5 million and EUR 1 million.  

Ratio: 

The benefits largely outweigh the costs. 

The  effectiveness  of  Option  4  will  be  particularly  strong  for  those  instances  where  information 
collected using SMIT will be used as necessary105 evidence for supporting Commission infringement 
proceedings  or  informing  legislative  initiatives  in  case  of  enforcement  deficits.  However,  such 
effectiveness should be qualified considering that SMIT will be an exceptional tool subject to a rather 
demanding  test:  in  other  words,  SMIT  will  not  be  the  only  tool  to  collect  data  for  infringement 
proceedings  as  Member  States  will  remain  the  first  channel source  for  such  data  collection; it  will 
also  be  used  as  a  'last  resort'  tool  to  support  the  assessment  of  impacts  of  selected  important 
initiatives.  

In the exceptional circumstances in which the Commission could use SMIT powers, Option 4 would 
place  an  administrative  burden  on  the  Commission  when  issuing  and  processing  information 
requests. Compared to Option 3, SMIT would hardly impose any administrative burden on Member 
States,  since  it  would  consist  only  of  (negligible)  cost  of  confirming  that  they  cannot  make  the 
requested  information  available  to  the  Commission.  SMIT  would,  nevertheless,  allow  Member 
States,  in  the  context  of  infringement  procedures,  to  have  access  to  information  necessary  for 
backing  up  economically  significant  enforcement  cases.  Thus,  it  would  guarantee  the  role  of  the 
Member States, alongside the Commission, in securing that single market rules are correctly applied. 
Overall,  Option  4  is  likely  to  result  in  a  more  efficient  process  and  less  cumulative  administrative 
burden for the Commission and Member States.  

103 Information  requests  were  issued  in  the  FIAT  case  (SA.38375)  and  the  Starbucks  case  (SA.387340).  For  a 
detailed analysis of these two cases see Annex 5. 
104 Cf.  example  of  enforcement  of  public  concessions  rules  in  the  context  of  large  infrastructure  projects  in 
Section 2.2.1. 
105 It is recalled that SMIT will only be used where the Commission is able to show the necessity of the firm-
level information at stake for the relevant purpose. This will only happen in exceptional cases. 

40 

 
 
                                                            
In order to address some concerns of firms106 as regards the confidentiality of the information and 
its purported use, individual replies to requests for information would not be forwarded to Member 
States, unless in the context of formal infringement procedures. Yet, in those cases, respondents will 
have  the  possibility  to  submit  an  additional  non-confidential  version  to  the  Commission  to  be 
forwarded to the national authorities. In addition,  the information will be used only for the purpose 
for  which  it  was  collected107.  Preparation  of  an  additional  non-confidential  answer  is,  however, 
connected with an additional cost as reported by one business association. 

The  existence  of  sanctions  for  intentionally  or  negligently  providing  misleading  information  would 
ensure  more  truthful  and  reliable  replies,  thus  improving the  overall effectiveness  of  the  initiative 
and clearly improving the status quo108. Firms in the public consultation opted for a voluntary-only 
regime without sanctions, while supporting Member States acknowledge the need for proportionate 
sanctions109.  The  sanctions  proposed  in  Option  4  do  not  intended  to  correct  any  underlying  firm 
behaviour  relating to  the  practices  under  examination or  to  punish  firms  for  creating  cross-border 
obstacles to the functioning of the internal market. Instead, the proposed sanctions would only be 
issued for the failure to provide the relevant information at its disposal110. Such sanctions would not 
apply automatically, but only after a case-by-case assessment accounting for relevant circumstances 
and  paying  particular  attention  to  proportionality  (particularly  for  SMEs).  Finally,  addressees  of  a 
Commission  decision  imposing  sanctions  could  appeal  to  the  Court  to  annul  such  decision  or  to 
lower the amount of the fine111. The sanctions in option 4 are modelled after the competition law 

106 One association said in public consultations: 'There are no guarantees that the information provided would 
remain confidential and only used for the purpose for which it was required. This would require involvement of 
legal experts (in house or outsourced) which would entail considerable cost'. 
107 Option 4 also complies with Art. 7 of the Charter of Fundamental Rights (right to private life of businesses) 
and is consistent with provisions on the same issue in State aid (cf. Art. 7(3) of Regulation (EU) 2015/1589). 
108 In the public consultation, one Member State reported having in certain cases powers to sanction firms for 
non-compliance  with  information  requests  and  noted  that  in  areas  where  sanctions  are  not  available  firm 
participation is negatively impacted. 
109 In  a  position  paper  submitted  to  the  public  consultation,  a  Member  State  suggested  using  significantly 
lower pecuniary fines than in the State aid field: 'This is to reflect the fact that, unlike in State aid cases or in 
competition cases, the businesses are not suspected of any wrong doing. It is important that the fines are high 
enough to be an effective motivator for compliance but not so high that it would have an undue adverse effect 
on the businesses.' 
110 The Commission could also waive a certain type of sanction (i.e. periodic penalty payments) for failure to 
reply in time, if the reply is finally handed to the Commission. 
111 Important  to  note,  distinguishing  the  imposition  of  sanctions  to  firms  depending  on  the  purpose  of  the 
request  for  information  (e.g.  in  the  context  of  infringement  proceedings  or  the  development  of  legislative 
policy)  would  intensely  reduce  the  effectiveness of  Option  4:  this would deprive  certain  requests  from their 
enforceability character, making them a mere plea for voluntary cooperation and, therefore, not changing the 
status  quo.  Moreover,  limiting  information  requests  or  sanctions  to  firms  that  might  have  performed  illegal 
activities  would  impose  major  problems.  First,  it  would  imply  that  the  Commission  already  knows  whether 
firms have engaged in illegal behaviour, for which data would already have to be available. Second, this would 
tarnish  the  reputation  of  the  firms  that  are  subject  to  information  requests  or  fines,  since  they  would  be 
labelled as "illegal" even without having obtained the information that proves this. Third, this is not the rule in 
the competition domain and could lead to calls for only limiting information requests to offending firms there. 
In  the  State  aid  field,  the  Commission  can  request  information  not  only  from  beneficiaries,  but  also  from 
competitors. Even in the antitrust and mergers fields, where the Commission does enforce Union law against 
firms  directly,  other  market  players  (e.g.  buyers,  suppliers,  competitors)  which  are  not  suspected  of 
committing  and  infringement  but  may  be  in  possession  of  relevant  information  are  under  the  very  same 

41 

 
                                                            
 
domain, where they have acted largely as a deterrent. In that domain, despite the large majority of 
information requests being issued only as simple requests (i.e. without an obligation to reply), the 
requested  information  was  provided  in  nearly  all  cases.  Moreover,  it  appears  that  hardly  ever 
specific sanctions for failure to provide information have been imposed since Regulation No 1/2003 
is in force in the antitrust field or since the MIT was introduced in the State aid rules in 2013. This 
demonstrates  that  the  mere threat of  sanctions  (which  could  have only  been imposed  following  a 
request of information by Decision) works to incentivise firms to provide the information requested. 
Also the level of the sanctions proposed in Option 4 is consistent with Union competition rules. One 
could  conceive,  in  abstracto,  the  application  of  alternative,  less  far  reaching  sanctions  for  non-
replying  firms  in  the  context  of  SMIT:  i.e.  lower  levels  of  fines  or  non-pecuniary  sanctions  (e.g.  a 
temporary  ban  from  registration  in  the Transparency  Register112,  thus  preventing  the  non-replying 
firm from contributing to the debates on the development of Union policy113). However, experience 
in the competition field shows that lower pecuniary sanctions lack the deterrent effect. Indeed, in 
the  2003  reform  of  the  antitrust  procedural  rules,  the  Commission  felt  necessary  to  propose 
increasing the level of then existing procedural fines (limited to €5000)114 to ensure they would have 
deterrent effect, which was not the case at that time115 – the Council accepted such increase. The 
same,  revised,  level  of  sanctions  was  introduced  in  2013  in  the  State  aid  rules.  Lower  levels  of 
sanctions  for  SMIT  would  likely  result  in  pressure  on  the  EU  legislator  to  also  reduce  the  level  of 
sanctions in the competition law area, therefore diminishing their already proven deterrent effect. 
As  regards  a  temporary  ban  from  registration  in  the  Transparency  Registry,  such  ban  could  have 
little, if any,  deterrent effect on firms  not willing to cooperate. At the same time, such ban would 
introduce a strong restriction of the rights of the firms in question to express their views on Union 
policy  matters.  This  could  be  more  intrusive  and  less  proportionate  in  terms  of  respect  of 
fundamental rights. 

The annual Union-wide cost of Option 4 ranges between EUR 0.37m and EUR 0.61m for firms, and 
between EUR 0.12m and EUR 0.43m for the Commission. There is no cost for Member States. The 
total  cost  ranges  between  EUR  0.49m  and  EUR  1.04m.  The  expected  benefits  of  the  option  range 
from  EUR  50m  to  EUR  6bn  for  enforcement  cases  and  around  EUR  9bn  and  more  in  cases  where 

regime on requests for information (including the possibility of being sanctioned in case of failure to reply to 
those requests). 
112 http://ec.europa.eu/transparencyregister/  
113 The  rationale  for  such  ban  would  be  that  a  firm  should  not  be  allowed  to  attempt  to  influence  the 
development of Union's policy when such firm is not willing to cooperate with the Commission in replying to a 
justified request for information. 
114 Cf. Council Regulation No 17 of 1962, which provided for fines in "absolute terms" rather than on "relative 
terms" (cf. with reference to companies' turnover). 
115 'Paragraph 1 modifies  the  fines  for breaches  of procedural rules  [N.B.  including  requests  for  information], 
which in the existing Regulation No 17 can be between EUR 100 and 5 000. These amounts no longer have any 
deterrent effect. It is proposed that these procedural fines be aligned on the ECSC Treaty, which provides for 
fines of up to 1% of the total annual turnover for these kinds of infringements (Article 47).' [emphasis added]. 
Cf. European Commission, Proposal of 27.9.2000 for a Council Regulation on the implementation of the rules 
on  competition  laid  down  in  Articles  81  and  82  of  the  Treaty  and  amending  Regulations  (EEC)  No  1017/68, 
(EEC) No 2988/74, (EEC) No 4056/86 and (EEC) No 3975/87 ('Regulation implementing Articles 81 and 82 of the 
Treaty'), COM(2000)582 final, p. 27.  

42 

 
                                                                                                                                                                                         
firm-level information collected is used for informing legislative initiatives, with a high likelihood that 
they will materialize (see Annex 8). 

6.6.

 Additional impacts specific to Option 5 

Option 5 builds on both Options 2 and 4. The described ineffectiveness of Option 2 would remain (in 
terms of the difficulties for Member States to cooperate with the Commission, the (in)completeness 
of  information  collected  domestically,  the  cross-border  comparability  of  data  etc.)  as  well  as  the 
proportionality concerns (mostly due to providing the Commission with access to national databases 
without consent of firms and use of information for purposes other than originally collected).  At the 
same time, the possibility to use SMIT (Option 4) would relatively diminish (to the extent that the 
Commission would have access to information stored in national databases under option 2 and the 
necessity  test  of  option  4  would  be  more  difficult  to  be  met).  SMIT  would  continue  to  allow  the 
Commission to collect the necessary firm-level information when national tools come short, such as 
when:  (1)  national  authorities  do  not  possess  or  are  not  able  to  obtain  the  necessary  information 
using  their  existing  powers;  (2)  data  collected  by  authorities  is  not  timely  or  complete;  and  (3) 
Member  States  are  hesitant  or  unwilling  to  provide  sensitive  information  to  the  Commission. 
However, the use of option 2 would result in reducing the efficiency gains of option 4 as regards the 
comparability  of  data  since  the  Commission  could  have  access  to  data  in  Member  States  under 
different  formats,  making  it  more  difficult  for  the  Commission  to  justify  the  use  of  SMIT  in  those 
cases  while  not  obtaining  a  correspondent  advantage  because  of  the  timely  access  to  the 
information.  Option  5  adds  an  additional  coordination  effort  concerning  whether  investigative 
powers should be used at national or Union level. As existing national tools are mostly sectorial and 
differ significantly across the Union, selecting the most appropriate tool on a case-by-case basis may 
be  burdensome  and  slow.  Such  efforts  would  be  particularly  high  in  situations  involving  market 
participants  from  several  Member  States.  Therefore,  ensuring  a  timely  access  to  the  information 
may be impeded. Similar to Option 3, sanctions for non-compliance would not be harmonised across 
Member States in cases when national tools (option 2) are used, therefore potentially reducing the 
overall effectiveness of the option 4 and the overall initiative.  

The annual Union-wide cost of this option is between EUR 0.37m and EUR 0.6m for firms; between 
EUR 0.01m and EUR 0.27m for the Member States; and between EUR 0.13m and EUR 0.36m for the 
CommissionError!  Bookmark  not  defined..  The  total  cost  ranges  between  EUR  0.51m  and  EUR  1.23m.  The 
expected  benefits  of  the  option  range  between  EUR  50m  to  EUR  6bn  for  enforcement  cases  and 
around  EUR  9bn  and  more  in  cases  of  informing  legislative  initiatives.  The  likelihood  of  these 
benefits materialising is high (see Annex 8).  

7.  HOW DO THE OPTIONS COMPARE?  

7.1.

 Comparison of the options  

Table  7.1  provides  information  comparing  the  policy  options  in  the  light  of  the  effectiveness  and 
efficiency criteria. Table 7.2 compares the impact of the policy options on stakeholders. 

43 

 
 
 
Table 7.1 Comparison of policy options against effectiveness and efficiency criteria 

Effectiveness 

Improve access to 
comparable cross-
border information  

Improve access to 
confidential firm-
level information 

Ensure that collected 
information is correct, 
complete, and unbiased 

Ensure that the 
information is 
sufficiently 
detailed, 
disaggregated, and 
timely 

Efficiency  
(benefit to cost analysis) 

0 

0 

0 

0 

0 

Baseline 

Option 1: 
Exchange of 
best practices 
between 
Member States 
and with the 
Commission 

Option 2:  
Lifting 
regulatory 
limitations to 
the sharing of 
firm-level 
information 
between the 
Member States 
and the 
Commission 

Option 3: 
Introducing 
residual 
investigative 
powers through 
national level 
single market 
information 
tools 

Option 4: 
Introducing an 
EU-level Single 
Market 
Information 
Tool  

(0/-) no mechanism in place in majority of Member States (MS); 
potential improvement in long run, assuming all MS would 
participate 

(0/-) limited number of 
best practices; no 
coordination or 
exchange mechanism, 
cross-border jurisdiction 
issues;  
comparability of 
information could be a 
problem 

(+) improved access 
to information that 
is already collected; 
no improvement 
with regard to 
access to 
information that is 
not already 
collected by MS 
(e.g. cost structure, 
price strategy)  

(+) direct access to 
some data for the 
Commission, difficulty in 
finding responsible 
authority, some MS may 
not collect certain data 
at all, need to 
harmonise data 
protection between MS; 
comparability may be a 
problem due to 
differences in e.g. 
definitions;  
(++) access to information vastly improved 
both for MS and the Commission; 
comparability ensured due to common 
formats and definitions; possibility of some 
MS not cooperating; firms may be unwilling 
to share all information with MS 

(++) as in Option 3; MS cannot block an 
information request 

(0/+) dependent on 
national measures; MS 
would enforce based on 
national rules; potential 
for different treatment 
of stakeholders in single 
market (e.g. fines for 
non-compliance) 

(0/+) dependent 
on national 
measures; certain 
information is not 
collected by MS; 
periodic reporting 
(e.g. annual) 
means delays in 
data availability  

(+) Potential lack of 
harmonisation between 
MS with regard to 
enforcement of 
compliance with 
information request, 
resulting in a different 
treatment of 
stakeholders in the 
single market (e.g. in 
terms of fines for non-
compliance); 

(++) single sanctions 
system;  
Clarity which 
information is shared 
with MS (possibility of 
non-confidentail 
version) 

(+) access to any 
kind of 
information 
necessary for 
enforcement 
would be granted; 
possible delays 
due to necessary 
coordination 
between 28 MS in 
cross-border cases 

(++) access to any 
kind of 
information 
necessary for 
enforcement 
would be granted;  

Option 5: – A 
'hybrid' 
approach 
combining 
Options 2 and 4   

(+/++) as in Opt. 4, but given the necessary sequential nature of requests in this hybrid 
option, MS would have to be approached before a Union-level request could be issued 
directly to firms.  This could lead to important delays, receivinig non-comparable and 
incomplete data, making it necessary to eventually contact the firms directly (assuming 
that the necessity test for the use of SMIT could be met in every case, which is not 
granted). 

Net effect: (0/+) 
benefits (0/↑):  potential in 
the long run (low likelihood) 
Costs (0/↑): creation of new 
capacity required in all but 
one MS; new coordination 
efforts; MS may use the 
powers rutinely increasing 
cost on firms; (EUR 0 - 1.27m)  

Net effect: (+) 
benefits (↑): potentially high, 
depending on whether 
information is available at MS  
(billions of euro, but with 
medium likelihood) 
cost (0/↑): no or limited cost 
to firms; cost to Commission 
of finding and coordinating 
different authorities, cost to 
MS in preparing information; 
(EUR 0.02m - 0.72m)* 

Net effect: (++) 
benefits (↑↑): faster 
enforcement of Union law and 
prevention of future breaches 
(billions of euro) 
cost (↑):cost of replying to 
firms; MS may use the powers 
rutinely increasing cost on 
firms;  
coordination cost for 
authorities;  
(EUR 0.78m - 1.37m) 

Net effect: (++)  
benefits (↑↑): faster 
enforcement of Union law and 
prevention of future breaches 
(billions of euro) 
cost (↑): firm cost of replying;  
(EUR 0.49m - 1.04m)  

Net effect: (++) 
benefits (↑↑): as in Opt. 4 
cost (↑): higher due to 
potential duplication of 
activities and coordination 
cost; (EUR 0.51m - 1.23m) 

Note:  Assumption  of  4  small-scale  requests  (up  to  5  firms)  and  1  larger  request  (up  to  50  firms)  a  year  (see  Annex  8).  
Legend: ++ significant positive impact; + positive impact; 0 neutral; - negative impact; -- significant negative impact; ↑ increase in cost or 
benefits; ↑↑ significant increase in cost or benefits; *- not comparable with other options, assumption of 50% of information need covered 

44 

 
 
 
 
Table 7.2 Comparison of the impact of policy options on stakeholders 
Member States 
0 

EU institutions 
0 

Firms 
0 

(0/+) no change in short run; long term potential improvement in the 
single marke; information requests might be used rutinely by MS  

(0/+) positive in long run if 
MS decide to participate 
and share data 

Baseline 

Option 1 
Exchange of 
best practices  

Costs: EUR 0-0.59m 

EUR 0-0.47m 
Benefits: Low likelihood: Small-scale requests: EUR 50m-6bn; Larger requests: EUR 9bn and more 

EUR 0-0.21m 

Citizens 
0 

(0/+) no change in 
short run, potential 
improvement in the 
long run 

EUR 0 

Option 2  
Lifting 
regulatory 
limitations to 
the sharing of 
firm-level 
information 

(+) no new or limited cost for firms; 
potential positive impact on faster 
detection and prevention of any 
barrier-creating activity by firms and 
MS; firm data collected by MS will be 
used for other purposes to those for 
which it was collected without 
agreement of firms 

(+) better enforcement of Union 
law by MS could lead to lower 
number of infringement cases 
against MS, more data available 
for cross-border cases; certain 
information is not collected now; 
MS may be unwilling to pass self-
incriminating evidence 

(0/+) as each MS already 
has access to its own info 
any improvement could 
come from sharing of 
information between MS; 
this could lead to better 
enforcement of cross-
border cases 

(+) potential positive 
impact on faster 
detection and 
prevention of all kinds 
of discriminating 
activities by firms and 
MS 

Costs*: EUR 0 – EUR 0.29m 

EUR 0.01m-EUR 0.15m 

EUR 0.01-0.27m 

EUR 0 

Benefits: Medium likelihood: Small-scale requests: EUR 50m-6bn; Larger requests: EUR 9bn and more  

Option 3 
Introducing 
national-level 
single market 
information 
tools 

(+/++) much faster detection and 
prevention of discriminating activities 
by firms and MS; more cases solved 
at MS level; cost of complying with 
information request and eventual 
sanctions; no possibility to limit 
access to sensitive information to MS; 
might be used rutinely by MS furhter 
increasing the burden 

(+/++) better enforcement 
ofUnion law by MS should lead to 
less infringement cases against 
MS; all relevant data could be 
collected; time delays due to 
coordination; MS may be 
unwilling to pass self-
incriminating evidence 

(++) possibility to ask for 
information not collected 
now and facility to 
exchange information 
between MS should help in 
enforcement of national 
and cross-border cases; 
time delays due to 
coordination 

(++) much faster 
detection and 
prevention of all kinds 
of discriminating 
activities by firms and 
MS; more cases 
solved at MS level; 
some delays in cross-
border cases possible 
due to coordination 

Costs: EUR 0.36m-0.59m 

EUR 0.07m-0.26m 

EUR 0.35m-0.52m 

EUR 0 

Benefits: High likelihood: Small-scale requests: EUR 50m-6bn; Larger requests: EUR 9bn and more  

Option 4  
Introducing an 
EU-level Single 
Market 
Information 
Tool  

(++) faster detection and prevention 
of discriminating activities by firms 
and MS; more cases solved at MS 
level; cost of complying with 
information request and eventual 
sanctions; possible to send only non-
confidential version to MS; 
exemption of micro firms 

(++) better enforcement of Union 
law by MS should lead to fewer 
infringement cases against MS; all 
relevant data could be collected 

(+/++) possibility to ask for 
information not collected 
now and facility to 
exchange information 
between MS should help in 
enforcement of national 
and cross-border cases  

(++) much faster 
detection and 
prevention of 
potentially all kinds of 
discriminating 
activities by firms and 
MS; more cases 
solved at MS level 

Costs: EUR 0.37m-0.61m 

EUR 0.12m-0.43m 

EUR 0-0.002m 

EUR 0 

Benefits: Very high likelihood: Small-scale requests: EUR 50m-6bn; Larger requests: EUR 9bn and more  

Option 5  
'hybrid'  

(+/++) Same as Option 4, with similar concerns ot Option 2; longer delays due to sequential nature of the procedure, 
duplication of activities and need for coordination of replies from all Member States concerned 

Costs: EUR 0.37m-0.6m 

EUR 0.13m-0.36m 

EUR 0.01-0.27m 

EUR 0 

Benefits: High likelihood: Small-scale requests: EUR 50m-6bn; Larger requests: EUR 9 billions and more  

Note:  Assumption  of  4  small-scale  requests  (up  to  5  firms)  and  1  larger  request  (up  to  50  firms)  a  year  (see  Annex  8).  
Legend: ++ significant positive impact, + positive impact, 0 neutral, - negative impact, -- significant negative impact; *- not comparable with 
other options, assumption of 50% of information need covered 

Proportionality assessment. Option 4 appears the most proportionate to the objectives pursued by 
this initiative for the following reasons: 

45 

 
 
 
Option 4 is the only option next to Option 5 that provides a clear necessity test to be passed116 to 
ensure  the  exceptional  and 'last  resort'  nature  of  information  requests,  thereby  guaranteeing  that 
information requests are limited and targeted117. At the same time, Option 4 (and Option 5) would 
facilitate more timely access to relevant information by the Commission than Options 2 and 3, as the 
Member States could not significantly delay the flow of information. 

Option 4 minimises the overall administrative burden on firms and public authorities compared to 
the other options. 

Option  4  is  the  least  intrusive  option  for  businesses.  Options  2,  3  and  5  would  guarantee  the 
Commission  access  to  any  firm's  detailed  information  stored  by  a  national  authority  without  the 
knowledge of the firm. In addition, Options 1 and 3 could not ensure that the residual powers of the 
Member States would be used in a moderate manner. 

Unlike  other  options,  Option  4  would  overcome  the  coordination  problem  when  it  is  necessary  to 
obtain  information  from  market  participants  located  in  different  Member  States.  Option  4  would 
achieve  the  objective  at  stake,  which  cannot  be  attained  by  Option  2  (not  all  types  of  firm-level 
information could be collected and data might not be comparable) and Option 3 (Member States are 
not in a position to enforce cross-border requests for information). Option 5 necessarily introduces a 
more complex coordination mechanism. 

The  proportionality  of  Option  4,  as  well  as  Option  5,  is  also  reflected  in  the  way  it  integrates  the 
important role of the Member States, alongside the Commission, in the enforcement of the single 
market rules. This option does not deprive Member States of such role, who will continue to have 
their own investigation powers and remain free to extend them (Option 3 would be more intrusive 
from this perspective as it would force Member States to ensure that residual investigative powers 
are available at national level). Moreover, the use of SMIT by the Commission, being of 'last resort', 
will  ensure  that  its  use  will  be  limited  and  targeted  at  the  most  appropriate  cases  where  national 
intervention would not be effective (e.g. for reason of their scale or effects). Furthermore, the role 
of Member States within the operation of SMIT is also important: a Member State may signal to the 

116 This  test  would  be  subject  to  appropriate  ex  post  judicial  control.  One  could  argue,  however,  that  an 
additional ex ante control by another Union institution or body (in the same manner as the Commission must 
consult  the  European  Data  Protection  Supervisor  as  regards  personal  data  protection  initiatives  could  be 
warranted  to  ensure  that  the  Commission  respects  the  conditions  imposed  and  does  not  abuse  SMIT  (thus 
resulting  in  excessive  administrative  burden).  However,  such  an  ex  ante  control  could  interfere  with  the 
balance  of  powers  between  Union  institutions  and  bodies,  in  particular  the  Commission's  right  of  initiative, 
unless the task of such body would be to provide a mere opinion. Yet, in the latter case, the result would be a 
delay  in  the  procedure  without  any  guarantee  that  such  opinion  would  bring  added  value  to  the  process, 
particularly considering the possibility of judicial review on the Commission Decision. Furthermore, it is unclear 
which body or institution could be entrusted with that role. A different issue would be if the Commission were 
to  establish  ad  hoc  internal  procedures  for  such  an  ex  ante  assessment  by  a  Commission's  department 
specifically entrusted with the task of controlling the quality of the regulation process (such as the Regulatory 
Scrutiny Board). However, a decision on such an internal allocation of competences would correspond to the 
Commission itself and it would not be a matter for an inter-institutional legal instrument to address. 
117 It  could  be  argued  that  in  view  of  the  small  number  of  instances  in  which  SMIT  could  be  used  the 
establishment of a new legislative tool would not be justified. However, it is precisely the exceptional and 'last 
resort' character of the tool, limiting its use in practice, which makes it a non-intrusive and proportionate tool. 

46 

 
                                                            
Commission  a  potential  enforcement  issue  and  request  the  Commission  to  use  the  investigation 
powers; Member States are informed of the requests issued by the Commission; and by sharing the 
information with the concerned Member State in the context of infringement proceedings, both the 
Commission and that Member State would have the timely access to the needed information, thus 
ensuring better informed decision-making on both national and Union levels. 

Option 4 does not go beyond what is necessary to achieve the stated objectives, thus respecting the 
principle of proportionality laid down in Article 5(4) TEU118.  

7.2.

 Preferred option 

Option 4 is the most proportionate to the objective pursued; it scores best in terms of achieving all 
the  objectives  while  minimising  the  overall  administrative  burden  on  firms  and  public  authorities. 
Table 7.3 summarises the costs and benefits of the preferred option per stakeholder type. 

Table 7.3. Total EU28 annual costs and benefits of the preferred option per stakeholder type.  

Option  Stakeholder 
4 

Firms  

Costs (EUR) 
Min.  Max.  

0.37m 

0.61m 

Commission 

0.12m 
Total   0.49m 

0.43m 
1.04m 

Benefits 

Value (EUR) 
- Small requests: EUR 50m-EUR6bn 
- Larger requests: EUR 9bn and more  
- Savings on external studies:  EUR 0.7m – EUR 1.6m 

Likelihood 

Very High 

From 50m to  9bn of euro and more 

Note: Based on 4 small-scale requests (up to 5 firms) and 1 larger request (up to 50 firms) a year. (see Annex 8). 

The Commission costs indicated above would not require any new budgetary commitments. They 
would only involve redeployment of existing staff and infrastructure. 

The principal parameters of the preferred option are graphically illustrated for overview in Fig. 7.1.  

Fig. 7.1. Principal parameters of the preferred option 

118 Option  4  is  moreover  particularly  in  line  with  Article  337  TFEU,  which  explicitly  foresees  that  the 
Commission should be able to collect the information required for the performance of the tasks entrusted to 
it, within the limits and under the appropriate conditions fixed by the Union legislator. 

47 

Economic/social impact –possible market failureLast resort: information not otherwise availableFirms, trade organisations, business associationsPublic authoritiesMicro-enterprisesProposing improvements where evaluation shows that enforcement deficits are due to gaps in relevant sectoral legislationEnforcement of EU Single Market rules and principlesWhen?Conditions that have to be satisfiedFactual company and market data (e.g. cost structure, profits, pricing policy)Who?Main addressees of information requestsEnforcementConfidentialitySelected market participants who could be expected to have the necessary informationProfessional secrecy obligations imposed on the Commission and the Member States (information may not be disclosed to general public)Authority to perform interviews, audits, etc.Why?Purpose of collecting informationWhat?Type of data requestedHow?If the Commission had already launched an infringement procedure:Commission transfers replies to MS concernedInformation readily available to replying firms (acquiring data does not require research or extra effort to retrieve)Simple requests for informationNo obligation to replyPecuniary sanctions for missing or late replyFormal Commission Decision requesting the informationInformation necessary for decision makingThe Commission adopts a decision stating its intention to use SMITIf the Commission had already launched an infringement procedure:The MS concerned agrees to the request for informationDisaggregated information used only for the purpose for which it was acquiredProcedurePecuniary sanctions for intentionally or negligently supplying incorrect or misleading information 
 
 
 
 
 
                                                            
Fig. 7.2. Use of firm-level information by Member States and the Commission 

How  firm-level  information  collected  under  the  preferred  option  is  going  to  be  used:  The 
Commission  would  first  use  the  collected  information  for  confirming  or  denying  the  existence  of 
serious  obstacles  to  the  functioning  of  the  single  market.  In  the  event  that  the  existence  of  those 
obstacles  is  not  confirmed,  no  further  action  would  follow.  If  the  existence  of  such  obstacles  is 
however confirmed, the Commission would need to take action with a view to address the problem. 
It would need to involve the concerned Member State where the problem could be better addressed 
at national level: this avenue may lead to formal infringement proceedings if the concerned Member 
State fails  to  fulfil  its  obligations  under  Union  law.  Sharing  of  data  with the  Member States  would 
take due regard to the protection of firms' confidential information and of the due process principles 
guaranteeing  the  rights  of  defence  of  the  Member  States  in  those  proceedings.  Alternatively,  the 
Commission may use the relevant data, with due regard to confidentiality obligations, for assessing 
the need for new or amended Union legislation (especially concerning new market phenomena) and 
submitting  related  proposals  to  the  co-legislators  (see  Fig.  7.2).Choice  of  the  legal  instrument  for 
the preferred option: A regulation would appear as a suitable and appropriate legal instrument for 
the  preferred  option,  considering  that  empowering  the  Commission  to  obtain  information  in  a 
limited  set  of  circumstances  would  not  require,  by  itself,  the  approximation  of  national  laws  – 
therefore recourse to a Directive is excluded. In this context, a standalone regulation appears as an 
appropriate  choice  in  terms  of  legal  clarity,  therefore  providing  higher  legal  certainty;  and  of  no 
interference with other policy areas119. 

119 As an alternative approach, the scope of existing information collection powers available to the Commission 
in other policy domains (e.g. MIT available in Regulation 2015/1589 on the application of State aid rules) could 
be,  from  a  formal  perspective,  extended  to  allow  the  Commission  to  request  firm-level  information  from 
market participants for a broader scope of cases of internal market malfunctioning. This alternative, however, 
would  require  substantial  changes  to  the  State  aid  rules  (or  the  antitrust  rules).  Regulation  2015/1589  (or 
Regulation 1/2003) was tailored to the specific objectives, procedural steps and powers of the Commission in 
this narrowly defined area. Any such extension, mixing the two types of investigative powers in a single legal 
instrument  could  raise  questions  as  to  its  legal  robustness.  Moreover,  it  would  also  likely  endanger  the 

48 

In case of recurrent or systemic infringements … Collected data necessary for an enforcement action sent to MS(s) (with due regard to protection of confidential information) Information request upon reasonable suspicion of an internal market malfunctioning: firm-level information collectedConfirms the existence of an internal market malfunctioningRefutes the existence of an internal market malfunctioningNo further actionThe Commission's conclusion :Collected data used to back up an infringement case against MS(s)The issue can be solved at a national levelThe issue cannot be solved at a national level (e.g. because of a cross-border dimension)The Commission revises an existing or proposes new legislationIssue solved by MS(s) concernedIssue not solved by MS(s) concernedThe Commission launches an infringement procedure against MS(s) concernedProblem solved…aggregated and anonymized data are used when: 
 
 
 
                                                            
 
Consistency  of  the  preferred  option  with  Fundamental  Rights.  The  initiative  respects  the 
fundamental  rights  and  observes  the  principles  recognised,  in  particular  by  the  Charter  of 
Fundamental Rights of the European Union (hereinafter, the 'Charter'), notably the right to respect 
for private and family life (Article 7). Clear safeguards and guarantees taking into account legitimate 
interest  of  undertakings  in  the  protection  of  their  business  secrets  would  be  provided  for  in  the 
future  Regulation.  In  particular,  any  undertaking  concerned  by  the  Commission's  request  for 
information would be given the opportunity to indicate which information it considers confidential, 
stating the reasons for such confidentiality. According to the first indent of Article 4(2) of Regulation 
(EC)  No  1049/2001  on  public  access  to  documents120,  the  Commission  shall  refuse  access  to  a 
document where disclosure would undermine the protection of commercial interests of a natural or 
legal  person.  Furthermore,  the  Commission  would  share  information  gathered  through  SMIT  with 
the Member State concerned by the request, to the extent that this information is not confidential 
vis-à-vis  that  Member  State.  Furthermore,  in  this  initiative,  in  accordance  with  Article  339  TFEU, 
there  would  be  guarantees  that  any  information  acquired  by  the  Commission  through  the 
application of SMIT would be covered by professional secrecy obligations. 

This initiative would not affect the right to  the protection of personal data. Furthermore, it would 
guarantee protection of personal data in order to ensure compliance with Article 8 of the Charter. 
The  initiative  also  respects  the  right  to  good  administration  (Article  41  of  the  Charter),  and  in 
particular  the  access  to  files,  while  respecting  business  secrecy  as  well  as  the  obligation  of  the 
Commission to motivate its requests for information. The right of access to documents (Article 42 of 
the  Charter)  would  be  guaranteed  in  accordance  with  the  provisions  of  Regulation  (EC)  No 
1049/2001 on public access to documentsError! Bookmark not defined.120.  

The  initiative  also  respects  the  right  to  an  effective  remedy  and  to  a  fair  trial  (Article  47  of  the 
Charter). Decisions requiring undertakings to supply information taken by the Commission pursuant 
to  SMIT  would  be  subject  to  review  by  the  CJEU  in  accordance  with  Article  263(4)  TFEU.  This 
initiative respects Article 48 of the Charter which guarantees presumption of innocence until proved 
guilty  according  to  law  and  right  of  defence  of  anyone  who  has  been  charged121.  By  a  request  for 

coherence of the systems given the different procedural steps for the investigations and the different policy 
objectives  and  could  potentially  result  in  implementation  problems.  Even  within  the  competition  area, 
different legal instruments with investigative powers are used for the State aid and antitrust fields. Moreover, 
the legal basis for the existing competition instruments and those for the current initiative are different and 
entail different legislative procedures for the adoption of the rules. While the antitrust or State aid regulations 
are  Council  regulations  only,  the  rules  to  implement  Option  4  in  the  current  initiative  would  require  the 
involvement of the European Parliament in the course of the ordinary legislative procedure.  
120 Regulation  (EC)  No  1049/2001  of  the  European  Parliament  and  of  the  Council  of  30  May  2001  regarding 
public access to European Parliament, Council and Commission documents. 
121 In  accordance  with  Article  52(3)  of  the  Charter,  this  right  has  the  same  meaning  and  scope  as  the  right 
guaranteed by the Convention. Article 48 of the Charter corresponds to Article 6(2) and (3) of the European 
Convention of Human Rights. In deciding whether proceedings concerning misconduct are to be categorised as 
'criminal' or not, the European Court of Human Rights (ECtHR) has regard to 'Engel criteria', in particular the 
nature of the offence and the degree of severity of the penalty that the person concerned risks incurring. It has 
in  that  regard  considered  it  relevant  whether  the  penalty  is  intended  essentially  as  a  punishment  to  deter 
offending rather than as pecuniary compensation for damage (judgement of the ECtHR of 8 June 1976  Engel 
and  Others  v.  the  Netherlands,  8  June  1976,  par  82). The  ECtHR  recognises  that  Art.  6  of  the  European 
Convention  of  Human  Rights  is  applicable  to  cases  not  strictly  belonging  to  the  traditional  categories  of  the 

49 

 
                                                                                                                                                                                         
 
information  the  Commission  would  compel  undertakings  to  provide  the  necessary  information 
available to it, even if it can be used to establish against it or another undertaking, the existence of 
an  infringement  of  the  internal  market  rules,  it  may  not,  by  means  of  a  decision  calling  for 
information,  undermine  the  rights  of  defence  of  the  undertaking  concerned122.  In  particular,  the 
Commission may not compel an undertaking to provide it with answers to a request for information 
which might involve an admission on its part of the existence of an infringement. 

This initiative also respects Article 49(3) of the Charter according to which 'the severity of penalties 
must not be disproportionate to the criminal offence'. This initiative could empower the Commission 
to  enforce  compliance  with  the  requests  for  information  by  means  of  proportionate  fines  and 
periodic  penalty  payments.  In  setting  the  amounts  of  fines  and  periodic  penalty  payments,  the 
Commission  would  take  due  account  of  the  principles  of  proportionality  and  appropriateness,  in 
particular  as  regards  SMEs.  The  rights  of  the  parties  requested  to  provide  information  would  be 
safeguarded  by  giving  them  the  opportunity  to  make  known  their  views  before  any  decision 
imposing  fines  or  periodic  penalty  payments  is  taken.  The  CJEU  would  have  unlimited  jurisdiction 
with regard to such fines and periodic penalties pursuant to Article 261 TFEU. 

The  future  Regulation  will  be  interpreted  and  applied  with  respect  to  rights  and  principles 
recognised by the Charter.  

8.  HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

The  Commission  will  monitor  the  application  of  SMIT  with  a  view  to  assess  the  effectiveness  and 
proportionality of this tool based on the following criteria: 

Exceptionality  of  the  use  of  the  tool.  The  Commission  will  record,  in  particular,  the  number  of 
instances  SMIT  was  used  per  year,  the  area/domain  of  the  single  market  concerned,  the 
type/size/number  of  firms  covered  (and  whether  the  same  firm  had  to  reply  to  requests  for 
information more than once). Follow-up voluntary feedback surveys will be sent to firms covered by 
the  Commission  requests  to  gauge  their  views  of  the  process,  including  associated  time/money 
outlays and their views on the proportionality of the requests. Member States would be encouraged 
to  send  similar  surveys  to  their  firms  in  case  Options  1,  3  or  5  are  chosen.  The  proportionality  of 
SMIT  will  also  be  assessed  by  the  number  of  instances  in  which  Member  States  or  firms  would 
challenge before the CJEU the justification for collecting the information (i.e. the Commission's initial 
decision) and/or the proportionality of the extent of the requests for information. 

Cooperation  of  the  addressees  of  the  requests  in  providing  the  information  requested.  The 
Commission will record, in particular, the timeliness of replies, the response rate and whether the 
information is sufficiently representative considering the response rate. The Commission could use 
indicators  such  as  whether  follow-up  action  to  remind  firms  that  they  should  reply  to  simple 

criminal law, e.g. to antitrust proceedings (see e.g. judgment of the ECtHR of 27 September 2011, Menarini v. 
Italy, par 38-44). In the context of this initiative 'Engel criteria' are met because the Commission can enforce 
compliance  with  requests  for  information  by  means  of  fines  and  periodic  penalty  payments  intended 
essentially as a punishment for missing, late, misleading or incorrect replies.  
122 See, by analogy, judgment of the CJEU of 18 October 1989, in case 374/87 Orkem v Commission, par 34. 

50 

 
                                                                                                                                                                                         
requests, including the threat of sanctions if the information is requested by Decision, was necessary 
to receive replies. 

Quality of the information collected. The Commission will record, in particular, information on the 
quality  of  responses,  that  is:  their  comprehensiveness  and  completeness,  their  accuracy,  their 
reliability  (e.g.  information  not  biased).  It  will  also  record  information  on  the  comparability  of  the 
data  collected  from  firms  situated  in  different  Member  States.  Beyond  the  necessary  qualitative 
judgments, some quantitative data could also be recorded: e.g. whether follow-up action (requests 
for clarification, requests for submitting complementary/supplementary information) was needed. 

Usefulness  of  the  information  collected.  The  Commission  will  record,  in  particular,  whether  the 
information  collected  through  SMIT  was  actually  used  in  the  decision-making  process  of  the 
Commission  and  for  which  purposes:  e.g.  infringement  proceedings  against  Member  States; 
enforcement  action  at  domestic  level  following  infringement  proceedings;  informing  legislative 
initiatives. The Commission will also verify whether the use of SMIT, as an ancillary tool, resulted in 
better  Commission's  decisions.  The  following  indicators  could  help  in  this  regard:  e.g.  the  success 
rate  of  launched  enforcement  proceedings  at  Union  level  (e.g.  whether  the  CJEU  will  uphold  the 
Commission's  arguments  supported  by  the  information  collected  using  SMIT);  the  success  rate  of 
domestic  enforcement  actions  following  infringements  proceedings  where  information  collected  
using  SMIT  was  used;  ex  post  feedback  from  stakeholders  on  the  usefulness  of  the  information 
collected for the decision-making process, in particular in the case of legislative proposals benefiting 
from information collected through SMIT. The Commission will also verify whether the use of SMIT 
resulted  in  timely  decision-making  by  the  Commission:  this  is  likely  to  require  a  counterfactual 
assessment, such as whether the time spent on collecting information through SMIT actually allowed 
the Commission to accelerate its own procedures after the collection of information. 

The results of these monitoring activities would be assessed in a Commission's report after five full 
years of the tool functioning and could lead to modifications of the legal framework, if appropriate.  

* 

* 

* 

51 

 
 
 
ANNEX 1: PROCEDURAL INFORMATION 

Lead Directorate-General. This initiative is led by Directorate-General for Internal Market, Industry, 
Entrepreneurship and SMEs (DG GROW).  

Agenda  planning  and  Work  Programme  References.  The  Agenda  Planning  Reference 
is 
2017/GROW/014. The Single Market Information Tool was announced in the Single Market Strategy 
(Com(2015)550 of 28.10.2015) and was part of Commission’s 2016 and 2017 Work Programme123. 

Organisation  and  timing.  The  inter-service  steering  group  for  this  initiative  was  chaired  by  the 
Secretariat-General.  The  following  Directorates-General  (DG)  participated:  the  Legal  Service,  DG 
Agriculture and Rural Development; DG Climate Action; DG Communications Networks, Content and 
Technology; DG Competition; DG Economic and Financial Affairs; DG Employment, Social Affairs and 
Inclusion; Eurostat; European Political Strategy Centre; DG Financial Stability, Financial Services and 
Capital Markets Union; DG Justice and Consumers; and DG Mobility and Transport. 

The following meetings took place: 

  7 April 2016 – on the inception impact assessment; 
  17 June 2016 – on the public consultations questionnaire; 
  29 September 2016 – on the problem definition; 
  11 November 2016 – on the options and analysis; 
  8 December 2016 – on the final draft of the impact assessment. 

The Regulatory Scrutiny Board (RSB) discussed the draft impact assessment on 18 January 2017 and 
issued a negative opinion on 20 January 2017. The Board recommended the following 
improvements: 

123

 Commission 

4, 
http://ec.europa.eu/atwork/pdf/cwp_2016_annex_i_en.pdf;  Commission  Work  Programme  2017  point  6, 
page 3, http://ec.europa.eu/atwork/pdf/cwp_2017_annex_i_en.pdf  

Programme 

2016, 

Work 

point 

page 

9, 

52 

 
 
 
                                                            
Area  RSB recommendations 

Revisions introduced 

The report emphasises the 
enforcement dimension of 
SMIT while barely treating the 
policy design dimension. The 
problem definition and the 
description of objectives should 
clearly distinguish between the 
two dimensions. 

The report should explain past 
attempts to collect data, and 
demonstrate that firm-level 
data are indeed necessary to fill 
gaps. In this regard, the 
examples in the report are 
more convincing for 
enforcement than for policy 
design. The report should both 
strengthen its justification of 
SMIT for policy design and 
recognise the limits of empirical 
evidence to support the policy 
design dimension of the SMIT. 

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explain how the options will 
ensure proportionate use of an 
information-gathering tool that 
is intended as exceptional and 
of 'last resort'. It should explain 
what constitutes 'last resort' 

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As stated in the Single Market Strategy, this initiative should allow 
the  Commission  to  collect  information  directly  from  selected 
market  players  in  order  to  "improve  the  Commission’s  ability  to 
monitor and enforce EU rules in priority areas", as well as "help the 
Commission to propose improvements where evaluation shows that 
enforcement  deficits  are  due  to  flaws  in  the  relevant  sectoral 
legislation".  The  problem  definition  (incl.  the  problem  tree, 
depicted  in  Fig.  2.2.)  and  the  objectives  (incl.  the  objectives  tree, 
depicted in Fig. 4.1) of the impact assessment (IA) report have been 
amended to clearly show both of these 'dimensions'.  The IA report 
also  outlines  and  explains  in  Section  2.2  that  the  underlying 
problem drivers apply in equal manner regardless of whether single 
legal  actions  (i.e. 
market  obstacles  are  addressed  through 
infringement  proceedings  against  Member  States), 
through 
broader  enforcement  actions  or  through  the  use  of  firm-level 
information  to  inform  policy  responses.  Moreover,  the  IA  report 
emphasizes  that  these  actions  are  not  easily  separable  as,  for 
example, individual infringement cases can evolve into new Union 
legislation,  particularly  if  the  single  market  malfunctioning  in 
question  is  novel,  systematic  and  persistent.  This  is  in  addition 
supported by additional evidence in Section 2.2.1 (i.e. examples of 
incomplete  information  when  single  market  enforcement  requires 
new legislation).  

The  impact  assessment  now  presents  two  realistic,  high-impact 
examples  from  different  policy  domains  demonstrating  the  need 
for  firm-level  information  for  the  purpose  of  informing  legislative 
proposals (Section 2.2.1). These examples clearly demonstrate past 
Commission unsuccessful efforts to get the needed information as 
well as the potential impact caused by the lack of such information. 
In  particular,  the  example  on  interbank  exposures  limits  has  been 
improved  by  emphasizing  difficulties  in  calibrating  these  limits, 
despite  regulatory  attempts  during  the  past  eight  years.  The 
example  details  why  firm-level  information  is  indeed  crucial  for 
such calibration and emphasizes the preferences of banks for high 
exposure  limits.  This  explains  their  reluctance  to  cooperate  with 
the  Commission  in  terms  of  voluntary  requests  for  information, 
which  has  so  far  allowed  them  to  circumvent  the  Union  law  with 
potential  negative  consequences  on  financial  stability.  The  second 
example  presents  how  an  infringement  case  led  to  a  legislative 
proposal on geo-blocking and geographically-based discrimination. 
It  furthermore  analyses  the  need  for  extending  the  scope  of  this 
legislation  to  the  copyright-protected  content  and  follows  on  a 
European Parliament call for an assessment of the current situation 
based  on  solid,  proprietary,  firm-level  data.  Finally,  this  example 
shows  past  attempts  to  obtain  such  data  and  outlines  importance 
of  proper  analysis  to  judge  whether  any  changes  would  benefit 
consumers.  
The proportionality assessment of the options presented in the IA 
report  has  been  amended  and  is  now  thoroughly  described  in 
Section 7.1. The assessment pays particular attention to explaining 
the exceptional and 'last resort' nature of information requests and 
explains  why  the  necessity  test  introduced    for  Option  4  – 
particularly  when  using  the  information  to  inform  legislative 
proposals – would indeed guarantee that information requests are 

 
 
 
 
 
 
Area  RSB recommendations 

Revisions introduced 

with regard to policy design and 
whether the two objectives are 
subject to the same safeguards.  

Proportionality also needs to be 
clear with regard to how firms 
might face sanctions for not 
delivering information. The 
report should explain the 
rationale of sanctions on firms 
that do not deliver information 
that the Commission requests 
for policy design purposes. 

The arguments should address 
situations where there is no 
cross-border dimension. They 
should also address the content 
of the other options besides 
option 4. 

limited and targeted. The assessment also compares the necessity 
test  for  launching  information  requests  under  SMIT  with  the 
provisions of existing similar investigation powers (e.g. in State aid) 
and  shows  that  these  conditions  are  consistent  with  other  policy 
areas. 

The  proportionality  with  regard  to  the  possibility  of  imposing 
pecuniary  sanctions  to  non-compliant  addressees  of  information 
requests  is  now  discussed  in  detail  in  Section  6.5.  In  the  analysis 
provided  in  this  section,  the  IA  report  outlines  why  distinguishing 
the  imposition  of  sanctions  to  firms  depending  on  the  use  of 
information (e.g. in the context of infringement proceedings or for 
the  development  of  legislative  policy)  would  intensely  reduce  the 
effectiveness of  Option  4.  In  particular,  this would  deprive  certain 
requests  from  their  enforceability  character,  making  them  a  mere 
plea  for  voluntary  cooperation  and,  therefore,  not  changing  the 
status quo. 

To address further comments made by some stakeholders, Section 
6.5 also explains why limiting information requests or sanctions to 
firms  that  might  have  performed  illegal  activities  would  impose 
major problems. First, it would imply that the Commission already 
knows whether  firms  have engaged in  illegal behaviour,  for  which 
data would already have to be available. Second, this would tarnish 
the reputation of the firms that are subject to information requests 
or  fines,  since  they  would  be  labelled  as  "illegal"  even  without 
having obtained the information that proves this. Third, this is not 
the rule in the competition domain and could lead to calls for only 
limiting information requests to offending firms there. In the State 
aid  field,  the  Commission  can  request  information  not  only  from 
beneficiaries, but also from competitors. Even in the antitrust and 
mergers fields, where the Commission does enforce EU law against 
firms  directly,  other  market  players  (e.g.  buyers,  suppliers, 
competitors)  which  are  not  suspected  of  committing  any 
infringement but may be in possession of relevant information are 
under the very same regime for requests for information (including 
the  possibility  of  being  sanctioned  in  case  of  failure  to  reply  to 
those requests). 

This  comment  has  been  addressed  in  Section  3.2,  which  now 
provides  significantly  more 
information  and  explanation  with 
regard to subsidiarity. The section details the necessity and added 
value of Union action beyond cases where there is no cross-border 
dimension. 

The report should clarify which 
legal or policy instruments will 
be used for options 2 and 3. It 
should also provide enough 
detail so that the related 
implementation costs and the 
potential benefits can be 
reliably assessed. 

The descriptions of all policy options have been amended to clearly 
specify  and  justify  envisaged  legal  instruments.  The  cost-benefit 
analysis has also been improved in order to address this comment. 
In particular, implementation costs are now discussed for Options 1 
and  3  and  are  analysed  in  detail  in  Annex  8,  together  with  a 
sensitivity  analysis  of  all  options.  The  estimation  of  benefits  is 
based  on  the  examples  provided  in  the  IA  report  and,  therefore, 
includes wide ranges to accommodate uncertainty of results. 

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Area  RSB recommendations 

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  The report reflects the views of 
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more clearly what criteria will 
define success. 

  The report should describe 
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The IA report has been amended to reflect the views of all Member 
States  who  have  so  far  provided  their  positions  on  the  initiative. 
This includes the input from a few Member States who participated 
in the public consultation, as well as information from the Council 
Working  Party  and 
the  High  Level  Working  Group  on 
Competitiveness and Growth.  
Section  8  on  monitoring  and  evaluating  the  actual  impacts  of  the 
initiative has been improved and extended to describe more clearly 
the  criteria  defining  success  of  the  initiative.  The  IA  report  now 
defines  a  number  of  criteria  for  assessing  the  effectiveness  and 
information  tool  and  defines 
proportionality  of  the  market 
methods for measuring such criteria.  

The RSB discussed the resubmitted draft impact assessment on 23 March 2017 and issued a positive 
opinion with reservations. The Board recommended the following improvements: 

Area  RSB recommendations 

Revisions introduced 

The report is still not 
sufficiently clear and 
sometimes inconsistent with 
regard to the scope of the 
initiative. In several places the 
report still presents the SMIT as 
a solution to general problems 
of data availability, or as a 
source of information for single 
market related policy purposes 
that do not stem from specific 
enforcement deficiencies, while 
it does not provide justification 
to do so. 

The report makes clear that the 
tool would be of last resort, but 
it is not clear about safeguards 
or the conditions that might 
trigger investigations. 

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reflect clearly enough Member 
States' and business interests' 
respective views. 

  The main report still does not 
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The  report  now  clearly  focuses  on  alleviating 
lack  of  data 
exclusively  connected  to  enforcement  of  Single  Market  rules  in 
selected and most important cases where information is necessary 
and otherwise not available. 

The  responsibility  of  the  Commission,  defined  by  the  Article  17(1) 
TEU,  is  to  ensure  that  the  Treaties,  as  well  as  the  secondary  rules 
adopted  pursuant  to  them,  are  correctly  applied.  Therefore, 
enforcement of internal market rules covers both the provisions of 
the Treaties and the secondary legislation, meaning that it can take 
form of either infringement proceedings against Member States or 
(in cases where the evaluation shows that enforcement deficits are 
due to shortcomings of the relevant sectorial legislation) proposals 
of legislative initiatives aiming at giving effect to the Treaty rules. 

The  report  now  explains  in  detail  the  conditions  that  need  to  be 
satisfied  before  SMIT  is  used,  including  proving  a  reasonable 
suspicion of existence of obstacles to the functioning of the single 
market  and  that  information  is  not  available  from  the  existing 
sources (the “last resort”).  
The  requirement  for  the  College  of  Commissioners  decision  to 
trigger  any  kind  of  SMIT  request  and  a  need  for  a  second  College 
decision to launch SMIT request with threat of sanctions is further 
highlighted. 

Businesses  and  Member  States’  views  (if  available)  are  now  more 
widely  featured  to  underpin  the  problem  definition  and  options 
analysis. 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION 

This  synopsis  documents  all  the  consultation  activities  accompanying  the  preparation  of  the 
proposal to introduce a Single Market Information Tool.  

The public consultation on the proposal took place between 2 August and 7 November 2016. There 
were additional targeted consultations with the following business representatives in the course of 
2016: BusinessEurope, EuroCommerce, UEAPME and PostEurop. The issue was also discussed with 
Member States during several working party meetings within the Council in 2015 and 2016. 

The results of these consultations were used for the preparation of the proposal and accompanying 
impact assessment. 

A2.1. Results of the public consultations 

The on-line public consultations for this initiative were announced on Your Voice in Europe124, used 
EUSurvey  as  consultation  tool  and  lasted  for  14  weeks.  They  consisted  of  three  dedicated 
questionnaires for citizens, firms and Member States available in three languages: German, English 
and  French.  Five  replies  came  by  mail  as  position  papers  only125.  Responses  to  public  consultation 
are  voluntary  and  represent  only  views  of  the  respondents.  Consequently  they  cannot  be 
interpreted as representative in a statistical sense to the whole EU. 

Description of respondents 

Responses  are  classified  based  on  self-identification  by  the  respondent.  By  the  end  of  the 
consultation  period  the  Commission  received  71  replies:  44  replies  from  firms  (including  31 
associations  and  13  individual  firms),  sixteen  replies  from  citizens  (including  four  replies  from 
organisations  representing  consumers,  civil  society,  or  non-governmental  organisations  in  Greece, 
Italy,  Portugal  and  Spain),  and  eleven  replies  from  authorities  representing  ten  Member  States126 
(including  9  national  and  2  regional  level).  The  replies  came  from  18  EU  Member  States,  an  EEA 
country and a non-European country. The geographical distribution of responses is depicted on Fig. 
A2.1. 

Among the 13 individual firms who responded, four were micro, three small, two medium-sized and 
four  large  firms.  All  but  the  large  firms  came  from  Germany;  the  large  firms  came  from  Spain, 
France, Poland and Portugal. Five firms were in manufacturing, two firms in wholesale, two firms in 
transport,  two  firms  in  professional  activities,  one  firm  in  administrative  and  one  in  information 
technology. Three out of four microenterprises exported to three other EU Member States, all small 
firms  exported  to  from  one  to  seven  EU  Member  States,  all  but  one  medium-sized  and  large 
company exported to up to 26 other EU Member States. 

124 http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8899  
125 Numerical  analysis  of  responses  is  based  only  on  those  that  came  via  EUSurvey,  position  papers  not 
following the questionnaire of the EUSurvey are used only for describing arguments presented by stakeholders 
and for description of respondents. 
126 Two  different  authorities  from  one  Member  State  replied,  so  there  are  only  ten  Member  States 
represented in this consultations. 

56 

 
                                                            
Among  the  31  associations,  nine  represent  SMEs  only  (one  with  1  million  members,  one  with 
450,000 members and the rest with less than 120,000 members), and 22 all kind of companies (one 
with 200,000 members, three with between 200,000 and 300,000 members, the rest below 20,000 
members). Altogether the business associations responding represented more than 20 million firms. 
22 associations act on behalf of businesses only in their own country, 2 were present in up to five 
countries, and 7 are pan-European. 

28 business associations and 4 firms were registered in the EU Transparency Register127. 

Fig. A2.1. Distribution of answers to public consultations by country and stakeholder type. 
Note: * 9 EU wide business associations are located in Belgium; ** 2 replies from Sweden 

Analysis of responses 

Issues causing firms not to share information with authorities via general consultations 

The  majority  (three  quarters)  of  responding  firms  participated  in  some  form  of  consultation 
launched  by  public  authorities  during  the  last  five  years.  They  were  asked  what  type  of  questions 
they usually do not respond to. The remaining quarter of responding firms were asked hypothetically 
which information they would prefer not to provide if they were asked. Table A2.1 summarises the 
responses. 

Table A2.1. Types of sensitive information asked in consultations 
Those participating in 
Information on 
consultations and asked for 
sensitive information*, said that 
such information was 

Those without experience in 
consultations said that they 
would prefer not to provide 
information on the following** 

Cost not included in financial reports 
Business strategy (e.g. pricing policy) 

Provided 

Not provided 

0 
4 (90) 

5 (490,000) 
3 (480,000) 

4 (4) 
8 (8) 

127 http://ec.europa.eu/transparencyregister/public/homePage.do  

57 

024681012141618No. of responsescitizensfirmsauthorities•31 business associations representing  20m firms•13 individual firms•8 governments** and 2 local authorities•4 consumer organisations/NGOs•12 individual citizens11 (15%)44 (62%)16 (23%) 
 
 
                                                            
1 (1) 

3 (450,000) 

4 (4) 
1 (58) 

4 (8,000) 
4 (9,300) 

4 (460,000) 
2 (450,000) 

Turnover, volumes or profit 
Ownership structure 
Contract details and relations with suppliers or 
other business partners 
Cross-border business (e.g. foreign branches or 
subsidiaries, costs of cross-border operations, 
direct cross-border provision of services) 
Geographic location of headquarters, 
warehouses and distributors 
Employment contracts and/or number of 
employees 
Product characteristics and production process 
Note: Numbers in brackets indicate no. of firms represented by respondent. Numbers of firm rounded to nearest thousand, 
hundreds or tens; * between 16 and 23 firms (36-52%) were not asked the above questions, and between 17-18 (40%) did 
not provide any answer; ** 2 (751) firms said none of the questions is problematic 

5 (41,000) 

4 (43,000) 

7 (24,000) 

4 (9,400) 

5 (62) 

3 (60) 

6 (63) 

2 (80) 

1 (80) 

2 (80) 

2 (90) 

0 

0 

Firms  were  not  providing  information  mainly  on  unpublished  costs,  business  strategy,  turnover, 
volumes and profits, ownership structure and contract details with business partners. The answers 
from companies that have never participated in consultation activities were similar. 

Subsequently,  those  respondents  who  did  not  provide  the  information  requested  by  public 
authorities  were  asked  for  the  reasons  not  to  do  so.  Four  respondents  (representing  490,000 
companies)  said  it  would  be  too  costly  to  extract  the  information;  3  respondents  (representing 
480,000 firms) were concerned that information might leak and be used either by competitors or 
public  authorities;  one  respondent  (representing  1,300  firms)  was  concerned  that  information 
might  be  made  public.  Similar  reasons  were  given  by  those  who  have  not  yet  participated  in 
consultations (2 answers, representing 4 firms each). 

Questions  on  breaches  of  EU  rights,  examples  of  information  provided  to  solve  the  case  and 
associated costs 

A  quarter  of  responding  firms  (11  answers,  representing  770,000  firms)  and  almost  half  of  the 
citizens  (6  answers,  including  from  2  consumer  organisations  from  Greece  and  Portugal)  faced  a 
situation of their rights arising from EU law (such as equal treatment, freedom of movement, etc.) 
not  being  respected  in  another  Member  State.  For  instance  one  EU  association  stated  that  its 
'members  face  this  on  a  daily  basis.  Frequently,  Member  States  do  not  respect  EU  law,  introduce 
national  barriers/measures  to  establish  or  operate,  or  apply  rules  in  a  discriminatory  way';  other 
complaints  related  to  public  procurement  and  unfair  practices  in  business  relations  between 
partners with different market power as well as geo-blocking. Citizens and consumer organisations 
were complaining about problems with price discrimination based on residence, different forms of 
geo-blocking:  restricted  access  to  on-line  audio-visual  content  while  abroad,  delivery  of  on-line 
purchases not possible to certain countries and problems with cross-border redress.   

Forty  percent  of  responding  firms  (18  answers,  representing  380,000  firms)  and  30  percent  of 
citizens (four individuals) did not encounter such situation, the rest either provided no answer or did 
not know.  

In case of breach of EU law, firms complained either directly to those who violated their rights (six 
answers),  to  the  European  Commission  or  to  the  European  Parliament  (seven  answers),  to 
authorities  in  concerned  Member  State  (five  answers)  or  at  home  (four  answers).  In  five  cases 
(representing  100  firms)  respondents  were  asked  to  submit  additional  information  to  public 

58 

 
authorities to solve the issue, in four cases the information was confidential,  and two respondents 
(representing  80  firms)  did  not  provide  it  in  all  cases.  Confidential  information  concerned  mainly 
business  strategy,  contract  details,  ownership  structure,  cross-border  operations  and  turnover 
(three answers each, representing 80 firms). Respondents compiled the requested information using 
their  own  records,  but  also  needed  to  contact  business  partners.  Legal  and  accounting  firms  were 
contracted by three respondents (representing 100 firms) to prepare the information.  

Regarding  the  cost  of  preparation  of  a  reply,  an  association  said  that  '[t]hese  information 
requirements are too burdensome and confusing for most companies, especially the SMEs', and that 
the cost is case-specific and varies. An individual firm estimated that time to prepare information in 
one case was around 30 man-hours (but cautioned that the figure is low as information was already 
prepared for another case) and estimated the cost of external firm advice at around EUR4,000 per 
reply. 

Five respondents (representing 180 firms) and 2 consumer organisations reported that the problem 
was  not  resolved.  When  asked  why,  they  pointed  either  to  firms  from  other  Member  States  or 
national authorities not cooperating; one association explained that '[t]he European Commission did 
not act against the Member State or the process took so long that our members had no other choice 
than to adapt to the situation. The Member State did not provide information, flawed or incomplete 
information, did not respect deadlines to reply or simply chose to ignore EU law'; another respondent 
said that the process was 'too costly or too complex to engage'; one respondent firm said that EU 
institutions were not interested to follow the case. 

Conditions making firms more willing to share sensitive information with authorities 

Subsequently, firms were asked to identify the conditions necessary to increase their willingness to 
provide information to authorities in order to solve cases of breach of EU rights (Table. A2.2).  

Table A2.2. Conditions necessary for firms to provide confidential information to the authorities 
Condition 

Absolutely 
essential 

Very 
important 

Of average 
importance 

Of little 
importance 

Information would remain confidential 

Information would be used only for the 
purpose of the investigation 
My participation would not be disclosed 

59%  
(26, 1.4m) 
50%  
(22, 1.2m) 
41%  
(18, 1m) 
41%  
(18, 1.4m) 
43%  
(19, 1.1m) 
41%  
(18, 1.2m) 

20%  
(9, 7k) 
25%  
(11, 12k) 
16%  
(7, 300k) 
23%  
(10, 25k) 
27%  
(12, 23k) 
27%  
(12, 230k) 

7%  
(3, 170) 
7%  
(3, 380) 
18%  
(8, 47k) 
16%  
(7, 7k) 
11%  
(5, 220k) 
11% 
(5, 470) 

0 

2%  
(1, 1) 
5%  
(2, 90) 
5%  
(2, 2) 
2%  
(1, 1) 
5%  
(2, 1.3k) 

I would not be asked for information on 
a regular basis 
Required information would be easy to 
extract and compile 
Public authorities could not acquire the 
information via other channels (e.g. 
consultations, studies, etc.) 
Legend: % of all firm answers (number of answers, number of firms represented by respondents), numbers rounded 

2%  
(1, 1) 

Firms are overwhelmingly of the opinion that information should remain confidential , be used only 
for  the  purpose  for  which  it  was  collected,  individual  firms  participation  should  not  be  disclosed, 
information  should  be  easy  to  extract  and  compile  and  should  be  asked  only  if  not  available 
elsewhere. 

59 

Not 
important at 
all 
0 

0 

7%  
(3, 300) 
2%  
(1, 300) 
0 

 
Respondents stressed the need for a strong legal framework for any tool allowing the Commission to 
request market information from firms. Such tool would need to guarantee at least confidentiality, 
proportionality,  neutrality,  non-discrimination,  a  level  playing  field  and  a  possible  right  of  appeal. 
Among other concerns, limiting the burden on companies was often raised, as well as not requesting 
information that is in possession of another public authority. Secure systems for data storage that 
should  protect  business  secrets  from  leakage  or  data  hacking  were  prominent  as  well  as  calls  to 
clarify how long the data would be kept, who would have access and who would own it. Firms were 
also concerned about small concentrated markets where the identification of respondent could be 
possible  even  despite  anonymizing  the  replies.  Several  companies  were  advocating  only  voluntary 
participation  in  data  requests.  It  was  suggested  that  companies  would  be  more  willing  to  provide 
information if reassured that it would not be used against them by national authorities; otherwise 
legal  assistance  would  be  necessary  to  prepare  their  answers,  increasing  the  cost  of  replying.  An 
association of small crafts asked for a simple, clear and targeted questionnaire that would be easy to 
answer  to  small  firms.  Another  answer  said  that  the  cost  might  rise  also  when  information  is 
available to the respondent, but in different format than requested. Use of local organisations who 
could  gather  information  and  send  aggregated  responses  was  suggested.  It  was  also  stressed  that 
business  would  be  more  willing  to  participate  if  the  Commission  could  demonstrate  that 
participation speeds up the resolution of market problems.  

Were  the  above  conditions  secured,  firms  would  be  willing  to  provide  all  kinds  of  information  to 
authorities,  with  most  positive  answers  concerning  information  on:  turnover,  volumes,  profits, 
geographical distribution, ownership, employment and cross-border business.  

Table A2.3. Types of sensitive information firms would provide upon satisfying certain conditions 
39% (17, 240k*) 
Turnover, volumes or profit 
37% (16, 690k*) 
Geographic location of headquarters, warehouses and distributors 
32% (14, 700k*) 
Ownership structure 
Employment contracts and/or number of employees 
30% (13, 240k*) 
Information on cross-border business (e.g. foreign branches or subsidiaries, costs of cross-border 
operations, direct cross-border provision of services) 
Business strategy (e.g. pricing policy) 
Contract details and relations with suppliers or other business partners 
Product characteristics and production process 
Information on cost not included in financial reports 

18% (8, 2.4k) 
16% (7, 10k) 
14% (6, 8.4k) 
11% (5, 220k*) 

27% (12, 230k*) 

None 

18% (8, 180k) 

Other 
Legend:  %  of  all  firm  answers  (number  of  answers,  number  of  firms  represented  by  respondents),  numbers  rounded 
* includes answer of a tax advisors association (around 220k firms) 

30% (13, 650k) 

In the 'other' category respondents suggested that information must be readily available in company 
records. It should not be requested several times by different governmental bodies. One association 
noted  that  the  older  information  gets  the  less  sensitive  it  becomes  thus  easier  to  provide.  Others 
stressed that the type of information they could submit depend on the company type and case at 
hand  and  cannot  be  determined  in  advance.  There  was  also  opposition  to  requesting  sensitive 
information from companies and support for a voluntary approach.  

What powers Member States currently have 

Only three out of ten replying Member States reported having powers that allow them to ask market 
participants for information on an ad hoc basis: a United Kingdom authority reported being able to 

60 

 
ask for information for the purpose of law enforcement (e.g. information on staff salaries); a regional 
authority  in  Spain  reported  having  powers  that  allow  it  to  collect  information  for  the  purpose  of 
policy development; an authority in France reported having powers to ask for information for both 
the  enforcement  of  existing  rules  and  preparation  of  policy,  but  exclusively  in  the  fields  of 
competition and product safety, which are endowed by Union rules, and in taxation. Three Member 
States  (the  Czech  Republic,  the  Netherlands  and  Sweden)  and  one  local  government  in  Germany 
indicated having no such powers.128 

France  reported  having  in  certain  cases  powers  to  sanction  firms  for  noncompliance  with 
information requests and noted that in areas where sanctions are not possible firm participation is 
negatively  impacted.  The  Spanish  regional  authority  state  that  despite  voluntary  nature  of  its 
information  requests  the  quality  of  data  was  not  affected.  Both  Spanish  and  French  authorities 
stated  that  they  would  be  able  to  share  information  with  the  Commission;  conversely  the  United 
Kingdom authority could not share such data. 

Three  authorities  encountered  a  situation  when  lack  of  firm  data  limited  their  enforcement  or 
legislative activity, while other three did not. One authority reported problems with obtaining data 
from  companies  located  in  another  Member  State,  as  either  firms  or  foreign  authorities  did  not 
cooperate. Another explained that lack of resources or  time  pressure could also explain why firm-
level information is not gathered. 

When a single market information tool should be used 

In all three questionnaires the Commission asked when it should be possible to query companies for 
information.  Most  support  in  all  categories  of  respondents  concerned  (1)  solving  breaches  of  EU 
rights of firms and citizens, followed by (2) prevention of future breaches. 

As for the answers from authorities, three of those having national powers and one with no national 
power  supported  the  first  case  (1),  and  two  with  national  powers  supported  the  second  case  (2). 
Two national authorities expressed their preference for the Commission to coordinate information 
requests; two opted for direct power to ask firms in any Member State without involvement of the 
Commission. Two authorities with no national powers said that public authorities should never ask 
firms for sensitive information. 

All four responding consumer organisations supported the first case (1) and two supported as well 
the second (2). 

Table A2.4. In which cases public authorities could ask firms for sensitive information 
Authorities 
40%  
(4) 

Firms 
41%  
(18, 250k) 

(1) When the information is crucial for resolving a breach of consumers' or 
firms' EU rights (such as equal treatment, freedom of movement, provision of 
services, establishment, and other situations with a strong cross-border 
context) 
(2) When the information is crucial for preventing future breaches of 
consumers' or firms' EU rights by reviewing existing or preparing new EU 

18%  
(8, 26k) 

20%  
(2) 

31%  
(5) 

Citizens 
69%  
(11) 

128 Additionally  a  Danish  business  association  (non-governmental)  in  their  reply  informed  that  the  Danish 
government has powers to request sensitive firm data when investigating potential rule breaking 

61 

 
 
                                                            
rules 
Never 

Other 

14% 
(6, 340k) 
32% 
(14, 1.2m) 

33%  
(3) 
0 

19%  
(3) 
0 

Legend: % of all answers in a given respondent category (number of answers, number of firms represented by respondents 
– in case of Firms), numbers rounded 
Note: 'No answer' not shown 

In case of firms, the 'other' category included limitation only to cases of breach of competition law, 
and calls for more cooperation with companies on concrete cases. One association suggested that it 
should be used when quick Commission action could prevent damage to consumers and businesses 
or prevent persistent breaches of EU law. Fears about administrative burden creation or statements 
of opposition to granting such powers to authorities were also aired. 

Thirteen  firms  additionally  sent  position  papers.  They  argued  that  Member  States  rather  than 
companies  are  creating  most  of  the  barriers  in  the  single  market129.  Eleven  expressed  serious 
concerns about the introduction of a tool allowing the Commission to request market information 
from firms,  calling  it  disproportionate,  intrusive  and  causing  administrative  burden.  Two  remained 
neutral  highlighting  conditions  necessary  to  make  a  possible  market  information  tool  as  easy  for 
companies  as  possible.  It  was  pointed  out that firms  are  already  subject  to  a  plethora  of  different 
formal reporting and informal requests which are increasingly costly to comply with, thus diverging 
resources from the core business. Hence, it was highlighted that any information requested should 
be  readily  available.  Requests  targeting  SMEs  should  be  proportionate  to  their  capabilities. 
Commission was asked for no new regular reporting obligation and asked to reuse existing tools and 
sources of information (including competition tools, improved consultations, etc.) and avoid 'double 
reporting'. There were also calls for more cooperation and data exchange between institutions and 
Member states as well as for more cooperation with business organisations. The voluntary nature of 
any participation of companies was raised repeatedly, with strong opposition to any sanctions (both 
for  non-submission  and  errors  in  submission).  Also,  the  importance  of  securing  legal  certainty  to 
participating firms was highlighted, including possibility for appeals and remedies. In case the tool is 
adopted it should be used very infrequently, after exhausting all other information sources and only 
for  the  purpose  for  which  it  was  collected.  The  need  to  protect  confidential  business  information 
with state-of-the-art systems was prominent. One respondent suggested outsourcing the collection 
of information to an independent and neutral entity. It was suggested that information could only be 
requested in cases of national administrative or criminal proceedings, only when there is suspicious 
of law being breached. Many respondents asked for clarification of when a market information tool 
would be used and which its added value would be in comparison to the existing tools. Others asked 
for  clarification  of  the  consequences  of  no-replying  to  requests  for  market  information.  One 
respondent  called  for  more  transparency  in  firm  reporting  and  electronic  access  to  financial 
statements. 

Position papers were also sent by national authorities. One supporting Member State called to use a 
It  also  suggested  that 
possible  market 

information  tool  to  prioritise 

infringement  cases. 

129 One organisation explained that for instance geo-blocking exists because it is often the only way to operate 
in a fragmented single market. 

62 

 
                                                            
proportionate  sanctions  are  necessary  to  ensure  participation130.  A  few  cautioned  about  excessive 
burden that could be minimised by e.g. high threshold for the Commission to launch a request for 
market information, such as College of Commissioners decision as well as offering different ways to 
reply (face-to-face, phone, e-survey). Calls for clarification when a possible market information tool 
could  be  used  were  also  made.  Advantages  of  collaboration  with  Member  States  in  the  data 
collection process were highlighted, including prior checking if national authorities already have the 
information to avoid double reporting. However, it was also noted that for the information gathering 
to  be  effective  no  Member  State  should  be  able  to  veto  the  request  of  the  Commission.  Another 
Member State asked to clarify how the information would be used, as well as to demonstrate why 
national authorities could not handle such requests themselves. It was also suggested that Member 
States are better placed to conduct such inquires and investigative powers in sector legislation could 
be extended. Those Member States against a possible market information tool for the Commission 
requested  a  thorough  assessment  of  the  actual  need  for  such  a  tool,  suggesting  better  use  of 
existing  information  sources:  annual  accounts,  national statistics,  business  registers,  SOLVIT131,  the 
Internal  Market  Information  system  (IMI)132,  or  REFIT133.  They  also  found  sanctions  proportionate 
only in the event of potential rule-breaking by a company.  

A2.2. Results of the targeted consultations 

The Commission discussed a possible market information tool during bilateral meetings with several 
pan-European  business  organisations:  BusinessEurope,  EuroCommerce,  UEAPME  and  PostEurop 
during the course of 2016 (all of these organisations are registered in the Transparency Register). All 
of  them  expressed  their  reservations,  mainly  due  to  the  increase  of  administrative  burden  by  yet 
another information request. One stressed that existing competition tools are sufficient and should 
not be extended. They pointed to the fact that even readily available information would have to be 
reworked before it is sent. Thus, they stressed that, if adopted, a possible market information tool 
should  only  be  used  on  an  exceptional  basis.  There  were  also  fears  about  safeguards  on  the 
protection  of  commercially-sensitive  data.  One  association  stated  based  on  experience  with 
competition  requests  that  preparation  of  additional  non-confidential  version  of  reply  to  Member 
States was extremely burdensome. The compulsory nature of  the requests and the  potential fines 
for not-replying or for providing misleading information were not welcome either. A need for appeal 
possibility  against  information  request  was  also  raised.  One  claimed  that  companies  are  willing  to 
provide  evidence  of  single  market  infringements  by  Member  States  to  the  Commission,  but  that 
companies are frustrated by no or slow reaction from the Commission to resolve breaches of single 
market rules. 

130 The reply stated: 'For SMIT to work companies must supply the information requested by the Commission. 
(…)If the Commission has been unable to ensure compliance by other means and they judge that obtaining the 
information  is  important  enough  then  they  should  have  the  power  to  impose  fines  on  companies  for  non-
compliance.' 
131 http://ec.europa.eu/solvit/index_en.htm   
132 http://ec.europa.eu/internal_market/imi-net/index_en.htm  
133  http://ec.europa.eu/info/law-making-process/evaluating-and-improving-existing-laws/refit-making-eu-law-
simpler-and-less_en  

63 

 
                                                            
A  possible  market  information  tool  was  also  discussed  in  some  meetings  of  the  Council  Working 
Party on Competitiveness and Growth in 2015 and 2016, as well as at the High Level Working Group 
on  Competitiveness  and  Growth  and  during  several  bilateral  meetings  with  individual  Member 
States. National authorities were mainly interested in which conditions would need to be satisfied by 
the  Commission  to  be  able  to  launch  requests  for  information  to  firms,  who  would  collect  the 
information,  what  the  role  of  the  Member  States  would  be  and  whether  data  collected  by  the 
Commission would be shared with Member States, the administrative burden that such a tool would 
cause and the proportionality of any sanctions.  

A2.3. How the results of consultations were used 

The suggestions by stakeholders were taken on board in the preparation of the initiative on a market 
information tool. Notably the calls for sparse application of the tool and clarification when it would 
be used were translated into demanding ex-ante requirements – the market information tool would 
only  be  used  for  cases  of  high  single  market  significance,  the  Commission  would  need  to 
demonstrate that all sources of information available cannot provide the information at stake and 
approval  by  the  College  of  Commissionaires  would  be  needed  before  launching  requests  for 
information.  It  has  also  been  explained in  the  impact assessment  why  the existing  tools,  including 
the ones in the competition area, cannot deliver the kind of information at stake in the single market 
setting: EU law restricts the use of information collected under the competition rules to use by the 
Commission for competition purposes only; while other tools such as SOLVIT, IMI and REFIT do not 
collect  the  kind  of  firm-level  information  considered  in  this  initiative.  The  aspect  of  protecting 
confidential  information  was  strengthened  by,  among  others,  following  state-of-the-art  tools  and 
procedure used in the competition enquires. On the controversial issue of sanctions for not replying, 
the proposal was made clearer showing that they act as an incentive to reply (not punishment for 
wrong behaviour), in practice are hardly ever used (based on experience of the competition cases) 
and  will  always  be  considered  on  a  case-by-case  basis.  As  from  every  Commission  decision  the 
appeal  possibility  to  the  Court  of  Justice  of  the  European  Union  was  explicitly  highlighted.  On 
administrative burden reduction, the proposal stressed that information should be easily available to 
firms, questionnaires should be clear and simple allowing for alternative ways to reply.  

Feedback and concerns raised by the Member States have been taken into account in the design of 
the options, particularly with regard to the proportionality of an information tool, subsidiarity (most 
notably  in  terms  of  an  appropriate  role  for  the  Member  States),  and  measures  to  minimise  the 
administrative burden for the replying firms. 

64 

 
 
 
 
 
ANNEX 3: WHO IS AFFECTED BY THE INITIATIVE AND HOW 

The  tables  below  present  summaries  of  impacts  of  the  preferred  package  on  the  key  stakeholder 
groups. 

Table A3.1. Impacts of the preferred option on key stakholders 

Firms 

EU institutions 

Member States 

Citizens 

Option 4  
Introducing an EU-
level Single Market 
Information Tool  

(++) faster detection and 
prevention of discriminating 
activities by firms and MS; more 
cases solved at MS level; cost of 
complying with information 
request and eventual sanctions; 
possible to send only non-
confidential version to MS; 
exemption of micro firms 

(++) better enforcement of 
Union law by MS should lead 
to fewer infringement cases 
against MS; all relevant data 
could be collected 

Costs: EUR 0.37m-0.61m 

EUR 0.12m-0.43m 

(+/++) possibility to ask for 
information not collected 
now and facility to exchange 
information between MS 
should help in enforcement 
of national and cross-border 
cases; risk that Commission 
will not agree to conduct 
SMIT data collection 
EUR 0-0.002m 

(++) much faster 
detection and 
prevention of 
potentially all kinds of 
discriminating 
activities by firms and 
MS; more cases 
solved at MS level 

EUR 0 

Benefits: Very high likelihood: Small-scale requests: EUR 50m-6bn; Larger requests: EUR 9bn and more 

Note:  Assumption  of  4  small-scale  requests  (up  to  5  firms)  and  1  larger  request  (up  to  50  firms)  a  year  (see  Annex  8).  
Legend: ++ significant positive impact, + positive impact, 0 neutral, - negative impact, -- significant negative impact 

Table A3.2. Total EU28 annual costs and benefits of the preferred option per stakeholder type.  

Likelihood 

Very High 

Option  Stakeholder 
4 

Firms  

0.37m 

Commission 

0.12m 

Costs  

Benefits 

Min. (EUR)  Max. (EUR)  Value (EUR) 

0.61m 

0.43m 

- Small-scale requests: EUR50m-EUR6bn 
-  Larger requests:  EUR9bn and more  
- savings on external studies:  EUR0.7m – EUR1.6m 

Total  

0.49m 

1.04m 

From 50m to  9bn of euro and more 

Note: Based on 4 small-scale requests (up to 5 firms) and 1 larger request (up to 50 firms) a year. (see Annex 8). 

65 

 
 
 
 
 
 
 
 
 
ANNEX 4: ANALYTICAL MODELS USED IN PREPARING THE IMPACT ASSESSMENT 

No econometric modelling was used to support this impact assessment. 

66 

 
 
 
 
ANNEX 5: EXAMPLES AND CASE STUDIES SUPPORTING THE PROBLEM DEFINITION 

Figure A5.1. illustrates the role of access to firm-level information in evidence-based enforcement of 
single  market  rules.  In  the  great  majority  of  cases,  the  Commission  is  able  to  acquire  necessary 
information  either  from  the  Member  States  (which  are  under  a  duty  to  cooperate  with  the 
Commission  as  per  Article  4(3)  TEU)  or  via  currently  available  tools  to  prove  (or  disprove)  a  single 
market malfunctioning. Note, however, that although measurements may not be extremely precise, 
it  is  in  most  cases  sufficiently  clear  how  the  Commission  should  act.  This  particular  situation  is 
illustrated in Fig. A5.1.A. It demonstrates a hypothetical status quo that is clearly negative in regards 
to,  for  example,  fundamental  freedoms  and  equal  treatment.  In  such  cases,  the  Commission  will 
assess  different  ways  to  improve  the  single  market  (e.g.  assisting  Member  State authorities,  or  by 
opening an infringement procedure, or proposing regulatory improvements) and choose the option 
producing the best results (shown as Alternative 1 in Fig. A5.1.A).  

Sometimes, however, the information at hand (or otherwise easily available) does not allow to: (1) 
confirm whether the situation constitutes a breach of Union rules and, consequently, whether there 
should be an enforcement action, and (2) whether such action would improve the situation or not 
(as  illustrated  in  Fig.  A5.1.  B1).  In  such  circumstances,  more  precise  information  would  allow 
determining whether a problem exists and if an intervention is justified (Fig. A5.1. B2). 

Fig. A5.1. When does a data shortage constitute a problem? 

In the remainder of this annex, we analyse several examples and case studies related to information 
and  data  gaps  in  the  Commission's  claims  in  the  case-law  of  the  CJEU  concerning  infringement 
proceedings under Article 258 TFEU. These examples, which span across several policy domains, are 
not  meant  to  be  exhaustive,  but  rather  a  small,  yet  representative,  subset  to  show  that  reliable, 
detailed  and  timely  market  information  would  have  allowed  for  more  effective  and  efficient 
enforcement.  In  remainder  of  the  annex  we  also  analyse  the  objectives  and  the  impact  of  the 
existing Market Investigation Tool available in State aid in order to anticipate a possible impact of a 
single market information tool. 

67 

Size of a bubble represents the degree of uncertainty of a given alternative's impactnegativepositivenegativepositiveImpact on fundamental freedomsImpact on non-discrimination(obvious choice of the best alternative)Alternative 2Alternative 1Status quonegativepositivenegativepositiveImpact on fundamental freedomsImpact on non-discriminationB1 –Low precision measurement(unclear choice of the best alternative)Alternative 2Alternative 1Status quonegativepositivenegativepositiveImpact on fundamental freedomsImpact on non-discriminationAlternative 2Alternative 1Status quoB2 –High precision measurement(obvious choice of the best alternative)B -Potential benefits from more precisionA -No need for precise measurementRed outline represents the alternative with the best overall impactLegend: 
 
 
A5.1. Examples of incomplete information in infringement proceedings before the CJEU 

Infringement proceedings under Article 258 TFEU: burden of proof, collection of information and 
information gaps  

The allocation of the burden of proof: the onus is on the Commission. 

Infringements proceedings under Article 258 TFEU134 are an important tool for the enforcement of 
EU law135. The Commission can bring a Member State (or several Member States) before the CJEU if 
it  believes  that  the  Member  State  had  failed  to  fulfil  an  obligation  under  the  Treaties.  If  the  CJEU 
indeed  finds  that  the  Member  State  had  failed  to  fulfil  an  obligation  under  the  Treaties,  then  the 
CJEU can require the Member State to take the necessary measures to comply with its judgement136. 
It is important to highlight that the parties to the infringement proceedings are the Commission, on 
the one hand, and the Member State(s) on the other hand. Complainants and generally individuals 
(including companies) are, strictly speaking, not parties to those proceedings. 

An important issue in infringement proceedings is the question of the  allocation  of  the  burden  of 
proof  upon  the  parties  (Commission  and  Member  State(s)).  It  is  settled  case-law  that  the 
Commission  bears  the  burden  of  proving  that  a  certain  national  measure  may  be  in  breach  of  EU 
law:  e.g.  'it  is  incumbent  upon  the  Commission  to  prove  the  allegation  that  an  obligation  has  not 
been  fulfilled.  It  is  the  Commission’s  responsibility  to  place  before  the  Court  all  the  factual 
information needed to enable the Court to establish that the obligation has not been fulfilled and, in 
so doing, the Commission may not rely on any presumption.'137 

The  Commission  is  not  allowed  to  rely  on  presumptions,  but  must  submit  'sufficient  evidence'  to 
support its claims.  

Over time, the CJEU has progressively been stricter with the Commission in relation to the sufficient 
factual evidence that it must submit in order to prove 'to the requisite legal standard' the elements 
of the allegations made138. 

134 Article 258 TFEU: 'If the Commission considers that a Member State has failed to fulfil an obligation under 
the Treaties, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity 
to submit its observations. 
If the State concerned does not comply with the opinion within the period laid down by the Commission, the 
latter may bring the matter before the Court of Justice of the European Union.' 
135 To be sure, there are other tools as well: e.g. individuals can defend their rights arising from EU law before 
national courts thanks to the principle of the primacy of EU law and, where applicable, the principle of direct 
effect of EU law; in addition, there is the possibility of indirect control exercised by the CJEU via preliminary 
rules (cf. Article 267 TFEU). 
136 Cf. Article 260(1) TFEU. 
137 Cf. judgment of the CJEU in case C-400/08, Commission vs. Spain, paragraph 58. See also judgments of the 
CJEU  in  several  other  cases,  e.g.  C-241/08,  Commission  vs.  France,  paragraph  22,  C-105/08  Commission  vs. 
Portugal,  paragraph  26;  C-304/05,  Commission  vs.  Italy,  paragraph  105;  C-419/01  Commission  vs.  Spain, 
paragraph 26; C-290/87 Commission vs Netherlands, paragraphs 11 and 12; etc. 
138 See  Luca  PETRE  and  Ben  SMULDERS,  'The  Coming  of  Age  of  Infringement  Proceedings',  Common  Market 
Law Review 47, 2010, po. 9. These authors (p. 38) refer to several judgments of the CJEU supporting this trend. 
Cf.  cases  C-532/03,  Commission  vs.  Ireland,  paragraphs  36-37;  C-507/03,  Commission  vs  Ireland,  paragraphs 

68 

 
                                                            
 
This  standard  of  proof  is  higher  when  the  Commission  complains  about  the  implementation  of  a 
national provision: 

'In  addition,  with  regard,  in  particular,  to  a  complaint  concerning  the  implementation  of  a 
national  provision,  proof  of  a  Member  State’s  failure  to  fulfil  its  obligations  requires 
production of evidence different from that usually taken into account in an action for failure 
to  fulfil  obligations  concerning  solely  the  terms  of  a  national  provision  and,  in  those 
circumstances,  failure  to  fulfil  obligations  can  be  established  only  by  means  of  sufficiently 
documented  and  detailed  proof  of  the  alleged  practice  of  the  national  administration  for 
which the Member State concerned is answerable (see judgments in Commission v Belgium, 
C ‑287/03,  EU:C:2005:282,  paragraph  28  and  Commission  v  Germany  C ‑441/02, 
EU:C:2006:253, paragraph 49).' 

How  does  the  Commission  obtain  information?  The  specific  obligation  of  Member  States  to 
cooperate and other sources of information 

The  Commission  relies  primarily  on  information  submitted  by  the  concerned  Member  State. 
Pursuant  to  Article  4(3)  of  the  Treaty  on  European  Union  (TEU)139,  Member  States  are  under  the 
duty,  as  recalled  several  times  by  the  CJEU140,  to  facilitate  the  Commission's  tasks,  including  in 
particular its role as guardian of the Treaty (cf. Article 17(1) TEU). 'It follows that Member States are 
required  to  cooperate  in  good  faith  with  the  inquiries  of  the  Commission  pursuant  to  Article  [258 
TFEU],  and  to  provide  the  Commission  with  all  the  information  requested  for  that  purpose.'141 In 
practice,  this  means  that  Member  States  must  provide  the  Commission,  upon  its  request,  with 
information and documents when the Commission is investigating possible infringements of Union 
law.  

In addition, the Commission also uses other sources of information, voluntarily submitted by third 
parties: for instance complainant, interested parties, other Member States etc. These other sources 
may help in filling information gaps, at least partially.  

Information/data  gaps:  Member  States  do  not  always  cooperate  with  the  Commission's 
investigations and the Commission does not have investigative powers 

A practical problem is that Member States do not always fully cooperate with the Commission by 
submitting all necessary information and documents, which results in an information/data gap. Such 
failure  to  achieve  full-cooperation  during  the  investigation  phase  under  Article  258  TFEU,  in 
particular  by  failing  to  provide  information  requested,  could  amount  to  an  infringement  of  Article 
4(3) TEU and the CJEU has stated so several times142.  

32-35; C-293/07 Commission vs. Greece, paragraphs 32-34; C-156/04 Commission vs. Greece, paragraphs 35 
and 51; C-237/05 Commission vs. Greece, paragraph 39. 
139 Previously, Article 10 EC; and Article 5 of the original Treaty of Rome.  
140 See, for instance, judgment of the CJEU in case C-494/01, Commission vs. Ireland, paragraph 197. 
141 Judgment of the CJEU in case C-494/01, Commission vs. Ireland, paragraph 198. 
142 See,  for  instance,  judgments  of  the  CJEU  in  C-82/03,  Commission  vs.  Italy,  paragraph  18;  C-494/01, 
Commission vs. Ireland, paragraphs 195 and seq.; C-137/91, Commission vs. Greece, paragraphs 5-6. See also 

69 

 
                                                                                                                                                                                         
 
Any  information/data  gap  may  have  important  consequences  for  certain  types  of  infringement 
procedures, due to the Commission's lack of investigative powers, as the CJEU has recognised: '[...] 
account  should  be  taken  of  the  fact  that,  where  it  is  a  question  of  checking  that  the  national 
provisions  intended  to  ensure  effective  implementation  of  the  directive  are  applied  correctly  in 
practice, the Commission which does not have investigative powers of its own in this area, is largely 
reliant  on  the  information  provided  by  complainants  and  by  the  Member  State  concerned'143 
[emphasis added]. To be noted that in a few cases the CJEU referred to the need to rely not only on 
information  provided  by  complainants  and  by  the  Member  State  concerned,  but  also  information 
provided by 'public or private bodies' and 'by the press'144 

Indeed, the negative effects of the Commission's lack of investigative powers will be felt with more 
intensity when examining cases of misapplication of the rules. A Member State's infringement of EU 
law does not necessarily result from its legislative acts (or the lack of adoption of those acts), but can 
also  originate  from  its  administrative  practice  provided  that  such  practice  is  'to  some  degree,  of  a 
consistent and general nature'145. 

Consequences of information/data gaps in infringement proceedings 

There are two types of consequences: 

  First, in the past 20 years, the Commission has lost, either partially or completely, at least 49 
infringement  cases  under  Article  258  TFEU  because  the  CJEU  considered  that  the 
Commission  had  not  submitted  sufficient  evidence  in  support  of  its  claims.  This  is  further 
explained in point 2 of this annex. 

  Second,  the  Commission  has  allegedly  refrained  from  taking  Member  States  to  the  CJEU 
under Article 258 TFEU for possible infringements of EU law where, despite the information 
provided by the concerned Member State or by interested parties (complainants etc.), the 
Commission lacked of sufficient relevant information – which could have been provided by a 
private  party  had  the  Commission  obtained  specific  investigative  powers  to  that  end. 
However, there is no public data on this issue.  

C-390/07, Commission vs. United Kingdom, paragraphs 44 and 355 (the Commission claimed that the UK had 
not cooperated, but lost on this point); or case C-490/09, Commission vs. Luxembourg, paragraphs 56-57 (the 
Commission claimed that Luxembourg had not cooperated, but lost on this point). 
143 Judgment of the CJEU in case C-394/14, Commission vs Portugal, paragraph 47; see also judgments in cases 
C-301/10,  Commission  vs.  United  Kingdom,  paragraph  71;  C-390/07,  Commission  vs.  United  Kingdom, 
paragraphs 44 and 45; or C-494/01, Commission vs. Ireland, paragraph 43.  
144 See  e.g.  judgments  of  the  CJEU  in  cases  C-677/13,  Commission  vs.  Greece,  paragraph  65,  C-297/08 
Commission vs. Italy, paragraph 101; or C-135/05, Commission vs. Italy, paragraph 28 (only referring to public 
and private bodies, not to the press). 
145 See,  for  instance,  judgments  of  the  CJEU  in  cases  C-342/05,  Commission  vs.  Finland,  paragraph  33;  C-
287/03, Commission vs. Belgium, paragraph 29; C-494/01, Commission vs. Ireland, paragraph 28. 

70 

 
 
 
                                                                                                                                                                                         
Analysis  of  CJEU  case-law:  cases  lost  by  the  commission  in  which  the  question  of  insufficient 
evidence was raised  

The survey 

In  the  past  20  years,  the  Commission  has  lost,  either  partially  or  totally,  at  least  49  infringement 
cases under Article 258 TFEU in which the CJEU considered that the Commission had not submitted 
sufficient factual evidence in support of all or part of its claims.  

Methodology. A  research  was  carried  out by  Commission  staff  into  the  CURIA database  of 
the  CJEU  for  the  period  01.01.1997  to  25.11.2016146.  The  CURIA  database  contains  1654 
judgments of the Court of Justice on 'actions for a declaration of failure to fulfil obligations' 
during that period (784 cases in the period between 01.01.2007 and 25.11.2016). Of those, 
the Commission lost, either partially or completely, on substantive grounds in 309 cases (177 
cases  in  the  last  10  years).  This  sample  was  further  reduced  by  using  certain  search 
expressions147:  'charge  de  la  preuve'  ('burden  of  proof')  and  'éléments  nécessaires  à  la 
verification' ('information necessary for it to determine…'). This resulted in 102 cases. One of 
these  cases  was  removed  since  it  was  a  false  positive  (the  reference  to  'burden  of  proof' 
concerned  an  issue  of  national  law)148.  Therefore,  the  final  examination  concerned  101 
judgments. The CJEU considered in 52 of those cases that the Commission had not provided 
sufficient  arguments  in  support  of  its  claims:  the  issue  was  less  a  question  of  absence  of 
supporting  factual  evidence,  but  rather  a  lack  of  sufficient  explanation  on  why  an 
infringement of EU law had been committed149. However, in 49 cases, the CJEU considered 
that the Commission had not provided sufficient factual evidence in support of its claims (36 
of these cases in the past 10 years)150.  

Forty-nine  is  an  important  number  considering  the  Commission  only  lost  309  cases  (of  the  1654 
cases decided by the CJEU in that period) on substantive grounds during that period. That is, in 16% 
of those (partially or totally) lost cases, the Commission lacked enough supporting evidence151. This 
percentage is higher (20%) if only the last ten years are considered. 

146 The database was accessed on 28 November 2016 for the last time. 
147 N.B.  this  search  was  carried  out  in  French,  since  there  is  a  French  version  of  all  judgments,  but  not  an 
English one. 
148 Case C-137/14.  
149 Cases  C-589/14,  C-678/13,  C-433/13,  C-361/13,  C-525/12,  C-237/12,  C-152/12,  C-127/12,  C-369/11,  C-
562/10, C-539/09, C-490/09, C-376/09, C-512/08, C-306/08, C-246/08, C-241/08, C-10/08, C-427/07, C-397/07, 
C-293/07,  C-250/07,  C-227/07,  C-401/06,  C-387/06,  C-304/05,  C-127/05,  C-110/05,  C-32/05,  C-490/04,  C-
428/04, C-334/04, C-59/04, C-06/04, C-456/03, C-419/03, C-377/03, C-441/02, C-431/02, C-341/02, C-288/02, 
C-185/02,  C-419/01,  C-194/01,  C-233/00,  C-150/00,  C-139/00,  C-68/99,  C-347/98,  C-96/98,  C-408/97,  C-
300/95. 
150 Cases C-38/15,  C-504/14, C-180/14, C-87/14, C-677/13, C-356/13, C-109/11, C-600/10, C-556/10, C-555/10, 
C-545/10,  C-251/09,  C-79/09,  C-37/09,  C-400/08,  C-308/08,  C-160/08,  C-105/08,  C-530/07,  C-438/07,  C-
416/07,  C-390/07,  C-335/07,  C-331/07,  C-150/07,  C-518/06,  C-305/06,  C-179/06,  C-342/05,  C-248/05,  C-
167/05,  C-507/04,  C-418/04,  C-156/04,  C-532/03,  C-508/03,  C-507/03,  C-410/03,  C-287/03,  C-135/03,  C-
117/02, C-434/01, C-229/00, C-10/00, C-55/99, C-166/97, C-159/94, C-158/94, C-157/94.  
151 It must be noted that there may be issues of missing evidence also in cases that the Commission won. Take 
for  instance  the  judgment  of  the  CJEU  in  case  C-491/01,  Commission  vs.  Ireland  (Irish  Waste  case  / 

71 

 
                                                            
 
The next question is whether the Commission could have obtained the missing information/data by 
requesting private parties to provide it152. From the examination of those 49 cases, it appears that in 
17 of those cases, the Commission could have usefully tried to obtain the missing factual evidence 
from market participants – it is noted that 17 cases correspond to 5,5% of the total 309 cases lost in 
that  period.  It  should  also  be  noted  that  13  of  those  17  cases  were  in  the  last  ten  years  and 
corresponded to 7,3% of the total 177 cases lost in that period. 

In  the  remaining  32  cases,  the  missing  evidence  at  stake  could  not  really  have  been  provided 
through  a  market  information  tool.  19  of  those  cases  concerned  the  application  of  environmental 
protection legislation where the missing evidence was of scientific nature: i.e. the missing evidence 
could have been obtained from the Member State concerned, through specific studies or inspections 
etc.; but such information would not be readily available to companies in the market. In the 13 other 
cases, the missing evidence could possibly have been provided by the Member State concerned or 
perhaps through other means, but it appears unclear that companies could have been in a position 
to provide such missing evidence. 

Summaries of the 17 cases where the Commission could have usefully tried to obtain missing factual 
evidence from market participants 

These cases are presented in 5 different groups. 

First,  a  group  of  cases  relate  to  the  Commission's  attempts  to  enforce  EU  Treaty  rules  on  free 
movement of goods against commercial monopolies in cases concerning network industries and also 
to  enforce  secondary  EU  rules  also  regulating  network  industries.  Three  cases  were  in  the  energy 
sector, the other three in the transport sector. 

  C-159/94,  Commission  vs.  France;  C-158/94,  Commission  vs.  Italy  and  C-157/94,  Commission 
vs.  Netherlands  (free  movement  of  goods  /  monopolies  /  energy).  The  Commission  brought 
actions against Netherlands, Italy and France with regard to domestic monopolies in the energy 
field claiming they were not compatible with the Treaty rules on free movement of goods. The 
actions  concerned:  the  exclusive  import  rights  for  electricity  intended  for  public  distribution 
(Netherlands); import and expert rights in the electricity industry as part of a national monopoly 
of  a  commercial character  (Italy) and  exclusive  import and  export rights for  gas  and  electricity 
(France).  The  Court  eventually  dismissed  the  three  actions,  using  similar  arguments  and 
language.  In  the  three  cases,  the  Court  reproached  to  the  Commission  that  it  'confined  itself 
essentially to purely legal arguments', both in the reasoned opinion and in the application, not 

environment), paragraphs 16, 18 and 66 to 68. Ireland did not reply to a Commission's request for information 
regarding  a  complaint  related  to  the  operation,  without  a  permit,  of  a  private  waste  storage  and  treatment 
facility  at  Cullinagh,  Fermoy,  County  Cork. In  this case  (which  concerned  several  other  situations  of  possible 
infringement), the absence of reply from the Irish authorities did not result in considering that the Commission 
was  unable  to  supply  sufficient  evidence  –  although  it  is  apparent  that  the  Commission  could  have  filled 
certain  information  gaps  if  it  had  enjoined  the  operator  of  the  private  facility  to  provide  information.  The 
absence of this information was however not decisive, since the Commission eventually won this case. 
However, this type of case has not been included in the examination. 
152 To be sure, in some of these cases, the Member State concerned could perhaps have been in a position to 
also provide the information at stake or part of it.  

72 

 
                                                                                                                                                                                         
providing  enough  factual  particulars153.  The  Court  further  stated  that  '[...]  the  Court  can  judge 
only the merits of the pleas in law which the Commission has put forward. It is certainly not for 
the Court, on the basis of observations of a general nature made in the reply, to undertake an 
assessment, necessarily extending to economic, financial and social matters, [...]'154. 

The Commission would have needed additional factual evidence and detailed economic analysis 
for  which  firm-level  data  would  have  been  necessary.  It  is  unclear  that  the  Member  States 
concerned could have been in a position to provide such data. It should be noted that in parallel, 
the Commission had undertaken the liberalization of the Union energy markets by proposing the 
enactment  of  legislation.  That  second  avenue  proved  successful.  In  other  terms,  while 
enforcement  of  the  Treaty  rules  proved  not  possible  due  to  lack  of  sufficient  evidence,  policy 
design  through  secondary  legislation  was  necessary  to  achieve  the  dismantling  of  import  and 
export rights in the energy sector. 

  C-556/10,  Commission  vs.  Germany  and  C-555/10  Commission  vs.  Austria  (rail  transport  / 
independence of the infrastructure manager). In these two cases, the Commission claimed that 
the entities managing the rail infrastructure in Germany (Deutsche Bahn Netz AG – DB Netz) and 
Austria (ÖBB‑Infrastruktur) were not independent enough from their parent companies which, 
in both cases, were also providing or supervising other entities that were providing rail transport 
services (Deutsche Bahn AG  – DB AG, in Germany;  and ÖBB-Holding in Austria). In  both  cases, 
the  Court,  however,  said  that  the  Commission  had  failed  to  provide  any  concrete  evidence  to 
show  that  DB  Netz  or  ÖBB‑Infrastruktur  were  not  independent  of  DB  AG  or  ÖBB-Holding, 
respectively,  as  regards  their  decision‑making  arrangements.  The  Court  stressed  that  '[i]t  was 
therefore for the Commission, in the light not only of the objectives of Directives […] but also all 
the  factors  pertaining  to  the  relationship  between  DB  Netz  and  DB  AG,  including  factors  of  a 
private nature155, to prove that, in practice, DB Netz is not independent of DB AG in its decision 
making' (emphasis added).156 

It appears that the missing evidence that the Commission could have submitted in support of its 
claim  was  essentially  related  to  firms'  behaviour  within,  respectively,  the  DB  and  ÖBB  groups, 
including contractual arrangements between the holding companies and the entities managing 
the  infrastructure  but  also  other  type  information  concerning  the  relationship  between  such 
firms.  Such  information  could  have  been  directly  provided  by  the  companies  concerned.  It  is 

153 Judgments  of  the  CJEU  in  cases  C-157/94,  Commission  vs.  Netherlands,  paragraphs  61-62;  C-158/94, 
Commission vs. Italy, paragraphs 57-58 and C-159/94, Commission vs. France, paragraphs 104-105.  
154  Judgments  of  the  CJEU  in  cases  C-157/94,  Commission  vs.  Netherlands,  paragraph  63;  C-158/94, 
Commission vs. Italy, paragraph 59 and C-159/94, Commission vs. France, paragraph 106. 
155 For  instance,  DG  Netz  and  DG  AG  had  entered  into  an  agreement  that  included  provisions  specifically 
directed at guaranteeing that, in practice, DB Netz enjoyed independent decision-making powers vis-à-vis DB 
AG. Cf. Judgment of the CJEU in case C-556/10, Commission vs. Germany, paragraphs 68. 
156 Judgment  of  the  CJEU  in  case  C-556/10,  Commission  vs.  Germany,  paragraphs  66  to  69,  in  particular  69. 
Please note that the Commission made additional claims that were rejected on other grounds.  
Similar wording was in the judgement of the CJEU in case C-555/10, Commission vs. Austria, paragraphs 62 to 
66, in particular 66. 

73 

 
                                                            
unclear whether the  Member State in  question could have provided such information had the 
Commission asked for it compared to a direct request to the firms in question. 

  C-545/10,  Commission  vs.  Czech  Republic  (rail  transport  /  costs).  The  applicable  directive  on 
the  development  of  EU  railways  at  the  time  stated  that  the  charges  for  the  minimum  access 
package and track access to service facilities must be set at 'the cost that is directly incurred as a 
result  of  operating  the  train  service'.  The  Commission  claimed  that  the  Czech  Republic's 
approach  to  calculate  that  costs  was  not  in  conformity  with  the  Directive.  The  Court  however 
considered  that  the  Czech  legislation  included  the  necessary  elements  for  the  infrastructure 
manager to determine, and for the regulatory authority to verify, the amount of the charges in 
accordance with Article 7(3) of Directive 2001/14. The Court furthermore stated that '[a]s far as 
the practical application of those elements is concerned, it is clear that the Commission has not 
provided any specific examples showing that access charges have been set in the Czech Republic 
in disregard of that requirement' (emphasis added)157.  

It appears that the missing evidence that the Commission could have submitted in support of its 
claim was essentially related to firm's (rail infrastructure manager) behaviour. This information 
could  have  been  directly  obtained  from  that  firm.  It  is  unclear  whether  the  Member  State  in 
question could have provided such information had the Commission asked for it compared to a 
direct request to the firm in question. 

Second, two cases concern the free movement of capital domain in relation to tax issues. 

  C-600/10,  Commission  vs.  Germany  (free  movement  of  capital  /  different  treatment  of 
resident  and  non-resident  pension  funds  as  regards  deductibility  of  operating  costs).  The 
Commission  claimed  that  German  legislation  was  discriminating  non-resident  pension  funds, 
compared to resident ones, since they could not deduct from dividends and interest perceived 
the operating costs incurred and which are directly linked to that income. This would be contrary 
to  Article  63  TFEU  on  free  movement  of  capital.  The  Commission  raised  that  the  following 
operating  costs  could  be  directly  linked  to  the  perception  of  dividends  and  interest  by  non-
resident  pension  funds:  banking  expenses  and  analogous  transaction  costs;  costs  linked  to 
disputes on dividends paid by a resident company to a non-resident pension fund; and expenses 
linked  to  human  resources  specifically  tasked  with  the  acquisition  of  shares  from  which 
dividends may be obtained. The CJEU considered that for all three types of costs, the evidence 
insufficient  and  theoretical,  amounting  to  mere 
submitted  by  the  Commission  was 
presumptions. The Commission lost the case.  

It appears that the type of evidence that the Commission could have submitted in support of its 
allegations  (detailed  and  representative  examples  of  operational  costs)  could  have  only 
originated from private parties (pension funds in this particular case)158. 

  C-105/08, Commission vs. Portugal (free movement of capital / freedom to provide services/ 
taxation of interest paid to non-residents financial institutions). The Commission claimed that 

157 Judgment of the CJEU in case C-545/10, Commission vs. Czech Republic, paragraphs 70-72, in particular 72. 
158 Judgment of the CJEU in case C-600/10, Commission vs. Germany, paragraphs 19 to 26. 

74 

 
                                                            
Portugal infringed EU law by taxing the interest paid to non-resident financial institutions more 
heavily than the interest paid to financial institutions resident in Portuguese territory (restriction 
of the freedom of non-resident financial institutions to provide mortgage and other loan services 
within the single market). The CJEU dismissed the Commission's application  which, in order to 
prove that the Portuguese legislation resulted in higher taxation of  non-resident legal entities, 
relied on an arithmetical example based on the assumption that the profit margin achieved by 
the  entity  in  question  in  that  example  is  10%.  The  CJEU  stated  that  profit  margin  played  a 
decisive role in the examination of whether legislation such as that at issue led to higher taxation 
of non-resident legal entities, as the rate of taxation was not the only component to be taken 
into consideration in that regard. The CJEU explained that in so far as the calculation in question, 
which  the  Commission  itself  described  as  ‘theoretical’,  was  disputed  by  the  Portuguese 
Government  on  the  ground  that  the  premises  underlying  it  beard  no  relation  to  the  true 
position, and since that government put forward a calculation based on a different profit margin 
which produced a solution in which resident legal entities are taxed more heavily, the onus was 
on the Commission to establish that the figures on which its calculation was based reflected the 
economic reality. The CJEU concluded that 'the Commission failed to produce, either during the 
written  procedure  or  the  hearing,  and  not  even  after  an  express  request  by  the  Court,  any 
conclusive  evidence  whatever  which  would  have  been  capable  of  establishing  that  the  figures 
which it puts forward in support of its argument are in fact borne out by the actual facts and that 
the  arithmetical  example  on  which  it  relies  is  not  purely  hypothetical.'159 The  CJEU  further 
explained that, 'the Commission could have furnished, inter alia, statistical data or  information 
concerning the level of interest paid on bank loans and relating to the refinancing conditions in 
order to support the plausibility of its calculations' [emphasis added]160. The Commission lost the 
case. 

It is unclear how the Commission could have obtained the information referred to by the CJEU 
from  the  Portuguese  authorities.  It  clearly  appears  that  correct,  representative  and  detailed 
information could have only come from (resident and non-resident) financial institutions. 

Third, other cases relate to freedom of establishment and free provision of services (including in the 
transport sector). 

  C-400/08,  Commission  vs.  Spain  (freedom  of  establishment).  In  this  case  the  Commission 
claimed  that  the  Spanish  restrictions  on  the  establishment  of  large  shopping  centres  in  the 
region of Catalonia were  contrary to  the EU Treaty rules on freedom of establishment.  In that 
regard,  the  Commission  argued  that  the  contested  legislation  had  indirectly  discriminatory 
effects  as  regards  operators  from  Member  States  other  than  Spain.  The  Commission  was 
expected to show that (1) large retail establishments were treated differently from other retail 
establishments  and  that  that  difference  constituted  a  disadvantage  for 
large  retail 
establishments;  and  (2)  that  difference  in  treatment  worked  to  the  advantage  of  Spanish 
operators  (because  Spanish  operators  favour  small  and  medium-sized  establishments  while 
operators from other Member States prefer large retail establishments). In order to do so, the 

159 Judgment of the CJEU in case C-105/08, Commission vs. Portugal, paragraph 30. 
160 Ibid., paragraph 29.  

75 

 
                                                            
Commission  had  submitted  a  series  of  figures  showing  that  Spanish  operators  preferred 
medium-sized  retail  establishments  and  operators  from  other  Member  States  preferred  large 
retail establishments. However the Court stated that '[…] The information provided to the Court 
does not enable it to determine with certainty either the number of establishments concerned or 
the  breakdown  between  Spanish  and  non-Spanish  control  of  a  significant  part  of  the 
establishments  falling  within  the  category  of  large  establishments,  […].Nor  has  the  Court  been 
provided  with  a  breakdown  showing  the  respective  shareholdings  of  the  economic  operators 
concerned  in  the  various  categories of  establishment'  (emphasis  added).    The Court  eventually 
concluded  on  this  point  that  'the  Commission  has  not  adduced  conclusive  evidence  capable  of 
establishing  that  the  figures  which  it  has  provided  in  support  of  its  argument  actually  confirm 
that its argument is sound. Nor has the Commission put forward other factors to show that the 
contested  legislation  indirectly  discriminates  against  operators  from  other  Member  States  as 
compared with Spanish operators.'161 

It appears that the missing evidence that the Commission could have submitted in support of its 
claim was essentially firm-level information. This information could have been directly obtained 
from market participants. It is unclear whether the Member State concerned could have been in 
position  to  provide  such  detailed  firm-level  information  had  the  Commission  asked  for  it 
compared to a direct request to the firms in question. 

  C-518/06, Commission vs. Italy (freedom of establishment and freedom to provide services / 
insurance). The Italian legislation imposed an obligation on all insurance undertakings to accept 
applications  for  motor  insurance  contracts  and  the  legislation  included  criteria  for  the 
calculation of insurance premiums aimed at ensuring compliance with the obligation to contract. 
The Commission claimed that those rules were an infringement to the freedom to set premium 
rates  stemming  from  EU  rules.  Italy  argued  that  the principles  in the  law  corresponded  to  the 
ordinary technical rules for determining premium rates, and to the actuarial principles followed 
by insurance undertakings. The Court rejected the Commission's claim essentially for insufficient 
argumentation. However, the Court added that '[t]he Commission has not, moreover, proved or 
even alleged, that the rule for calculation imposed by the Italian legislature is incompatible with 
the  technical  rules  for  determination  of  premium  rates,  or  the  actuarial  principles  which  are 
followed  in  the  insurance  sector'.  Had  the  Commission  used  that  argument,  it  would  it  would 
have needed to rely on detailed market information originating from insurance companies. This 
information  could  have  been  directly  obtained  from  market  participants.  It  is  possible  as  well 
that  the  Commission  could  have  obtained  the  information  referred  to  by  the  CJEU  from  the 
national authorities, had those authorities access to that information. 

  C-305/06,  Commission  vs.  Greece  (free  provision  of  services  /  transport).  Greece  had 
sanctioned  an  Austrian  road  transport  service  provider  for  allegedly  providing  cabotage 
transport  services  in  Greece.  The  Commission  claimed  that  the  company  in  question  was 
providing  part  of  a  combined  (rail  and  road)  cross-border  transport  service,  as  per  Directive 
92/106, from Austria to Greece (and vice-versa), the road transport being the last (or first) part 

161 Judgment of the CJEU in case C-400/08, Commission vs. Spain, paragraphs 59 to 62, in particular paragraphs 
60  and  62.  It  must  be  noted  that  the  Court  eventually  concluded  at  the  existence  of  a  restricting  to  the 
freedom of establishment on the basis of a different test: see paragraphs 63 to 72.  

76 

 
                                                            
of  the  transport  service.  However,  the  Court  considered  that  the  Commission  had  failed  to 
produce  the  documents  proving  the  combined  transport  in  one  of  the  two  examples 
presented162 and sufficient evidence on a second example. The Court strongly stated that 'il y a 
lieu  de  relever  le  caractère  particulièrement  sommaire  des  éléments  de  fait  et  de  droit  sur 
lesquels  se  fonde  le  présent  grief  de  la  Commission'163.  It  is  obvious  that  the  missing  evidence 
could have only come from the transport service provider. 

information  and  protection  on  customer 

  C-287/03,  Commission  vs.  Belgium  (loyalty  programmes  /  freedom  of  establishment,  free 
provision  of  services).  The  Commission  claimed  that  certain  articles  of  the  Belgian  law  on 
commercial  practices  and  consumer 
loyalty 
programmes  was  misapplied  with  the  result  of  a  discriminatory  treatment  towards  foreign 
undertakings wishing to enter the Belgian market. The CJEU said that 'sufficiently document and 
detailed  proof  of  the  alleged  practice  of  the  national  administration  and/or  courts'  was 
necessary to show the Member State's failure to fulfil the obligations of EU law. In that case, the 
CJEU  considered  that  the  Commission  had  not  shown  the  existence  in  Belgium  of  an 
administrative practice (or of national case-law) with the characteristics required by the Court's 
case-law.  Commission's  reference  to  a  single  complaint  was  not  enough  to  sow  evidence  of  a 
'discriminatory and disproportionate' application of the law provisions in question164.  

It may be argued that the Commission could have obtained from the Member State evidence of 
administrative  practice  or  national  case-law;  however,  such  information  could  have  also  been 
obtained  from  private  parties  –  in  particular  those  foreign  undertakings  entering  the  Belgian 
market.  The  latter  would  have  also  allowed  for  faster  processing  of  information  since 
presumably only the relevant administrative practice/case-law to show discriminatory treatment 
would have been made available by private parties. 

Fourth, a few cases relate to public procurement procedures. 

  C-160/08,  Commission  vs.  Germany  (free  provision  of  services,  freedom  of  establishment  / 
public  procurement).  The  Commission  claimed  that  in  some  areas  of  Germany,  public 
authorities  had  failed  to  respect  EU  law  on  freedom  of  establishment  and  free  provision  of 
services as well as on public procurement by failing to make a public call for tenders or to award 
contracts  in  the  field  of  emergency  ambulance  and  qualified  patient  transport  services.  The 
Court explained that it was not in a position to find that there had been a failure to comply with 
the  Treaty  rules  on  freedom  of  establishment  and  free  provision  of  services  in  the  absence  of 
sufficient specific information regarding the predominance of the value of health services over 
transport services in the contracts at stake165. The Court was not in a position to find that there 
had been a failure to comply with Article 10 of Directive 92/50 in conjunction with Titles III or VI 
thereof (or since 1 February 2006, of Article 22 of Directive 2004/18 in conjunction with Articles 
23 to 55 thereof)166. 

162 Judgement of the CJEU, in case C-305/06, paragraphs 39, 40 and 42. 
163 Ibid., paragraph 48. 
164 Judgment of the CJEU in case C-287/03, Commission vs. Belgium, paragraphs 28 to 31. 
165 Judgment of the CJEU in case C-160/08, Commission vs. Germany, paragraph 123. 
166 Ibid., paragraph 122. 

77 

 
                                                            
It appears that the Commission could have obtained additional data from the firms providing the 
emergency  ambulance  and  qualified  patient  transport  services,  possibly  in  addition  to 
information provided by the Member State concerned. 

  C-532/03,  Commission  vs.  Ireland  (free  provision  of  services,  freedom  of  establishment  / 
public procurement / Dublin City Council). The Commission claimed that the Dublin City Council 
was  providing  emergency  ambulance  services  without  a  prior  advertising  by  the  relevant 
authority,  in  violation  of  the  EU  rules  on  public  procurement.  The  Court  said  that  neither  the 
Commission’s  arguments  nor  'the  documents  produced'  demonstrate  that  there  has  been  an 
award  of  a  public  contract.  The  missing  evidence  could  have  perhaps  been  obtained  from  the 
service operator and not only from the Member State or the awarding authority.  

  C-507/03,  Commission  vs.  Ireland  (free  provision  of  services,  freedom  of  establishment  / 
public  procurement  /  An  Post).  Ireland had entrusted the provision of services relating to the 
payment of social welfare benefits to An Post (Irish postal service) without undertaking any prior 
advertising. Such prior advertising was not mandatory by Directive 92/50 (applicable at the time) 
to such type of service. The CJEU considered, nevertheless, that the award, in the absence of any 
transparency,  of  that  contract  to  an  undertaking  located  in  the  same  Member  State  as  the 
contracting  authority  amounts  to  a  different  in  treatment  to  the  detriment  of  undertakings 
which might be interested in that contract but which are located in other Member States (which 
would  amount  to  indirect  discrimination  on  the  basis  of  nationality,  prohibited  by  the  Treaty 
articles  on  freedom  to  provide  services).  Yet,  the  CJEU  took  the  view  that  it  was  for  the 
Commission to  establish  (and  to  provide sufficient  evidence)  that  such  contract was  of  certain 
interest  to  an undertaking located in  a  different  Member  State  and  that  that  undertaking  was 
unable  to  express  its  interest  in  that  contract  because  it  did  not  have  access  to  adequate 
information before the contract was awarded. The CJEU decided that the Commission had not 
provided the necessary evidence: reference to a complaint made in relation to the contract was 
considered  not  sufficient  to  establish  that  the  contract  was  of  certain  cross-border  interest 
(which  was  a  pre-condition  to  show  that  Ireland  failed  to  fulfil  its  obligations) 167.  The 
Commission lost the case.  

It  is  clear  that  the  Commission  could  only  have  obtained  the  required  information  (that  the 
contract was of certain interest to an undertaking located in a different Member State and that 
that  undertaking  was  unable  to  express  its  interest  in  that  contract  because  it  did  not  have 
access to adequate information before the contract was awarded) from a private party: whether 
provided voluntarily (by a complainant) or upon request. 

Finally, two cases relate to tax issues. 

  C-79/09,  Commission  vs.  Netherlands  (Tax  /  VAT).  The Commission brought an action against 
the Netherlands for having excluded certain activities from the VAT. Concerning the second part 
of  the  action  (on  the  exclusion  of  the  making  staff  available  by  public  law  bodies  to  the 
'euroregions'  and  in  the  context  of  the  promotion  of  professional  mobility),  the  Commission 
claimed  that  such  exclusion  would  lead  to  distortions  of  competition  within  the  meaning  of 

167 Judgment of the CJEU in case C-507/03, Commission vs. Ireland, paragraphs 30 and seq. 

78 

 
                                                            
les  conditions  dont 

Article 13(1), second subparagraph, of Directive 2006/112. However, the Court replied that the 
Commission had not submitted any information backing its claim: 'Or, force  est de constater à 
cet égard que, dans son recours, la Commission se borne à indiquer qu'elle n'est 'absolument pas 
le  non-
convaincue'  que 
assujettissement  à  la  TVA  permettent  d'éviter  une  distorsion  de  concurrence.  Elle  n'apporte 
cependant aucun élément à l'appui de cette affirmation, en particulier en vue de démontrer que 
la possibilité de distorsion de concurrence alléguée avec les activités exercées par des opérateurs 
privés, tels les bureaux de placement, n'est pas uniquement théorique mais bien réelle (voir, par 
analogie, arrêt du 8 mars 2001, Commission/ Portugal, C-276/98, Rec. p. I-1699, point 28).'168 

la  réglementation  néerlandaise  assortit 

It  appears  that  the  Commission  could  have  tried  to  rely  on  information  provided  by  private 
parties (i.e. placement agencies) in order to show the alleged distortions of competition in that 
field.  At  the  same  time,  it  is  unclear  that  such  information  could  have  been  provided  by  the 
Member  State concerned  given  that  its  interest was  totally  opposed  –  according  to  the Court, 
the  Member  State  had  provided  detailed  explanations  on  why  competition  was  not  distorted, 
which the Commission was not in a position to refute169. 

  C-156/04, Commission vs.  Greece  (taxation  of  motor  vehicles  /  determination  of  residence  / 
tax provisions). The Commission claimed, inter alia, that Greece was breaching Article 110 TFEU 
because  the  system  of  penalties  for  offences  relating  to  the  declaration  of  motor  vehicles 
temporarily  imported  into  its  territory,  in  conjunction  with  the  administrative  authorities' 
practice of systematically deciding that the individual importing the vehicle (whether for private 
or business use) has his normal residence in Greece, was disproportionate. The CJEU explained 
that the Commission was seeking to prove, 'on the basis of certain individual cases', that there 
was  a  consistent  administrative  practice  on  the  part  of  the  Greek  administrative  authorities 
which was incorrect and unlawful, and thereby to obtain a finding that the defendant Member 
State  had  generally  failed  to  fulfil  its  obligations.  As  a  matter  of  fact,  the  Commission  only 
submitted 8 individual cases. The CJEU decided that the evidence submitted by the Commission 
was insufficient: '[…] given the very large number of Community nationals and Greek nationals 
established in other Member States who go to Greece by car each year, the eight individual cases 
to which the Commission refers […] constitute a substantially inadequate percentage, in the light 
of the requirements set by the case-law of the Court, for the purposes of proving the existence of 
a  consistent  administrative  practice  amounting  to  a  failure  to  fulfil  obligations.' 170  The 
Commission lost the case on this point.  

It is unclear how the Commission could have obtained information on a substantial number of 
additional  cases  (necessary  to  prove  the  administrative  practice)  unless  such  information 
originated  from  private  parties  (notably  individuals  temporarily  importing  motor  vehicles  for 
business use). 

168 Judgment of the CJEU, C-79/09, Commission vs. Netherlands, paragraph 92. 
169 Ibid., paragraph 93. 
170 Judgement of the CJEU, in case C-156/04, paragraphs 47 to 51. 

79 

 
                                                            
A market information tool such as SMIT could be particularly useful to better address 'general and 
persisting infringements' resulting from administrative practice 

A market information tool such as SMIT would allow the Commission to more easily obtain certain 
information of relevance for certain types of infringement proceedings, such as those concerning the 
practical  application  of  national  law  transposing  EU  law  (as  opposed  to  cases  looking  at  the  mere 
transposition of EU law into national law): e.g. when there are administrative decisions, granting of 
permits or licences, supervisory activity etc.  

In this context, SMIT would be a particular useful tool for those infringement proceedings addressing 
'general  and  persisting 
infringements  arising  from  administrative  practice  that  constitute 
infringements' of EU law171. In those cases, the Commission needs to document and prove that the 
Member State's practice amounts to a certain pattern: e.g. by providing several situations illustrating 
the problem etc. It is unlikely that in those circumstances complainants could be in a situation to fill 
in  all  information  gaps  resulting  from  lack  of  cooperation  from  Member  States  or  from  Member 
States' inability to provide relevant information. 

Furthermore,  a  market  information  tool  such  as  SMIT  could  usefully  allow  the  Commission  to 
document additional situations to illustrate the problem which could be produced at later (judicial) 
stages of the procedure. The CJEU has already accepted that the Commission could adduce in front 
of  the  CJEU  new  examples  (not  included  in  the  reasoned  opinion)  of  infringements  of  a  given 
obligation under EU law  to the extent  that providing  the new examples  would  not constitute new 

171 The  CJEU  has  accepted  that  the  Commission  can  bring  infringement  proceedings  under  Article  256  TFEU 
against a Member State when, beyond a specific violation of Union law, there is a general and to some extent 
structural/continuous infringement by such Member State of its duties under Union law: e.g. '[…] it should be 
stated,  first,  in  relation  to  the  subject-matter  of  the  present  proceedings,  that,  without  prejudice  to  the 
Commission's  obligation  to  satisfy  in  each  and  every  case  the  burden  of  proof  which  it  bears,  in  principle 
nothing prevents the Commission from seeking in parallel a finding that provisions of a directive have not been 
complied with by reason of the conduct of a Member State's authorities with regard to particular specifically 
identified  situations  and  a  finding  that  those  provisions  have  not  been  complied  with  because  its  authorities 
have adopted a general practice contrary thereto, which the particular situations illustrate where appropriate.' 
[emphasis added] Cf. Judgment of the CJEU in case C-494/01, Commission vs. Ireland, paragraph 27. (see also 
the Opinion of Advocate General Geelhoed on the same case, paragraphs 43 and seq.)  
In the same vein: 'It should also be noted that, without prejudice to the Commission’s obligation to discharge 
the burden of proof upon it in proceedings under Article 258 TFEU, there is nothing precluding the Commission 
from acting on such a difference of interpretation and bringing proceedings before the Court, alleging a failure 
by  the  Member  State  concerned  to  fulfil  its  obligations,  putting  forward  the  numerous  sets  of  circumstances 
which, in its view, are contrary to EU law, even though it does not identify each and every one of them (see, by 
analogy, inter alia judgment in Commission v Italy, C-135/05, EU:C:2007:250, paragraphs 20 to 22).  
In  the  present case,  the  interpretation  given  by the Member State  concerned  to a provision  of EU  law which 
differs from the one endorsed by the Commission gives rise to a situation in the territory of that Member State 
where  there  is  an  administrative  practice  whose  existence  is  undisputed  even  though  it  is  not  generalised. 
Accordingly,  the  fact  that  the  Commission  has  given  only  a  few  examples  of  that  practice  in  support  of  its 
argument  does  not  mean  its  action  lacks  the  necessary  detail  to  enable  an  assessment  to  be  made  of  the 
subject-matter of the action.' Cf. Judgment of the CJEU in case C-512/12, Commission vs. Germany, paragraphs 
25-26. 
See as well Pal WENNERAS, 'A New Dawn for Commission Enforcement under Articles 226 and 228 EC: General 
and Persistent (GAP) Infringements, Lump Sums and Penalty Payments', Common Market Law Review 43, p. 
31, 2006. 

80 

 
                                                            
pleas  (this  would  not  be  admissible  at  this  stage  of  the  procedure)  but  rather  mere  additional 
evidence in support of a claim of general and persistent infringement: 

'[…]  in  so  far  as  the  action  seeks  to  raise  a  failure  of  a  general  nature  to  comply  with  the 
Directive's  provisions,  concerning  in  particular  the Irish authorities'  systemic  and consistent 
tolerance  of  situations  not  in  accordance  with  the  Directive,  the  production  of  additional 
evidence intended, at the stage of proceedings before the Court, to support the proposition 
that the failure thus alleged is general and consistent cannot be ruled out in principle. 

It  should  be  noted  that  in  its  application  the  Commission  may  clarify  its  initial  grounds  of 
complaint  provided,  however,  that  it  does  not  alter  the  subject-matter  of  the  dispute.  In 
producing  fresh  evidence  intended  to  illustrate  the  grounds  of  complaint  set  out  in  its 
reasoned opinion, which allege a failure of a general nature to comply with the provisions of 
a directive, the Commission does not alter the subject-matter of the dispute (see, by analogy, 
the  judgment  of  12  October  2004  in  Case  C-328/02  Commission  v  Greece,  not  published in 
the ECR, paragraphs 32 and 36).'172 

A5.2. Examples from the State aid domain 

Although  addressing issues  in  a  different  domain,  a  single  market information  tool would  in  many 
dimensions  be  closely  analogue  to  the  MIT  available  to  the  Commission  in  the  State  aid  area. 
Namely,  the  objectives  of  the  tools  are  similar,  they  involve  same  stakeholders  (the  Commission, 
Member  States,  and  private  firms),  and  would  be  used  for  collecting  similar  type  of  information 
under similar conditions. Therefore, in the remainder of the annex we analyse the objectives and the 
impact  of  the  existing  MIT  tool  in  order  to  anticipate  a  possible  impact  of  a  single  market 
information tool. The frequency of use, as well as regulatory cost and benefit of MIT is possibly the 
best available real life proxy for the impact assessment of SMIT.    

Since the introduction of MIT in 2013, information requests have been issued only in two cases for 
large-impact cases of selective tax advantages provided to firms through tax rulings on intra-group 
transfers. In these cases, information requested was very specific, readily available to  the relevant 
market  participants,  and  the  information  was  not  voluntarily  provided  by  firms  nor  could  be 
obtained  otherwise.  In  both  cases,  information  was  acquired  through  simple  procedures  and  the 
requested information was collected fully and timely (i.e. there was no need for fining the replying 
firms).  

Selective tax advantages to companies through tax rulings on intra-group price transfers  

172 Judgment of the CJEU in case C-494/01, Commission vs. Ireland, paragraphs 37 and 38. See also paragraph 
20  explaining  that  the  Commission,  in  the  reasoned  opinion,  stated  that  the  complaints  referred  to  did  not 
constitute  the  only  cases  of  non-compliance  with  the  Directive  and  that  it  reserved  its  right  to  cite  other 
examples in order to illustrate the breaches of a general nature in implementing the provisions of the Directive 
of which it accused the Irish authorities.  

81 

 
                                                            
Since  June  2013,  the  Commission  has  been  investigating  public  allegations  of  favourable  tax 
treatment of certain companies (in particular in the form of tax rulings173) by several Member States 
voiced in the media and in national Parliaments. The Commission extended this information inquiry 
to  all  Member  States  in  December 2014.  Overall,  the  Commission (DG Competition)  has  looked at 
more than 1000 tax rulings.  

The  issue  at  stake  was  whether  those  Member  States  practices  resulted  in  granting  selective  tax 
advantages  to  certain  companies  that  could  constitute  illegal  State  aid,  incompatible  with  the 
internal  market  under  Article  107(1)  TFEU.174 While  the  Member  States  enjoy  fiscal  autonomy,  a 
measure  by  which  the  public  authorities  grant  certain  undertakings  a  favourable  tax  treatment 
which places them in a more favourable financial position than other taxpayers amounts to State aid 
within the meaning of Article 107(1) TFEU.175 

The inquiry focused on tax rulings which endorse transfer pricing arrangements176 proposed by the 
taxpayer  for  determining  the  taxable  basis  of  an  integrated  group  company.  A  particular  problem 
arising  is  the  existence  of  national  schemes  or  individual  aid  measures  allowing  multinational 
companies to price their intra-group transactions in a  manner that does not reflect the  conditions 
that apply between independent companies at arm's length. The arm's length principle requires that 
intra-group  transactions  are  remunerated  as  if  they  were  agreed  to  by  independent  companies 
negotiating under comparable circumstances. 

The Commission opened several formal investigations. Some of them have been completed and the 
Commission has already adopted final decisions in the following four cases:  

1.  SA.38373 (Ireland – Apple)177, decision of 30 August 2016;  

2.  SA.38374 (The Netherlands – Starbucks)178, decision of 21 October 2015;  

3.  SA.38375 (Luxembourg – Fiat)179, decision of 21 October 2015; and  

4.  SA.37667  (Belgium  –  Art.  185§2b  'excess  profit  scheme')  CIR92)180,  decision  of  11  January 

2016.  

Three formal investigations (against Luxembourg) remain open181.  

173 Tax rulings are comfort letters issue by tax authorities to give company clarity on how its corporate tax will 
be calculated or on the use of special tax provision. They are a tool that provides legal certainty to tax payers. 
At such, tax rulings are not illegal. 
174 Article  107  TFEU:  '1.  Save  as  otherwise  provided  in  the  Treaties,  any  aid  granted  by  a  Member  State  or 
through State resources in any form whatsoever which distorts or threatens to distort competition by favouring 
certain  undertakings  or  the  production  of  certain  goods  shall,  in  so  far  as  it  affects  trade  between  Member 
States, be incompatible with the internal market. […]' 
175 See generally European Commission (DG Competition) working paper on State aid and tax rulings of June 
2016: http://ec.europa.eu/competition/state_aid/legislation/working_paper_tax_rulings.pdf  
176 Transfer  prices  refer  to  the  prices  charged  for  intra-group  transactions  concerning  the  sale  of  goods  or 
services between associated group companies. 
177 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373  
178 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38374  
179 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38375  
180 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_37667  
181 http://ec.europa.eu/competition/state_aid/tax_rulings/index_en.html  

82 

 
                                                            
Requests for information made by the Commission to private parties 

The Commission used the possibility to request information directly from companies in two of the 
tax ruling cases referred to above: in the FIAT case (SA.38375) and the Starbucks case (SA.38734). In 
both cases, the Commission had requested the Member States subject to the State aid investigations 
(Luxembourg  and  the  Netherlands,  respectively),  both  during  the  preliminary  examination  phases 
and  after  opening  the  two  formal  investigations  procedures  on  11  June  2014182,  to  submit  certain 
information, but this proved to be ineffective – essentially because the information in question was 
not  available  to  the  Member  States  in  question183.  Therefore,  the  Commission  adopted  a  decision 
that entitled it to use, in accordance with Article 7 of Council Regulation (EU) 2015/1589 [Art. 6a of 
Council Regulation (EC) No 659/1999 at the time], the new market investigation tool. 

  The  Fiat  case:  The  Commission  sent  a  simple  request  for  information  to  FIAT  on  20  February 
2015,  which  was  replied  by  FIAT  on  31  March  2015.184 The  information  requested  (and 
submitted) concerned185: 

o 

o 

o 

o 

financial information on FIAT group treasury companies (incl. annual reports, description of 
the  functions  of  the  group  treasury  companies,  participations  by  the  Fiat  group  treasury 
companies in affiliated companies); 

information  on  the  asset  and  liabilities  of  the  FIAT  treasury  company  established  in 
Luxembourg (incl. data on deals with counterparties within the group, average outstanding 
positions, issuance of debt);  

individual intra-group transactions and a document on the FIAT group liquidity policy (incl. 
single rules for investment of cash by the group); and 

information on FIAT group's single transfer pricing policy (incl. a document titled 'Transfer 
Pricing Policy' explaining the pricing of intra-group loans and deposits). 

FIAT  also  submitted  information  to  the  Commission  voluntarily,  as  interested  party,  following 
the publication of the decision on the opening of the formal investigation procedure186.  

  The Starbucks case: The Commission also sent a simple request for information to Starbucks on 
16  March  2015,  6  May  2015  and  5  August  2015,  which  was  replied  by  Starbucks  on  13  April 

182 For  a  summary  of  the  information  requests,  see  Commission  Decision  C(2015)7152  of  21.10.2015,  in 
particular  §§11-19  (FIAT  case);  and  Commission  Decision  C(2015)7143  of  21.10.2015,  in  particular  §§1-15 
(Starbucks case). 
183 FIAT  case:  §20  of  Decision  C(2015)7152  (it  is  noted  that  the  Commission  had  already  anticipated  in  its 
Decision C(2014)3627, of 11 June 2014, opening the formal investigation procedure in this case that requesting 
information from FIAT could eventually be necessary: see §93 of that decision). Starbucks case: §16 of Decision 
C(2015)7143.  
184 Decision C(2015)7152, §§21 and 27. It is noted that the Commission granted an extension of the deadline to 
respond, following a request by the company. 
185 Ibid. §§110-126. 
186 Ibid. §17 and §§158 -183. 

83 

 
                                                            
2015,  29  May  2015,  29  June  2015,  24  July  2015  and  10,  11  and  23  September  2015 
respectively.187 The information requested (and submitted) concerned:  

o 

information on the activities and risks of certain Starbucks subsidiaries (incl. structure of the 
subsidiary's  costs,  breakdown  of  sales  by  products,  data  on  pricing  of  products,  data  on 
expenses including salary expenses); 

o  data  on  royalty  payments  paid  by  a  subsidiary  in  the  Netherlands  to  another  subsidiary  in 

the UK and on the calculation of the tax base; 

o 

information  on  the  subsidiary  in  the  UK  (incl.  data  on  employees  performing  certain 
operations, data on the functioning of the company within the group);  

o  data  on  intra-group  payments  (incl.  data  on  payments  to  parent  company  in  the  US,  on 

royalty payments and group organisation);  

o 

o 

o 

information  on  the  operations  of  a  subsidiary  in  Switzerland  (incl.  financial  information, 
prices  of  products  (green  coffee  beans)  used  by  Starbucks,  transfer  pricing  policy,  transfer 
pricing  reports  (covering  the  pricing  of  green  coffee  beans,  prices  actually  paid  by  the 
subsidiary in the Netherlands to that in Switzerland); 

information and figures on Starbucks shops (incl. information on licensee programmes and 
eligibility  criteria  to  develop  shops,  license  fees  percentage  over  turnover  paid  by  the 
licensees);  

information  on  the  profitability  of  other  roasting  facilities  operated  by  Starbucks  (incl. 
accounts);  

o  contracts between Starbucks and third parties relating to the manufacturing and the sale of 

coffee, including contracts on the licencing of intellectual property188.  

Starbucks  had  also  submitted  information  to  the  Commission  voluntarily,  as  interested  party, 
following  the  publication  of  the  decision  on  the  opening  of  the  formal 
investigation 
procedure189.  

In  addition  to  this,  the  Commission  also  addressed  simple  requests  for  information  to  4 
competitors of Starbucks on 7 April 2015 who replied in 27 April, 20 May and 26  May 2015190. 
Other interested parties voluntarily submitted comments in that case191. 

In the other two tax ruling cases where the Commission has taken a final decision, recourse to the 
new  investigations  tool  was  not  needed  to  the  extent  that  the  Member  States  concerned  (and/or 
State aid beneficiaries voluntarily)  provided sufficient information that allowed the Commission to 
complete its investigation. 

187 Decision C(2015)7143, §§18 and 21. The Commission eventually sent additional requests of information to 
Starbucks: ibid., §§24, 28, 31 to 35. 
188 Ibid. §§91 to 154. 
189 Ibid.  §14  and  §§187-195.  Note  that  in  certain  cases,  Starbucks  was  not  in  a  position  to  provide  the 
requested information, as not available to it. 
190 Ibid. §§20, 22 and 26. See also §§202-212 for the description of the information supplied. 
191 Ibid. §§196-201. 

84 

 
                                                            
Benefits of the use of the market information tool in the State aid context 

Direct benefits: possibility to satisfactorily conclude two State aid investigations 

In both the FIAT and Starbucks cases, the use of the Market Investigation Tool under the State aid 
Procedural Regulation allowed the Commission to obtain relevant information that it would have not 
obtained  otherwise.  Indeed,  the  Commission  was  not  in  a  position  to  obtain  the  relevant 
information  from  other  sources  (the  Member  States  in  question  did  not  have  the  requested 
information). 

The  information  submitted  by  FIAT,  Starbucks  and  the  latter's  competitors  proved  to  be  of  crucial 
importance for allowing the Commission to finalise the investigation and to prove the existence of 
State aid incompatible with the single market. The Commission eventually concluded192 that the two 
tax  rulings  under  investigation  endorsed  artificial  and  complex  methods,  not  reflecting  economic 
reality, to establish taxable profits for the companies. This was done, in particular, by setting prices 
for  goods  and  services  sold  between  companies  of  the  FIAT  and  Starbucks  groups  that  did  not 
correspond  to  market  conditions.  As  a  result,  most  of  the  profits  of  Starbucks'  coffee  roasting 
company were shifted abroad, where they were also not taxed, and FIAT's financing company only 
paid taxes on underestimated profits. 

Direct benefits: recovery of unpaid tax and stop to unfair advantages 

The  conclusion  of  the  investigation  allowed  the  Commission  to  order  Luxembourg  and  the 
Netherlands to recover the unpaid tax from FIAT and Starbucks, respectively, in order to remove the 
unfair  competitive  advantage  they  have  enjoyed  and  to  restore  equal  treatment  with  other 
companies  in  similar  situations.  The  amounts  recovered  amounted  to  EUR23  million  (FFT)  and 
EUR25.7 million (Starbucks). 

In  addition,  the  companies  in  question  no  longer  benefit  from  the  advantageous  tax  treatment 
granted by these tax rulings. 

Indirect benefits: increased voluntary cooperation by State aid beneficiaries in the future? 

The Commission used the market investigation tool in the State aid area for the first time in these 
two  cases.  These  first  uses  could  have  an  exemplary  value  for  the  future.  The  fact  that  the 
Commission  can  and  is  prepared  to  use  MIT  may  lead  to  an  increase  of  voluntary  cooperation  by 
State  aid  beneficiaries  with  the  Commission  during  the  investigation  phase  –  thus  alleviating  the 
need for the Commission to have recourse to what remains an exceptional information tool in the 
State aid area. 

192 See, IP/15/5580 of 21 October 2015: http://europa.eu/rapid/press-release_IP-15-5880_en.htm  

85 

 
 
 
                                                            
ANNEX 6: OVERVIEW OF EXISTING POLICY FRAMEWORKS  

This Annex gives an overview of different policy areas where the  European Commission (section I), 
EU  bodies  and  agencies  (section  II),  national  authorities  in  Member  States  (section  III)  are 
empowered to gather information directly from market players  in the exercise of the full range of 
their responsibilities under the EU regulatory framework. Section IV presents a specific example of 
UK  Competition  and  Market  Authority  which  under  national  law  has  horizontal  (generic)  tools  for 
requesting  information  from  firms.  Section  V  presents  examples  of  different  tools  for  exchange  of 
information between national authorities among themselves and between these authorities and the 
Commission.  

A6.1. Investigative powers of the European Commission  

1.  Competition law 

Enforcement of Articles 101 and 102 TFEU  

In the field of antitrust (application of Articles 101 and 102 TFEU), the Commission has powers since 
1962  to  request  information  from  undertakings193.  These  powers  are  regularly  used  when  the 
investigations are directed at possible infringements of EU law by undertakings. 

Requests for information can be addressed to undertakings either in the context of so-called case-
specific investigations or "sector inquires"194.  

Table. A6.1. Competition "sector inquires" in the antitrust and state aid areas– frequency and firm 
coverage 

E-commerce 
Electric supplies (State aid) 
Pharmaceutical 
Retail Banking 
Insurance 
Telecommunication (3G) 
Telecommunication (local loop) 
Telecommunication (roaming) 

Year  
2015 
2015 
2008 
2005 
2005 
2004 
2001 
2000 

No. of firms covered 
1800195 
124196 
70197 
250198 
425199 
227200 
150201 
200202 

193 See  Council  Regulation  (EC)  No  1/2003  of  16  December  2002  on  the  implementation  of  the  rules  on 
competition laid down in Articles 81 and 82 of the Treaty. This Regulation repealed Council Regulation No 17 
of 1962 (First Regulation implementing Articles 85 and 86 of the Treaty).  
194 It would be more appropriate to refer to those as "investigations into sectors of the economy and into types 
of Agreements", as in the title of Article 1 of Council Regulation (EC) No 1/2003. 
195 http://europa.eu/rapid/press-release_IP-16-3017_en.htm 
196 http://ec.europa.eu/competition/sectors/energy/capacity_mechanism_report_en.pdf page 5 
197 http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/staff_working_paper_part1.pdf page 13 
198 http://ec.europa.eu/competition/sectors/financial_services/inquiries/sec_2007_106.pdf page 8  
199 http://ec.europa.eu/competition/sectors/financial_services/inquiries/final_report_annex.pdf page 3 
200 http://ec.europa.eu/competition/sectors/media/inquiries/final_report.pdf page 1 
201http://ec.europa.eu/competition/sectors/telecommunications/archive/inquiries/local_loop/ 
local_loop_unbundling_inquiry.pdf page 8  
202 http://ec.europa.eu/competition/sectors/telecommunications/archive/inquiries/roaming/ 
working_document_on_initial_results.pdf page 1 

86 

 
 
                                                            
Telecommunication (leased lines)  1999 
Source: http://ec.europa.eu/competition/antitrust/sector_inquiries.html 

92203 

According to Article 17 of Regulation 1/2003,  'where the trend of trade between Member States, the 
rigidity  of  prices  or  other  circumstances  suggest  that  competition  may  be  restricted  or  distorted 
within the common market, the Commission may conduct its inquiry into a particular sector of the 
economy or into a particular type of agreements across various sectors. In the course of that inquiry, 
the Commission may request the undertakings or associations of undertakings concerned to supply 
the  information  necessary  for  giving  effect  to  Articles  [101  and  102  TFEU]  and  may  carry  out  any 
inspections necessary for that purpose. The Commission may in particular request the undertakings 
or  associations  of  undertakings  concerned  to  communicate  to  it  all  agreements,  decisions  and 
concerted practices'. 

Under  Article  18(1)  of  Regulation  1/2003  'in  order  to  carry  out  duties  assigned  to  it  by  this 
Regulation,  the  Commission  may,  by  simple  request  or  by  decision,  require  undertakings  and 
association of undertakings to provide all necessary information'.  

The Court of Justice has confirmed that the Commission benefits from a wide margin of discretion in 
deciding whether particular information is necessary to enable it to bring to light an infringement of 
the  competition  rules204.  The  Court  has  also  held  that  in  addressing  requests  for  information  to 
undertakings  the  Commission  is  bound  by  the  principle  of  proportionality205.  The  necessity  of  the 
information sought must be judged in relation to the purpose stated in the request for information, 
that purpose must be indicated with sufficient precision206.  

Under  Article  18  of  Regulation  1/2003  the  Commission  can  require  undertakings  to  provide 
information  either  through  a  simple  request207 or  through  a  request  by  decision208.  Where  the 
Commission  requires  undertakings  to  supply  information  both  through  a  simple  request  and  a 
request  by  decision,  it  has  to  state  the  legal  basis  and  the  purpose  of  the  request,  specify  what 
information  is  required  and  fix  the  time-limit  within  which  the  information  is  to  be  provided.  No 
sanctions can be imposed if information is not provided in response to simple requests. The answer 
to requests  by decision is  compelled by fines or periodic  penalty  payments. Supplying incorrect or 
misleading information can be sanctioned both under simple requests and requests by decision.  

203 http://ec.europa.eu/competition/sectors/telecommunications/archive/inquiries/leased_lines/ 
working_document_on_initial_results.pdf page 5 
204 Judgment of the Court in case 374/87 Orkem v Commission, paragraph 15. 
205 Judgment of the Court in C-36/92 P SEP.  
206 Judgment of the Court in case C-247/14 P HeidelbergCement AG, paragraph 24. That judgment related to 
the formal request for information, which included a questionnaire of 67 pages, issued in the context of cartel 
investigation  in  the  cement  industry.  In  that  judgment  the  Court  held  that  matters  covered  in  the 
questionnaire addressed to HeidelbergCement were extremely numerous and covered very different types of 
information. The decision to request information did not disclose, clearly and unequivocally, the suspicion of 
infringement which justified the adoption of that decision and did not make it possible to determine whether 
the  requested  information  was  necessary  for  the  purpose  if  the  investigation.  The  Court  found  that  the 
statement of reasons in the Commission's decision to request information was excessively brief, vague, generic 
and in some respect, ambiguous.  
207 Article 18(2) of Regulation 1/2003.  
208 Article 18(3) of Regulation 1/2003.  

87 

 
 
                                                            
According to Article 18(5) of Regulation 1/2003, 'the Commission shall without delay forward a copy 
of the simple request or of the decision to the competition authority of the Member State in whose 
territory the seat of the undertaking or association of undertakings is situated and the competition 
authority of the Member State whose territory is affected'. 

Recital 37 of Regulation 1/2003 also clarifies that the Regulation respects the fundamental rights and 
observes  the  principles  recognised  in  particular  by  the  Charter  of  Fundamental  Rights  of  the 
European Union. Accordingly, the Regulation is interpreted and applied with respect to those rights 
and principles.  

Confidential information is protected under Article 27 of Regulation 1/2003 which stipulates that the 
right of access to the file of the parties concerned shall not extend to confidential information and 
under Article 28 of Regulation which contains rules on professional secrecy. 

Under Article 12(1) of Regulation 1/2003 'for the purpose of applying Articles [101 and 102 TFEU] the 
Commission and the competition authorities of the Member States shall have the power to provide 
one  another  with  and  use  in  evidence  any  matter  of  fact  or  of  law,  including  confidential 
information'.  Paragraphs  2  and  3  of  Article  12  further  circumscribe  the  exchange  of  information 
between the Commission and the national competition authorities (e.g. information exchanged shall 
only be used in evidence for the purpose of applying Articles 101 and 102 TFEU and in respect of the 
subject-matter for which it was collected by the transmitting authority).  

For  the  purpose  of  enforcing  Article  101  and  102  TFEU  the  Commission  has  also  the  power  to:  (i) 
interview any natural or legal person who contents to be interviewed for the purpose of collecting 
information  relating  to  the  subject  matter  of  an  investigation209,  (ii)  inspect  business  premises  of 
undertaking  and  associations  of  undertakings210,  (iii)  inspect  other  premises,  including  private 
homes211. 

Control of concentrations  

In  the  field  of  control  of  concentrations,  the  Commission  is  entitled  to  request  information  from 
undertakings. The legal basis for such requests is provided in Article 11 of Regulation No 139/2004 of 
20  January  2004  on  the  control  of  concentrations  between  undertakings  ('the  EC  Merger 
Regulation').  Article  11  of  Regulation  139/2004  mirrors  Article  18  of  Regulation  1/2003  and  also 
distinguishes between simple requests for information and requests by decision.    

State aid  

Similarly to the infringement procedures under Article 258 TFEU, State aid procedures under Article 
108 TFEU are addressed against Member States. In that context, the Commission traditionally relied 
on information provided by complainants and by the concerned Member State. Member States have 

209 Article 19 of Regulation 1/2003. 
210 Article 20 of Regulation 1/2003. 
211 Article 21 of Regulation 1/2003. 

88 

 
                                                            
a duty to cooperate with the Commission under Article 4(3) TEU and procedural rules on State aid 
allow the Commission to request Member States to provide information212. 

Nevertheless,  in  July  2013,  the  European  Commission  was  entrusted  with  the  possibility,  in  the 
context of formal investigation procedures in the area of State aid, to directly require undertakings 
and associations of undertakings to provide information to the Commission213: i.e. MIT.  

The Commission now can, if the information provided by the Member State subject to the State aid 
investigation  is  not  sufficient,  ask  that  companies  (whether  a  company  benefitting  from  the 
contested  aid  measure  or  third  parties)  to  provide  directly  to  the  Commission  market  information 
necessary  to  enable  it  to  complete  its  State  aid  assessment.  The  Commission  may  also  use  these 
powers in the context of wider State aid investigations into sectors of the economy. The Commission 
may  request  such  information  through  a  simple  request  for  information  or  through  a  formal 
Commission decision.  

These  powers  are,  however,  of  last  resort:  the  Commission  can  only  use  them  within  a  formal 
investigation  procedure  under  Article  108  TFEU  if  the  information  provided  by  the  Member  State 
concerned  (whether  in  the context  of  the  preliminary  examination  or  in  the context  of  the formal 
investigation procedure) is not sufficient and if the Commission adopts a formal decision stating that 
the formal investigation procedure in question is ineffective. These powers are without prejudice to 
the possibility for interested parties to submit observations following the publication of decisions to 
open formal investigations. 

Trade defence policy 

The  EU  uses  trade  defence  instruments  to  re-establish  a  competitive  environment  for  the  EU 
industry  when  harmed  by  dumped  or  subsided  imports.  There  are  three  types  of  trade  defence 
instruments214:  

  anti-dumping measures (a company is dumping if it is exporting a product to the EU at prices 

lower than the normal value of the product);  

  anti-subsidy measures (a subsidy is a financial contribution from a third-country government 
or public body which, in the case of trade, affects the pricing of goods imported into the EU); 
and  
safeguards (safeguards are intended for situations in which an EU industry is affected by an 
unforeseen,  sharp  and  sudden  increase  of  imports.  The  objective  is  to  give  the  industry  a 
temporary breathing space to make necessary adjustments – safeguards always come with 
an obligation to restructure). 

 

212 See Council Regulation (EU) No 2015/1589 laying down detailed rules for the application of Article 108 of 
the treaty on the functioning of the European Union (codification). 
213 Council  Regulation  (EC)  No  659/1999  of  22  March  1999  laying  down  detailed  rules  for  the  application  of 
Article  108  of  the  treaty  on  the  functioning  of  the  European  Union,  as  amended  by  Council  Regulation  (EU) 
734/2013 of 22 July 2013. Council Regulation (EC) No 659/1999 has in the meantime been repealed by Council 
Regulation (EU) No 2015/1589 laying down detailed rules for the application of Article 108 of the treaty on the 
functioning of the European Union (codification). See the correlation table in Annex II to Regulation (EU) No 
2015/1589. 
214 For a general introduction, see: http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151014.pdf  

89 

 
                                                            
  
The  Commission  is  empowered  to  take  decisions  on  these  three  areas,  after  consulting  the  Trade 
Defence Committee (which can block adoption of measures by a qualify majority). The Commission 
is also responsible for carrying out investigations, either ex officio or upon complaints.  

Following the initiation of proceedings for anti-dumping and anti-subsidy measures, the Commission 
commences an investigation at Union level covering, as appropriate, either both dumping and injury 
or subsidisation and injury.  

The Commission may send questionnaires to 'parties', who shall be given at least 30 days to reply. 
The Commission may also request EU Member States to supply information as well as to carry out 
checks and inspections215. 

There are consequences in case of non-cooperation by an interested party (including if an interested 
party  refuses  to  supply  information).  The  Regulation  foresees  that  if  an  interested  party  does  not 
cooperate, or cooperate only partially, so that relevant information is thereby withheld, the result of 
the investigation may be less favourable to the party than if it had cooperated216.  

Both  in  the  case  of  anti-dumping  investigations  and  anti-subsidy  investigations,  there  are  rules  on 
the treatment of confidential information217. 

The Commission has developed standard questionnaires used to collect information in the context 
of anti-dumping investigations, although the questionnaires are systematically adapted on a case by 
case basis218. 

It must be noted that, contrary to the case of dumping, in the case of subsidies the 'infringer' is a 
public  authority  from  a  third  country.  This  means  that  when  the  Commission  directly  requests 
information  from  private  parties  (e.g.  beneficiaries),  it  is  in  a  position  similar  to  that  of  State  aid 
investigations. 

The procedure for adopting safeguards is slightly different from that for adopting anti-dumping and 
anti-subsidy measures. This procedure is hardly used.  

The  Commission  may  invite  interested  parties  to  submit  information.  Also,  the  Commission  has 
some  investigative  powers,  including  the  possibility  to  'seek  all  information  it  deems  to  be 
necessary'219.  

215 See Article 6(2), (3) and (4) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 
8  June  2016  on  protection  against  dumped  imports  from  countries  not  members  of  the  European  Union 
(codification); or Article 11(2), (3) and (4) of Regulation (EU) 2016/1037 of the European Parliament and of the 
Council of 8 June 2016 on protection against subsidised imports from countries not members of the European 
Union (codification). 
216 See Article 18 of Regulation (EU) 2016/1036; and Article 28 of Regulation (EU) 2016/1037. 
217 See Article 19 of Regulation (EU) 2016/1036 and Article 29 of Regulation (EU) 2016/1037. 
218

 http://ec.europa.eu/trade/policy/accessing-markets/trade-defence/actions-against-imports-into-the-

eu/anti-dumping/#_templates  
219 Article 6(2) of Council Regulation (EC) No 260/2009, of 26 February 2009, on the common rules for imports; 
and  Article  5(2)  of  Council  Regulation  (EC)  No  625/2009,  of  7  July  2009,  on  common  rules  for  imports  from 
certain third parties.  

90 

 
                                                            
A6.2. Investigative powers of EU bodies/agencies in the financial services sector  

The  European  Banking  Authority  (EBA),  the  European  Insurance  and  Occupational 
Pensions Authority (EIOPA), the European Securities and Market Authority (ESMA) 

General power to collect information of the EBA, the EIOPA and the ESMA 

The general principle 

Article 8(2)(h) of the EBA Regulation220, Article 8(2)(h) of the EIPOA Regulation221 and Article 8(2)(h) 
the ESMA Regulation222 grant each of these authorities a general power (among other powers223) to 
'collect  the  necessary  information  concerning'  'financial  institutions'  (EBA,  EIOPA224)  or  'financial 
market participants' (ESMA). In the three cases, it is also stated that this should be done 'as provided 
for in Article 35'. 

The Article on 'Collection of Information' 

Article 35 in the three Regulations contains provisions (paragraphs 6 and seq.) on the possibility of 
obtaining information directly from financial institutions or financial market participants.  

1)  Power  of  last  resort.  It  is  a  power  of  last  resort,  when  obtaining  information  from  national 
authorities  has  proven  unsuccessful225.  The  relevant  text  (N.B.  the  EBA  Regulation  is  slightly 
different, since it was amended in 2013 on this point226) is as follows: 

220 Regulation  (EU)  No  1093/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing  a  European  Supervisory  Authority  (European  Banking  Authority),  amending  Decision  No 
716/2009/EC and repealing Commission Decision 2009/78/EC. 
221 Regulation  (EU)  No  1094/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing  a  European  Supervisory  Authority  (European  Insurance  and  Occupational  Pensions  Authority), 
amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC. 
222 Regulation  (EU)  No  1095/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing  a  European  Supervisory  Authority  (European  Securities  and  Markets  Authority),  amending 
Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC. 
223 Article 8 in each of the three regulations deals with 'Tasks and Powers of the Authority'. 
224 The term 'financial institution' is defined differently in the EBA and the EIOPA Regulations.  
225 See  also  recital  46  of  the  EBA  Regulation  or  recital  45  of  the  EIOPA  Regulation(recital  46  of  the  ESMA 
Regulation has similar language, slightly adapted to refer to financial market participants rather than financial 
institutions):  
'In  order  to  carry  out  its  duties  effectively,  the  Authority  should  have  the  right  to  request  all  necessary 
information. To avoid the duplication of reporting obligations for financial institutions, that information should 
normally  be  provided  by  the  national  supervisory  authorities  which  are  closest  to  the  financial  markets  and 
institutions  and  should  take  into  account  already  existing  statistics.  However,  as  a  last  resort,  the  Authority 
should be able to address a duly justified and reasoned request for information directly to a financial institution 
where  a  national  competent  authority  does  not  or  cannot  provide  such  information  in  a  timely  fashion. 
Member States’ authorities should be obliged to assist the Authority in enforcing such direct requests. In that 
context,  the  work  on  common  reporting  formats  is  essential.  The  measures  for  the  collection  of  information 
should  be  without  prejudice  to  the  legal  framework  of  the  European  Statistical  System  and  the  European 
System of Central Banks in the field of statistics. This Regulation should therefore be without prejudice both to 
Regulation  (EC)  No 223/2009  of  the  European  Parliament  and  of  the  Council  of  11 March  2009  on  European 

91 

 
                                                            
 
EBA Regulation 

'6.  Where  complete  or  accurate  information  is  not  available  or  is  not  made  available  in  a 
timely fashion under paragraph 1 or 5227, the Authority228 may request information, by way 
of a duly justified and reasoned request, directly from: 

(a) relevant financial institutions; 

(b) holding companies or branches of a relevant financial institution; 

(c)  non-regulated  operational  entities  within  a  financial  group  or  conglomerate  that  are 
significant to the financial activities of the relevant financial institutions. 

The  addressees  of  such  a  request  shall  provide  the  Authority  promptly  and  without  undue 
delay with clear, accurate and complete information. 

 […].' 

EIOPA and ESMA Regulations 

'6. Where information is not available or is not made available under paragraph 1 or 5 in a 
timely  fashion,  the  Authority  may  address  a  duly  justified  and  reasoned  request  directly  to 
the  relevant  financial  institution  [/financial  market  participant  in  the  ESMA  text].  The 
reasoned  request  shall  explain  why  the  information  concerning  the  respective  individual 
financial market participants is necessary. 

[…]' 

2)  Information  of  national  authorities.  If  the  EBA,  EIOPA  or  ESMA  request  financial  institutions  or 
financial  markets  participants  to  provide  information,  they  must  inform  the  relevant  competent 
authorities  of  such  requests  (cf.  third  subparagraph  of  paragraph  6  in  the  EBA  Regulation;  second 
subparagraph of paragraph 6 in the EIOPA and ESMA Regulations).  

3) Enforcement of the request. The EBA, EIOPA or ESMA lack enforcement powers (contrary to the 
faculty of the Commission under State aid rules, they do not have possibility to impose sanctions for 
missing or misleading replies). They need to rely on national competent authorities for assistance:  

EBA, EIOPA and ESMA Regulations: 

'6. […] At the request of the Authority, the competent authorities shall assist the Authority in 
collecting the information.' 

statistics and  to  Council  Regulation  (EC)  No 2533/98  of  23 November  1998  concerning  the  collection  of 
statistical information by the European Central Bank.'  
226 The text of Article 35 of the EBA Regulation was amended in 2013, by Regulation (EU) No 1022/2013 of the 
European  Parliament  and  of  the  Council  of  22  October  2013  amending  Regulation  (EU)  No  1093/2010 
establishing  a  European  Supervisory  Authority  (European  Banking  Authority)  as  regards  the  conferral  of 
specific tasks on the European Central Bank pursuant to Council Regulation (EU) No 1024/2013).  
227 N.B. on the possibility to request national authorities to provide information. 
228 i.e. the European Banking Authority. 

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The EBA, EIOPA and ESMA Regulation assume that those national competent authorities do have the 
necessary and relevant powers.  

The EBA Regulation has additional language in this regard: 

'7a. Where the addressees of a request under paragraph 6 do not provide clear, accurate and 
complete information promptly, the Authority shall inform the European Central Bank where 
applicable  and  the  relevant  authorities  in  the  Member  States  concerned  which,  subject  to 
national  law,  shall  cooperate  with  the  Authority  with  a  view  of  ensuring  full  access  to  the 
information  and  to  any  originating  documents,  books  or  records  to  which  the  addressees 
have legal access in order to verify the information.' 

In addition, a recital provides some clarification on whether the addresses of a request could oppose 
to providing information [emphasis added]:  

'(9)  Requests  for  information  by  EBA  should  be  duly  justified  and  reasoned.  Objections  to 
specific  requests  for  information  on  grounds  of  non-compliance  with  Regulation  (EU) 
No 1093/2010  should  be  raised  in  accordance  with  the  relevant  procedures.  Where  an 
addressee  of  a  request  for  information  raises  such  objections,  this  should  not  absolve  him 
from providing the information requested. The Court of Justice of the European Union should 
be  competent  to  decide,  in  accordance  with  the  procedures  set  out  in  the  Treaty  on  the 
Functioning  of  the  European  Union,  whether  a  specific  request  for  information  by  EBA 
complies with that Regulation.'229 

4) Type of information concerned. The three Regulations did not specify the type of information that 
could be collected230. Yet, for the EBA Regulation, amending Regulation (EU) No 1022/2013 provided 
some clarification, in its recitals 8, on the type of information that could be required: 

'(8) EBA should be able to request information from financial institutions in accordance with 
Regulation  (EU)  No 1093/2010  in  relation  to  any  information  to  which  those  financial 
institutions  have legal  access,  including  information  held  by  persons  remunerated  by  those 
financial  institutions  for  carrying  out  relevant  activities,  audits  provided  to  those  financial 
institutions by external auditors and copies of relevant documents, books and records.' 

5) Use of the information collected. The EBA, EIOPA or ESMA may use the confidential information 
received by under this provision only for the purpose of carrying out the duties assign to them by the 
three Regulations (cf. paragraph 7 of Article 35 in the three Regulations). 

Specific additional information collection power for the EBA 

229 It is recital 9 of amending Regulation (EU) No 1022/2013. 
230 In  certain  cases,  there  are  provisions  in  other  legal  instruments  in  which  these  authorities  may  be 
specifically empowered to collect certain information. For instance, ESMA is empowered to 'request from any 
person  all  relevant  information  regarding  the  size  and  purpose  of  a  position  or  exposure  entered  into  via  a 
derivative' (cf. Article 45(1)(a) of Regulation (EU) No 600/2014 of the European Parliament and of the Council 
of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012. 

93 

 
                                                            
In addition, there is a specific provision added in 2013 to the EBA Regulation, Article 32(3a), on the 
collection of information from financial institutions in connection to 'Union-wide assessments of the 
resilience of financial institutions to adverse market developments'. See the following text [emphasis 
added]: 

'[…]  

3a.  For  the  purpose  of  running  the  Union-wide  assessments  of  the  resilience  of  financial 
institutions under this Article231, the Authority may, in accordance with Article 35 and subject 
to  the  conditions  set  out  therein,  request  information  directly  from  those  financial 
institutions.  It  may  also  require  competent  authorities  to  conduct  specific  reviews.  It  may 
request competent authorities to carry out on-site inspections, and may participate in such 
on-site inspections in accordance with Article 21 and subject to the conditions set out therein, 
in order to ensure comparability and reliability of methods, practices and results. 

3b.  The  Authority  may  request  that  the  competent  authorities  require  that  financial 
institutions  subject  to  an  independent  audit  information  that  they  must  provide  under 
paragraph 3a. 

[…].' 

Specific additional information collection power for the ESMA 

According to Regulation No 513/2011 of the European Parliament and of the Council of 11 May 2011 
amending  Regulation  (EC)  No 1060/2009  on  credit  rating  agencies  and  Regulation  No  648/2012  of 
the European Parliament and the Council of 4 July 2012 on OTC derivatives, central counterparties 
and trade repositories, ESMA has direct supervisory powers on registered Credit Rating Agencies and 
trade repositories. In the areas where it exercises its direct supervision ESMA can request or require 
by  decision  that  directly  supervised  entities  or  related  third  parties  provide  all  information  that  is 
necessary in order to carry out its duties. ESMA can also conduct general investigations and on-site 
inspections and has extensive data-gathering powers in that context.  

Protection of confidential information 

231 Paragraph 2 of the same Article states the following:  
'2.  The  Authority  shall,  in  cooperation  with  the  ESRB,  initiate  and  coordinate  Union-wide  assessments  of  the 
resilience of financial institutions to adverse market developments. To that end it shall develop:  
(a) common methodologies for assessing the effect of economic scenarios on an institution's financial position; 
(b) common approaches to communication on the outcomes of those assessments of the resilience of financial 
institutions; 
(c)  common  methodologies  for  assessing  the  effect  of  particular  products  or  distribution  processes  on  an 
institution; and 
(d) common methodologies for asset evaluation, as necessary, for the purpose of the stress testing. 

94 

 
                                                            
Protection  of  confidential  information  is  addressed  in  Article  70  of  the  three  Regulations,  on 
'Obligation  of  professional  secrecy'.  See  the  following  text,  identical  in  the  three  Regulations 
[emphasis added]232: 

'1. Members of the Board of Supervisors and the Management Board, the Executive Director, 
and members of the staff of the Authority including officials seconded by Member States on a 
temporary basis and all other persons carrying out tasks for the Authority on a contractual 
basis  shall  be  subject  to  the  requirements  of  professional  secrecy  pursuant  to  Article  339 
TFEU and the relevant provisions in Union legislation, even after their duties have ceased. 

Article 16 of the Staff Regulations shall apply to them. 

In accordance with the Staff Regulations, the staff shall, after leaving service, continue to be 
bound  by  the  duty  to  behave  with  integrity  and  discretion  as  regards  the  acceptance  of 
certain appointments or benefits. 

Neither Member States, the Union institutions or bodies, nor any other public or private body 
shall seek to influence staff members of the Authority in the performance of their tasks. 

2. Without prejudice to cases covered by criminal law, any confidential information received 
by persons referred to in paragraph 1 whilst performing their duties may not be divulged to 
any  person  or  authority  whatsoever,  except  in  summary  or  aggregate  form,  such  that 
individual financial institutions cannot be identified. 

Moreover,  the  obligation  under  paragraph  1  and  the  first  subparagraph  of  this  paragraph 
shall  not  prevent  the  Authority  and  the  national  supervisory  authorities  from  using  the 
information for the enforcement of the acts referred to in Article 1(2), and in particular for 
legal procedures for the adoption of decisions. 

3.  Paragraphs  1  and  2  shall  not  prevent  the  Authority  from  exchanging  information  with 
national  supervisory  authorities  in  accordance  with  this  Regulation  and  other  Union 
legislation applicable to financial institutions. 

That  information  shall  be  subject  to  the  conditions  of  professional  secrecy  referred  to  in 
paragraphs  1  and  2.  The  Authority  shall  lay  down  in  its  internal  rules  of  procedure  the 
practical arrangements for implementing the confidentiality rules referred to in paragraphs 1 
and 2. 

[…]' 

It  must  be  noted  that  the  EBA,  EIOPA  and  ESMA  are  subject  to  Regulation  (EC)  No  1049/2011  on 
access to documents (cf. Article 72 and recital 64 of the three Regulations). 

232 See also recital 62 of the three Regulations:  
'It  is  essential  that  business  secrets  and  other  confidential  information  be  protected.  The  confidentiality  of 
information made available to the Authority and exchanged in the network should be subject to stringent and 
effective confidentiality rules.' 

95 

 
                                                            
Sharing of information with the Commission by the EBA, EIOPA and ESMA 

The EBA, EIOPA and ESMA are not expected to share confidential supervisory information with the 
Commission:  e.g.  no  mentioning  of  the  Commission  in  article  70(3)  as  regards  the  exchange  of 
confidential information with national authorities.  

Yet, there is a case when the three authorities should provide data to the Commission, in relation to 
breaches of EU law. Article 17 ('Breach of Union Law') in each of the three Regulations233 provides 
for a 3-step graduated response involving the EBA, EIOPA or ESMA and the Commission in case that 
a national competent authority does not properly apply EU relevant law (cf. as referred to in Article 
1(2) of each of the Regulations, mostly financial services law):  

  First,  the  EBA  (or  EIPA  or  ESMA)  may  investigate  the  alleged  breach  or  non-application  of 
Union law by the national authority and may address a recommendation to the competent 
authority concerned setting out the action necessary to  comply  with Union law (cf. Article 
17(2) and (3)234; 

  Second, if the national authority does not follow the recommendation, the Commission may 
be  involved  in  the  procedure,  as  stated  in  paragraph  4  of  Article  17  of  each  Regulation235, 
and in particular the Commission shall receive all necessary information: 

'4.  Where  the  competent  authority  has  not  complied  with  Union  law  within  1  month  from 
receipt of the Authority’s recommendation, the Commission may, after having been informed 
by  the  Authority,  or  on  its  own  initiative,  issue  a  formal  opinion  requiring  the  competent 
authority to take  the action necessary to comply with Union law. The Commission’s formal 
opinion shall take into account the Authority’s recommendation. 

The Commission shall issue such a formal opinion no later than 3 months after the adoption 
of the recommendation. The Commission may extend this period by 1 month. 

233 See recital 27 of the EBA Regulation (identical text is found in recital 26 of the EIOPA Regulation and recital 
27 of the ESMA Regulation):  
'(27) Ensuring the correct and full application of Union law is a core prerequisite for the integrity, transparency, 
efficiency  and  orderly  functioning  of  financial  markets,  the  stability  of  the  financial  system,  and  for  neutral 
conditions of competition for financial institutions in the Union. A mechanism should therefore be established 
whereby the Authority addresses instances of non-application or incorrect application of Union law amounting 
to a breach thereof. That mechanism should apply in areas where Union law defines clear and unconditional 
obligations.' 
234 See also recital 28 of the EBA Regulation (identical text is found in recital 27 of the EIOPA Regulation and 
recital 28 of the ESMA Regulation): 
'(28) To allow for a proportionate response to instances of incorrect or insufficient application of Union law, a 
three-step mechanism should apply. First, the Authority should be empowered to investigate alleged incorrect 
or  insufficient  application  of  Union  law  obligations  by  national  authorities  in  their  supervisory  practice, 
concluded by a recommendation. […]' 
235 See also recital 28 of the EBA Regulation (identical text is found in recital 27 of the EIOPA Regulation and 
recital 28 of the ESMA Regulation): 
'(28)  […]  Second,  where  the  competent  national  authority  does  not  follow  the  recommendation,  the 
into  account  the  Authority’s 
Commission  should  be  empowered  to 
recommendation, requiring the competent authority to take the actions necessary to ensure compliance with 
Union law.' 

issue  a  formal  opinion  taking 

96 

 
                                                            
The Authority and the competent authorities shall provide the Commission with all necessary 
information.' 

The  extent  to  which  this  reference  to  'all  necessary  information'  includes  firm-level 
confidential information is unclear. But it appears the only instance in which the EBA, EIOPA 
or ESMA would forward supervision-related information to the Commission.  

  Third,  Article  17  of  each  Regulation  further  foresees  that  the  EBA,  EIOPA  or  ESMA  may, 
under  certain  circumstances,  address  an  individual  decision  to  a  financial  institution  (EBA, 
EIPOA) or to a financial market participant (ESMA)236, without prejudice to the Commission's 
powers pursuant to Article 258 TFEU. 

The Single Resolution Board (SRB) 

The SRB Regulation237 established a Single Resolution Board (SRB), which is a Union agency with legal 
personality.  

Investigative powers 

236 See also recital 29 of the EBA Regulation (identical text is found in recital 28 of the EIOPA Regulation and 
recital 29 of the ESMA Regulation): 
'(29) Third, to overcome exceptional situations of persistent inaction by the competent authority concerned, the 
Authority  should  be  empowered,  as  a  last  resort,  to  adopt  decisions  addressed  to  individual  financial 
institutions  [N.B.  financial  market  participants  in  the  ESMA  Regulation].  That  power  should  be  limited  to 
exceptional circumstances in which a competent authority does not comply with the formal opinion addressed 
to it and in which Union law is directly applicable to financial institutions by virtue of existing or future Union 
regulations.'  
See paragraphs 5 to 7 of Article 17 of each of the Regulations, as well: 
'5.  The  competent  authority  shall,  within  10  working  days  of  receipt  of  the  formal  opinion  referred  to  in 
paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to comply 
with that formal opinion. 
6.  Without  prejudice  to  the  powers  of  the  Commission  pursuant  to  Article  258  TFEU,  where  a  competent 
authority  does  not  comply  with  the  formal  opinion  referred  to  in  paragraph  4  within  the  period  of  time 
specified  therein,  and  where  it  is  necessary  to  remedy  in  a  timely  manner  such  non-compliance  in  order  to 
maintain  or  restore  neutral  conditions  of  competition  in  the  market  or  ensure  the  orderly  functioning  and 
integrity of the financial system, the Authority may, where the relevant requirements of the acts referred to in 
Article 1(2) are directly applicable to financial institutions, adopt an individual decision addressed to a financial 
institution [N.B. 'financial market participant' in the ESMA Regulation] requiring the necessary action to comply 
with its obligations under Union law including the cessation of any practice. 
The decision of the Authority shall be in conformity with the formal opinion issued by the Commission pursuant 
to paragraph 4. 
7.  Decisions  adopted  under  paragraph  6  shall  prevail  over  any  previous  decision  adopted  by  the  competent 
authorities on the same matter. 
When taking action in relation to issues which are subject to a formal opinion pursuant to paragraph 4 or a 
decision pursuant to paragraph 6, competent authorities shall comply with the formal opinion or the decision, 
as the case may be.' 
237 Regulation  (EU) No 806/2014 of  the  European  Parliament  and of  the Council  of  15  July 2014  establishing 
uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in 
the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) 
No 1093/2010. 

97 

 
                                                            
The SRB Regulation grants extensive investigative powers to the SRB, for the purpose of performing 
its tasks under that Regulation238.  

Requests for information to natural and legal persons (cf. Article 34) 

The SRB may require certain (legal or natural) persons to provide 'all of the information necessary to 
perform the tasks conferred on it by [the SRB] Regulation'. 

The  addressees  of  the  requests  are:  certain  credit  institutions  and  investment  firms  (defined  in 
Article  2  of  the  SRB  Regulation),  including  other  entities  within  the  group;  employees  of  those 
institutions and entities; third parties to whom the institutions/entities have outsource functions or 
activities.  

The SRB does not need to ask permission from national authorities [emphasis added]: '[…] the Board 
may, through the national resolution authorities or directly, after informing them, making full use of 
all  of  the  information  available  to  the  ECB  or  to  the  national  competent  authorities239,  require  the 
following  […]  persons  to  provide  […]'  (cf.  Article  34(1)).  If  the  SRB  obtains  the  information  directly 
from  the  addressees  of  the  requests,  it  must  make  that  information  available  to  the  national 
resolution authorities concerned (cf. Article 34(3)).  

At  the  same  time,  national  authorities  must  cooperate  with  the  SRB  in  finding  the  information: 
'National  competent  authorities,  the  ECB  where  relevant,  and  national  resolution  authorities  shall 
cooperate  with  the  Board  in  order  to  verify  whether  some  or  all  of  the  information  requested  is 
already  available.  Where  such  information  is  available,  national  competent  authorities,  the  ECB 
where  relevant,  or  national  resolution  authorities  shall  provide  that  information  to  the  Board.'  (cf. 
Article 34(6)).  

General investigations (cf. Article 35) 

The SRB is empowered, 'subject to any other conditions laid down in relevant Union law', to conduct 
all necessary investigations of the same legal or natural person referred to in Article 34(1). It may do 
so directly or through the national authorities. A decision of the Board is needed in order to launch 
an investigation. 

On-site inspections (cf. Article 36 and 37) 

238 See  recital  93:  'In  order  to  perform  its  tasks  effectively,  the  Board  should  have  appropriate  investigatory 
powers. It should be able to require all necessary information either through the national resolution authorities, 
or directly, after informing them, and to conduct investigations and on-site inspections, where appropriate in 
cooperation with national competent authorities, making full use of all information available to the ECB and 
the national competent authorities. In the context of resolution, on-site inspections should be available for the 
Board  to  ensure  that  decisions  are  taken  on  the  basis  of  fully  accurate  information  and  to  monitor 
implementation by national authorities effectively.' 
239 National resolution authorities are under the obligation to submit information to the SRB (cf. Article 8(4)). 
Those authorities are empowered by Directive 2014/59/EU to obtain information.  

98 

 
                                                            
The SRB is also empowered to conduct on-site inspections at the business premises of the natural 
and legal persons concerned. A decision by the Board is needed (cf. Article 36). An authorisation by a 
judicial authority must be sought, where needed (cf. Article 37).  

Type of information concerned 

Concerning the requests for information (cf. Article 34), the SRB Regulation states that the SRB 'shall 
be able to obtain, including on a continuous basis, any information necessary for the exercise of its 
functions under this Regulation, in particular on capital, liquidity, assets and liabilities concerning any 
institution subject to its resolution powers.' (cf. Article 34(4)).  

Concerning the general investigations (cf. Article 35), the SRB may: 

'(a) require the submission of documents;  

(b) examine the books and records of any legal or natural person referred to in Article 34(1) 
and take copies or extracts from such books and records;  

(c) obtain written or oral explanations from any legal or natural person referred to in Article 
34(1) or their representatives or staff;  

(d)  interview  any  other  natural  or  legal  person  who  consents  to  be  interviewed  for  the 
purpose of collecting information relating to the subject matter of an investigation.' 

99 

 
 
 
 
 
 
 
Enforcement 

The addresses of the requests for information must supply the information requested under Article 
34(1) and they cannot oppose any duty of professional secrecy (cf. Article 34(2)240).  

Concerning  the  general  investigations,  'where  a  person  obstructs  the  conduct  of  the  investigation, 
the  national  resolution  authorities  of  the  participating  Member  State  where  the  relevant  premises 
are  located  shall  afford,  in  accordance  with  national  law,  the  necessary  assistance  including 
facilitating the access by the Board to the business premises of the natural or legal persons referred 
to in Article 34(1), so that those rights can be exercised.' (cf. Article 32(2) second subparagraph). 

In addition, the SRB Regulation foresees the application of fines (cf. Article 38)241) where the legal or 
natural person concerned does not supply the information requested under Article 34 or does not 
submit to a general investigation (under Article 35) or an on-site inspection (under Article 36). Article 
38(3)  establishes  the  basic  amount  of  fines,  by  setting  a  lower  and  a  higher  limit.  There  are 
additional detailed rules of the application of the limits, including by applying aggravating factors. 

The SRB  Regulation also  foresees  the  application  of  periodic  penalty  payments  in order  to  compel 
the legal or natural person concerned: to comply with a decision of the SRB adopted under Article 
34; to supply complete information which has been required by a decision pursuant to Article 34; to 
submit to an investigation under Article 35 (e.g. by providing complete records, data, procedures or 
any other material required and by completing and correcting other information already provided); 
to submit to an on-site inspection under Article 36. 

Protection of confidential information 

Protection of confidential information is primarily addressed in Article 88 of the SRB Regulation, on 
'Professional secrecy and exchange of information'. See also recitals 116 and 117. 

There are also rules on the protection of business secrets and confidential information in the context 
of the hearings of the persons subject to the proceedings (cf. Article 40(2)).  

The SRB is subject to Regulation (EC) No 1049/2011 on access to documents (cf. Article 90). 

Sharing of information with the Commission 

Article 34(5) foresees that, for the information collected under Article 34, 'the Board, the ECB, the 
national competent authorities and the national resolution authorities may draw up memoranda of 

240 See  also  recital 94:  'In order  to  ensure that  the  Board  has  access  to  all relevant  information,  the  relevant 
entities  and  their  employees  or  third  parties  to  whom  the  entities  concerned  have  outsourced  functions  or 
activities  should  not  be  able  to  invoke  the  requirements  of  professional  secrecy  to  prevent  the  disclosure  of 
information  to  the  Board.  At  the  same  time,  the  disclosure  of  such  information  to  the  Board  should  not  be 
deemed to infringe the requirements of professional secrecy.' 
241 See also recital 95: 'In order to ensure compliance with decisions adopted within the framework of the SRM, 
proportionate  and  dissuasive  fines  should  be  imposed  in  the  event  of  an  infringement.  The  Board  should  be 
entitled to impose fines or periodic penalty payments on undertakings for failure to comply with  its decisions 
addressed to them.' 

100 

 
                                                            
understanding with a procedure concerning the exchange of information.' The Commission does not 
participate in that arrangement242.  

However, the Commission has some role in the resolution procedure (cf. Article 18). In that context, 
the  SRB  Regulation  foresees  that  the  Commission  will  have  access  to  information  (cf.  Article 
18(10)243: 

'10.  Commission  shall  have  the  power  to  obtain  from  the  Board  any  information  which  it 
deems to be relevant for performing its tasks under this Regulation. The Board shall have the 
power to obtain from any person, in accordance with Chapter 5 of this Title [N.B. Articles 34 
to  37],  any  information  necessary  for  it  to  prepare  and  decide  upon  a  resolution  action, 
including updates and supplements of information provided in the resolution plans.' 

In addition, there are some cooperation obligations in Article 30:  

'1.The  Board  shall  inform  the  Commission  of  any  action  it  takes  in  order  to  prepare  for 
resolution.  With  regard  to  any  information  received  from  the  Board,  the  members  of  the 
Council, the Commission as well as the Council and the Commission staff shall be subject to 
the requirements of professional secrecy laid down in Article 88.  

2.In  the  exercise  of  their  respective  responsibilities  under  this  Regulation,  the  Board,  the 
Council,  the  Commission,  the  ECB  and  the  national  resolution  authorities  and  national 
competent authorities shall cooperate closely, in particular in the resolution planning, early 
intervention and resolution phases pursuant to Articles 8 to 29. They shall provide each other 
with all information necessary for the performance of their tasks. 
[…]' 

A6.3. Examples of investigative powers of national authorities in Member States    

1. Competition law  

Regulation  1/2003  empowers  national  competition  authorities  to  apply  the  EU  competition  rules 
alongside  the  Commission.  However,  it  does  not  regulate  how  national  competition  authorities 
(NCAs) apply those rules. The investigative powers and sanctioning mechanisms are not governed by 
EU law but are determined by national law.  

242 In  addition,  Article  30(7)  foresees  that  the  SRB  should  conclude,  where  necessary,  a  memorandum  of 
understanding  with  the  ECB  and  the  national  resolution  authorities  and  the  national  competent  authorities 
describing in general terms how they will cooperate under paragraphs 2 and 4 of Article 30 in the performance 
of their respective tasks under Union law. See also recital 54 in that regard. Again, the Commission is not part 
of that arrangement. 
243 See  also  recital  56  [emphasis  added]:  'In  order  to  minimise  disruption  of  the  financial  market  and  of  the 
economy, the resolution process should be accomplished in a short time. Depositors should be granted access 
at  least  to  the  guaranteed  deposits  as  promptly  as  possible,  and  in  any  event  within  the  same  deadlines  as 
provided  for  in  Directive  2014/49/EU  of  the  European  Parliament  and  of  the  Council  (1).  The  Commission 
should, throughout the resolution procedure, have access to any information which it deems to be necessary to 
take an informed decision in the resolution process.' 

101 

 
 
                                                            
The  2012  Report  on  investigative  powers  of  NCAs  conducted  within  the  European  Competition 
Network244 demonstrates  that  competition  authorities  in  all  Member  States  have  the  power  to 
request information in the context of investigations of competition law infringements.  

According  to  such  report,  the  "scope  of  such  requests  is  generally  comprehensive  (e.g.  all  kind  of 
information  necessary/relevant  for  the 
investigation",  "any  question  regarding  the  alleged 
infringement)"245. The information which can be requested includes documents and data.  

The  competition  authorities  usually  state  the  legal  basis  and  the  purpose  of  the  request  for 
information, specify what information is required and within which time-limit246. The power of NCAs 
to ask for information is limited, for example, by legal professional privilege or privilege against self-
incrimination247.  In  all  jurisdictions,  fines  or  penalty  payments  may  be  imposed  in  case  of  non-
compliance  or  refusal  by  an  undertaking  to  submit  a  reply  to  a  request  for  information.  Most 
jurisdictions  equally  provide  for  periodic-penalty  payments  as  a  means  to  enforce  requests  for 
information248.  

In most Member States NCAs can issue requests for information in the context of sector inquiries249. 
A large number of such inquiries have been used by NCAs in a broad variety of sectors since 2004250.  

Requests for information are subject to judicial control, either directly (an application can be made 
against the request) or indirectly (the request can be appealed in the context of an appeal against 
the final decision).  

Cases  dealt  with  by  NCAs  often  have  cross-border  dimension.  For  this  reason  Regulation  1/2003 
introduces close cooperation between NCAs in the field of fact-finding and exchange of information, 
in particular within the European Competition Network.  

In 2013/2014, the Commission conducted the assessment of the functioning of Regulation 1/2003. 
Based  on  the  results  of  this  assessment,  the  Commission  identified  areas  for  action  to  make  the 
enforcement of competition rules by NCAs more effective, in particular to ensure that NCAs: have a 
complete set of effective investigative and decision-making powers at their disposal and can impose 
effective and proportionate fines251.  

244 ECN WORKING GROUP COOPERATION ISSUES AND DUE PROCESS, 'Investigative Powers Report', 31 October 
2012, http://ec.europa.eu/competition/ecn/investigative_powers_report_en.pdf  
245 See page 29 of the Report. 
246 Ibid.  
247 According to the Report, '[o]ther limitations may also play a role in certain very limited circumstances, […]'. 
See page 31 of the Report. 
248 See page 33 of the Report. 
249 See page 37 of the Report.  
250 For details see Commission Staff Working Document, 'Ten Years of Antitrust Enforcement under Regulation 
1/2003', SWD(2014) 230/2.  
251 See  Communication  from  the  Commission  to  the  European  Parliament  and  the  Council,  'Ten  Years  of 
Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives', COM(2014) 453.  

102 

 
                                                            
2. Consumer protection 

The CPC Regulation 252 lays down a framework for cooperation between the competent authorities in 
the EU and the Commission in cases of 'intra-Community infringement' of Union consumer law. In its 
annex, the CPC Regulation includes a list of EU legal acts in the field of consumer protection that are 
subject to this enforcement cooperation. 

Article  4(6)  of  the  CPC  Regulation  establishes  certain  minimum  investigative  and  enforcement 
powers  of  the  competent  authorities  in  relation  to  their  obligations  under  the  CPC  Regulation,  in 
particular to address intra-Community infringements: 

a)  to  have  access  to  any  relevant  document,  in  any  form,  related  to  the  intra-Community 

infringement; 

b)  to require the supply by any person of relevant information related to the intra-Community 

infringement;  

c)  to carry out necessary on-site inspections; 
d)  to  request  in  writing  that  the  seller  or  supplier  concerned  cease  the  intra-Community 

infringement; 

e)  to  obtain  from  the  seller  or  supplier  responsible  for  intra-Community  infringements  an 
undertaking to cease the intra-Community infringement; and, where appropriate, to publish 
the resulting undertaking; 
to  require  the  cessation  or  prohibition  of  any  intra-Community  infringement  and,  where 
appropriate, to publish resulting decisions; and 

f) 

g)  to require the losing defendant to make payments into the public purse or to any beneficiary 
designated  in  or  under  national  legislation,  in  the  event  of  failure  to  comply  with  the 
decision. 

Depending on the enforcement system in place, the CPC competent authorities either exercise these 
powers  directly  (possible  subject  to  judicial  supervision)  or  indirectly  by  applying  to  competent 
courts to seek the necessary judicial orders. 

On 25 May 2016, the Commission presented a legislative proposal253 to review the existing rules on 
consumer protection cooperation  between enforcement authorities. The aim is  to  clarify the rules 
and to provide national enforcement authorities with additional powers (e.g. require the supply of 
information  from  any  public  authority  or  banks,  or  internet  service  providers  for  the  purpose  of 
among others identifying and following financial flows or of ascertaining the identity of persons who 
own  websites)  most  importantly  to  enable  them  to  address  unlawful  intra-Union  online  practices 
and improve coordination among them. The proposal also foresees a new procedure, which will be 
trigged at the Union level by the Commission to permit closer coordination of enforcement actions 
when harmful practices concern a large majority of European consumers. 

252 Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the  Council  of  27  October  2004  on 
cooperation between national authorities responsible for the enforcement of consumer protection laws.  
253 COM(2016)283, 25.5.2016. 

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3. Financial supervision 

National  financial  supervision  authorities,  being  part  of  the  European  System  of  Financial 
Supervision, have extensive investigative powers. To give an example, under Regulation 596/2014 on 
market abuse (Market Abuse Regulation) those powers include, among others:  

a)  the  access  to  any  document  or  data  in  any  form  and  the  right  to  receive  or  take  a  copy 

thereof;  

b)  powers  to  require  or  demand  information  from  any  person,  including  those  who  are 
successively involved in the transmission of orders or conduct of the operations concerned, 
as well as their principals, and if necessary, to summon and question any such person with a 
view to obtain information;  
 in  relation  to  commodity  derivatives,  powers  to  request  information  from  market 
participants  on  related  spot  markets  according  to  standardised  formats,  obtain  reports  on 
transactions, and have direct access to traders’ systems;  

c) 

d)  powers to carry out on-site inspections and investigations at sites other than at the private 

residences of natural persons;  

e)  powers to enter the premises of natural and legal persons in order to seize documents and 
data in any form where a reasonable suspicion exists that documents or data relating to the 
subject matter of the inspection or investigation may be relevant to prove a case of insider 
dealing or market manipulation infringing the Market Abuse Regulation; and  

f)  powers 

to 

require  existing 

telephone  conversations,  electronic 
communications  or  data  traffic  records  held  by  investment  firms,  credit  institutions  or 
financial institutions. 

recordings  of 

4. Market surveillance 

Market surveillance ensures that non-food products on the EU market conform with the rules and in 
particular,  with  product  safety  requirements.  Market  surveillance  covers  a  wide  variety  of  sectors 
such  as  medical  devices,  toys,  machinery,  lifts,  and  cosmetics.  There  is  a  plethora  of  market 
surveillance authorities in Member States. Regulation (EC) No 765/2008 of the European Parliament 
and  of  the  Council  of  9  July  2008  setting  out  the  requirements  for  accreditation  and  market 
surveillance  relating  to  the  marketing  of  products  and  repealing  Regulation  (EEC)  No  339/93  gives 
market  surveillance  authorities  the  powers  to  obtain  all  necessary  documentation  from 
manufacturers to evaluate product conformity, to enter manufacturers' premises and take samples 
for testing, and in extreme cases to destroy products254.  

5. Energy sector  

Directive  2009/72/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  concerning 
common rules for the internal market in electricity and repealing Directive 2003/54/EC ('Electricity 
Directive') and Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 
concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC 

254 Article 19(1) of Regulation 765/2008.  

104 

 
 
                                                            
('Gas Directive') introduce rules with regard to the national regulatory authorities. Article 35 of the 
Electricity  Directive  and  Article  39  of  the  Gas  Directive  enhance  the  independence  of  regulatory 
authorities. In addition, Articles 36 and 37 of the Electricity Directive and Articles 40 and 41 of the 
Gas  Directive  provide  for  National  regulatory  Authorities  to  be  assigned  objectives,  duties  and 
powers. 

Under Article 37(4) of the Electricity Directive and Article 41(4) of the Gas Directive 'Member States 
shall ensure that regulatory authorities are granted the powers enabling them to carry out the duties 
referred  to  in  paragraph  1,  3  and  6  in  an  efficient  and  expeditious  manner.  For  this  purpose,  the 
regulatory authority shall have at least the following powers: (…) (c) to require any information from 
[electricity  and  natural  gas]  undertakings  relevant  for  the  fulfilment  of  its  tasks,  including  the 
justification for any refusal to grant third-party access, and any information on measures necessary 
to reinforce the network'. 

Regulation  1227/2011  on  wholesale  energy  market  integrity  and  transparency  (REMIT)  establishes 
an EU-wide monitoring framework for the integrity and transparency of wholesale electricity and gas 
markets.  The  Regulation  aims  at  preventing  use  of  insider  information  which  distorts  wholesale 
energy  prices.  REMIT  empowers  the  Agency  for  the  Cooperation  of  Energy  Regulators  to  monitor 
trading  activity  in  wholesale  energy  products  to  detect  and  prevent  trading  based  on  inside 
information  and  market  manipulation.  Member  States  may  provide  for  their  national  competition 
authority  or  a  market  monitoring  body  established  within  that  authority  to  carry  out  market 
monitoring  with  the  national  regulatory  authority.  Market  participants  are  obliged  to  provide  the 
Agency  and  national  regulatory  authorities  with  information  related  to  the  capacity  and  use  of 
facilities for production, storage, consumption or transmission of electricity or natural gas or related 
to  the  capacity  and  use  of  liquefied  natural  gas  (LNG)  facilities,  including  planned  or  unplanned 
unavailability  of  these  facilities,  for  the  purpose  of  monitoring  trading  in  wholesale  energy 
markets255.  REMIT  also  stipulates  that  the  reporting  obligations  on  market  participants  shall  be 
minimised  by  collecting  the  required  information  or  parts  thereof  from  existing  sources  where 
possible256.  This  Regulation  does  not  empower  the  Commission  to  request  firm-level  information 
from the Agency or the national authorities.  

6. Telecommunication sector  

The  regulatory  framework  in  the  telecommunication  sector  consists  of  five  Directives257 and  two 
Regulations258.   

255 Article 8(5) of Regulation 1227/2011.  
256 Ibid.  
257 Directive  2002/21/EC  of  the  European  Parliament  and  of  the  Council  of  7  March  2002  on  a  common 
regulatory framework for electronic communications networks and services (Framework Directive), Directive 
2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic 
communications  networks  and  services  (Authorisation  Directive),  Directive  2002/19/EC  of  the  European 
Parliament  and  of  the  Council  of  7  March  2002  on  access  to,  and  interconnection  of,  electronic 
communications  networks  and  associated  facilities  (Access  Directive),  Directive  2002/22/EC  of  the  European 
Parliament  and  of  the  Council  of  7  March  2002  on  universal  service  and  users'  rights  relating  to  electronic 

105 

 
 
  
                                                            
 
In order to carry out their functions under EU regulatory framework, national regulatory authorities 
in the telecommunication sector were granted investigative powers by EU legislation.  

The  Commission  may  obtain  information,  upon  a  reasoned  request,  from  national  authorities 
provided such information is necessary for the Commission to carry out its tasks under the Treaty. 
The  request  may  concern  information  that  the  national  authorities  have  previously  obtained  from 
firms. 

Article 5 of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on 
a common regulatory framework for electronic communications networks and services (Framework 
Directive) on provision of information reads as follows:  

'1.  Member States shall ensure that undertakings providing electronic communications networks and 
services provide all the information, including financial information, necessary for national regulatory 
authorities  to  ensure  conformity  with  the  provisions  of,  or  decisions  made  in  accordance  with,  this 
Directive  and  the  Specific  Directives.  In  particular,  national  regulatory  authorities  shall  have  the 
power  to  require  those  undertakings  to  submit  information  concerning  future  network  or  service 
developments  that  could  have  an  impact  on  the  wholesale  services  that  they  make  available  to 
competitors. Undertakings with significant market power on wholesale markets may also be required 
to submit accounting data on the retail markets that are associated with those wholesale markets. 

Undertakings  shall  provide  such  information  promptly  upon  request  and  in  conformity  with  the 
timescales  and  level  of  detail  required  by  the  national  regulatory  authority.  The  information 
requested  by  the  national  regulatory  authority  shall  be  proportionate  to  the  performance  of  that 
task.  The  national  regulatory  authority  shall  give  the  reasons  justifying  its  request  for  information 
and shall treat the information in accordance with paragraph 3. 

2.  Member States shall ensure that national regulatory authorities provide the Commission, after a 
reasoned request, with the information necessary for it to carry out its tasks under the Treaty. The 
information requested by the Commission shall be proportionate to the performance of those tasks. 
Where  the  information  provided  refers  to  information  previously  provided  by  undertakings  at  the 
request  of  the  national  regulatory  authority,  such  undertakings  shall  be  informed  thereof.  To  the 
extent  necessary,  and  unless  the  authority  that  provides  the  information  has  made  an  explicit  and 
reasoned request to the contrary, the Commission shall make the information provided available to 
another such authority in another Member State. 

Subject  to  the  requirements  of  paragraph  3,  Member  States  shall  ensure  that  the  information 
submitted to one national regulatory authority can be made available to another such authority in 

communications  networks  and  services  (Universal  Service  Directive),  Directive  97/66/EC  of  the  European 
Parliament  and  of  the  Council  of  15  December  1997  concerning  the  processing  of  personal  data  and  the 
protection of privacy in the telecommunications sector.  
258 Regulation  (EC)  No  1211/2009  of  the  European  Parliament  and  of  the  Council  of  25  November  2009 
establishing  the  Body  of  European  Regulators  for  Electronic  Communications  (BEREC)  and  of  the  Office  and 
Regulation (EU) No 531/2012 of the European Parliament and of the Council of 13 June 2012 on roaming on 
public mobile communications networks within the Union.  

106 

 
                                                                                                                                                                                         
the same or different Member State, after a substantiated request, where necessary to allow either 
authority to fulfil its responsibilities under Community law. 

3.  Where  information  is  considered  confidential  by  a  national  regulatory  authority  in  accordance 
with  Community  and  national  rules  on  business  confidentiality,  the  Commission  and  the  national 
regulatory authorities concerned shall ensure such confidentiality. 

4.  Member  States  shall  ensure  that,  acting  in  accordance  with  national  rules  on  public  access  to 
information  and  subject  to  Community  and  national  rules  on  business  confidentiality,  national 
regulatory  authorities  publish  such  information  as  would  contribute  to  an  open  and  competitive 
market. 

5.  National regulatory authorities shall publish the terms of public access to information as referred 
to in paragraph 4, including procedures for obtaining such access'. 

7. UK Competition and Markets Authority (CMA) 

CMA combines the powers of initial and in-depth investigations and it uses criminal and civil powers 
to gather information and conduct cases related to competition and consumer protection problems. 
These powers allow to examine why particular markets may be malfunctioning, taking an overview 
of regulatory and other economic drivers and patterns of consumer and business behaviour.  

CMA applies a range of analytical techniques, both qualitative and quantitative, so as to understand 
the nature of competition in the market under investigation as well as the impact of any features. 
CMA  will  seek  data  and  information  about  a  range  of  factors,  including  the  pricing  and  quality  of 
goods and services supplied in the market under investigation. The extent to which the CMA seeks 
to  quantify  particular  effects  and  the  degree  of  precision  with  which  this  is  attempted  normally 
varies from case to case. 

Market  studies  are  one  of  a  number  of  tools  at  the  CMA’s  disposal  to  address  competition  or 
consumer  protection  problems,  alongside  its  enforcement  and  advocacy  activities.  On  the  other 
hand,  market  investigations  are  more  detailed  and  targeted  examinations.  Formally,  market 
investigations  consider  whether  there  are  features  of  a  market  that  have  an  adverse  effect  on 
competition. If there is an adverse effect on competition, the CMA has the power to impose its own 
remedies,  but  if  it  exceeds  a  competition  law  problem  CMA  can  also  make  recommendations  to 
other bodies such as sectoral regulators (e.g. Ofcom, Ofgem, and others) or the government when 
new  legislation  might  be  required.  Investigation  references  can  be  ordinary  (not  cross-market 
references  and  without  public  interest  issues)  or  cross-market  (in  respect  of  specific  features  or 
combinations of features that exist in more than one market). 

Where the CMA considers that a person has, without reasonable excuse, failed to comply with any 
requirement of a notice issued by the CMA using its statutory investigatory powers, the CMA has the 
power to impose an administrative penalty (non-compliance includes failures to attend interviews or 
meetings with the CMA, failure to provide evidence, and failure to produce documents required by 
the CMA). Failure to provide requested information to CMA is considered a criminal offence. 

107 

 
A6.4. Examples of information exchange tools between different authorities   

1. 

Internal Market Information System (IMI)259 

IMI was established by Regulation (EU) No 1024/2012 of the European Parliament and of the Council 
of 25 October 2012 on administrative cooperation through the Internal Market Information System 
and repealing Commission Decision 2008/49/EC. The purpose of IMI is to improve the functioning of 
the  single  market  by  providing  an  effective,  user-friendly  tool  for  the  implementation  of 
administrative  cooperation  between  Member  States  and  between  Member  States  and  the 
Commission260.  IMI  enables  different  authorities  in  Member  States  to  exchange  information  with 
one  another  and  with  the  Commission.  Whereas  IMI  reinforces  administrative  cooperation  and 
allows  for  information  exchange  between  different  authorities,  it  does  not  empower  such 
authorities to gather information directly from market participants.  

2. 

Information exchange between market surveillance authorities – RAPEX and ICSMS 

Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting 
out the requirements for accreditation and market surveillance relating to the marketing of products 
and  repealing  Regulation  (EEC)  No  339/93,  sector  specific  EU  harmonization  legislation  aligned  to 
Decision 768/2008/EC of the European Parliament and of the Council of 9 July 2008 on a common  
framework  for  the  marketing  of  products,  and  repealing  Council  Decision  93/465/EEC,  Directive 
2001/95/EC  of  3  December  2001  on  general  product  safety  and  current  administrative  practice 
provide  tools  for  the  pooling  of  information  and  cooperation  between  market  surveillance 
authorities in different Member States. They include: 

Rapid  Information  System  (RAPEX)261 -  an  alert  system  that  facilitates  the  rapid  exchange  of 
information among EU countries and the Commission; 

Information  and  Communication  System  on  Market  Surveillance  (ICSMS) 262 –  the  system  for 
information exchange that includes best practices, results of joint actions, details of non-compliant 
products and information on national market surveillance programmes. 

3. 

SOLVIT  

SOLVIT is an on-line network, created by the Commission and the Member States, with the aim to 
solve cross-border problems that arise for individual citizens and businesses from the misapplication 
of single market law by public administrations. All EU Member States as well as Norway, Iceland and 
Liechtenstein,  have  created  a  SOLVIT  Centre,  in  most  cases  within  their  ministry  of  foreign  or 
economic affairs. These centres cooperate directly and share information via an on-line database (a 
module  of  the  Internal  Market  Information  system,  IMI)  to  solve  this  kind  of  problems  free-cost, 
rapidly  and  pragmatically.  As  such,  the  SOLVIT  Recommendation  neither  empowers  any  national 

259 http://ec.europa.eu/internal_market/imi-net/index_en.htm  
260 Recital 4 of Regulation 1024/2012.  
261 http://ec.europa.eu/consumers/consumers_safety/safety_products/rapex/index_en.htm  
262 https://webgate.ec.europa.eu/icsms/  

108 

 
                                                            
authority  nor  the  Commission  to  gather  information  directly  from  market  participants  for 
enforcement purposes.  

4. 

Body of European Regulators for Electronic Communications (BEREC) 

To ensure that the EU regulatory framework in the telecommunication sector is applied consistently, 
Regulation 1211/2009 established the Body of European Regulators for Electronic Communications 
(BEREC)  and  the  Office.   Currently  BEREC  is  a  forum  for  cooperation  among  national  regulatory 
authorities, and between National regulatory authorities and the Commission, in the exercise of the 
full  range  of  their  responsibilities  under  the  EU  regulatory  framework.  BEREC  does  not  have 
investigative  powers  of  its  own.  Nonetheless,  in  its  proposal  for  a  Directive  establishing  the 
European  Electronic  Communications  Code263,  presented  on  14  September  2016,  the  Commission 
proposes to  reinforce BEREC's  powers, by giving it the power to request information directly from 
market players.  

5. 

European Competition Network (ECN) 

Under Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition 
laid down in Articles 81 and 82 of the Treaty 'the Commission and the competition authorities of the 
Member  States  should  form  together  a  network  of  public  authorities  applying  the  Community 
competition  rules in  close  cooperation.  For  that  purpose it is necessary  to  set  up arrangements  for 
information  and  consultation.  (…)'264.  For  that  purpose  the  European  Competition  Network  was 
created.  A  key  element  of  the  functioning  of  the  network  is  the  power  of  all  the  competition 
authorities  to  exchange  and  use  information  (including  documents,  statements  and  digital 
information) which has been collected by them for the purpose of applying Article 101 or Article 102 
of the Treaty265. Article 12 of Regulation 1/2003 provides that 'for the purpose of applying Articles 
[101 and 102 TEFU] the Commission and the competition authorities of the Member States shall have 
the  power  to provide one another with and use in evidence any  matter of fact or of law, including 
confidential information'. 

6. 

Consumer Protection Cooperation Network  

Regulation (EC) No 2006/2004 of the European Parliament and of the Council of 27 October 2004 on 
cooperation between national authorities responsible for the enforcement of consumer protection 
laws  ('the  CPC  Regulation')  provides  a  cooperation  system  among  competent  authorities,  which  is 
designed  for  the  purpose  of  cross-border enforcement  of  Union  consumer  laws. Those  authorities 
cooperate within the Consumer Protection Cooperation Network which is a network of authorities 
responsible for enforcing EU consumer protection laws in EU and EEA countries. The network allows, 
for example, for information exchange between competent national authorities, as provided in the 
CPC Regulation.  

263 COM(2016) 590 final/2 2016/0288(COD). 
264 Recital 15.  
265 Commission  Notice  on  cooperation  within  the  Network  of  Competition  Authorities,  2004/C  101/03, 
paragraph 26.  

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A6.5. Examples of investigative powers of third country authorities  

Enforcement  Action  and 

Investigative  Powers  of  the  US  Federal  Trade  Commission  

[in the context of its consumer protection mission] 

The US Federal Trade Commission (FTC)266 

The  FTC  was  created  in  1914  by  the  Federal  Trade  Commission  Act  (FTCA).  Originally,  its  main 
mission was to enforce federal antitrust rules.  

Later  on,  however,  the  FTC  received  additional  powers  in  relation  to  consumer  protection.  Since 
1938,  it  deals  with  'unfair  and  deceptive  acts  or  practices'.  Section  5(a)(1)  FTCA  provides  that  '[…] 
unfair or deceptive acts or practices267 in or affecting commerce268 […] are hereby declared unlawful.' 
Additionally, the scope of action of the FTC under this second mission expanded to other (federal) 
consumer protection laws269.  

The following paragraphs deal with the enforcement action and the investigative powers of the FTC 
in relation to its second mission (protecting consumers).  

Enforcement action of the FTC in relation to consumer protection: introduction. 

Following an investigation (ex officio or upon complain), the FTC may initiate an enforcement action 
if it has 'reason to believe' that the law is being or has been violated (cf. Section 5(b) FTCA). The FTC 
is empowered to: 

 

(i)  stop  unfair,  deceptive  or  fraudulent  practices  in  the  market270,  through  administrative 
enforcement, by issuing cease and desist orders271;  

266 See generally: www.ftc.gov/  
267 According  to  Section  5(n)  FTCA,  unfair  acts  or  practices  are  those  'likely  to  cause  substantial  injury  to 
consumers who are not reasonably avoidable by consumers themselves and not outweighed by countervailing 
benefits to consumers or to competition'. 
268 'Commerce' is to be understood as inter-State commerce or commerce between the US and a third country. 
The 'commerce' clause in the US constitution is the one that entitles the Federal legislator to act (Section 8 of 
the Constitution says that 'The Congress shall have Power […] to regulate Commerce with foreign Nations, and 
among the several States, and with the Indian Tribes […]'). This clause is, broadly speaking, the equivalent of 
the single market clauses enabling the EU legislator to act.  
269 Other federal consumer protection laws state that certain (defined) trade practices must be considered as if 
they  were  'unfair  or  deceptive'  acts  or  practices  under  Section  5(a)  FTCA.  These  laws  include  e.g.  the  Equal 
Credit Opportunity Act, Truth-in-Lending Act, Fair Credit Reporting Act, the Cigarette Labelling Act, the Do-Not-
Call  Implementation  Act  of  2003,  the  Children's  Online  Privacy  Protection  Act,  Fair  and  Accurate  Credit 
Transactions Act of 2003, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 
and others. For a description of these laws, see https://www.ftc.gov/enforcement/statutes 
270 Section 5(a)(2): 'The Commission is hereby empowered and directed to prevent persons, […], from using […] 
unfair or deceptive acts or practices in or affecting commerce.' 
271 Section  5(b)  provides  for  the  procedural  steps.  Appeals  for  review  of  cease  and  desist  orders  may  be 
brought before an US Court of Appeals. In addition, the FTC may seek, by civil action before a federal district 
court, consumer redress from the infringer for the consumer injury caused by the act or practice that was at 
issue in the administrative proceeding (cf. section 19 FTCA). 
The FTC may also obtain, before a federal district court, civil penalties from the infringer who does not respect 
the cease and desist order (cf. Section 5(m) FTCA) 

110 

 
                                                            
 

 

(ii) directly sue infringers before federal district courts, seeking preliminary and permanent 
injunctions to remedy 'any provision of law enforced by the [FTC]'272; and  
(iii) develop (since 1975) trade regulation rules to remedy unfair or deceptive practices that 
occur on an industry-wide basis (cf. Section 18 FTCA)273.  

The FTC has also a role in educating market participants (both businesses and consumers). 

Investigative powers of the FTC in relation to its consumer protection mission274 

Under its consumer protection mission, the FTC may use two different investigative tools275: 

  Section  6(b)  order.  Under  Section  6(b)  FTCA,  the  FTC  may  require  (by  order)  the  filing  of 
'annual or special […] reports or answers in writing to specific questions'276 for the purpose of 
obtaining  information  about  'the  organization,  business,  conduct,  practices,  management, 
and relation to other corporations, partnerships, and individuals' of the entities to whom the 
inquiry is addressed. 

Section  6(b)  orders  enable  the  FTC  to  conduct  wide-ranging  economic  studies  that  do  not 
have  a  specific  law  enforcement  purpose.  The  FTC  may  make  public  portions  of  the 
information  that  it  obtains,  where  disclosure  would  serve  the  public  interest  (cf.  Section 
6(f)), unless information is a trade secret or privileged. 

  Civil  Investigative  Demands  (CIDs)  –  Section  20  FTCA.  The  FTC  Bureau  of  Consumer 
Protection  uses  CIDs  to  investigate  possible  'unfair  or  deceptive  acts  or  practices  in  or 
affecting  commerce'.  Similarly  to  subpoenas277,  a  CID  may  be  used  to  obtain  existing 
documents  or  oral  testimony.  In  addition,  a  CID  may  also  be  used  to  require  that  the 
recipient files written reports or answers to questions and to submit tangible things. 

272 Section  13(b)  FTCA.  Following  case-law  development,  courts  grant,  in  addition  to  injunctions,  monetary 
equitable relief (such as restitution and rescission of contracts) to remedy past infringements. 
273 The  FTC  is  enabled  to  prescribe  '(A)  interpretative  rules  and  general  statements  of  policy  with  respect  to 
unfair or deceptive acts or practices in or affecting commerce (within the meaning of section [5(a)(1) FTCA]), 
and (B) rules which define with specificity acts or practices which are unfair or deceptive acts or practices in or 
affecting commerce (within the meaning of section [5(a)(1) FTCA])' (cf. Section 18(a)(1) FTCA). Other statutes 
also provide rulemaking power to the FTC. 
The  FTC  may  only  prepare  such  rules  where  'it  has  reason  to  believe  that  the  unfair  or  deceptive  practices 
which are the subject of the proposed rulemaking are prevalent' (cf. Section 18(a)(3) FTCA).  
Infringers of FTC rules of this kind are liable for civil penalties (cf. Section 5(m)(1)(A) FTCA) and for any injury 
caused to consumers (cf. Section 19 FTCA).  
274 See generally: www.ftc.gov/about-ftc/what-we-do/enforcement-authority  
275 The FTCA provides  the  FTC with  a  general  investigative authority  in  so  far  as  the  FTC  'may prosecute  any 
inquiry  necessary  to  its  duties  in  any  part  of  the  United  States'  (cf.  Section  3  FTCA).  Also,  Section  6(a)  FTCA 
states that the FTC may 'gather and compile information concerning, and to investigate from time to time, the 
organisation,  business,  conduct,  practices,  and  management  of  any  person,  partnership,  or  corporation 
engaged  in  or  whose  business  affects  commerce,  excepting  banks,  savings  and  loan  institutions  […],  Federal 
credit unions […] and common carriers […], and its relation to other persons, partnerships, and corporations.'. 
276 Emphasis added. 
277 Subpoenas  under  Section  9  FTCA  are  only  used  by  the  FTC  Bureau  of  Competition  for  the  purpose  of 
enforcing antitrust law. 

111 

 
                                                            
A recipient of a Section 6(b) order or of a CID may raise objections by filing a petition to modify or 
set aside the order/CID. 

If a recipient of the request fails to comply with a Section 6(b) order or with a CID (either without 
filing  a  petition  to  modify/set  aside,  or  after  a  duly  filed  petition  is  denied),  the  FTC  may  seek 
enforcement  of  the  order  or  CID  before  a  federal  (district)  court  (cf.  Section  9  FTCA  and  Section 
20(e)). The court may issue an order requiring compliance. 

In  addition,  in  the  case  of  a  Section  6(b)  order,  there  are  penalty  payments  for  failing  to  provide 
information within the time-limit set by the FTC (USD 110 per day of non-compliance). The FTC may 
bring a civil suit before a federal court to recover the relevant amount (cf. Section 10 FTCA). 

How different are the FTC powers compared to other US executive agencies? 

Administrative  subpoena  authority.  The  US  legislator  has  granted  some  form  of  'administrative 
subpoena  authority'  to  most  federal  agencies  and  entities  (with  many  agencies/entities  holding 
several  such  authorities),  for  use  in  civil  (or  criminal)  investigations.  Administrative  subpoena 
authorities allow executive branch agencies/entities to issue a compulsory request for documents or 
testimony  without  prior  judicial  approval  (i.e.  from  a  grand  jury,  court  or  other  judicial  entity).  A 
report  made  by  the  Office  of  Legal  Policy  of  the  US  Department  of  Justice  to  Congress  identified 
more  than  300  existing  administrative  subpoena  authorities  held  by  various  executive  branch 
entities under the law applicable at the time of the report278. 

Judicial review. The issuance of an administrative subpoena is subject to judicial review: either upon 
a  recipient's  motion  to  modify  or  quash  the  subpoena  or  upon  an  agency/entity's  initiation  of  a 
judicial enforcement action. 

The  US  Supreme  Court  has  construed  administrative  subpoena  authorities  broadly  and  has 
consistently  allowed  expansion  of  the  scope  of  administrative  investigative  authorities,  including 
subpoena authorities, in recognition of the principle that overbearing limitation of these authorities 
would leave administrative entities unable to execute their respective statutory responsibilities. 

Enforcement  of  administrative  subpoenas.  Federal  agencies/entities  depend  on  federal  district 
courts  to  enforce  administrative  subpoena  requests.  Depending  on  the  authority  received,  the 
agency/entity may do this directly or may need to request the assistance of the Attorney General. 

Non-compliance  with  an  (enforced)  administrative  subpoena  is  subject  to  sanctions.  Most  statutes 
authorizing  administrative  subpoena  enforcement  in  federal  district  court  authorise  the  court  to 
impose contempt sanctions upon a recipient who continues to refuse to comply even after a court 
order  of  compliance.  Certain  statutes  authorising  enforcement  by  a  federal  district  court  also 
provide for specific penalty ranges or limitations for findings of  criminal or  civil contempt  of court 
based on non-compliance with a court order to comply with an administrative subpoena request. 

278 US Department of Justice, Office of Legal Policy, 'Report to Congress on the Use of Administrative Subpoena 
Authorities by Executive Branch Agencies and Entities', pursuant to Public Law 106-544. 13 May 2002.  

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Australian Government Productivity Commission 

The Productivity Commission279 is the Australian Government's independent research and advisory 
body on a range of economic, social and environmental issues, located within the Treasury. It was 
created  by  an  Act  of  Parliament  in  1998,  to  replace  the  Industry  Commission,  Bureau  of  Industry 
Economics and the Economic Planning Advisory Commission.  

The core function of the Commission is to conduct public inquiries at the request of the Australian 
Government on key policy or regulatory issues. The subject-matter of public inquiries ranges widely 
from childcare or access to justice to public infrastructure or electricity networks. In the context of 
public  inquiries  the  Commission  provides  the  Government  with  policy  options  representing 
alternative  means  of  addressing  the  issues,  as  well  as  a  preferred  option.  It  may  also  make 
recommendations  on  any  matters  it  considers  relevant  to  the  inquiry.  A  public  hearing  or  other 
consultative forums are held in the inquiry process.  

The  Commission  also  undertakes  a  variety  of  research  at  the  request  of  the  Government  and  to 
support  its  annual  reporting,  performance  monitoring  and  other  responsibilities.  For  example,  the 
annual  Report  on  Government  Services  provides  information  on  the  equity,  effectiveness  and 
efficiency  of  a  range  of  government  services  in  Australia,  including  health,  education,  justice, 
housing and community services. 

A  separate  unit  within  the  Commission,  the  Australian  Government  Competitive  Neutrality 
Complaints  Office,  handles  private  sector  complaints  about  unfair  competition  from  the  public 
sector.  Any  individual,  organisation  or  government  body  with  an  interest  in  the  application  of 
competitive neutrality may lodge a complaint. 

To conduct its inquiries with hearings and to assess complaints, the Commission is  empowered  to 
request  information  from  any  person.  If  the  Commission  has  reason  to  believe  that  a  person  is 
capable of giving information or producing documents relevant to the inquiry, the Commission may 
issue  a  notice  to  that  person  obliging  it  to  provide  the  relevant  information  and  documents.  The 
notice must specify the period within which information must be provided. The intentional failure to 
provide  information  to  the  Commission  is  a  criminal  offence,  subject  to  the  penalty  of  up  to  6 
months  imprisonment.  A  court  may  impose  an  appropriate  fine  instead  of  or  as  well  as 
imprisonment.  

279 Source: website of the Commission: http://www.pc.gov.au/, Productivity Commission Act 1998 available at: 
https://www.legislation.gov.au/Details/C2016C00867 

113 

 
 
 
 
                                                            
ANNEX 7: DISCARDED OPTIONS 

A7.1. Reuse of Competition and Consumer Protection tools for coordination in Option 3 

Under  Option  3,  one  could  conceive  extending  the  scope  of  existing  investigative  powers  of 
identified  national  authorities  already  active  for  specific  areas  of  the  single  market: 
i.e. 
competition280 or consumer protection. This would allow the Commission to channel its request for 
information through specific existing networks somehow alleviating the coordination efforts.  

As  the arguments  for  discarding  those sub-options  are  largely  similar,  they  are  discussed  jointly  in 
the remainder of this section. 

Competition.  The  Commission  could  in  theory  rely  on  the  NCAs  to  carry  out  the  necessary 
information collection and use the ECN for coordinating purposes281.  

However, the reuse of existing procedures in the competition area however does not appear to be a 
viable option.  

First,  this  new  task  would  go  well  beyond  the  existing  role  of  NCAs  in  enforcing  Union  rules  on 
competition.  Regulation  1/2003  (on  antitrust)  empowers  the  NCAs  to  co-enforce  the  Union 
competition rules, but it does not provide for a mechanism whereby information is collected by the 
NCAs on behalf of the Commission. This is also the case for Regulation (EU) 2015/89 (on State aid). 
Moreover, in the area of merger control, Regulation 139/2004 only applies to concentrations with an 
Union  dimension,  based  on  turnover  thresholds,  for  the  review  of  which  the  Commission  has 
exclusive  competence;  mergers  below  these  thresholds  are  assessed  by  NCAs  on  the  basis  of 
national law. The NCAs are therefore not empowered to issue requests for information on behalf of 
the Commission pursuant to Regulation 139/2004. Additionally, the legal basis in Regulation (EC) No 
1/2003,  Regulation  (EU)  2015/1589  and  Regulation  (EC)  No  139/2004  does  not  allow  the  use  of 
information  collected  for  purposes  other  than  the  enforcement  of  the  Union  competition  rules. 
Legislating at Union level to ensure that the NCAs have such new role would seem disproportionate 
as it would go well further than is provided for in Union law on competition enforcement.  

Second,  obliging  NCAs  to  undertake  such  information  collection  task  would  risk  undermining  their 
ability to carry out their core competition enforcement activities unless they were given additional 
resources  to  do  this.  Currently,  not  all  NCAs  have  the  means  and  instruments  they  need  to 
effectively  enforce  the  EU  competition  rules.  A  number  of  NCAs  do  not  have  effective  tools  to 

280 In the domain of competition law, the Commission is already empowered to issue requests for information 
from  market  players  in  the  area  of  antitrust,  mergers,  and  State  aid.  The  Commission  uses  these  tools  to 
enforce the Union antitrust and merger control rules and to ensure that State aids are compatible with Union 
rules,  as  well  as  to  launch  investigations  into  sectors  of  the  economy  or  into  certain  aid  instruments  across 
several Member States (so-called 'sector inquiries'). 
281 NCAs are empowered by Regulation 1/2003 to apply the EU competition rules alongside the Commission. 
To that end, the NCAs and the Commission cooperate together in the ECN. 

114 

 
 
 
                                                            
request information which would be backed up by deterrent fines to compel companies to comply. 
Some NCAs also lack the resources they need to effectively enforce the Union competition rules, let 
alone take on a new task. The Commission is looking into how to resolve these issues.282 

Consumer  protection.  In  the  domain  of  consumer  protection,  enforcement  of  Union  consumer 
legislation is in the competence of the Member States. The Commission does not have investigation 
and enforcement powers.  

The  CPC  Regulation283 currently  vests  the  national  authorities  with  a  set  of  minimum  investigation 
and  enforcement  powers  to  combat  transnational  infringements  to  Union  consumer  legislation 
listed  in  the  Annex  of  the  CPC  Regulation.  Investigation  powers  currently  available  for  the  CPC 
authorities include among others (1) access to any  relevant document, in any form, related to the 
intra-Community  infringement,  (2)  possibility  to  require  the  supply  by  any  person  of  relevant 
information  related  to  the  intra-Community  infringement,  and  (3)  the  possibility  to  carry  out 
necessary  on-site  inspections.  Depending  on  the  enforcement  system  in  place,  the  competent 
authorities  either  exercise  these  powers  directly  (possible  subject  to  judicial  supervision)  or 
indirectly by applying to competent courts to seek the necessary judicial orders.  

These  powers  and  cooperation  mechanisms  available  for  national  authorities  under  the  CPC 
Regulation are used to address intra-Community infringements of Union consumer legislation listed 
in  the  Annex  of  the  Regulation.  For  example,  enforcers  using  these  minimum  powers  ensure  that 
consumers  have  easily  accessible  information  on  the  key  characteristics  of  the  products,  contact 
details of traders or that consumers are adequately informed about the price of products/services 
and  payment  arrangements.  The  CPC  Regulation  does  not  specify  what  type  of  information 
collection methods Member States should apply and does not detail the procedure on penalties or 
sanctions that can be imposed on the companies for incomplete, misleading, or missing information. 
Member States retain flexibility when it comes to the exercise of the powers and the use of national 
procedures for the exercise of these powers. The time limits for providing the information are also 
not precisely defined284. However, this should change in the future, as the Commission's proposal to 
revise the CPC Regulation foresees time-limits and more streamlined procedures for cooperation. 

The CPC Regulation provides a complete cooperation system among competent authorities, which 
was  specifically  designed  for  the  needs  of  consumer  protection  and  cross-border  enforcement  of 
Union  consumer  laws.  The  scope  of  the  CPC  cooperation  is  defined  by  its  annex  which  already 

2015, 

282 European Commission, 'Inception 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', 
http://ec.europa.eu/smart-
November 
regulation/roadmaps/docs/2017_comp_001_iia_ecn_project_en.pdf  
283Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the  Council  of  27  October  2004  on 
cooperation between national authorities responsible for the enforcement of consumer protection laws, OJ L 
364, 9.12.2004, p. 1. 
284 According  to  Article  2  of  the  implementing  rules,  the  requested  authorities  shall  respond  to  requests  for 
mutual  assistance  from  applicant  authorities  to  the  best  of  their  ability,  making  use  of  all  the  appropriate 
investigation and enforcement powers and without delay. Moreover, the time-limits for addressing requests 
for mutual assistance under Articles 6 and 8 of Regulation (EC) No 2006/2004 shall be agreed by the applicant 
authority and the requested authority on a case-by- case basis, using the database standard forms. 

115 

 
                                                            
contains consumer-relevant legislation. This annex can be amended easily, if, for example, there is a 
need  to  add  a  piece  of  concrete  consumer  legislation  so  that  it  is  enforceable  in  a  cross-border 
context. 

The  CPC  Regulation  applies  only  to  Business-to-Consumers  legislation.  It  works  with  the  concepts 
that pertain to consumer protection, such as 'collective interest of consumers', 'consumer harm', or 
'effect  on  consumers'.  These  concepts  cannot  be  transferable  to  other  fields  such  as  Business-to-
Business  or  Business  to  end-user  relations.  The  evaluation  of  the  CPC  Regulation  in  2012,  among 
other matters, also looked at the possible extension of the CPC cooperation to Business-to-Business 
legislation 285.  Business-to-business  provisions  are  laid  down  in  acts  like  the  misleading  and 
comparative advertising legislation286, where it is acknowledged that micro and small businesses face 
the same difficulties as consumers when trading cross-border. The evaluation concluded that while 
there  was  some  rationale  for  the  inclusion,  there  was  little  support  from  the  CPC  stakeholders  as 
business-to-business  was  not  their  main  responsibility.  Further,  changes  to  substantive  consumer 
laws concerned would be necessary to extend the protection to business-to-business relations and 
only subsequently enable responsible national competent authorities to enforce these aspects. The 
inclusion of business-to-business aspects was therefore not recommended287. 

The current provisions of the CPC Regulation endow the Commission with a coordinating role or an 
opinion  formulating  role  in  cases  where  CPC  competent  authorities  have  not  found  a  satisfactory 
solution. However, the proposal for a new CPC Regulation of 25 May 2016 contains a stronger role 
for  the  Commission  in  coordinating  the  authorities.  It  proposes  to  put  in  place  a  stronger 
coordinated  mechanism  to  tackle  practices  which  harm  a  large  majority  of  consumers  (in  75%  of 
Member States or more that are amounting to 75% of the Union population or more). In such cases 
the  Commission  will  launch  a  procedure  requiring  national  authorities  to  coordinate  a  common 
position assessing the problematic practices. Overall Member States are and will remain in charge of 
investigation  and  enforcement.  Under  the  CPC  proposal,  in  specified  cases  of  Union  dimension, 
Member  States'  authorities  will  do  so  with  the  assistance  of  the  Commission  in  a  coordinated 
manner by pooling their resources, expertise and thus saving resources and time. 

However, the reuse of existing procedures in the consumer protection area for collecting firm-level 
information  for  horizontal  single  market  purposes  does  not  appear  to  be  a  viable  option  either. 
Entrusting  consumer  protection  authorities  with  a  new  task  of  collecting  information  for  the 
Commission in other areas than consumer protection would go well beyond their existing role.  The 

285 P. 9 of the evaluation report: 
http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf  
286 Directive 2006/114/EC concerning misleading and comparative advertising, OJ OJ L 376, 27.12.2006, p. 21. 
287 In  January  2016,  the  Commission  published  a  roadmap  on  the  REFIT  Fitness  check  of  consumer  law 
(http://ec.europa.eu/smart-regulation/roadmaps/docs/2016_just_023_evaluation_consumer_law_en.pdf). 
Next  to  their  application  in  the  business-to-consumer  relations,  the  Fitness  Check  will  analyse  the  need  and 
potential for the application of the existing consumer rules also in business-to-business (B2B) transactions, in 
particular  the  transactions  with  the  SMEs,  by  taking  account  of  the  B2B  rules  already  laid  down  in  the 
Misleading and Comparative Advertising Directive, and in transactions between businesses and non-for-profit 
entities that do not qualify as consumers under the current rules. The Fitness Check will also analyse the issues 
arising  in  consumer-to-consumer  (C2C)  transactions  (increasingly  relevant  due  to  the  rise  of  the  sharing 
economy) and in consumer-to-business (C2B) relations. 

116 

 
                                                            
 
CPC framework has worked well for enforcement of Union consumer protection legislation288, which 
is  listed  in  the  annex  of  the  CPC  Regulation,  in  a  cross-border  context.  However,  turning  this 
instrument  into  a  tool  for  all  single  market  information  requests  appears  disproportionate 
considering  the  current  responsibilities  of  consumer  protection  authorities.  This  would  completely 
change the nature of these authorities. 

Moreover,  in  case  the  CPC  model  were  to  be  extended  to  the  rest  of  the  single  market  acquis, 
significant changes would have to be introduced to the CPC framework (such as the extension of the 
CPC  to  business-to-business  legislation).  This  would  be  complex  and  costly.  Furthermore,  such 
extension of  the CPC  framework to  business-to-business  legislation  was  not  supported  by  the CPC 
stakeholders.  Thus,  the  cooperation  framework  under  the  CPC  Regulation  is  not  suitable,  without 
fundamental changes, to cover the complete scope of the SMIT initiative. 

A7.2. Options not discussed in the impact assessment 

Two  options  that  were  considered  at  the  phase  of  inception  impact  assessment289 were  discarded 
upfront  as  not  proportional:  enhancing  the  coverage  of  European  statistics  (option  6)  and 
introduction of regular reporting obligation via Accounting Directive (option 7). They are analysed in 
more detail below. 

Option 6: Enhancing the coverage of European statistics 

This  Option  would  enhance  the  coverage  of  official  statistics  gathered  by  Eurostat  through 
introducing  new  questions  to  the  appropriate  official  statistical  surveys.  The  new  questions  would 
aim at collecting the information needed for single market enforcement. In addition to this, access 
to  Eurostat's  micro  data  could  be  considered  (e.g.  access  to  individual  anonymised  responses  to 
surveys with full respect of statistical confidentiality) in order to allow for firm-level analysis. 

Such new statistical obligation would have to be very wide in order to anticipate future data needs 
and different scenarios. This would make new surveys very long and potentially unacceptable, both 
to  national  statistical  offices  and  to  surveyed  companies.  Frequent  changes  to  statistical 
questionnaires would also be required. Adapting the questionnaires usually takes a lot of time and 
statistical variables, in addition, cannot be changed at short notice as such change would generally 
require  an  amendment  of  concerned  regulations.  Any  change  to  the  questionnaires  additionally 
disrupts data continuity (long time series are preferred to one-off observations). It also introduces 
uncertainty to market players who need to provide such information.  

In terms of addresses of the obligation, this option would target entire populations: i.e. all 21 million 
companies in the European Union would be covered, as statistical units, by this obligation to provide 
data periodically (depending on the statistics even several times per year). 

288 See  the  Commission's  report  on  assessing  the  effectiveness  of  the  CPC  Regulation,  COM(2016)  284  final: 
http://ec.europa.eu/consumers/consumer_rights/unfair-trade/docs/cpc-revision-report_en.pdf  
289 http://ec.europa.eu/smart-
regulation/roadmaps/docs/2017_grow_014_single_market_information_tool.pdf  

117 

 
                                                            
There  could  be  problems  with  timeliness  of  information  as  (a)  there  is  a  delay  between  data 
collection  and  presentation  of  information  by  Eurostat,  and  (b)  some  Eurostat  surveys  are  not 
conducted frequently enough.  

The  question  of  the  confidentiality  of  the  information  collected  and  any  issue  related  to  non-
compliance with the obligation would be dealt with by default national statistics rules. It should be 
noted, however, that no sectorial statistical legislation foresees explicit sanctions for firms which do 
not  provide  data  to  Eurostat.  The  relations  between  national  statistical  authorities  and  statistical 
units/respondents are regulated in national law. A Member State could thus include sanctions in its 
national statistical law in case of lack of reply from the statistical units. Article 26 of Regulation (EC) 
No 223/2009 on European statistics290 establishes that the Member States and the Commission shall 
take appropriate measures to prevent and penalise any violations of statistical confidentiality.  

More  importantly,  in  terms  of  use,  data  from  official  statistics  can  only  be  used  in  cases  where 
aggregated information would be needed. Therefore, option 6 would be of little use for infringement 
cases where, firm-level specific information would be required.  

Official  statistics  rely  on  the  concept  of  statistical  confidentiality:  information  gathered  from 
individuals or legal persons (enterprises) is treated as confidential. This is a fundamental principle in 
statistics  as  it  ensures  confidence  of  the  persons/organisations  providing  such  information. 
Therefore,  all  data  gathered  for  statistical  purposes  can  only  be  used  for  statistical  and  scientific 
purposes, and it can only be disseminated in aggregated format (thus protecting the identity of the 
respondents). Regulation 223/2009 states in its recital 23  that 'the confidential information which 
the  national  and  Community  statistical  authorities  collect  for  the  production  of  European  statistics 
should  be  protected,  in  order  to  gain  and  maintain  the  confidence  of  the  parties  responsible  for 
providing that information'. 

Thus,  firm-level  statistical  data  and  information  (often  referred  to  as  'micro  data')  is  strictly 
confidential  and  it  is  protected  by  the  statistical  confidentiality  rule  (see  Regulation  223/2009, 
Articles  2,  18,  20-26).  Access  to  firm-level  confidential  data  may  only  be  granted  to  researchers 
under strict conditions and only for statistical or scientific purposes. 

Therefore, even if some new variables are included in official statistics, these would only be available 
for administrative use in  aggregated format, and no data on specific firms would be available (the 
same holds of course also for all already available statistical data).  

This  option  presents  obvious  limitations  towards  the  achievement  of  the  objectives  discussed  in 
Section 4 of this impact assessment. Under this option, information is collected on a regular basis, 
whereas  the  essence  of  the  problem  is  to  react  with  surgical  information  requests  only  when  and 
where the specific single market problem arises. In particular, requests for information under Option 

290 Regulation  (EC)  223/2009 of  the European  Parliament  and  of  the  Council  of 11 March 2009  on European 
statistics and repealing Regulation (EC, Euratom) No 1101/2008 of the European Parliament and of the Council 
on  the  transmission  of  data  subject  to  statistical  confidentiality  to  the  Statistical  Office  of  the  European 
Communities, Council Regulation (EC) No 322/97 on Community Statistics, and Council Decision 89/382/EEC, 
Euratom  establishing  a  Committee  on  the  Statistical  Programmes  of  the  European  Communities,  OJ  L  87, 
31.3.2009, p. 164. 

118 

 
                                                            
6  would  not  target  specific  companies  (but  rather  entire  populations)  nor  would  the  requests  for 
information  be  triggered  by  specific  instances  of  single  market  malfunctioning.  Instead,  Option  6 
would  oblige  all  European  companies  to  provide  information  that  could  cover  a  large  part  of 
potential instances of single market malfunctioning. This option would, therefore, on the one hand, 
significantly  increase  the  administrative  burden  for  the  European  companies  while,  on  the  other 
hand,  it  would  not  allow  ensuring  that  the  information  received  through  such  means  will  be 
available timely or that it will cover the needs of targeted enforcement. 

Administrative  burden  could  be  partially  addressed  by  the  Framework  Regulation  Integrating 
Business  Statistics  (FRIBS)  initiative291,  which  aims  at  creating  a  single  streamlined  framework  for 
business statistics data collection. By using common definitions, eliminating overlaps, improving data 
interconnection  and  exchange  as  well  as  better  use  of  existing  sources,  it  will  reduce  the 
administrative burden on companies and improve quality, comparability and timeliness of data. This 
initiative  has  a  special  focus  on  delivering  high  quality  information  on  service,  globalisation  and 
entrepreneurship,  which  are  priorities  for  the  Commission.  Being  part  of  the  Regulatory  Fitness 
programme,  FRIBS  emphasises  burden  reduction  and  simplification,  thus  keeping  the  burden  on 
companies  at  a  minimum:  for  instance,  the  introduction  of  new  data  requirements  is  usually 
balanced  by  the  elimination  of  an  existing  requirement  which  is  deemed  less  useful  by  users. 
However, as option 6 would require the addition of numerous extra variables, it is unlikely that even 
an initiative like FRIBS would be able to compensate for such an increased burden. 

Therefore option 6 is neither a time-effective nor a cost-effective option. 

Option 7: Introduction of regular reporting obligation via Accounting Directive 

Under  this  option,  the  Commission  would  amend  companies'  reporting  obligations  in  the  relevant 
sector legislation. For example, in order to facilitate the potential enforcement of single market rules 
and  the  design  of  Union  policy  the  Commission  could  propose  amendments  to  the  existing 
Accounting Directives that would oblige companies to provide factual market and firm data (e.g. cost 
structure,  profits,  pricing  policies,  cross-border  transaction  costs,  volumes,  supply  contracts, 
employment contracts) and other information as part of their annual financial reporting obligations. 
In terms of addressees of such obligation, 1.7 million limited-liability companies, already in the scope 
of these directives, would be covered. 

In  order  to  obtain  information  relevant  for  the  preparation,  evaluation,  and  enforcement  of  EU 
single market policy, the reporting obligation would either have to be very wide (so as to anticipate 
in  abstracto  future  data  needs  and  different  single  market  enforcement  scenarios)  or  frequent 
changes  to  the  directive  would  be  necessary.  The  question  of  non-compliance  with  the  obligation 
would  be  dealt  by  the  default  Directive  rules.  Furthermore,  the  obligation  to  audit  the  additional 
information (as specified in the Accounting Directives) would be maintained. 

291 Inception Impact Assessment on Framework Regulation Integrating Business Statistics (FRIBS), January 
2016, http://ec.europa.eu/smart-
regulation/roadmaps/docs/2012_estat_011_regulation_integrating_business_stats_en.pdf  

119 

 
                                                            
Very wide reporting obligation would increase the administrative burden for the replying companies. 
Moreover, introduction of frequent changes to the accounting directives to adjust the scope of the 
obligations  would  further  increase  the  administrative  burden  (time  to  adjust)  and  would  result  in 
uncertainty  to  market  players.  Companies  and  accounting  service  providers  would  thus  need  to 
frequently accommodate their reporting systems and data gathering methods. 

The  effectiveness  of  Option  7  is  similar  to  that  of  Option  6.  It  also  presents  obvious  limitations 
towards  the  achievement  of  the  objectives  discussed  in  Section  4  of  the  impact  assessment.  This 
option would also collect information on a regular annual basis, whereas the essence of the problem 
is  to  react  with  surgical  information  requests  only  when  and  where  the  specific  single  market 
problem  arises.  The  requests  for  information  would  not  target  specific  companies  nor  would  such 
requests  be  triggered  by  specific  instances  of  single  market  malfunctioning.  Option  7  would 
significantly  increase  the  administrative  burden  for  European  companies,  but  it  would  not  allow 
ensuring that the information is received timely and that it is fit for purpose.  

Conclusions  

Table A7.1. Comparison of total EU28 annual costs of discarded options per stakeholder type. 

Option 
6 

Stakeholder 
Firms  
Member States 

7 

Firms 
Firms  audit  

Costs 

Min. (EUR) 
10.5m 
8.1m 

Max. (EUR) 
38.5m 
29.6m 

Total option 6 

18.6m 

68.1m 

537m 
274m 

1, 807m 
931m 

811m 

2,738m 

Total option 7 
Note: See Annex 8 for calucation details 

In conclusion, solutions proposed in both Options 6 and 7 would introduce significant administrative 
burden to the replying companies as well as the institutions responsible for collecting and processing 
the  information  (Tab  A7.1).  Moreover,  they  would  only  partially  alleviate  the  existing  problems  as 
they  would  not  be  suitable  for  targeted,  timely  information  requests.  The  generation  of  more 
information does not necessarily mean better or more-informed decision making. For information to 
be effective, it must address specific needs and be in a form that can be accessed, processed, and 
used  by  policymakers.  For  the  reasons  described  above,  Options  6  and  7  have  been  discarded 
upfront and their impacts are not fully assessed in the impact assessment.   

120 

 
 
 
 
ANNEX 8:  COST-BENEFIT ESTIMATION 

This annex estimates the costs and benefits of the different options. It is based on available studies, 
evidence  from  public  consultations  and  assumptions  on  the  operation  and  use  of  different 
options.292 The  figures  presented  here  should  be  interpreted  as  rough  estimations  rather  than  an 
exact monetary outcome.  

A8.1. Costs  

Availability of cost data 

included 

Data on firms' costs of replying to public inquiries are not collected. Therefore, a dedicated question 
quantifying  such  costs  was 
in  the  firm  questionnaire  of  the  public  consultation 
accompanying this initiative. Only one (large) firm replied stating that it had taken 30 man-hours to 
prepare  a  response,  noting  however  that  this  number  was  relatively  low  because  the  data  had 
already been gathered earlier for another purpose. This firm had also paid around EUR4,000 for legal 
advice.  The  other  respondents  only  replied  qualitatively,  stating  that  providing  answers  to 
information  requests  is  very  burdensome.  These  scarce  answers  confirm  the  problem  driver  that 
firms are reluctant to share any cost data. In order to estimate the costs of preparing and submitting 
information, other data/assumptions are needed.  

Assumptions on cost per reply to a request for information 

The  notes  to  financial  accounts  provide  additional  detailed  numerical  and  descriptive  analyses  to 
support  the  financial  statements.  They  contain  around  50  different  disclosure  requirements  (the 
precise number depends on the size and operational complexity of each firm). Information on firms' 
costs of preparing these notes was gathered in several studies in 2009 and 2010.293 

The cost of preparing notes to financial accounts will be used as a proxy for the cost of replying to 
information  requests  for  the  following  reasons.  First,  the  costs  reported  in  the  aforementioned 
studies refer to preparing information that is already available, which is in line with SMIT principles. 
Second, the information quality to be requested via SMIT is likely to be similar to the notes' quality, 
which combine numbers with descriptions (although it is unlikely to cover as many items as current 
full notes do).  

Two  scenarios  will  be  analysed:  (1)  maximum,  based  on  the  cost  of  preparing  full  notes,  and  (2) 
minimum,  based  on  the  number  of  hours  provided  in  response  to  the  public  consultation.  To 
estimate  the  cost  of  legal  advice,  the  figure  provided  in  the  public  consultations  is  used.  The 

292 The following costs are excluded from the computation given the difficulty of assigning monetary value to 
them: costs resulting from a lengthy coordination process, from associated delays in receiving data and costs 
related to introducing changes to national laws. 
293 CSES ( 2010), '4th Company Law Directive and IFRS for SMEs',  
http://ec.europa.eu/finance/accounting/docs/studies/2010_cses_4th_company_law_directve_en.pdf; 
Ramboll, CapGemini (2009), 'Final Report for Priority Area Annual Accounts/Company Law', 
http://ec.europa.eu/dgs/secretariat_general/admin_burden/docs/enterprise/files/abst09_companylaw_en.pd
f 

121 

 
                                                            
maximum scenario is likely to overestimate the costs as SMIT information requests are very unlikely 
to cover as many items as notes to the financial statements do. 

Table. A8.1. Estimated cost of replying to information requests by firms (EUR per company) 

SMEs (except micro) 

Large 

Preparation 

Legal advice 

Preparation 

Scenario 
Maximum scenario (disclosure of several items) 
Minimum scenario (based on 30 man-hours) 
Note: numbers rounded to the nearest hundreds 
* calculated based on EU average hourly salary of senior officials and managers of EUR41.50 (based on 
adjusted Eurostat Structure of Earnings Survey from 2010) 
** calculated in proportion to min and max scenario for large firms 
Source: Commission own calculations based on: public consultations (minimum scenario and legal advice), 
CSES. 2010. 4th Company Law Directive and IFRS for SMEs and Ramboll, CapGemini. 2009. Final Report for 
Priority Area Annual Accounts/Company Law.293 

4,400 
1,200* 

1,000 
300** 

1,000** 

4,000 

Legal advice 

The  analysis  below  will  be  based  on  a  conservative  assumption  that  only  large  firms  are  queried 
(except in Option 7294) – were only SMEs involved the cost below would be 75% lower. We assume 
that firms will always use  legal advice in order to screen the information that  could potentially be 
used against them. 

Assumption on variable costs of administration 

The cost of hiring an external auditor could be considered as a prudent proxy for the maximum cost 
that  authorities  would  incur  for  processing  and  analysing  the  information.  The  aforementioned 
accounting studies293 will be used for these estimates, since they also provide the cost of auditing the 
notes. Moreover, when computing the administrative burden of authorities, it is assumed that half 
of the cost stems from collecting the firm responses (this includes sending the requests, responding 
to questions, sending reminders, converting data to electronic format if not submitted electronically, 
requesting  firms’  authorization  to  share  the  information  with  other  authorities  if  needed).  The  
remaining cost corresponds to the cost of analysing the data, including econometric analyses, data 
aggregation and reporting (Tab. A8.2).   

Table.  A8.2.  Estimated  cost  of  authorities  in  gathering  and  analysing  information  (EUR  per 
responding company) 

Scenario 

Administration cost per single firm reply 

SMEs 

Large 

Collection 
850 
250 

Analysis 
850 
250 

Collection 
3,050 
850 

Analysis 
3,050 
850 

Maximum  
Minimum* 
Note: based on cost of audit of notes to financial statements; numbers rounded to nearest hundred; s 
* calculated as proportion of firm costs reported in Tab. A8.1  
Source: As in Tab.A8.1. 

Assumption on fixed cost of administration 

294 Discarded option, see Annex 7. 

122 

 
 
 
                                                            
Options  1  and  3295 could  be  implemented  by  the  Member  States  either  i)  by  using  their  existing 
resources (e.g. relevant ministries or authorities) or ii) by establishing  new authorities/bodies. The 
cost of both scenarios will be assessed. In case of i), only the variable cost as presented in Table A8.2 
will  be  used.  In  case  of  ii),  the  calculations  will  be  based  on  the  experience  from  the  Consumer 
Protection Cooperation (CPC) network.  

The 2012 study on the evaluation of the CPC network296 estimates the average annual operating cost 
of a national competent authority regarding CPC-related tasks at around EUR130,000 per Member 
State. Average employment in such a body amounts to 4.4 persons in terms of full time equivalents.  

When analysing options 1 and 3 with new authorities, it will be assumed that these bodies will be 
established  in  all  but  one  MS  (the  UK  has  already  an  equivalent  dedicated  authority  -  CMA). 
Moreover, we will assume that such bodies will have the capacity to handle all SMIT requests both in 
terms  of  data  collection  and  analysis.  Therefore,  no  variable  cost  will  be  added  (this  assumption 
holds as long as the number of SMIT requests is relatively low, see the sensitivity analysis below). 

Assumption on coordination cost 

For options 1, 2, 3 and 5 it is necessary to estimate the coordination costs for national authorities 
(Option  1)  and  the  Commission  (Option  2,  3,  5).  These  include  identifying  relevant  authorities, 
negotiating  their  agreement  to  issue  information  requests  on  their  territories,  defining  common 
templates,  definitions  of  variables  and  calculation  methods,  avoiding  duplicate  reporting  (e.g.  by 
parts of the same consortium) and other contacts with national authorities to solve potential issues 
with implementation of information requests. 

Based  on  the  CPC  study296,  one  can  estimate  the  share  of  coordination  cost  in  the  cost  of  data 
gathering and analysis to roughly 9%297, but for the ease of calculations we herewith use 10%. 

Assumption on the number of firms queried 

It is assumed that in a large majority of cases, requests for information would be addressed to a low 
number  of  market  participants  (likely  below  5),  particularly  in  the  context  of  an  infringement 
procedure. This assumption comes from the experience with investigations in the State aid domain, 
where the number of firms asked is usually very low (e.g. in the Fiat case298, only the beneficiary was 
asked; in the Starbucks case, in addition to the beneficiary, also a few competitors were asked). With 
regard to the examples used in this impact assessment (Section 2.2.1), this would concern e.g. the 
case  of  infrastructure  concessions  (information  request  could  be  addressed  to  the  concessionaire 
and a handful of competitors) or geo-blocking (e.g. in the music sector information requests could 
address four major market players). 

295 See chapters 6.1 and 6.4 
296 CPEC.  2012.  (External)  evaluation  of  the  Consumer  Protection  Cooperation  Regulation.  pp.107-114. 
http://ec.europa.eu/consumers/enforcement/docs/cpc_regulation_inception_report_revised290212_en.pdf 
297 The annual cost of all CPC’s Single Liaison Offices (coordination offices) divided by the cost of all National 
Competent Authorities (offices gathering the information and processing cases). See CPEC. 2012. Page 111. 
298 For details see Annex 5. 

123 

 
                                                            
In  less  frequent  occasions,  and  particularly  (although  not  exclusively)  in  the  context  of  informing 
legislative  initiatives,  the  number  of  addressees  of  information  requests  could  be  higher,  but  still 
limited  -  likely  below  50.  This  assumption  seems  reasonable  considering  the  number  of  firms 
surveyed  by  the  European  Banking  Authority's  2016  bank  stress  test,  which  addressed  51  biggest 
European banks covering 70% of banking assets.299 It should be noted, however, that in some sectors 
even a smaller number of firms could be representative for the overall sector (e.g. there are only 5 
European  major  cement  producers300).  With  regard  to  the  examples  presented  in  this  impact 
assessment (Section 2.2.1), such larger-scale information requests could be used e.g. to support the 
decision of a potential extension of the scope of the geo-blocking regulation.  

It is also assumed that all firms queried will reply to the information request.301 

Assumption on the number of information request per year 

Considering the 'last resort' nature of SMIT, it is assumed that there will be up to 4 small-scale (i.e. 
up to 5 addressees) and 1 larger-scale information requests (i.e. up to 50 addressees) per year. This 
seems reasonable as, for example, in the State aid domain, information requests have been issued 
only twice since 2013302; the Commission has lost 17 cases in front of the Court due to the lack of 
firm information in 20 years (i.e. on average less than once per year). It is important to emphasize 
that  launching  an  information  request  under  SMIT  would  require  a  formal  Commission  Decision, 
which would in reality certainly further limit the number of SMIT uses. 

Table. A8.3. Estimated number of firms covered by information requests per year 

Request type 
'Small-scale' request 
'Larger-scale' request 

No. of request 
per year 
4 

Total  

1 
5 

Firms per 
request  
up to 5 
up to 50 

Total number of 
firms covered 
20 

50 
70 

Summary of calculations 

Based on the above assumptions, the following analysis shows estimated total annual EU28 burden 
per option per minimum and maximum scenario. 

299 http://www.eba.europa.eu/-/eba-publishes-2016-eu-wide-stress-test-results  
300 http://www.globalcement.com/magazine/articles/822-top-75-globalcementcompany  
301 Costs of sanctions or any potential legal challenges to the Commission’s decision requesting information are 
not considered. 
302 For details see Annex 5. 

124 

 
 
 
 
 
 
 
                                                            
Table. A8.4. Detailed EU28 total annual cost of options calculations per scenario (in thousands of 
Euros) 

Data gathered using 

Existing resources 

New authorities (Opt. 1 and 3) 

Option 1 (Exchange of best practices between Member States) 
Firms (preparation) 
Firms (legal advice) 
Member States (collection, analysis) 
Member States (coordination) 
Commission (analysis) 

Total 

Option 2 (No barriers to information sharing with the Commission) 
Firms (preparation, 50%) 
Firms (legal advice, 50%) 
Member States (search, 2.5%) 
Member States (collection, 50%) 
Member States (legal advice, 50%) 
Commission (analysis, 50%) 
Commission (coordination) 

Total 

Option 3 (national SMIT) 
Firms (preparation) 
Firms (legal advice) 
Member States (Opt. 2: 2.5%) 
Member States (collection) 
Member States (legal advice) 
Commission (analysis) 
Commission (coordination) 

Total 

Option 4 (EU SMIT) 
Firms (preparation) 
Firms (legal advice) 
Firms (non-confidential version, 25%)* 
Commission (collection, analysis) 

Total 

Option 5 (combination of Options 2 and 4) 
Firms (preparation) 
Firms (legal advice) 
Firms (non-confidential version, 25%) 
Member States (search, Opt. 2) 
Member States (collection, Opt. 2) 
Member States (legal advice, Opt. 2) 
Commission (collection) 
Commission (analysis) 
Commission (coordination) 

Option 6 (Eurostat)*** 
Firms  
Member States 

Total 

Total 

Min. 

0 
0 
0 
0 
0 
0 

0 
0 
6 
0 
0 
0 
12 
18 

84 
280 
6 
60 
280 
60 
12 
781 

84 
280 
6 
119 
489 

84 
280 
6 
6 
0 
0 
60** 
60 
12 
507 

10,511 
8,067 
18,578 

Min.  

Max.  

0 
0 
0 
0 
0 
0 

84 
280 

3,510 

60 
12 
3,945 

308 
280 
3,510 
43 
214 
4,354 

308 
280 

3,510 

214 
43 
4,354 

Max. 

308 
280 
427 
43 
214 
1,271 

154 
140 
21 
107 
140 
107 
43 
712 

308 
280 
21 
214 
280 
214 
43 
1,359 

308 
280 
22 
427 
1,037 

308 
280 
11** 
21 
107 
140 
107** 
214 
43 
1,230 

38,540 
29,580 
68,120 

Option 7 (Accounting Directive)*** 
Firms (preparation) 

125 

Min SMEs  Min. large  Min. total  MaxSMEs  Max large  Max total 
1,807,203 

1,616,687 

536,965 

190,516 

485,006 

51,959 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Firms (audit) 

930,640 
2,737,843 
Note: Assumption of 4 small-scale requests (up to 5 firms) and 1 larger request (up to 50 firms) a year. * based 
on  small  request  only  (infringement  requests);  **  all  collection  done  by  Commission  (Min.)  or  following  
option 2 - half done by Member States (Max.);  *** discarded option. 

666,516 
2,283,203 

274,494 
811,459 

264,124 
454,640 

200,886 
685,892 

73,608 
125,567 

Total 

Option 1. Exchange of best practices between Member States and with the Commission 

The additional cost of this option to large firms is as assumed above between zero and EUR0.59m. A 
situation  with  no  cost  occurs  if  none  of  the  27  Member  States  currently  without  inquiry  powers 
would decide to implement them. The maximum cost would occur if all Member States introduced 
investigative powers. 

The  same  logic  applies  to  additional  cost  to  national  authorities  that  could  be  between  EUR0  and 
EUR0.47m  including  coordination  costs  of  EUR0.04m.  Additional  burden  on  the  Commission  to 
analyse responses amounts to between zero and EUR0.21m. 

If all 27 Member States without dedicated bodies decided to set them up, the maximum cost of this 
option  would  increase  for  authorities  to  EUR3.5m.  The  coordination  cost  is  as  above.  Although 
creating  new  bodies  only  to  handle  a  low  number  of  request  envisaged  in  this  proposal  does  not 
seem proportional and reasonable, it might be justified if Member States decided to additionally use 
them  for  internal  purposes.  In  case  of  the  latter,  the  administrative  burden  on  firms  would  raise 
significantly. However, for the purpose of comparability, all options are assessed based on the same 
scenario of 4 smaller and 1 larger requests per year (as in Tab. A8.3). 

The total cost of Option 1 is between zero and EUR1.27m (if existing authorities are used) and up to 
EUR4.4m (if new dedicated authorities are created). 

Option  2.  Lifting  regulatory  limitations  to  the  sharing  of  firm-level  information  between  the 
Member States and the Commission 

Under this option, Member States would share with the Commission firm-level information already 
available  to  them  or  that  can  be  obtained  using  existing  Union  or  national  level  powers.  No  new 
investigative powers would be granted. 

To evaluate  this option, future data needs of  the Commission have to  be estimated.  This  is rather 
difficult  since  it  requires  foreseeing  future  obstacles  to  the  functioning  of  the  single  market. 
Consequently,  it  would  have  to  be  estimated  to  what  extent  the  future  data  requirements  by  the 
Commission could be covered with the information that Member States would already have or be 
able to request with their existing powers at that point in time.  

In order to compute a ballpark estimate, we will assume optimistically that 50% of future data needs 
by  the  Commission  could  be  met  by  existing  investigation  powers  of  national  authorities.  In  this 
scenario,  the  Member  States  do  not  have  any  information  readily  available,  but  would  have  to 
request it from the relevant firms. It should be noted, however, that the real number will depend on 
the  nature  of  the  individual  cases.  Based  on  the  analyses  in  Section  2.4.1  and  Annex  6,  it  can  be 
inferred  that  there  are  common  instances  in  which  the  Member  States  would  not  have  any 
information  needed  by  the  Commission  available  nor  it  would  be  able  to  acquire  it  using  their 

126 

 
 
existing  investigation  powers.  In  this  scenario,  the  cost  to  firms  and  authorities  would  be  close  to 
zero and would consist only in checking if information is available to national authorities. 

information  using  the  existing  national 

Cost on firms will range from zero (when no information is requested from firms) to EUR0.29m (if 
investigation  powers).  Public 
firms  are  asked  for 
administration  would  be  responsible  upon  Commission's  request  for  checking  if  information  is  in 
their  possession  and  forwarding  it  to  the  Commission.  Since  this  should  be  a  largely  mechanical 
exercise, the additional cost is considered very low. It is assumed at 10% of collection cost reported 
in Option 3 and EU-wide could range between EUR6,000 and EUR21,000, depending on the amount 
of data requested. We further assume that the data is not in the archives, but its collection is within 
the existing powers of the Member State which would gather it at the cost of EUR0.11m. We further 
assume that Member States would do legal vetting of all data before it is sent to the Commission (as 
it may be used for infringement proceedings against that Member State). This would cost between 
EUR0  (when  no  information  is  sent)  and  EUR0.14m  (calculated  on  the  basis  of  legal  advice  cost  – 
Tab.A8.1).  The  coordination  cost  of  the  Commission  would  consist  in  finding  whether  the 
information  is  available  at  the  national  level  and  what  national  authorities  it  should  contact 
(potentially  different  authorities  in  different  Member  States).  This  cost  is  estimated  to  between 
EUR12,000 and EUR43,000. The cost of data analysis ranges from EUR0 (no data) to EUR0.11m. Thus 
the total cost of this option for all stakeholder is estimated between EUR18,000 and EUR0.71m303. 

Option 3. Introducing residual investigative powers through national level single market 
information tools 

Under this option, Member States would have to ask firms for information upon the Commission’s 
request.  The  EU-wide  cost  of  this  option  to  firms  would  range  between  EUR0.36m  and  EUR0.59m 
(preparation cost and cost of legal advice). In case Member States would apply the new investigation 
powers using existing resources, the burden on administration would consist of a negligible cost of 
checking  if  the  information  is  already  available  (as  in  Option  2  –  EUR6,000-EUR21,000),  the  direct 
cost of gathering this information (between EUR0.06m and EUR0.21m), and the cost of legal vetting 
before  it  is  sent  to  the  Commission  (EUR0.28m).  The  Commission’s  coordination  cost  (e.g. 
cooperation  with  authorities,  agreeing  on  common  questionnaire  and  definitions,  avoiding  double 
counting in case of multinational enterprises, etc.) amounts to EUR12,000 and EUR43,000. The cost 
of  data  analysis  ranges  from  EUR0.06m  to  EUR0.21m.  The  total  annual  cost  of  this  option  to  all 
stakeholders would range between EUR0.78m and EUR1.37m.  

Currently, the UK is the only Member State with an authority (CMA) to issue information requests in 
the  single  market  domain.  If  all  other  Member  States  chose  to  establish  such  authorities,  the 
aggregated fixed cost to national administrations would amount to EUR3.5m in both minimum and 
maximum  scenarios.  This  fixed  cost  is  assumed  to  cover  all  national  expenses  (checking  if 
information  is  available,  collection  of  the  information,  legal  advice).  Burden  on  firms  and  the 
Commission would remain the same. In this case, the total cost of Option 3 would range between 

303 In  case  the  Commission  requested  data  is  readily  available  to  the  national  authorities,  their  cost  of 
collection  of  EUR0.11m  and  firm’s  cost  or  preparation  and  legal  advice  of  EUR0.29m  would  not  materialise. 
Therefor  EUR0.4m  would  have  to  be  deducted  from  the  total  of  the  maximum  scenario.  See  also  sensitivity 
analysis section. 

127 

 
                                                            
EUR3.9m and EUR4.4m. This scenario seems unlikely given the low number of information requests 
to be processed under this proposal. However, it might materialise if Member States would decide 
to use the new investigative powers not only for the infrequent Commission requests, but also for 
their  domestic  purposes.  In  the  latter  case,  the  administrative  burden  on  firms  would  raise 
significantly. However, for the purpose of comparability of the options, all are assessed based on the 
same scenario of 4 smaller and 1 larger information requests per year (as in Tab. A8.3). 

Option 4. Introducing an EU-level Single Market Information Tool (SMIT) 

Preparation  of  the  requested  information  is  expected  to  cost  firms  addressed  by  information 
requests between EUR0.08m and EUR0.31m. Legal advice would contribute additional EUR0.28m to 
the burden. Should a responding firm consider that its reply contains information that should remain 
confidential vis-à-vis that Member State, it may decide to share only a non-confidential version of its 
reply  with  national  authorities.  Based  on  the  input  from  stakeholders  through  the  public 
consultation  and  bilateral  meetings,  creation  of  such  additional  non-confidential  version  is 
considered  quite  burdensome  and  time  consuming.  For  the  purpose  of  calculating  this 
administrative  burden,  we  assume  that  all  firms  subject  to  small-scale  requests  (which  are  more 
likely to be used in the context of infringement proceedings against Member States where national 
authorities would have access to firms' replies) would decide to prepare a non-confidential version 
of their replies. We furthermore assume that this would add 25% to the cost of preparation of the 
reply.  The  resulting  burden  stands  between  EUR6,000  and  EUR22,000.  The  total  cost  to  firms  is, 
therefore, between EUR0.37m and EUR0.61m. 

There is no cost to national authorities The cost to the Commission of gathering and analysing data is 
estimated at EUR0.12m to EUR0.43m. There is no coordination cost for the Commission as it would 
ask firms for information directly. Therefore, the total cost of this option ranges between EUR0.49m 
and EUR1.04m. 

Option 5. A 'hybrid' approach combining Options 2 and 4 

In terms of administrative burden, this option is a combination of the costs of Options 2 and 4. The 
total  EU  annual  burden  on  companies  is  expected  to  range  between  EUR0.37m  and  EUR0.6m, 
assuming  that  Member  States  do  not  already  possess  the  required  information,  but  that  the 
information must be gathered either by national authorities or the Commission (50% each according 
to Option 2). The burden on national administrations (including finding information collected earlier, 
collecting information from firms and legal vetting before the information is sent to the Commission 
– as described in Option 2) would amount to between EUR6,000 and EUR0.27m. The burden on the 
Commission  (including  the  coordination  cost,  the  cost  of  collecting  information  (ranging  from 
collecting  100%  information  in  the  minimum  scenario  to  50%  in  the  maximum  scenario),  and  the 
cost  of  data  analysis)  ranges  between  EUR0.13m  and  EUR0.36m.  Hence,  the  total  EU  cost  of  this 
option would range between EUR0.51m and EUR1.2m. 

Option 6. Enhancing the coverage of European statistics – discarded option 

128 

 
The option  on enhancing  Eurostat statistics  would  cost  companies  between  EUR11m  and  EUR39m 
and national authorities between EUR8m and EUR30m. The EU total cost would range from EUR19m 
to EUR68m304. 

Option 7. Introduction of regular reporting obligation via Accounting Directive – discarded option 

Enhancing  the  reporting  obligations  in  the  accounting  directive  would  increase  the  burden  on 
companies by between EUR0.5bn and EUR1.8bn annually. If audit was required, this would increase 
the burden further by EUR0.3bn to EUR0.9bn305. 

Impact on SMEs  

SMIT  is  primarily  concerning  large  enterprises,  meaning  no  administrative  burden  on  SMEs  as  a 
default. There may, however, be instances where SMEs (except micro entities, which are exempted) 
would be asked to participate (e.g. in case of smaller Member States or certain sectors of economy 
in which medium-sized companies may be the main market players). The individual costs of an SME 
to reply is estimated to range between EUR300 and EUR1,000 per information request with a cost of 
EUR1,000 for legal advice (roughly a quarter of cost of large firms, see Tab. A8.1). Moreover, in case 
only  SMEs  are  covered  by  an  information  request,  the  global  impact  of  all  options  amounts  to 
roughly a quarter of the cost presented in Tab. A8.4306.  

It must be noted that in case of Options 1 and 3 Member States may decide to cover all companies 
(e.g. not excluding micro entities) and issue information request more often for domestic purposes. 
In that case the administrative burden on SMEs would increase substantially. 

Benchmark – cost of the baseline option 

To  compare  the  cost  of  the  discussed  alternative  options,  we  must  consider  the  cost  of  the  data 
collection  in  the  baseline  scenario.  Given  the  limitations  of  the  current  possibilities  with  regard  to 

304 Based  on  the  IA  on  FRIBS:  the  total  EU  cost  on  data  providers  of  European  Business  Statistics  stands  at 
EUR689m per annum for the whole EU and at EUR290m for National Statistical Authorities  (NSA). Structural 
Business  Statistics  (SBS)  collects  similar  data  to  at  least  some  of  those  likely  to  be  requested  by  SMIT.  The 
share of cost of SBS for data providers and NSA is estimated in the FRIBS IA at 8.39% and 15.3% respectively of 
the  total  EU  cost  of  the  European  Business  Statistics.  There  are  around  75  different  variables  collected  per 
responding company (the actual number depends on company size and sector, some variables are not annual 
and  data  collection  methods  vary  for  different  variables).  Note  that  the  total  cost  depends  on  many  factors 
(e.g.  the  cost  of  collecting  a  variable  may  dramatically  vary  depending  on  whether  information  is  readily 
available from other sources or not), and there is no linear relationship between number of variables and total 
cost.  Nevertheless,  given  the  above,  the  cost  of  adding  one  additional  variable  to  SBS  can  be  very  roughly 
estimated at around EUR0.77m for companies in the EU, and EUR0.6m for NSAs of the EU. In the maximum 
scenario around 50 items are asked (as in notes to financial accounts) - resulting in a cost of around EUR38m 
for  companies  and  EUR30m  for  NSAs.  The  minimum  scenario  was  constructed  as  proportion  of  preparation 
cost  for  large  companies  reported  in  Tab.  A8.1.  As  explained,  these  estimates  are  very  rough,  and  should 
rather be viewed as giving a general idea of the involved costs only. 
305 Preparation and audit cost as reported in Tab A8.1 and A8.2, audit cost for SMEs: max scenario EUR1,700 
(based on studies reported Tab A8.1.), min scenario EUR500 (calculated in proportion to cost of preparation 
for SMEs), no. of firms affected large – 0.043m preparation and audit; SMEs – 1.6m (preparation), 0.4m (audit). 
306 except for the new authorities scenario where cost stand at 85% of the total cost of Option 1 and 3 with 
dedicated new authorities presented in Tab A8.4. 

129 

 
                                                            
collecting  proprietary  firm  information  (i.e.  the  lack  of  any  investigation  tools  that  could  gather 
similar  information  in  the  internal  market  field  outside  of  the  competition  law  domain307),  such 
comparison is far from one-to-one. The closest proxy is the Eurobarometer representative opinion 
poll. It caters for data reliability, representativeness and timeliness, but is not designed to collect e.g. 
detailed  descriptions,  it  is  uncertain  that  companies  would  be  willing  to  provide  confidential 
information  (participation  is  voluntary),  and  given  the  random  selection  of  participants  firms  of 
interest  might  not  be  questioned.  An  approximate  cost  of  a  single  question  for  an  EU  wide 
representative poll for citizens is around EUR15,000, and can be higher in case of firm surveys (e.g. 
given  difficulties  in  gathering  representative  sample  of  willing  respondents).  Thus,  for  instance,  a 
survey  corresponding  to  the  scenarios  considered  in  this  impact  assessment  would  cost  the 
Commission  between  EUR210,000  and  EUR750,000  (assuming  citizens  survey  cost).308 There  is  a 
corresponding cost to firms, but due to the lack of data on cost of replying to such surveys, it cannot 
be  estimated.  It  should  be  noted,  however,  that  a  representative  survey  usually  covers  1000 
companies per Member State. 

A8.2. Benefits 

The benefits of using the tool could be three-fold: (1) direct benefits; (2) cost savings; (3) shifting the 
burden. 

Direct benefits. Benefits of information requests can be estimated based on past cases, as reported 
in Section 2 of the impact assessment. For instance, the benefits of a small-scale information request 
(covering up to 5 firms) could range from around EUR25m (as evidenced by Fiat or Starbucks in the 
competition area) to EUR 3bn (as shown by the example of infrastructure concession). Assuming that 
half of small-scale information requests would typically be successful, benefits would range between 
EUR 50m  and  EUR 6bn.  Benefits  of  larger  information  request,  which  would  in  majority  of  cases 
likely be used for informing legislative initiatives, are expected to be even greater. For instance, even 
small  changes  in  the  geo-blocking  regulation  with  regard  to  copyright-protected  content  for  the 
intellectual property intensive industries could bring benefits of up to EUR 9bn in terms of additional 
investments or savings to consumers.   

Cost  savings.  More  narrow  calculation  of  benefits  could  be  done  by  estimating  costs  saved  on 
procuring external studies. Although, as discussed in Section 2 of the impact assessment, in majority 
of  cases  external  contractors  are  not  able  to  obtain  the  kind  of  information  SMIT  could  provide, 
studies  are  used  anyhow  in  the  absence  of  any  other  source  of  information,  particularly  for 
informing  legislative  initiatives  (results  are,  however,  often  far  from  perfect:  attempts  to  get 
proprietary  information  from  companies  via  interviews  are  rarely  successful,  and  the  results  are 
often  based  on  numerous  assumptions  and  highly  aggregated  data).  Based  on  the  Commission 
experience, a study with detailed analysis of up to 5 firms can cost between 100 and 200 thousand 
euros (corresponding to small-scale information requests, particularly in the context of infringement 

307 Investigation  powers  in  the  competition  law  domain  cannot  be  used  for  other  purposes.  For  details  see 
Annex 6. 
308 Corresponds  to  asking  between  14  and  50  questions  –  a  rough  equivalent  of  minimum  and  maximum 
scenario. 

130 

 
                                                            
proceedings), while a study covering up to 50 firms can cost between 200 and 800 thousand euro. 
Therefore, Member States and the Commission could benefit from savings on case studies ranging 
between  EUR0.4m  and  EUR0.8m.  The  Commission  could  benefit  from  savings  on  larger  studies 
ranging  between  EUR0.2m  and  EUR0.8m.  Therefore,  the  replacement  of  4  small  and  1  big  study 
would  bring  benefits  in  terms  of  cost  savings  to  the  administration  of  between  EUR0.7m  and 
EUR1.6m. 

Shifting the burden. In case information is shared between the Commission and national authorities, 
or vice versa, cost bore by one side constitutes a savings of the other. Administrative savings would 
emerge  for  the  side  that  would  receive  the  data  without  organising  the  collection.  These  savings 
would depend on the number of cases in which the data is shared. For example, in case of Option 4, 
the cost of data collection in the context of infringement proceedings bore by the Commission would 
be the maximum saving for national authorities who receive them.  

Likelihood  of  benefits  to  materialise.  In  case  of  Option  1,  which  depends  on  setting  up 
infrastructure  (both  legal  and  institutional)  to  conduct  inquires  in  all  but  one  Member  State,  the 
likelihood of savings materialising is considered low at least in the medium-run. This likelihood could 
increase  with  creation  of  national  capacities  in  the  Member  States,  but  problems  such  as 
coordination and timeliness of information would remain.  

For  Option  2,  given  that  the  majority  of  Member  States  currently  cannot  collect  a  great  deal  of 
information  and  that  no  new  collecting  powers  would  be  granted,  a  significant  part  of  future 
Commission data needs will not be met (above assumed at least 50%). Therefore, the likelihood for 
benefits is also limited and assessed as medium.  

For  options  3  and  5,  likelihood  is  considered  high  as  all  relevant  information  could  be  collected. 
There  is  a  risk,  however,  that  some  national  authorities  may  not  share  all  of  the  requested 
information  with  each  other  or  with  the  Commission  (Option  3),  or  that  the  process  could  take 
longer  due  to  coordination  delays  (Option  5  necessitates  going  through  a  sequence  of  steps: 
checking if Member States have the information or can obtain it; waiting for the Member States to 
organise  collection  and  deliver  the  information;  in  case  Member  States  do  not  deliver  the 
information or cannot obtain it, organising a collection by the Commission).  

The likelihood of benefits materialising in Option 4 is very high, as the Commission would have direct 
access to the necessary data without any coordination delays.  

In the case of Options 6 and 7, the likelihood is considered low as necessary information is unlikely 
to be collected due to inflexibility of these two options as regards collection of relevant information 
in an ad-hoc manner. 

A8.3. Comparison of costs and benefits 

The table below summarises total EU wide annual costs and benefits of all the options. 

Table A8.6. Comparison of total EU28 annual costs and benefits per option per stakeholder type. 
Benefits 

Costs 

Option 
0 

Stakeholder 
Commission 

Min. (EUR) 
0.21m 

Max. (EUR) 
0.75m 

Value (EUR) 
0 

Likelihood 
High 

131 

 
Table A8.6. Comparison of total EU28 annual costs and benefits per option per stakeholder type. 
Benefits 

Costs 

Option 

Stakeholder 

Min. (EUR) 

Max. (EUR) 

Value (EUR) 

Likelihood 

Total option 0 (Baseline) 

0.21m*  

0.75m* 

1 

2 

3 

4 

5 

6 

7 

0 
0 
0 

Total option 1 

0 

0 
0.006m 
0.01m 

0.59m 
0.47m 
0.21m 

0.29m 
0.27m 
0.15m 

1.27m 

Total option 2 

0.02m* 

0.72m* 

Total option 3 

0.36m 
0.35m 
0.07m 

0.37m 
0.12m 

0.78m 

Total option 4 

0.49m 

Firms  
Member States  
Commission 

0.37m 
0.006m 
0.13m 

Total option 5 

0.51m 

10.5m 
8.1m 

0.59m 
0.52m 
0.26m 

0.61m 
0.43m 

0.6m 
0.27 
0.36m 

38.5m 
29.6m 

1.37m 

1.04m 

1.23m 

Total option 6 

18.6m* 

68.1m* 

537m 
274m 

1, 807m 
931m 

Firms  
Member States 
Commission 

Firms  
Member States 
Commission 

Firms  
Member States 
Commission 

Firms  
Commission 

Firms  
Member States 

Firms 
Firms  audit  

Small-scale 
requests (in the 
context of 
infringement 
proceedings):  
EUR 50m-EUR 
6bn 

Larger requests:  
EUR 9bn and 
more 

Additional 
savings on 
studies:  
EUR 0.7m – EUR 
1.6m 

Low 

Medium 

High 

Very High 

High 

Low 

Low 

Total option 7 

811m* 
Note:  Assumption  of  4  small-scale  requests  (up  to  5  firms)  and  1  larger  request  (up  to  50  firms)  a  year.(cid:13)  All 
number  are  rounded,  totals  are  recalculated.  *Not  comparable  with  options  1,3,4,5  –  different  amount  of 
information covered (e.g. in case of Option 2 only 50% of information needs covered) or different number of 
firms (Options 0, 6 and 7). 

2,738m* 

A8.4. Sensitivity analysis 

A sensitivity analysis is carried out in order to assess whether the ranking of options in terms of their 
cost  efficiency  changes  with  respect  to:  the  amount  of    information  needed  that  is  already  at 
disposal to national authorities (i.e. they do not have to collect it from firms);  the number of firms 
covered by smaller and larger requests and the composition of administrative costs.  

Sensitivity analysis of Option 2 

Option 2 is based on two important assumptions on the future data needs of the Commission that 
are hard to quantify ex ante:  

A)  the  percentage  of  the  data  that  could  be  provided  by  the  Member  States  (regardless  of 
whether it is readily available to the Member States or they have the power to ask for it); 
and  

B)  Out  of  all  the  data  that  can  be  provided  by  the  Member  States  (as  defined  in  the  point 

above), the percentage of data they would have to ask firms for. 

132 

 
 
 
The table below shows how the total cost of Option 2 changes with respect to different combination 
of the two variables discussed above. 

Table A8.7. Impact on the cost of Option 2 depending on the amount of future Commission’s data needs in 
the possession of Member States and the proportion of that data that needs to be collected from firms (in 
EUR thousands). 

(B) Out of all the data that can be provided by MS (A), the percentage of data they would have to 
ask firms for (%) 

0 

10 

25 

50 

75 

90 

100 

t
a
h
t
a
t
a
d
f
o
e
r
a
h
S
)
A
(

y
b
d
e
d
i
v
o
r
p
e
b
d
u
o
c

l

)

%

0 
10 
25 
50 
75 
90 
100 

64 
113 
187 
311 
434 
508 
558 

64 
121 
207 
351 
494 
580 
638 

64 
133 
238 
411 
584 
689 
758 

64 
153 
288 
511 
735 
869 
958 

64 
174 
338 
611 
885 
1,049 
1,159 

64 
186 
368 
671 
975 
1,157 
1,279 

64 
194 
388 
712 
1,035 
1,230 
1,359 

(
S
M
Note: ceteris paribus 
How to read this table: For example, 50% of the future Commission’s data needs could be provided by a Member State (A). 
The Member State does not have any of that information available at hand but has to get all of it (i.e. 100%) directly from 
firms (B). In this case, the cost of Option 2 is EUR 712,000 (see highlighted cell). This combination of assumptions was used 
as the central scenario for analysing cost of Option 2 and consequently as input to Options 3 and 5. 

In  case  the  national  authorities  could  deliver  all  the  information  required  by  the  Commission,  the 
total cost of Option 2  would range between EUR0.56m (in case they have all the information readily 
available) to EUR1.36m (if all information would need to be gathered from firms). Only such figures 
could be directly compared to the cost of other options. 

Impact of Option 2 on Options 3 and 5 

As Option 2 feeds into Options 3 and 5, any alterations to the above assumptions will affect these 
two  options  as  well.  More  precisely,  the  more  of  needed  information  is  readily  available  to  the 
national authorities, the less costly Options 3 and 5 become (as the following costs are reduced: the 
cost of firms to prepare information, the cost of legal advice, and the cost of authorities to organise 
data collection)309. 

309 Option 3 with new authorities is always the most expensive, ceteris paribus 

133 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Table A8.8. Impact on the ranking of Options 3-5 depending on the amount of future Commission’s data 
needs in possession of Member States and the proportion of that amount that needs to be collected from 
firms. 

Option 3  
(reuse of authorities) 

Option 4 

Option 5 

 (B) Out of all the data that can be provided by MS (A), percentage of data they would have to ask firms for (%) 
50 
1 

100 
3 

100 
2 

100 
1 

25 
3 

50 
3 

75 
3 

25 
1 

75 
1 

25 
2 

50 
2 

75 
2 

0 
3 

0 
1 

0 
2 

3 

2 

2 

3 

3 

2 

3 

3 

3 

3 

3 

3 

3 

3 

3 

2 

3 

3 

2 

2 

3 

1 

2 

2 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

2 

1 

1 

2 

2 

2 

2 

2 

2 

0 

25 

50 

75 

l

d
u
o
c

t
a
h
t
a
t
a
d
f
o
%

)
A
(

S
M
y
b
d
e
d
i
v
o
r
p
e
b

1 

100 

2 
3 
Legend: 1 - the most cost efficient (least costly) option; 2 - the second most efficient option; 3 - the third most efficient 
option; Note: Options ranked based on the total cost of the maximum scenario; ceteris paribus 

1 

1 

2 

2 

3 

3 

1 

1 

1 

1 

1 

2 

Option  4  is  the  least  costly  in  case  national  authorities  could  satisfy  below  25%  of  the  future 
Commission’s data needs (regardless of whether they have the information available or would have 
to collect it from firms) and in all cases when national authorities would need to collect from firms 
75% or more of the data that they can provide. Option 5 is the least costly in the remaining cases. 
Option 3 (in case existing authorities are reused for issuing information requests) is the least costly 
in cases when national authorities can provide all the information the Commission needs and when 
half  of  that  information  is  already  readily  available  to  them  (Tab  A8.8).  Changes  in  the  number  of 
firms queried do not affect the above (table not presented). 

Consequently, Option 4 is the least costly in 56% of cases, followed by Option 5 – 44% of cases and 
Option  3  –  12%  (assuming  that  all  combinations  of  variables  presented  in  table  A8.8  are  equally 
possible). 

The below table shows how Options 3 and 5 compare in terms of total cost to the preferred Option 
4, depending on different combinations of Option 2 assumptions. 

Table A8.9. Cost of options 3 and 5 in relation to the cost of the preferred option 4 depending on different 
assumptions for Option 2 (in % of Option 4 cost). 

Option 3 
(reuse of authorities) 

Option 5 

(B) Out of all the data that can be provided by MS (A), the percentage 
of data they would have to ask firms for (in %) 

d
e
d
i
v
o
r
p

e
b
d
u
o
c

l

t
a
h
t
a
t
a
d
f
o
%

)
A
(

0 

0  31 
25  12 
-8 

50 

S
M
y
b

75 

100 

-27 

-46 

25 

31 

17 

2 

-12 

-27 

50 

31 

21 

12 

2 

-8 

75 

31 

26 

21 

17 

12 

100 

31 

31 

31 

31 

31 

0 

6 

-7 

-20 

-33 

-46 

25 

6 

-2 

-10 

-19 

-27 

50 

75 

100 

6 

3 

-1 

-4 

-8 

6 

8 

9 

10 

12 

6 

12 

19 

25 

31 

Note: Options compared based on the total cost of the maximum scenario; ceteris paribus 
How to read this table:  For example, 50% of the future Commission’s data needs could be provided by a Member State (A). 
The Member State does not have any of that information available at hand but has to get all of it (i.e. 100%) directly from 
firms (B). In this case, compared to Option 4, Option 3 is 31% more expensive and Option 5 is 19% more expensive. 

On  the one  hand,  Option  3  and  5  can  be  up  to  30%  more  expensive than  Option  4  in  cases  when 
national authorities would need to contact firms directly to collect all relevant information. On the 
other hand, when all information is readily available to the national authorities, Options 3 and 5 can 
be up to 46% less expensive than the preferred option. On average Option 3 is 12% more expensive 

134 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and  Option  5  is  1%  less  expensive  than  the  preferred  option  (assuming  that  all  combinations  of 
variables  presented  in  table  A8.9  are  equally  possible  –  from  the  analysis  of  options  it  is  clear 
however,  that  instances  where  information  is  not  available  at  national  level  are  more  common, 
additionally the effectiveness of Option 5 is reduced by a lengthy process which is not monetized). 

Impact  of  the  number  of  firms  queried  on  the  ranking  of  options  (assuming  reusing  existing 
authorities under Option 3) 

This  analysis  is  done  only  for  the  options  with  the  highest  probability  of  delivering  the  benefits, 
which are Options 3 to 5. 

The number of firms queried does not influence the order of options. Option 4 is in all cases the least 
costly,  followed  by  Options  5  and  3  (assuming  reusing  existing  authorities  for  issuing  information 
requests; data not presented).  

Impact of Option 3 on the ranking of options, assuming creation of new national authorities  

In  the  scenario  when  new  dedicated  authorities  would  be  created  for  conducting  information 
requests at the Member State level, the number of firms queried would influence the ranking of the 
options.  

Table A8.10. Impact of the number of firms covered on the most cost efficient option. 

Option 3 
(new authorities) 

Option 4 

Option 5 

No. of firms per small-scale request 

t
s
e
u
q
e
r

r
e
g
r
a

l

r
e
p
s

m

r
i
f

f
o

.

o
N

1 

50  3 
75  3 
100  3 
350  3 
500  3 
600  3 
1000  2 

5 

3 

3 

3 

3 

3 

2 

2 

10  20  30  40  50 

3 

3 

3 

3 

3 

2 

2 

3 

3 

3 

3 

3 

2 

2 

3 

3 

3 

3 

3 

2 

1 

3 

3 

3 

3 

3 

2 

1 

3 

3 

3 

3 

3 

2 

1 

  1 
  1 
  1 
  1 
  1 
  1 
  1 
  1 

5 

1 

1 

1 

1 

1 

1 

1 

10  20  30  40  50 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

2 

1 

1 

1 

1 

1 

1 

2 

1 

1 

1 

1 

1 

1 

2 

  1 
  2 
  2 
  2 
  2 
  2 
  2 
  3 

5 

2 

2 

2 

2 

2 

3 

3 

10  20  30  40  50 

2 

2 

2 

2 

2 

3 

3 

2 

2 

2 

2 

2 

3 

3 

2 

2 

2 

2 

2 

3 

3 

2 

2 

2 

2 

2 

3 

3 

2 

2 

2 

2 

2 

3 

3 

Legend: 1 - the most cost efficient (least costly) option; 2 - the second most efficient option; 3 - the third most efficient 
option; Note: Options ranked based on the total cost of the maximum scenario; ceteris paribus 

Option  4  is  the  least  costly  in  cases  when  up  to  20  firms  would  be  covered  by  a  small-scale 
information request and up to 1000 in a larger request. Above that level, Option 4 becomes second 
best and Option 3 becomes the least costly. Option 5 is the second most cost-efficient (and Option 3 
the third) in cases involving up to 1 firm in small-scale request  and 600 in larger requests.  Above 
that level, Option 5 becomes the third best (Tab. A8.10).  

On  the  one  hand,  this  situation  is  a  direct  result  of  using  only  a  fixed  cost  to  calculate  Option  3 
administrative  expenses  for  the  newly  created  authorities  (cost  is  a  constant  independent  of  the 
number  of  firms  covered).  On  the  other  hand,  Options  4  and  5  are  based  on  a  variable  cost  (cost 
increases with the number of firms). In reality, an authority with a fixed number of staff could only 

135 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
process a certain number of requests per year, and would need to hire more staff to cover additional 
requests.  More  realistic  cost  structure  of  Option  3  (assuming  creation  of  new  authorities)  should 
take that into account – the administrative costs should be composed of a fixed cost up to a certain 
level and a variable element above it. In such cases, there would be no impact on ranking of options. 
Given,  however,  that  SMIT  is  intended  for  an  exceptional  use  on  a  small  number  of  cases,  such 
additional complication would not change the result and is not introduced for the sake of simplicity.  

Impact of change in proportion of authorities cost for data collection and analysis 

The calculations of all options are based on the assumption that the cost for authorities is equally 
split between data collection and data analysis (see Tab. A8.2). The table below shows how changing 
this proportion affects the ranking of Options 3 to 5 in terms of their cost efficiency, as well as how 
the cost of Options 3 and 5 compares to the cost of the preferred option 4. 

Table A8.11. Impact of the share of data collection cost on the most cost-efficient option and cost 
difference from the preferred option. 

Ranking 
Option3*   Option 4  Option 5 
2 
2 
2 
1 
1 
1 
1 
1 
1 
1 
1 

1 
1 
1 
2 
2 
2 
2 
3 
3 
3 
3 

3 
3 
3 
3 
3 
3 
3 
2 
2 
2 
2 

0 
10 
20 
30 
40 
50 
60 
70 
80 
90 
100 

  Cost difference from Opt 4 (%) 

Option3* 
29 
29 
30 
30 
31 
31 
31 
32 
32 
33 
33 

Option 5 
-25 
-16 
-7 
1 
10 
19 
27 
36 
45 
53 
62 

)

%

(

t
s
o
c
n
o
i
t
c
e

l
l

o
c
a
t
a
d
f
o
e
r
a
h
S

Note: Options ranked based on the total cost of the maximum scenario; ceteris paribus; 
* Option 3 with reuse of existing authorities;  

When  the  share  of  data  collection  cost  in  the  total  cost  of  data  collection  and  analysis  is  30%  or 
above (and consequently the share of data analysis cost is 70% or below), Option 4 is the least costly 
option in terms of the total cost (that is in majority of cases). Below 30%, Option 5 becomes the least 
costly.  Option  3  (assuming  creation  of  new  national  authorities)  is  in  all  cases  the  most  expensive 
option (data not presented, ceteris paribus).  

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 9: WHY SHOULD THE EU ACT? 

According  to  Article  5(1)  TEU,  the  limits  of  Union  competence  are  governed  by  the  principle  of 
conferral.  The  use  of  Union  competences  is  governed  by  the  principles  of  subsidiarity  and 
proportionality. According to Article 5(2) TEU, the Union shall act within the competences conferred 
upon it by Member States in the Treaties to attain the objectives set out therein. The achievement 
of  a  functioning  single  market  is  an  objective  to  be  reached  by  the  Union  in  cooperation  with  the 
Member States (shared competence, cf. Article 4(2)(a) TFEU). 

A9.1. The legal basis  

Article  114  TFEU  allows  for  the adoption  of  measures  for  the approximation  of  the  provisions  laid 
down by law, regulation or administrative action in the Member States, provided that such measures 
have as their object the establishment or functioning of the single market310. The need to establish a 
coherent  and  systematic  mechanism  for  the  collection  of  reliable  and  accurate  firm-level 
information for the purpose of enforcing single market law at a cross-border scale is the core of the 
policy intervention. Existing national rules provide for an uneven and insufficient level of information 
collecting,  making  enforcement  of  the  single  market  rules  more  difficult  or  even  impossible.  As  a 
result, obstacles to the proper functioning of the single market could be created. The use of Article 
114 TFEU would therefore aim at preventing the emergence of obstacles to the functioning of the 
single  market  and  should  be  enough  legal  basis  for  an  EU  action  entrusting  Member  States 
authorities with powers to collect information (option 3)311.  

However, should the policy intervention require entrusting the Commission with specific powers to 
collect  information  from  firms  (option  4),  Article  114  TFEU  would  need  to  be  supplemented  by 
Article 337 TFEU. The latter entitles the Commission, within the limits and under the conditions laid 
down by the Council, to collect any information required for the performance of the tasks entrusted 
to it. The combination of Articles 114 and 337 TFEU has already been used in other legislative acts 
entrusting the Commission with information collection powers, notably Directive (EU) 2015/1535312. 
Moreover, the use of Article 114 TFEU for entrusting EU institutions or bodies with powers for the 
implementation of harmonised rules has already been accepted by the CJEU, including the possibility 

310 According to Article 26 TFEU, 'the internal market shall comprise an area without internal frontiers in which 
the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the 
Treaties.' 
311 Cf. Judgments of the CJEU in cases C-380/03, Germany vs. European Parliament and Council, paragraphs 38 
to 42 and 80; C-434/02, Arnold André GmbH & Co. KG vs Landrat des Kreises Herford, paragraphs 31-34;and C-
376/98, Germany vs. European Parliament and Council, paragraph 86. 
312 Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down 
a procedure for the provision of information in the field of technical regulations and of rules on Information 
Society services (codification), OJ L 241, 17.9.2015, p.1. 
Note that the original Commission proposal was based on the then Article 213 of the Treaty (now 337 TFEU) 
only.  However,  the  legal  basis  was  enlarged  to  encompass  Article  100  of  the  Treaty  (now  114  TFEU)  cf. 
Proposal  for  a  Council  Decision  laying  down  a  procedure  for  the  provision  of  information  in  the  field  of 
technical standards and regulations, COM(80)400, 19 August 1980. 

137 

 
                                                            
to  adopt  measures  that  are  legally  binding  on  individuals313.  Both  the  CJEU314 and  the  Union  co-
legislators315 have  also  accepted  that  the  reference  in  Article  114  TFEU  to  'measures  for  the 
approximation'  may  encompass  the  use  of  Article  114  TFEU  as  legal  basis  for  the  adoption  of  a 
directly applicable Regulation. 

Article 114 TFEU acts as a default legal basis within the single market area. However, there are three 
specific  economic  sectors  within  the  internal  market  for  which  the  Treaty  has  foreseen  common 
policies  within  the  internal  market:  agriculture  and  fisheries 316,  transport317 and  energy318.  In 
addition,  there  are  areas  closely  connected  to  the  single  market  such  as  the  policy  on  the 
environment. Therefore, the use of additional Articles of the TFEU as additional specific legal basis 
may be needed to ensure full coverage of the single market in relation to economic sectors of the 
single market that benefit from specific legal basis within the TFEU for legislative action: e.g. Article 
43  TFEU  (as  regards  agricultural  goods),  Articles  91  and  100  TFEU  (transport),  Article  192  TFEU 

313 Cf.  Judgement  of  the  CJEU  in  case  C-270/12,  United  Kingdom  vs.  European  Parliament  and  Council, 
paragraphs 97 and seq. 
314 Ibid. 
315 See  for  instance  Regulation  (EU)  No  1093/2010  of  the  European  Parliament  and  of  the  Council  of  24 
November 2010 establishing a European Supervisory Authority (European Banking Authority); Regulation (EU) 
No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European 
Supervisory  Authority  (European  Insurance  and  Occupational  Pensions  Authority);  Regulation  (EU)  No 
1095/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010  establishing  a  European 
Supervisory  Authority  (European  Securities  and  Markets  Authority);  or  Regulation  (EU)  No  537/2014  of  the 
European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of 
public-interest entities and repealing Commission Decision 2005/909/EC. 
316 Article 38 TFEU: 
'1. The Union shall define and implement a common agriculture and fisheries policy. 
The  internal  market  shall  extend  to  agriculture,  fisheries  and  trade  in  agricultural  products.  'Agricultural 
products' means the products of the soil, of stockfarming and of fisheries and products of first-stage processing 
directly related to these products. References to the common agricultural policy or to agriculture, and the use 
of  the  term  'agricultural',  shall  be  understood  as  also  referring  to  fisheries,  having  regard  to  the  specific 
characteristics of this sector. 
2. Save as otherwise provided in Articles 39 to 44, the rules laid down for the establishment and functioning of 
the internal market shall apply to agricultural products. 
3. The products subject to the provisions of Articles 39 to 44 are listed in Annex I. 
4. The operation and development of the internal market for agricultural products must be accompanied by the 
establishment of a common agricultural policy.' 
317 Article  90  TFEU:  'The  objectives  of  the  Treaties  shall,  in  matters  governed  by  this  Title  [Transport],  be 
pursued within the framework of a common transport policy.' 
318 Article 194 TFEU:  
'1. In the context of the establishment and functioning of the internal market and with regard for the need to 
preserve  and  improve  the  environment,  Union  policy  on  energy  shall  aim,  in  a  spirit  of  solidarity  between 
Member States, to: 
(a) ensure the functioning of the energy market; 
(b) ensure security of energy supply in the Union; 
(c) promote energy efficiency and energy saving and the development of new and renewable forms of energy; 
and 
(d) promote the interconnection of energy networks. 
2.  Without  prejudice  to  the  application  of  other  provisions  of  the  Treaties,  the  European  Parliament  and  the 
Council, acting in accordance with the ordinary legislative procedure, shall establish the measures necessary to 
achieve the objectives in paragraph 1. Such measures shall be adopted after consultation of the Economic and 
Social Committee and the Committee of the Regions. […]' 

138 

 
                                                            
(environment) or Article 194 TFEU (energy). This does not entail an undue extension of the scope of 
this initiative outside the single market area and has been done in other pieces of legislation319.  

The policy intervention is limited to the single market and does not extend to policy areas that do 
not fall within the single market320. 

A9.2. Subsidiarity  

According  to  the  principle  of  subsidiarity  laid  down  in  Article  5(3)  TEU,  in  areas  which  do  not  fall 
within  its  exclusive  competence,  the  Union  shall  act  only  if  and  in  so  far  as  the  objectives  of  the 
proposed action cannot be sufficiently achieved by the Member States, but can rather, by reason of 
the scale or effects of the proposed action, be better achieved at Union level.  

The  problem  addressed  in  this  impact  assessment  essentially  relates  to  the  enforcement  of  single 
market law, both the Treaties and secondary legislation, by the Commission and the Member State. 
The  Member  States  must  respect  Union  law  and  have  particular  obligations  in  respect  of  the 
implementation  and  transposition  of  Union  law  as  well  as  in  ensuring  its  correct  application  at 
national level. At the same time, the responsibility of the Commission under Article 17(1) TEU is to 
ensure that the Treaties and Union measures adopted pursuant to them are correctly applied and, it 
is empowered, as the 'guardian of the Treaties', to oversee the application of Union law (under the 
control of the CJEU). Thus, the Commission is responsible for monitoring the application of the single 
market  law  in  Member  States.  In  order  to  correctly  perform  this  function,  Commission's  access  to 
relevant, reliable, accurate and timely information is essential – including, where necessary, access 
to firm-level information.  The CJEU has indeed progressively been stricter with the Commission in 
relation to the sufficient factual evidence that it must submit in order to prove 'to the requisite legal 
standard' the elements of the allegations made in infringement proceedings321.The options proposed 
this impact assessment aim at improving access to such type of information and therefore allowing 

319 For instance, Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 
(laying down a procedure for the provision of information in the field of technical regulations and of rules on 
Information Society services) is based on Articles 43, 114 and 337 TFEU. 
320 Area  of  freedom,  security  and  justice  (Arts.  67-89  TFEU);  economic  and  monetary  policy  (Arts.  119  -144 
TFEU);  research,  technological  development  and  space  (Arts.  179-190  TFEU),  employment  (Arts.  145-150 
TFEU);  social  policy  (Arts.  151-161  TFEU);  the  European  Social  Fund  (Arts.  162-164  TFEU);  Trans-European 
Networks  (Arts.  170-172  TFEU);  economic, social  and  territorial  cohesion  (Arts.  174-178  TFEU);  environment 
(Arts. 191-193 TFEU), areas of Union exclusive competence as referred to in Art. 3(1) TFEU [N.B. (a) customs 
union,  (b)  the  establishing  of  the  competition  rules  necessary  for  the  functioning  of  the  internal  market;  (c) 
monetary policy for the Member States whose currency is the euro; (d) the conservation of marine biological 
resources  under  the  common  fisheries  policy;  (e)  common  commercial  policy];  areas  where  the  Union  has 
competence to carry out actions to support, coordinate or supplement the actions of the Member States as 
referred to in Art. 6 TFEU [N.B. (a) protection and improvement of human health (Art. 168 TFEU); (b) industry 
(Art.  173  TFEU);  (c)  culture  (Art.  167  TFEU);  (d)  tourism  (Art.  195  TFEU);  (e)  education,  vocational  training, 
youth and sport (Arts. 165-166 TFEU); (f) civil protection (Art. 196 TFEU); (g) administrative cooperation (Art. 
197 TFEU)]. 
321 See  e.g.  Luca  PETRE  and  Ben  SMULDERS,  'The  Coming  of  Age  of  Infringement  Proceedings',  Common 
Market Law Review 47, 2010, po. 9. These authors (p. 38) refer to several judgments of the CJEU supporting 
this  trend.  Cf.  cases  C-532/03,  Commission  vs.  Ireland,  paragraphs  36-37;  C-507/03,  Commission  vs  Ireland, 
paragraphs  32-35;  C-293/07  Commission  vs.  Greece,  paragraphs  32-34;  C-156/04  Commission  vs.  Greece, 
paragraphs 35 and 51; C-237/05 Commission vs. Greece, paragraph 39. 

139 

 
                                                            
the  Commission  to  better  perform  its  role  as  guardian  of  the  Treaties.  Full  and  correct 
implementation and application of single market rules are essential for the successful completion of 
the single market and have always been a priority for the Commission. Accordingly, the Commission 
has  been  systematically  taking  all  necessary  measures  in  order  to  assist  the  Member  States  in 
fulfilling  their  obligations  and  to  address  cases  where  national  legislations  or  practices  have  fallen 
short of the single market requirements (in accordance with the Article 258 TFEU). At the same time, 
this initiative does not deprive Member States of their important role, alongside the Commission, in 
the  enforcement  in  single  market  rules.  Member  States  continue  to  have  their  own  investigation 
powers and remain free to extend them (except in the case of option 3 where they will be required 
to do so).  

Union  action  is  needed  to  ensure  that  the  Commission  will  have  access  to  firm-level  information 
necessary  to  improve  the  Commission’s  ability  to  monitor  and  enforce  Union  single  market  rules 
through  infringement  proceedings.  The  objectives  of  this  initiative  (see  Section  4)  cannot  be 
sufficiently  achieved  by  Member  States  alone,  as  shown  in  previous  sections  of  this  Impact 
Assessment  in  relation  to  existing  legal  barriers  to  sharing  firm-level  information  with  the 
Commission  and  continuing  uncoordinated  national  approaches  in  this  area.  This  is  shown  by  the 
continuing uncoordinated national approaches in this field: Member States lacking sufficient powers 
in most cases (except when national competent authorities are specifically mandated by Union law 
to  do  so);  absence  of  mechanisms  for  sharing  of  information  among  Member  States  or  between 
Member States and the Commission (except when foreseen by Union law), methodological problems 
that  arise  for  instance  from  using  different  definitions  of,  for  example,  cost  and  combining  the 
information  with  a  risk  of,  for  example,  double  counting.  In  addition,  national  responses  are 
necessarily limited in their geographical scope and cannot be compared with or substitute for a co-
ordinated  or  systematic  response  at  Union  level.  This  incapacity  of  Member  States  to  act  is 
particularly detrimental to the responsibility of the Commission. Commission's access to reliable and 
accurate firm-level information is necessary in specific cases of cross-border dimension to exercise 
its  monitoring  and  enforcement  powers.  Yet,  we  have  seen  that,  in  certain  situations,  the 
Commission may lack essential information to enforce EU law and control the national application of 
Union  law.  Member  States  are  not  in  a  position  to  fill-in  this  gap.  As  a  result,  the  current 
inconsistencies hinder the functioning of the single market.In addition, possible national responses 
would necessarily be limited in their geographical scope and cannot be compared with or substitute 
for  a  co-ordinated  or  systematic  response  at  the  Union  level  providing  for  the  establishment  of 
information-collection  powers  to  assist  the  Commission  in  its  role  of  guardian  of  the  Treaty. 
Therefore,  the  objectives  envisaged  can  be  better  achieved,  by  reason  of  its  scale  and  effect,  at 
Union  level.  Indeed,  the  Union  is  best  placed  to  address  the  question  of  the  coordination  and/or 
collection of targeted firm-level information requests in the single market domain where there are 
suspicions of serious obstacles to the functioning of the single market, in particular due to the often 
cross-border  nature  of  such  obstacles322 and  the  related  data  requirements.  Such  Union  action 

322 In general, the Treaties require the existence of certain cross-border dimension for their single market rules 
to  be  applied.  At  the  same  time,  the  existence  of  purely  internal  situations  resulting  in  an  infringement  of 
Union law (e.g. secondary harmonising legislation) cannot be excluded.  
The  justification  for  the  Commission's  action  with  regard  to  those  situations  is  in  principle  weaker,  as  the 
Member  State  would  be  better  placed  to  address  such  purely  internal  situations.  However,  this  does  not 

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would  fulfil  the  necessity  test  in  this  regard  and  would  enhance  the  ability  of  the  Commission  to 
ensure  the  respect  of  Union  law,  in  particular  with  regard  to  infringement  proceedings,  without 
undermining the role of the Member States in applying Union law and enforcing it vis-à-vis individual 
companies.  

The necessity test would also be met regarding the collection of firm-level information for informing 
legislative  initiatives    –  in  particular  where  evaluation  shows  that  enforcement  deficits  are  due  to 
flaws in the relevant single market legislation. As a matter of principle (cf. Article 17(2) TEU), Union 
legislative  acts  may  only  be  adopted  on  the  basis  of  a  Commission  proposal  (except  where  the 
Treaties  provide  otherwise).  The  level  of  evidence  generally  required  from  the  Commission  for 
informing  legislative  proposals  has  progressively  increased  over  time  and  there  will  indeed  be 
circumstances,  in  technical  areas  (see  examples  in  previous  sections),  where  the  Commission  will 
need  to  use  collected  firm-level  information  to  calibrate  the  regulatory  solution  proposed.  Union 
action is also needed for this purpose, for the same reasons (e.g. Member States action would not 
be sufficient) expressed in the previous paragraph. It must be noted in this regard that there is no 
such thing as a sharp distinction between infringements proceedings and the use of legislative acts 
to  address  serious  obstacles  to  the  internal  market.  When  the  Commission  is  at  the  stage  of 
collecting  information  to  assess  whether  there  are  obstacles  to  the  functioning  of  the  internal 
market,  the  Commission  will  collect  the  information  concerned  without  necessarily  knowing  what 
the  future  action  to  address  those  obstacles  will  be:  either  launching  infringement  proceedings 
(which is a faculty, not an obligation of the Commission323) or proposing a legislative change (if the 
Commission believes that the latter choice is better justified)324.  

In  terms  of  added-value,  Union  action  would  ensure  that  the  Commission  has  access  to  relevant, 
reliable,  accurate  and  timely  firm-level  information  in  those  instances  where  access  to  such 
information  is  necessary  and  cannot  be  obtained  otherwise  (e.g.  in  situations  where  national 
authorities cannot have access to the relevant data; where they do not wish to cooperate with the 
Commission or where firms do not voluntary agree to share data with the Commission). Therefore, 

exclude that the Commission may need to address those situations (e.g. in the event of lack of action by the 
Member State concerned) and that, in doing so, it may need to have access (where appropriate and justified) 
to  specific  firm-level  information.  It  is  important  to  note  that  the  CJEU  applies  a  relatively  low  threshold  to 
show  the  existence  of  a  cross-border  dimension:  it  has  already  ruled  that,  even  when  a  purely  internal 
situation  is  concerned,  national  rules  may  have  the  capacity  of  producing  effects  outside  the  Member  State 
concerned  (see,  for  example,  joined  Cases C-159/12  and C-161/12, Venturini, paragraphs 25–26);  it has  also 
considered,  in  particular  in cases  related  to  public  procurement procedures  that  appeared  a  priori  as  purely 
internal  situations,  that  a  hypothetical  discrimination  against  potential  competitors  located  in  another 
Member States would be enough to in that respect (see, for example, case C-231/03, Coname v. Comune di 
Cingia de’Botti, paragraphs 17–21 and case C-458/03, ParkingBrixen GmbH v. Gemeinde Brixe, paragraph 55).  
323 'In  exercising  this  role  [N.B.  as  guardian  of  the  Treaties],  the  Commission  enjoys  discretionary  power  in 
deciding whether or not, and when, to start an infringement procedure or to refer a case to the Court of Justice. 
[…] It [N.B. the Commission] will distinguish between cases according to the added value which can be achieved 
by an infringement procedure and will close cases when it considers this to be appropriate from a policy point 
of  view".  Communication  from  the  Commission,  'EU  law:  Better  results  through  better  application',  OJ  C18, 
19.1.2017, ps.14 and 15.  
324 'The  Commission  will  exercise  such  discretion  in  particular  […]  in  those  [cases]  where  pursing  the 
infringement  would  be  in  contradiction  with  the  line  taken  by  the  College  of  Commissioners  in  a  legislative 
proposal'. Ibid. p. 15.  

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this  Union  action  would  provide  that  residual  powers  are  available  to  reach  the  last  "extra  mile" 
towards  the  necessary  data.  This  can  only  result,  in  the  exceptional  circumstances  in  which  such 
residual powers will need to be used, in better informed enforcement actions or policy initiatives by 
the  Commission  in  reaction  to  serious  obstacles  to  the  functioning  of  the  internal  market.  Union 
action  would  also  ensure  that,  where  as  a  result  of  an  infringement  proceeding  in  which  the 
Commission  had  access  to  such  type  of  data,  any  concerned  Member  State  (irrespective  of  their 
existing national powers) could also have also access to the necessary data for better applying Union 
law  at  domestic  level.  The  added-value  effects  achieved  by  Union  action  cannot  be  delivered  by 
uncoordinated  national  action,  which  would  not  be  able  to  ensure  that  the  Commission  (or  all 
concerned  Member  States)  would  have  access  to  relevant,  reliable,  accurate  and  timely  firm-level 
information  in  those  instances  where  access  to  such  information  is  necessary  for  the  purposes 
explained above 

142