Competition policy, not competition politics

Competition law enforcement in the European Union is at an all-times high, with several proeminent cases decided by the European Commission and others in the pipeline. The European Commission is now seen as a ”beacon” of competition enforcement in the world, except for the United States of America, and its activities are often praised.  The appreciation and the fuss around the enforcement undertaken by the European Commission cannot hide the elephant in the room: the fact that the procedures leading to the imposing of fines and remedies are subpar with regard to the due process requirements for such an enforcement.

At least since the European Court of Human Rights clarified in Menarini (2011) that the enforcement of competition law amounts to criminal enforcement, given exactly the high level of the fines which helped enhance the reputation of the European Commission, we are in a new world. A world in which the proceedings used by the European Commission are subpar with competition regimes which do not enjoy the same reputation, including those from many EU Member States. In short, it is no longer acceptable that fines of billions of Euros and measures which have the potential of changing dramatically the faith of many industries and the business models of the companies, lay in the hands of a single person, who is, in its turn, a political appointee – the competition commissioner. The fact that the decision itself is issued by the full body of EU commissioners is a masquerade, given their lack of expertise in the area and the limited span of attention to the complex matters in competition cases. The absence of any hearings and contradictory debate highlights how obsolete and inadequate the process used by the European Commission is. Can we go further and ignore this elephant? The Commission thinks that it should not bother and in its recent ECN+ Directive proposal did nothing more than aiming to transfer its powers to the NCAs which still do not have them, without any consideration to the differences among these and without any consideration to the best practices of some of the authorities, from which it could take inspiration.

Given the visibility of the activity of the European Commission in the enforcement of competition rules, it is no wonder that it becomes a point on the agenda of the future elections for the European Parliament, which is set to renew in 2019.  French president Emmanuel Macron was the first to mention this openly and we should be worried that the attention given by politicians in such a context does not aim to addressing the due process or the rights of the undertakings. Monsieur Macron wants to increase the powers of the Commission in the competition enforcement, but he does not say a word on balancing these powers with the necessary safeguards in order to ensure the outcomes are those appropriate and the false positives are avoided to the maximum possible extent. 

Populism is on the rise, both on the left and on the right of the political spectrum.  If an European politician who used to be an investment banker and was elected in his country on a wave of promises to reform and to refresh an obsolete political life and economy looks so preoccupied by punishing the big tech, what to expect from those on the fringes? Moreover, because the campaign for the European Parliament announces to be hot and the results of the main political groups narrow, we can expect that the populist competition enforcement arguments will take the main stage.  

It is good that the current and future decision-makers of the European Union talk about competition enforcement. But they should tackle the matter with due attention to anything which is at stake.  They should leave aside the politics and think of policies which can ensure a more competitive EU economy and benefits to the consumers and the undertakings.  So, I advocate for an honest debate and for using the opportunity of the elections for the European Parliament in order to set a realistic agenda for the future of the competition enforcement in the European Union.


1 Comment
  • Titangelgr

    December 21, 2018 at 12:20 pm

    In analysing the CLP indicators, three groups of OECD countries can be distinguished: countries with relatively strong CLP (Australia, Canada, the Czech Republic, Denmark, Italy, Korea, the United Kingdom and the United States), countries with relatively weak CLP (Austria, Greece, Japan, Mexico, Norway, Portugal and Switzerland), and the remaining countries that are not statistically distinguishable from the first two groups. Generally speaking, countries with a strong antitrust framework have relatively weak network policies, and vice-versa, with the two effects tending to offset each other in the summary indicator. This may suggest that countries counter-balance relatively weak antitrust policies by implementing strong network policies to promote competition. Conversely, countries with a tradition of strict enforcement of competition laws tend to rely on this for ensuring competition in network industries (OECD, 2009).