Need for greater cooperation in Union’s competition policy

Date: 18/07/1996

By Ian S. Forrester QC

MANY European Voice readers live in Belgium, a country which often gives rise to disputes where politics, law and economics are mixed together.

One such dispute offers an illustration of the phenomenon of multiple competencies in competition matters.

Belgium has an extensive cable television distribution system. Cable distribution companies, usually owned by the local communes, have the right to place cables in the streets and supply television channels to their subscribers.

Cable firms capture television signals from a number of broadcasters and retransmit these to their subscribers. They pay the television companies for the the right to transmit. How much should be paid, by whom, to whom, in what proportions and under what procedures has been the subject of dispute for months.

Interestingly for connoisseurs of European law, the dispute is proceeding on several fronts. There is litigation before the Belgian civil courts and before the Belgian competition authority. In addition, EC competition law is being invoked.

Since Brussels is the home of the European Commission, Belgian lawyers naturally consider having recourse to EC law. (Belgian and Dutch lawyers are perhaps Europe's leaders in this respect.)

It is quite common for the Commission to receive a complaint from a party to a Belgian litigation, for the Commission to express a view, for that view to be relied on in court and then for the party with which the Commission disagrees to rush to the Directorate-General for competition (DGIV) or the legal service to try to persuade them that the Commission's first view was wrong, incomplete, based on an imperfect knowledge of the facts, et cetera.

Belgian judges have on occasion noticed with surprise that in the course of a dispute, the Commission's thinking “has evolved”. (I have yet to hear a member of the legal service say: “We have changed our mind”.)

Whether or not the Commission can be persuaded to do a theoretical 'U-turn', the keenness of all parties to a national dispute to have its ear is illustrative.

The Commission has more prestige, visibility, 'scalps' and a stronger track-record than most of its national competition counterparts - or should the word be rivals?

Certainly not, would be the answer from both DGIV and national agencies: we are colleagues, cooperating in doing our respective jobs.

I am not wholly convinced.

According to the EC treaty, as mutilated by the Maastricht Treaty on European Union, subsidiarity is a doctrine of Community law. According to this fashionable notion, EC competition law, which is part of national law, should therefore be applied, not by the archpriests in Brussels but by more profane persons at local level.

Now, EC competition law is more potent, enforced by national judges and supervised by DGIV (with its powers of investigation and of fining).

By comparison, national competition law and enforcement agencies may seem weaker and less attractive as a destination for complaints.

Thus it may be that decentralisation of EC competition law implies the withering of national laws and, as a result, the agencies which enforce them.

A more promising role for the national agencies could be to assist in enforcing EC competition law at local level. National agencies could be given the power to issue negative clearances (confirmation to those who have made filings with the Commission that particular action involves no restriction of competition) or to recommend exemptions (restrictions do exist but can be blessed as being in the public interest) to DGIV.

It is remarkable that cooperation between national agencies, and between them and the Commission, is limited to talking about what the law should be rather than vigorously cooperating in the prosecution of a common competition policy.

For example, I know of no case where two agencies have cooperated to attack a single cartel. The explanation offered is confidentiality - evidence delivered to the Bundeskartellamt may not, as a matter of German law, be handed over to the Conseil de la Concurrence.

The US has encountered this problem and found a solution: when the anti-trust authorities of several states wish to pursue a particular company, the firm is invited to waive its right to confidentiality so as to permit its reply to be shared among, say, seven state attorneys-general. The alternative is, of course, receiving seven different subpoenas. (European firms sometimes face a similar dilemma where the EC and US authorities cooperate.)

Whether or not some variant of this model proves useful in Europe, it seems plainly wrong that EC/US cooperation on competition policy is more effective, regular and far-reaching than cooperation between national administrations in Europe.

This article reflects the personal views of the author.