EU Competition Commissioner, Joaquín Almunia, signalled at a press conference in July that he intends to tighten up the monitoring of commitments agreed with the European Commission to close EU antitrust investigations. This is particularly true for complex cases that require close scrutiny, and also for cases in the tech industry.
The European Commission’s investigations of antitrust infringements outside the cartel area in complex cases which border on the regulatory sphere are now increasingly settled closed by means of commitments. However, the European Commission is keen to ensure that any commitments entered into by companies with the European Commission to close these cases are adhered to closely, and that a strict approach is applied to companies who deviate from their commitments.
On 17 July 2012, Almunia gave a midday press statement relation to the European Commission’s decision to proceedings against Microsoft in order to investigate whether it had failed to comply with its 2009 commitments offer users a choice screen enabling them to easily their preferred web browser.
During this announcement, Almunia made a number remarks which indicate that whilst the European Commission is keen to continue to close antitrust cases quickly in the future by means of its commitment procedure, it is concerned that any commitment package is adhered strictly and that there is a strong and effective means monitor compliance.
Specifically, Almunia stated that “commitments are way to solve competition problems as an alternative lengthy proceedings”, and that this was “essential in moving market” such as the tech sector. However, that commitments could only work if they are implemented fully. He said that he was considering specifically “strengthening the monitoring [of commitments] with frequent appointment of trustees”, and that he wanted competitors to come forward and alert the European Commission if they register any evidence of non-compliance with commitments.
How do EU commitment decisions work?
Whilst commitment decisions are a relatively new instrument of EU competition law enforcement, increasingly infringement proceedings by the European Commission in complex cases which border on the regulatory sphere (access to electricity and gas, essential patent royalties etc) now end with a commitment decision.
The formal commitment procedure was introduced under Article 9 (1) of Regulation 1/2003. Under this provision, companies, when charged with a competition law infringement by the European Commission, can offer commitments that address the competitions concerns that the European Commission has identified. If the European Commission accepts the commitments, it will adopt a decision making the commitments binding on the company, but without concluding whether or not there has been or still is an infringement. Commitments may apply for a set period of time, and can be either behavioural or structural, subject to the requirement that they are a proportionate way of addressing the competition problem that the European Commission has identified. Preamble 13 of Regulation 1/2003 states that “commitment decisions are not appropriate in cases where the Commission intends to impose a fine”.
The advantage for a company in engaging in the procedure is that it can resolve the case more speedily without having to go through the standard lengthy administrative procedure. Furthermore, a company can propose its own commitments for negotiation with the European Commission and thereby retain control over its case, rather than have the European Commission make an infringement decision and impose its own remedy. Finally a company will be able to avoid a formal finding of an infringement which could lead to a fine or which could be used directly in private damages actions.
Impact of Almunia’s comments
Companies entering into commitment decisions with the European Commission should now be aware that compliance with commitments will be extremely closely monitored. They may be obliged to appoint a trustee who will monitor compliance with reports back to the European Commission. Third parties should also be aware that the European Commission will be very keen to listen to complaints that commitments have not been adhered. In an era of increasingly complex commitments being offered to close cases, there may be significant risk of non-compliance. A company that has breached legally binding commitments may be fined up to 10% of its total annual turnover.