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LPC Law Notes International Competition and Anti-Trust Notes

Enforcement Notes

Updated Enforcement Notes

International Competition and Anti-Trust Notes

International Competition and Anti-Trust

Approximately 103 pages

A collection of the best LPC International Competition and Anti-Trust notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor". In short these are what we believe to be the strongest set of International Competition and Anti-Trust notes available in the UK t...

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Outcomes:

  1. Appreciate the extent of the competition authorities’ powers of investigation

  2. Identify the main steps in the investigatory and prosecution process

  3. Explain and advise on the main elements of leniency programmes and how they impact on the enforcement process

  4. Explain the penalties that can be imposed

  5. Appreciate the private actions that can be taken by third parties

  6. Develop memo writing skills

Outcome 1 - competition authorities’ powers of investigation & Outcome 2 – main steps in the investigatory and prosecution process & Outcome 4 - penalties that can be imposed

How authorities become aware of possible infringements:

  • Whistleblowing

    • Leniency can be given to those involved for bringing infringement to the notice of the authorities

    • Partial or total leniency

  • Information from other authorities

    • Increasing cooperation between global authorities

  • Third party complaint

    • Victims of anti-competitive behaviour

    • Generally from customers, suppliers and consumers of the product or service which is subject of the anti-competitive behaviour

  • Other investigations

    • Other investigations based on illegal activity can sometimes find evidence of other infringements

Powers of the Commission – investigation and prosecution
Investigation

Articles 4 & 7 of the Modernisation Regulation gives the Commission power to make infringement decisions relating to breach of Art 101 or 102 TFEU

Commission will require evidence to base conclusions.

Evidence obtained by:

  • RFI

    • Has the power under Article 18 Modernisation Reg to request businesses provide all necessary information

    • Commission must state legal basis for request and provide time limit for response

    • Art 18(2) & (3) – allows fines to be given for misleading information

    • Art 19 – can interview any person who may have information and record statements

  • Inspection ‘dawn raids’

    • On the spot investigation within EU territory (Art 20 & 21)

    • Power to examine and take copies of books and records relating to business

    • Art 21 – gives power to inspect other premises where information may be held

    • Seal any information or premises for duration of inspection

    • Ask any representative for information and record answer

    • Company can refuse inspection for particular information (Commission may then serve a decision ordering documents to be produced and fines if delay in doing so)
Criminal sanctions Where the EU Commission brings proceedings against a company for anti-competitive behaviour
In these circumstances, the EU has no powers to bring criminal proceedings against the company's directors and employees. However, the CMA does. So individuals cannot assume, just because the proceedings are being brought against their company by the Commission, that there will be no criminal consequences for them.

Where the EU Commission grants immunity to a company, as part of its leniency programme
In these circumstances, because the Commission has no powers to bring criminal proceedings, it cannot grant individuals immunity from any criminal sanctions that the CMA could bring. So to ensure that individuals are also protected against criminal proceedings brought by the CMA, either the company must apply to the CMA for Type A blanket immunity at the same time as applying to the Commission for leniency, or if it does not do so, individuals must make their own applications.
Interim Measures

In specific situations the Commission does not need evidence to make an order, in such situations they will make an interim measures order (Art 8).

Interim measures allows Commission to take action where delay that would be caused by full investigation would cause irreparable damage to competition
Post Investigation options

Once the Commission has gathered enough evidence (or interim measure) the following options are available to the Commission:

  • Infringement decisions

    • Last stage of prosecution process governed by the Commission Regulation 773/2004 (Conduct of Proceedings Reg)

    • Parties must be aware of the case against them and have opportunity to answer the case – therefore Commission should provide them with a statement of objections (Art 10)

    • Parties have right to make written response submissions and oral and written submissions at an oral hearing (Art 10-12)

    • Infringement decision can be given under Art 7 of Modernisation Reg

    • Fines can also be given under Art 23

  • Commitments

    • Commission may accept binding commitments from the parties subject to an investigation (Art 9 Modernisation Reg)

    • For the party involved this can remove the possibility of sanctions

  • Settlements in cartel cases

    • Commission can enter into agreement with parties involved in cartels

    • Parties under investigation have an opportunity to review Commissioner’s evidence and if they believe they cannot defend it may opt to enter into settlement with the Commission

    • In return for settling the case the parties will receive a 10% reduction in any fine imposed
Penalties

  • Fines

    • Article 23(2) of Modernisation reg, the Commission can impose fines not exceeding 10% of the worldwide turnover of the undertaking

    • Art 24 of Modernisation Reg – can impose penalties for non-compliance with infringement decisions

    • Level of the fine: is contained in Guidelines which first determines the basic amount of the fine (based on proportion of party’s value of sales (+15-25% as deterrent) in relevant market sector, depending on the gravity of the infringement and capped at 30%), multiplied by number of years of infringement

    • Fines assessed by gravity and takes into consideration:

      • Nature of infringement

      • Combined market share of undertakings

      • Geographic scope of infringement

      • Whether infringement has been implemented

    • Figure will be adjusted depending on aggravating or mitigating factors (e.g. repeat offending, refusal to co-operate, being instigator in infringement)

    • Final adjustment made to ensure fine is not <10% worldwide turnover

  • Cease and desist

    • Art 7 of Modernisation Reg – allows order...

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