Friday, 30 May 2008

EU TFEU: Commission competition enforcement

The Commission is entrusted to enforce the competition rules of the European Community (European Union), by investigating infringements and bringing them to an end. The EU Treaty of Lisbon gives the Commission express powers to adopt regulations relating to the categories of agreement in respect of which the Council has adopted a regulation or a directive, but this reflects current practice concerning block exemptions.


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Article 105 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/90:

Part Three ‘Policies and internal actions of the Union’

Title VII Common rules on competition, taxation and approximation of laws

Chapter 1 Rules on competition

Section 1 Rules applying to undertakings

Article 105 TFEU
(ex Article 85 TEC)

1. Without prejudice to Article 104, the Commission shall ensure the application of the principles laid down in Articles 101 and 102. On application by a Member State or on its own initiative, and in cooperation with the competent authorities in the Member States, which shall give it their assistance, the Commission shall investigate cases of suspected infringement of these principles. If it finds that there has been an infringement, it shall propose appropriate measures to bring it to an end.

2. If the infringement is not brought to an end, the Commission shall record such infringement of the principles in a reasoned decision. The Commission may publish its decision and authorise Member States to take the measures, the conditions and details of which it shall determine, needed to remedy the situation.

3. The Commission may adopt regulations relating to the categories of agreement in respect of which the Council has adopted a regulation or a directive pursuant to Article 103(2)(b).

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In Article 2, point 76 of the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) amended Article 85 TEC (OJ 17.12.2007 C 306/68):

76) In Article 85, the following new paragraph 3 shall be added:

‘3. The Commission may adopt regulations relating to the categories of agreement in respect of which the Council has adopted a regulation or a directive pursuant to Article 83(2)(b).’.

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The TFEU table of equivalences tells us that Article 85 TEC first became Article 85 TFEU (ToL) in the original Treaty of Lisbon, but later renumbered Article 105 TFEU in the consolidated version (OJ 17.12.2007 C 306/211).

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The current Article 85 of the Treaty establishing the European Community (TEC) is found under Title VI ‘Common rules on competition, taxation and approximation of laws’, Chapter 1 ‘Rules on competition’, Section 1 ‘Rules applying to undertakings’, in the latest consolidated version of the treaties in force (OJ 29.12.2006 C 321 E/76).

In Article 105 TFEU the Articles referred to were renumbered and the new third paragraph was inserted, so here is the current Article 85 TEC:

Article 85 TEC

1. Without prejudice to Article 84, the Commission shall ensure the application of the principles laid down in Articles 81 and 82. On application by a Member State or on its own initiative, and in cooperation with the competent authorities in the Member States, which shall give it their assistance, the Commission shall investigate cases of suspected infringement of these principles. If it finds that there has been an infringement, it shall propose appropriate measures to bring it to an end.

2. If the infringement is not brought to an end, the Commission shall record such infringement of the principles in a reasoned decision. The Commission may publish its decision and authorise Member States to take the measures, the conditions and details of which it shall determine, needed to remedy the situation.

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For the sake of a systematic comparison, we look at the Article during the previous treaty reform stages.

First, we turn to the European Convention, which located the provisions on competition in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter I ‘Internal market’, Section 5 ‘Rules on competition’, with Subsection 1 ‘Rules applying to undertakings’.

The draft Treaty establishing a Constitution for Europe used the terms ‘European decision’ and ‘European regulations’. Naturally, the Articles referred to in Article III-54 were numbered differently. There were slight changes to the wording, without material impact, but a new third paragraph was added (OJ 18.7.2003 C 169/36):

Article III-54 Draft Constitution

1. Without prejudice to Article III-53, the Commission shall ensure the application of the principles laid down in Articles III-50 and III-51. On application by a Member State or on its own initiative, and in cooperation with the competent authorities in the Member States, which shall give it their assistance, the Commission shall investigate cases of suspected infringement of these principles. If it finds that there has been an infringement, it shall propose appropriate measures to bring it to an end.

2. If the infringement is not brought to an end, the Commission shall adopt a reasoned European decision recording the infringement of the principles. The Commission may publish its decision and authorise Member States to take the steps, the conditions and details of which it shall determine, needed to remedy the situation.

3. The Commission may adopt European regulations relating to the categories of agreement in respect of which the Council of Ministers has acted pursuant to Article III-52(2)(b).

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In the Treaty establishing a Constitution for Europe the provisions on competition were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter I ‘Internal market’, Section 5 ‘Rules on competition’, with Subsection 1 ‘Rules applying to undertakings’.

Article III-165 of the Constitutional Treaty was materially the same as the corresponding provision of the draft, although there were small differences in the wording (OJ 16.12.2004 C 310/70):

Article III-165 Constitution

1. Without prejudice to Article III-164, the Commission shall ensure the application of the principles set out in Articles III-161 and III-162. On application by a Member State or on its own initiative, and in cooperation with the competent authorities in the Member States, which shall give it their assistance, the Commission shall investigate cases of suspected infringement of these principles. If it finds that there has been an infringement, it shall propose appropriate measures to bring it to an end.

2. If the infringement referred to in paragraph 1 is not brought to an end, the Commission shall adopt a reasoned European decision recording the infringement of the principles. The Commission may publish its decision and authorise Member States to take the measures, the conditions and details of which it shall determine, needed to remedy the situation.

3. The Commission may adopt European regulations relating to the categories of agreement in respect of which the Council has adopted a European regulation pursuant to Article III-163, second paragraph, (b).

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We have seen that Article 105 TFEU adopted the new third paragraph proposed by the European Convention and agreed by the IGC 2004, although ‘European regulations’ became mere ‘regulations’ and the act adopted by the Council changed from ‘European regulation’ to ‘regulation or a directive’.


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What has been said about Article 105 TFEU?


United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.3: Revised text of Part Three, Titles I to VI of the Treaty establishing the European Community (TEC): Internal Market and competition’ (Version 2, 23 October 2007) includes the current Title VI Common rules on competition, taxation and approximation of laws.

Peers highlighted the amendment to Article 85 TEC and TFEU (ToL), to be renumbered Article 105 TFEU in the consolidated version, with a short comment (pages 25–26):

“The amendment reflects existing practice.”

The analysis 3.3 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm

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The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 105 TFEU, Article 85 TFEU (ToL) in the original Lisbon Treaty (page 11):

“Paragraphs 1 and 2 are unchanged from Article 85 TEC. Paragraph 3 is new.”

The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

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The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed competition on pages 57 to 60. It described Article 85 TEC and ToL on page 58:

“Article 85 (Constitution Article III-165) gives the Commission the authority to investigate competition infringements within its competence, and requires Member States to assist the Commission in this work. There is one addition to the text in Article 85(3) (Constitution Article III-165(3)) to the effect that, where the Council has adopted a regulation pursuant to this provision, the Commission is empowered to adopt a regulation or directive relating to the categories of agreement.”

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

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The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) discussed the internal market and competition on pages 218 and 219.

The main discussion centred on concerns about the removal of ‘free and undistorted competition’ (according to Article I-3(2) of the Constitutional Treaty objectives), but the Committee offered the following statement on the contents of the competition provisions (page 218):

“9.14. The rules on competition contained in previous treaties would be unchanged by the Lisbon Treaty. Articles 101–103 of the TFEU are the same as Articles 81–83 of the TEC. They give the EU power to legislate to combat practices “which have as their object or effect the prevention, restriction or distortion of competition”.

But I found nothing on Article 105 TFEU (Article 85 TEC and ToL).

The report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf

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Sweden

The consultation paper of the government of Sweden, ‘Lissabonfördraget; Statsrådsberedningen, Departementsserien (Ds), Ds 2007:48’ published 20 December 2007, deals with the internal market on pages 261 to 269, ’22.1 Inre marknaden’. There is a brief description of the existing competition rules, Articles 81 to 89 TEC, on page 262.

On pages 265 to 266 the consultation paper explains the amendments to the competition rules (Konkurrensregler). With regard to Article 85(3) TFEU (ToL), the paper mentions that the Commission is given express authorisation to issue rules on block exemptions concerning categories of agreements decided by the Council, and it adds that the amendment reflects current practice:

”Vad avser kommissionens möjligheter att anta vissa genomförandebestämmelser för gruppundantag anges det uttryckligen att kommissionen får anta förordningar avseende de avtalskategorier som rådet har beslutat om (artikel 85.3 i EUF-fördraget). Ändringen motsvarar nuvarande tillämpning.”

The consultation paper ’Lissabonfördraget’ is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

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Finland

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), describes the proposed Commission powers to issue block exemptions, but it makes the observation that this has been the case on the basis of powers delegated by the Council. The comment on Article 85 TFEU (ToL), renumbered Article 105 TFEU is the following (page 207):

”85 artiklaan (uusi 105 artikla) lisätään uusi 3 kohta, jonka nojalla komissio voi antaa sellaisten sopimusten ryhmiä koskevia asetuksia, joista neuvosto on antanut asetuksen tai direktiivin SEUT 83 artiklan 2 kohdan b alakohdan mukaisesti. Komission antamat asetukset ovat SEUT 81 artiklan 3 kohdan soveltamista koskevia niin sanottuja ryhmäpoikkeusasetuksia. EY-sopimuksessa ei ole vastaavaa määräystä, jossa nimenomaisesti todettaisiin komission toimivaltuus antaa asetuksia SEY 81 artiklan 3 kohdan soveltamisesta sopimusten ryhmiin. Komissiolla on kuitenkin jo nykyisin mahdollisuus antaa SEY 81 artiklan 3 kohdan soveltamista koskevia ryhmäpoikkeusasetuksia, jos neuvosto on asetuksella antanut komissiolle siihen toimivaltuudet. Komission toimivallan kirjaaminen perussopimukseen ei siten tuo muutosta vallitsevaan oikeustilaan. Määräys on samansisältöinen kuin perustuslakisopimuksen III-165 artikla.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), offers the same observations about Article 85 TFEU (ToL), the future Article 105 TFEU, on page 210:

”Till artikel 85 (blivande artikel 105) fogas en ny punkt 3, med stöd av vilken kommissionen får anta förordningar avseende de avtalskategorier för vilka rådet har antagit en förordning eller ett direktiv i enlighet med artikel 83.2 punkt b i EUF-fördraget. De förordningar som antagits av kommissionen är s.k. gruppundantagsförordningar som gäller tillämpningen av artikel 81.3 i EUF-fördraget. I EG-fördraget ingår inte någon motsvarande bestämmelse där det uttryckligen skulle konstateras att kommissionen har befogenheter att anta förordningar avseende tillämpningen av artikel 81.3 i EG-fördraget på avtalskategorier. Kommissionen har emellertid redan nu möjlighet att anta förordningar om gruppundantag som gäller tillämpningen av artikel 81.3 i EG-fördraget, om rådet genom förordning har gett kommissionen befogenheter att göra det. Att kommissionens befogenheter skrivs in i grundfördraget innebär således ingen ändring i det rådande rättsläget. Bestämmelsen har samma innehåll som artikel III-165 i det konstitutionella fördraget.”

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf



Ralf Grahn