Wednesday, 28 May 2008

EU TFEU: Competition regulations and directives

The Council’s powers to lay down competition rules are unaffected by the EU Treaty of Lisbon.


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Article 103 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 115/89–90:

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 103 TFEU
(ex Article 83 TEC)

1. The appropriate regulations or directives to give effect to the principles set out in Articles 101 and 102 shall be laid down by the Council, on a proposal from the Commission and after consulting the European Parliament.

2. The regulations or directives referred to in paragraph 1 shall be designed in particular:

(a) to ensure compliance with the prohibitions laid down in Article 101(1) and in Article 102 by making provision for fines and periodic penalty payments;

(b) to lay down detailed rules for the application of Article 101(3), taking into account the need to ensure effective supervision on the one hand, and to simplify administration to the greatest possible extent on the other;

(c) to define, if need be, in the various branches of the economy, the scope of the provisions of Articles 101 and 102;

(d) to define the respective functions of the Commission and of the Court of Justice of the European Union in applying the provisions laid down in this paragraph;

(e) to determine the relationship between national laws and the provisions contained in this Section or adopted pursuant to this Article.

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In Article 2, point 75 of the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) laid out the specific amendments to Article 80 TEC and point 76 amended Article 85 TEC. Thus, no specific amendments were made to Article 83 TEC (OJ 17.12.2007 C 306/68).

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The TFEU table of equivalences tells us that Article 83 TEC first became Article 83 TFEU (ToL) in the original Treaty of LIsbon, but later renumbered Article 103 TFEU in the consolidated version (OJ 17.12.2007 C 306/211).

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The current Article 83 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/75).

In Article 103(1) TFEU the words ‘acting by a qualified majority’ were deleted in accordance with the Article 2 of the Treaty of Lisbon, horizontal amendment 2(d), and in Article 103(2)(d) the ‘Court of Justice’ became the ‘Court of Justice of the European Union’, as stated in horizontal amendment 7. Cf. OJ 17.12.2007 C 306/41 and 43.

In addition, the Articles referred to throughout have been renumbered in the amending treaty. For ease of use, Article 83 TEC is reproduced here in full:

Article 83 TEC

1. The appropriate regulations or directives to give effect to the principles set out in Articles 81 and 82 shall be laid down by the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament.

2. The regulations or directives referred to in paragraph 1 shall be designed in particular:

(a) to ensure compliance with the prohibitions laid down in Article 81(1) and in Article 82 by making provision for fines and periodic penalty payments;

(b) to lay down detailed rules for the application of Article 81(3), taking into account the need to ensure effective supervision on the one hand, and to simplify administration to the greatest possible extent on the other;

(c) to define, if need be, in the various branches of the economy, the scope of the provisions of Articles 81 and 82;

(d) to define the respective functions of the Commission and of the Court of Justice in applying the provisions laid down in this paragraph;

(e) to determine the relationship between national laws and the provisions contained in this Section or adopted pursuant to this Article.

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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 the first paragraph was slightly reworded and the draft used the term ‘Council of Ministers’ and the legal instruments to be used pursuant to Article III-52 were defined as ‘European regulations’. Naturally, the Articles referred to were numbered differently. In case someone wants to study the draft provisions more closely, the text looked like this (OJ 18.7.2003 C 169/36):

Article III-52 Draft Constitution

1. The Council of Ministers, on a proposal from the Commission, shall adopt the European regulations to give effect to the principles set out in Articles III-50 and III-51. It shall act after consulting the European Parliament.

2. The European regulations referred to in paragraph 1 shall be designed in particular:

(a) to ensure compliance with the prohibitions laid down in Article III-50(1) and in Article III-51 by making provision for fines and periodic penalty payments;

(b) to lay down detailed rules for the application of Article III-50(3), taking into account the need to ensure effective supervision on the one hand, and to simplify administration to the greatest possible extent on the other;

(c) to define, if need be, in the various branches of the economy, the scope of the provisions of Articles III-50 and III-51;

(d) to define the respective functions of the Commission and of the Court of Justice in applying the provisions laid down in this paragraph;

(e) to determine the relationship between national laws and this Section or the European regulations adopted pursuant to this Article.

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The location of Article III-162 of the Treaty establishing a Constitution for Europe was the same as for the corresponding provision of the draft (OJ 16.12.2004 C 310/69–70).

The ‘Council of Ministers’ became the ‘Council’, ‘Such regulations’ replaced ‘The European regulations referred to in paragraph 1’, the ‘Court of Justice of the European Union’ replaced the ‘Court of Justice’ and ‘national laws and this Section’ became ‘Member States’ laws and this Subsection’.

We take note of the fact that (European) regulations were the intended legal instruments. The numbering of the Articles referred to was different from the draft:

Article III-163 Constitution

The Council, on a proposal from the Commission, shall adopt the European regulations to give effect to the principles set out in Articles III‑161 and III‑162. It shall act after consulting the European Parliament.

Such regulations shall be designed in particular:

(a) to ensure compliance with the prohibitions laid down in Article III-161(1) and in Article III-162 by making provision for fines and periodic penalty payments;

(b) to lay down detailed rules for the application of Article III-161(3), taking into account the need to ensure effective supervision on the one hand, and to simplify administration to the greatest possible extent on the other;

(c) to define, if need be, in the various branches of the economy, the scope of Articles III-161 and III-162;

(d) to define the respective functions of the Commission and of the Court of Justice of the European Union in applying the provisions laid down in this paragraph;

(e) to determine the relationship between Member States' laws and this Subsection as well as the European regulations adopted pursuant to this Article.

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We have seen that Article 103 TFEU, content to make only horizontal and technical adjustments, is almost exactly the same as the current Article 83 TEC. Thus, the legal instruments are still described as ‘regulations or directives’.

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What has been said about Article 103 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 amendments to Article 83 TEC and TFEU (ToL), to be renumbered Article 103 TFEU in the consolidated version, without comment (page 25).

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 103 TFEU, Article 83 TFEU (ToL) in the original Lisbon Treaty (page 11):

“Unchanged from Article 83 TEC.”

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 page 57 to 60. It commented on Articles 81 and 82 as well as Article 85 TEC and ToL on page 58, but Article 83 TEC and ToL drew no comment.

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 around 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”.

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), but there are no specific comments on Article 83 TFEU (ToL).

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), includes only a short comment on the unchanged nature of Article 83 TFEU (ToL), renumbered Article 103 TFEU (on page 207):

”83 artiklaa (uusi 103 artikla), jossa määrätään 81 ja 82 artiklassa tarkoitettujen periaatteiden soveltamista koskevien neuvoston asetusten ja direktiivien antamisesta, ei muuteta.”


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 brief observation about Article 83 TFEU (ToL), the future Article 103 TFEU, on page 210:

”Artikel 83 (blivande artikel 103), där det föreskrivs om fastställandet av de förordningar och direktiv som gäller de principer som anges i artiklarna 81 och 82, ändras inte.”

The ratification bill in Swedish can be accessed at:

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




Ralf Grahn