Thursday, 29 May 2008

EU TFEU: Competition transition provision

The transitional provision on competition rules seems to illustrate the institutional focus of the treaty reform aspirations during the last decade. The EU Treaty of Lisbon makes technical adjustments, without taking notice of the relevance or irrelevance of most provisions concerning the internal policy areas.

If the Treaty of Lisbon enters into force, there might be an opening to modernise the Treaty on the Functioning of the European Union (TFEU).


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Article 104 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 104 TFEU
(ex Article 84 TEC)

Until the entry into force of the provisions adopted in pursuance of Article 103, the authorities in Member States shall rule on the admissibility of agreements, decisions and concerted practices and on abuse of a dominant position in the internal market in accordance with the law of their country and with the provisions of Article 101, in particular paragraph 3, and of Article 102.

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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 84 TEC (OJ 17.12.2007 C 306/68).

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The TFEU table of equivalences tells us that Article 84 TEC first became Article 84 TFEU (ToL) in the original Treaty of LIsbon, but later renumbered Article 104 TFEU in the consolidated version (OJ 17.12.2007 C 306/211).

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The current Article 84 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 104 TFEU the words ‘common market’ were replaced by ‘internal market’ in accordance with the Article 2 of the Treaty of Lisbon, horizontal amendment 2(g). Cf. OJ 17.12.2007 C 306/41..

In addition, the Articles referred to were renumbered in the amending treaty. For ease of use, the current Article 84 TEC is reproduced here in full:

Article 84 TEC

Until the entry into force of the provisions adopted in pursuance of Article 83, the authorities in Member States shall rule on the admissibility of agreements, decisions and concerted practices and on abuse of a dominant position in the common market in accordance with the law of their country and with the provisions of Article 81, in particular paragraph 3, and of Article 82.

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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 opted for the term ‘internal market’ and Article III-53 defined the legal instruments in the field of competition as ‘European regulations’. Naturally, the Articles referred to were numbered differently. Otherwise the rewording was minimal. 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-53 Draft Constitution

Until the entry into force of the European regulations adopted pursuant to Article III-52, the authorities in Member States shall rule on the admissibility of agreements, decisions and concerted practices and on abuse of a dominant position in the internal market in accordance with their internal law and Articles III-50, in particular paragraph 3, and Article III-51.

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The location of Article III-164 of the Treaty establishing a Constitution for Europe was the same as for the corresponding provision of the draft (OJ 16.12.2004 C 310/70).

The term ‘internal law’ became ‘national law’ and the Articles referred to were numbered differently:

Article III-164 Constitution

Until the entry into force of the European regulations adopted pursuant to Article III-163, the authorities in Member States shall rule on the admissibility of agreements, decisions and concerted practices and on abuse of a dominant position in the internal market in accordance with their national law and Article III-161, in particular paragraph 3, and Article III-162.

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We have seen that Article 104 TFEU, content to make only horizontal and technical adjustments, is almost exactly the same as the current Article 84 TEC. Thus, instead of legal instruments with distinct names, the provision refers to ‘the provisions adopted in pursuance of Article 103’.

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What has been said about Article 104 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 84 TEC and TFEU (ToL), to be renumbered Article 104 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 104 TFEU, Article 84 TFEU (ToL) in the original Lisbon Treaty (page 11):

“Unchanged from Article 84 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 pages 57 to 60. It commented on Articles 81 and 82 as well as Article 85 TEC and ToL on page 58, but Article 84 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 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”.

As we see, Article 104 TFEU (Article 84 TEC and ToL) was not mentioned.

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 84 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 84 TFEU (ToL), renumbered Article 104 TFEU (on page 207):

”84 artiklaa (uusi 104 artikla), joka koskee 83 artiklan nojalla annettujen asetusten ja direktiivien täytäntöönpanoa jäsenvaltioissa, 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 84 TFEU (ToL), the future Article 104 TFEU, on page 210:

”Artikel 84 (blivande artikel 104), som gäller genomförandet av förordningar och direktiv som antagits med stöd av artikel 83, ändras inte.”

The ratification bill in Swedish can be accessed at:

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

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European Community (European Union) competition law and policy is a developed area, with treaty provisions, secondary legislation, supplementing guidelines and a significant body of case law.

Today, areas not covered by EC law seem marginal or inexistent, especially after Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (Text with EEA relevance), as amended by Regulations No 411/2004 and 1419/2006:

Council Regulation (EC) No 411/2004 of 26 February 2004 repealing Regulation (EEC) No 3975/87 and amending Regulations (EEC) No 3976/87 and (EC) No 1/2003, in connection with air transport between the Community and third countries (Text with EEA relevance)

Council Regulation (EC) No 1419/2006 of 25 September 2006 repealing Regulation (EEC) No 4056/86 laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport, and amending Regulation (EC) No 1/2003 as regards the extension of its scope to include cabotage and international tramp services (Text with EEA relevance)

For convenience, see the consolidated version of Regulation 1/2003:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2003R0001:20061018:EN:PDF

In addition, we take note of the Article 3(1)(b) TFEU, on the future competition law of the European Union:

1. The Union shall have exclusive competence in the following areas:

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(b) the establishing of the competition rules necessary for the functioning of the internal market;
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If the Treaty of Lisbon enters into force, a reform of the policy areas in the EU treaties, especially the TFEU, seems to be called for, if only to rid the treaties of more or less redundant provisions.


Ralf Grahn