Commitment Decisions of the European Commission

Friday, 29 March 2013

On 8 March 2013, the European Commission (‘EC’) has given an explanation on commitment decisions in a memo giving answers to the most frequently posed questions on this subject. At the same time, Joaquín Almunia, Vice President of the EC responsible for competition policy, dedicated his speech on remedies, commitments and settlements in antitrust. 

Commitments

To deal with an antitrust case, the EC has two options on the basis of Regulation (EC) 1/2003 on the implementation of Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”) (“Regulation 1/2003”). First, the prohibition decision and the imposing of a fine as provided by article 7 and second, the commitment decision under article 9. The commitment decision allows companies to offer commitments that are intended to address the competition concerns identified by the EC. If the EC accepts these proposed commitments it adopts a commitment decision making them binding on the parties. This takes place without establishing an infringement, which is the major difference with a prohibition decision. In addition to that, a commitment decision is based on commitments offered voluntary by the undertakings concerned, while in case of a prohibition decision, the remedies are imposed on the parties concerned.

Speech of Joaquín Almunia

In its speech of 8 March 2013, Joaquín Almunia gives his view on the instruments which the EC has at its disposal to deal with business practices which are in breach with the articles 101 (cartel prohibition) and 102 (abuse of dominant position) of the TFEU. Since the enforcement of Regulation 1/2003, the EC has taken 41 decisions, which show that there is a clear preference for commitments: while 15 of the antitrust cases concern a prohibition decision, the other 26 cases contain a commitment.

Almunia reduces two questions from this. First, why do companies offer commitments if they claim they have done nothing wrong? For the companies it is important to chose the solution that can best protect their interests and reputation. A commitment decision is quick and formally. The companies have not broken the law, because no breach is detected. Second, he wonders why the EC accepts to close some cases without finding an infringement. Almunia explains that the EC also prefers to conclude cases quickly when it benefits the market. This is especially the case in certain industries.

However, Almunia notes that not all cases are suitable for commitments. Moreover, when the EC agrees to make a commitment decision, its wide margin of discretion and the market test of proposed commitments make sure that the commitments are appropriate for the competition problem. When a commitment decision is taken, the EC has several ways to observe that companies keep their promises. Almunia concludes that commitment decisions are an excellent way to keep good competitive conditions in the Single Market and they are clearly the favourite option among the companies.

Memo

In its memo, the EC gives answers to questions which can rise with regard to the commitment procedure. Special attention can be given to the next aspects. To start, the undertakings under investigation may contact the EC at any time to discuss a possible commitment decision. Moreover, both the EC and the undertakings concerned may decide at any moment during the commitment procedure to quit the discussions. In that case, the EC may continue formal prohibition proceedings as provided by article 7 of Regulation 1/2003.The EC can impose a fine or it can decide to re-open the investigation that was closed because of the commitment decision. Proceedings may also be re-opened when there is any change in the facts on which the decision was based.

In addition to that, the Memo also notices that not all cases are suitable for commitments, depending on the nature of the suspected infringement, the nature of the commitments, their ability to quickly and effectively solve the competition concerns, and the need to ensure deterrence. In cases like cartels, the competition problem cannot be solved by commitment.

For more information: http://europa.eu/rapid/press-release_SPEECH-13-210_en.htm

Conclusion

Commitments appear to become an increasingly important solution for antitrust problems in various sectors. The speech of Almunia shows that the EC welcomes this development and the memo of the EC gives guidance for companies which are interested in commitments.