Sunday, November 2, 2008
Posted by D. Daniel Sokol
ABSTRACT: More than 25 years ago, Christopher Norall and I wrote an article challenging the Commission’s approach to the application of Articles 81(1) and (3) EC, calling for the priests of competition law in Brussels to trust the laity more, to share enforcement duties with others, and to be less formalistic in interpreting the rules. It was one of a string of articles which suggested that the Commission could not maintain its monopoly over the grant of exemptions. Its theory that the prohibition of Article 81(1) EC caught everything which might have a remotely discernible effect on competition was understandable for the early days of an untested institution, dubious about the scope of its competence and the reception its theories would receive from courts and businesses. The theory needed to adapt to the realities of an enlarged Europe. After years of hesitation, the Commission wisely chose to share enforcement with national courts and national competition authorities. This was a massive change in course, widely and justly commended.
The biggest success of the reform has been the unexpectedly large surge in cooperation among national competition agencies, and between the competition agencies and the Commission. EC competition law has become a routine part of the business, economic, and governmental environment in Europe. There have been some unconvincing and some bad decisions; inconsistent decisions; eccentric national legislation (my favorite being Greek Law No 3373/2005 which kept in force the administrative prior authorization system and brought back compulsory notification for vertical agreements); but many good decisions. Instead of a tiny number of flagship European Commission decisions which were really major new pieces of rule-making, decisions applying the competition rules by competition authorities across the EU have now become commonplace. This is, I suggest, the most important point.