Monday, September 28, 2015

Commitment Decisions and the Paucity of Precedent

Melchior Wathelet, First Advocate General of the Court of Justice of the European Union describes Commitment Decisions and the Paucity of Precedent.

ABSTRACT: There is a growing and vocal disquiet within the EU competition law community concerning the European Commission's increasing recourse to commitment decisions pursuant to Article 9 of Regulation No. 1/2003. The debate on the matter has identified a number of interlinked points. Firstly, a great deal of discussion has focussed on the proportionality of commitments accepted (some have said ‘extracted’) by the Commission in order to meet the competition concerns expressed in its preliminary assessment or statement of objections. It is opined that if the commitments offered by undertakings and ultimately accepted by the Commission are overreaching or simply not necessary, the latter is effectively redrawing or regulating markets rather than strictly upholding competition rules. It is argued that the imposition of unnecessary or excessively restrictive behavioural and/or structural remedies may undermine an undertaking's ability to compete in the market, thereby weakening the competitive process itself. This debate may, however, underestimate the ability of undertakings to defend their legitimate interests, not to mention the capacity of those undertakings and the Commission to act in a rational manner. On a more positive note, the diverse benefits that accrue under commitment proceedings to the undertakings involved and the Commission as opposed to infringement proceedings, which are in principle more protracted and contentious, have been noted and welcomed. A swifter resolution of the matter together with the avoidance of fines and the negative publicity that a finding of infringement pursuant to Article 7 of Regulation No. 1/2003 by the Commission entails provides clear incentives for undertakings to engage in commitment proceedings and explain their popularity in that quarter. Commitment as opposed to infringement proceedings may also reduce undertakings’ compliance costs most notably by reducing expenditure on legal fees. In addition, the use of commitment rather than infringement decisions undoubtedly frees up limited Commission and NCA resources, which can be employed in other (more serious) cases in the interest of competition and thus the consumer. In that regard, I perceive the power granted by the legislature to the Commission pursuant to Article 9 of Regulation No. 1/2003 to adopt commitment decisions as a logical extension of its recognised entitlement to prioritise its case load.

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