It is necessary to await the decision of the cma.ec, and then the admin appeal (cat/ecj) to be able to file a civil (ordinary private) claim:  eg to cif

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EU: JR in cl

JR courts (unlike [trial=commonlaw= ordinary] courts) decide on grounds that are not proved on just facts, but also law and policy.

The grounds of jr:

 lack of jurisdiction, procedural failure, error of law, defective reasons, manifest error of appreciation and so forth, are now regarded as ‘error of fact’.
eg. an ec decision on the Channel Tunnel was annulled , by ecj, because of ec’s factual errors on the nature of the contracts.

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THE EU COURT OF FIRST INSTANCE (CIF) = TIF (tribunal of first instance)

Judges have been invited, for example, to stop French nuclear tests in the Pacific. They find themselves dealing with ‘Mad Cow’ Disease. They also deal with applications of freedom of information for access to eu docs. the heart of our work is cl and state aids. the name “Court of First Instance” is, in reality, an appeal from a decision by EC.cma

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Standards of Proof in Competition Cases

who has the onus of proof?…This of course depends on whether an administrative or a civil or criminal proceeding is involved

uk delegate opinion (on the above remarks):

Mr. Chairman, your remark is puzzling. Authorities might well bring a different number of
predation cases according to the kind of law that was operating. I believe that in Canada price
predation might be regarded as a criminal offence and hence the remarks that the judge made about the importance attached to intent is being very relevant. In a criminal case of predation, in most systems, predation would consist in the abuse of a dominant position, and perhaps the standards of proof would still be very demanding.

It would be not so strong as a criminal jurisdiction. In many countries, predation would be dealt with entirely administratively with no financial penalties even if a verdict of predation was concluded. No rights of appeal against that judgement exist in the British system. So perhaps the standard of proof that we would be able to apply in a predation case in the United Kingdom would be less rigorous – perhaps than in the EC system and certainly than in Canada and in America, where predation is a criminal offence. So, there are quite different sorts of standards of proof in CL.

A number of predation cases occurred in the United Kingdom since the deregulation of the bus industry. If we had been operating in one of the other competition systems around this table, there would have likely been a lot of appeals against the findings reached by the British
Authorities in those predation cases. However, the case ended with us with the mere undertaking of the industry that, future pricing policies will be arranged somewhat differently. Anyway, there is no scope for appeal in the UK. In another jurisdiction, however, the case would surely go through the courts and people would be challenging our analysis of the predatory pricing.

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cif reply to the uk delegate:

sanctions can only be applied to corporate bodies: there is no personal liability. Then, regarding this question of proof, it may well be the case, but it is not particularly logical, to say that “the less the penalty, the easier it is to prove the offence”.

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Within the civil sphere, various presumptions of fact may be applied:egs :
[Adam Smith: ‘whenever two traders meet, some mischief to the public is afoot’]….BUT, presumptions needed to be numerous and convergent, and based on evidence provided by the litigants.

-High market shares create a presumption of dominance or of illegality of a merger.
-cartel conduct, other forms of horizontal, or vertical agreements [such as resale price maintenance], have been presumed to be unlawful

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Courts continue to wrestle with issues of sufficiency of proof in the following areas of
competition analysis:

• Proof of agreement: this is often the most simple and straightforward type of evidence in
competition cases, but increasingly, direct evidence of agreement is not available; in those
cases, is evidence of “conscious parallelism” sufficient to prove an agreement?

• Market definition: this evidence, which often focuses on the willingness of buyers to
substitute among different products, may be considered as more specialised, “economic”
evidence; how are courts to evaluate this type of evidence, and are their conclusions on
relevant market ones of fact or law, or both?

market definition requires consideration of the substitutability of products and
of sources of supply. Substitutability is usually a matter of degree, however….Unless entry into the relevant market is also difficult, the large firm has no market power. But when is
entry sufficiently “difficult,” and how can such difficulty be measured? In one sense, the standard for measuring difficulty of entry may be relatively arbitrary, for example, if it takes more than two years for successful entry it may be considered difficult. In other ways, the entry analysis is not susceptible to generalisation. A high absolute cost of entry, for example, may not signal real difficulty if all or most of the costs are not sunk, or if they are small relative to the size of the industry.

Mergers are the most difficult type of cases, and cartels the easiest. merger cases involve complex analytical issues, including market definition, analysis of entry conditions and evaluation of competitive effects. The effects issue is especially challenging because it is prospective; it requires a prediction of future effects of present conduct

• Intent: some proof of intent to cause anticompetitive effects is usually required in criminal cases, but what is the standard in civil cases?

• Substantiality: How do courts decide whether a given restraint, if proven, is sufficiently
harmful to competition to breach the requirement of “substantiality” or “undue” harm to
competition that most laws require?

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difficult evidence issues are:

-proof of agreement in the absence of explicit evidence thereof,
-definition or articulation of standards for dominance,
-determining the substituability of products, and the substantiality resulting from the conduct
-location of supply and defining markets
– in different jurisdictions, the standards of proof or the nature of the prohibition may change as one wants to get a specific result.

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-facts fall into three difference kinds:

a.primary or basic facts:

what happened? did such a meeting indeed take place? was there such and such telephone
call? if so, was an agreement in fact made? ….. Basic facts mostly is based on written proof. Very little on oral testimony…..-in cartel cases we can follow this syllogism: ‘You were at the meeting, afterwards your market conduct followed that of the others. You have offered no other plausible explanation, so we find the infringement proved.’ …. but his court approach may breach the privilege against self-incrimination.

b. inferred facts:

The evidence may permit however, only an inference of agreement from certain conduct of the parties, or from circumstantial
evidence. Is evidence solely of “conscious parallelism” sufficient in this regard?

c. economic facts:

these are more complex. what is the relevant market? [This is a mixed question of fact and law]. what is substitutability, in the specific case? is there a dominant position? [This is a mixed question of fact and law].

But whether it is a question of fact or a question of law has not really been sorted out yet. It is important because the right of appeal from the Cif, to the ECJ depends upon whether you can raise a point of law.

Continental Can Case, cif held: there is no market for metal cans for fish paste, there is just a market for metal cans… thus, cif held that the [former] ec’s economic finding of fact, was of manifest error.

If factual evaluation is contested, both parties will file experts’ reports…but if these reports raise doubts in the courts [eg as to the correctness of the definition of the market], we do not proceed, as a Common Law court would, to cross examination or even to a confrontation among the experts. instead, we appoint a court expert or even a panel of three experts, one nominated by each party and one chosen to be neutral

As regards questions of abuse, probably the question of whether a particular conduct is to be regarded as abusive, that is to say whether it is justified or not, becomes more close to a question of law rather than a question of fact. The question of whether there is some effect on
trade between Member States is also now pretty well a question of law and not any longer a question of fact.

d. policy facts:

For example, in a decision granting exemption under Article 85-3 of the Treaty, ec have to decide whether certain alleged improvements flowing from the agreement, perhaps as a joint venture, outweigh the detriment to competition and are indispensable. here we accord considerable appreciation (deference) to the ec, and it is only rarely that the cif will interfere on a factual issue. However, cif can disagree here with ec, using the route known as ‘defects in the reasoning’. this route is how ec decisions are controlled

japan asked: the opinion of the cec is generally respected on the third factor on policy. With regard to the second category, which is the economic fact, is it correct to understand that no special weight is given to the opinion of the competition authority, because it is its very judgement which is being contested? reply: weight is give (by cif to ec decisions) on economic facts; but even more weight on policy facts.

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JR IN CL

What are the disadvantages of precedent based competition law?

-a lack of predictability. case to case simply does not produce rules of
wide ranging applicability

-lack of continuity in enforcement

the advantages of precendent:

-flexible enough to respond to changing economic conditions

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LEGITIMATE INTERESTS OF EU MEMBERS

the control of concentrations between undertakings as amended by Council Regulation (EC) No. 1310/97 of 30th June 1997), if a merger satisfies certain jurisdictional thresholds, that is, it is a concentration with a “Community dimension”, the European Commission (EC) has sole jurisdiction over competition issues and a Member State is precluded from applying its own competition laws (unless a Member State makes a request for the case to be referred back to it for consideration under domestic competition law pursuant to Article 9 of the ECMR and this is agreed to by the EC, or if a Member State invokes Article 296(1)(b) of the EC Treaty(1)).

However, notwithstanding the EC’s sole jurisdiction on competition in such cases, Member States may take appropriate measures to protect legitimate interests so long as they are compatible with the general principles and other provisions of Community law. Public security, plurality of the media and prudential rules are legitimate interests under the ECMR. In addition, other public interests may be invoked which have been communicated to and recognised by the EC pursuant to Article 21(3) of the ECMR.

Section 67 of the Enterprise Act 2002 (EA 2002) provides a mechanism for the Secretary of State to protect legitimate interests where the EC has sole jurisdiction of competition issues. That section enables the Secretary of State to serve a “European intervention notice” if she suspects that a relevant merger situation (as defined in section 23 of the EA 2002) has been, or will be, created; the merger is a concentration with a Community dimension and she is considering whether to take appropriate measures to protect legitimate interests as permitted under the ECMR. She must, however, believe that one or more of the public interest considerations specified (or if not specified, she thinks ought to be specified) in section 58 of the EA 2002 is relevant. Currently, only national security (which includes public security) is specified in section 58 EA 2002, but other public interest considerations may be specified by an Order subject to the affirmative resolution procedure or by other primary legislation. In relation to the recognised water comparator legitimate interest, this interest is protected by the special procedure in the Water Industry Act 1991.

This Order provides for the taking of action by the Secretary of State where a European intervention notice has been given so as to remedy the adverse public interest effects which have resulted from, or may be expected to result from, the creation of a European relevant merger situation—that is where the relevant merger situation is also a concentration with a Community dimension under the ECMR.

The Order follows the procedures set out in the public interest and special public interest schemes of the EA 2002 with appropriate modifications and many of the other provisions of Part 3 of the EA 2002 are applied with modifications where relevant. The Order makes provision for when a European intervention notice comes into force; imposes an obligation on the OFT to produce a report where such a European intervention notice has been given; makes provision for the Secretary of State to refer the matter to the Competition Commission and imposes on them an obligation to report on certain matters within certain time limits. It also enables the Secretary of State to take enforcement action in such European intervention cases and these enforcement provisions mirror to a large extent the public interest and special public interest enforcement regime in Schedule 7 to the EA 2002.

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EU JR

(1) The Treaty on the Functioning of the European Union is based on a confusing distinction between control of legality (Article 263 TFEU) and unlimited jurisdiction (Article 31 of Regulation No 1/2003 in relationship to Article 261 TFEU).

Limits to judicial review are based on the principle of separation of powers and to the exercise of discretionary powers.

(2) ec enjoys some discretion in the assessment of complex economic and technical issues. In these cases, judicial review limits to control whether ec committed a manifest error of assessment. eg: courts may annul the ec’s decisions when they are not based on sound economics.  eg: The Guidelines:  in assessing the seriousness of a competition infringement, ec does not have to take its actual market impact into account, and cannot be controlled by the legal principles, nor by alternative technical reports, unless they shed more certainty in the analysis.

(3)ec has discretionary powers, which involve the ability to make competition policy choices. Discretionary decisions must be annulled ONLY when they infringe the legal framework or are deemed not to be reasonable, suitable or proportionate….Thus, under no circumstances, can the Courts rule on the substance

 (4) the role of the Courts is controlling, not defining, competition policy, nor enforcing cl….Therefore, Courts have to limit themselves to quash the decision, but cannot substitute their point of view for that of the Commission…Courts are not competition authorities

(5) In CL, eu courts enjoy “unlimited jurisdiction with regard to the penalties”, so that they are not only allowed to annul the contested decision, but also to reduce or increase the fine or periodic penalty imposed…However, in practice, control of the merits has a limited scope.

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the European courts have to protect citizens’ rights. Article 263 (TFEU) provides a comprehensive way to review the law, the facts and their appraisal. However, on the other hand, courts are not competition authorities. This raises some limits for judicial review.

1. courts are entitled to annul the Commission’s decision, but as a rule they cannot pronounce on the merits of the case.
2. courts can annul discretionary decisions when they do not conform with the legal framework, but cannot substitute their own discretion for that of the Ec.
3. judicial review can control whether the Commission made a manifest error in the assessment of complex and technical issues.
4. in spite of the unlimited jurisdiction to courts found in (Article 261 TFEU), they give the ec significant leeway in the application of fines.

courts cannot substitute their own discretion for that of the European Commission.

(EC= EU competition authority) has the power to make competition policy decisions (discretionary powers). courts can limit this power, but not on the substance (of ec’s policy decision)…JR is limited to control whether ec committed a “manifest error” of assessment.

The Court has repeatedly held that the ec’s practice in previous decisions is not binding for ec. eg, the fact that ec in the past has imposed fines set at a specific level for certain infringements, does not prevent it from setting different fines in similar cases, if is necessary to comply with the Guidelines.

JR is limited to verifying whether ec made a manifest error in the assessment of the facts (Section V).

when there is a margin for choice (admin right to discretion), the ec decision will stand….ie: courts can declare the rights at stake, only where ec decision had no margin for ec discretion.

the court’s unlimited jurisdiction is only (Article 261 TFEU) to impose criminal fines

judicial review needs to strike the right balance between the conflicting forces of

• improving courts’ scrutiny as a means to protect the citizens’ rights…we must interpret the Treaty to ensure effective judicial protection.
• leaving the competition authority the necessary room to shape and implement competition policy

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ecj reviews the legality of ec’s decisions on the Article 263 TFEU grounds.

Competition law enforcement can have a significant bearing on wpis, such as private property, freedom of commerce and industry (Articles 16 and 17 of the Charter of Fundamental Rights of the European Union) or due process and fair trial (Article 6(1) ECHR).

For instance, the Court annuls the Commission’s decisions regarding State aids when it finds errors in law from [eg: failing to carry out the assessment of the selectivity of the measure,14 the application of the ‘private creditor test’, or a comprehensive review as to whether the tax scheme at issue came within the scope of Article 107(1) TFEU.16]

An ec decision can be made void when based on insufficient, incomplete, insignificant and inconsistent evidence.For instance, in Hellenic Republic, the General Court annulled ec’s decision, since it had not provided sufficient evidence to prove the abuse of dominant position (Article 102 TFEU). In this regard, it does not suffice to argue that the ec decision distorts competition by creating inequality of opportunities between economic operators (Article 106 (2) TFEU).22

In Deutsche Post, the Court held that ec was not entitled to classify as State aids the payments made to an undertaking entrusted with discharging a public service obligation, since it failed to check whether they exceeded the total amount of the net additional costs resulting from such obligations.

in MTU Friedrichshafen, the Court stated that ec cannot assume that an undertaking has benefited from a State aid solely based on a lack of information enabling the contrary to be found 

courts must not only control the law, but also the facts, their appraisal and the evidence provided by ec, to support its decision.

in the USA, antitrust law is not enforced by an administrative body, but directly by the courts.

In contrast, in all European jurisdictions, courts are not restrained to a mere control of law, but fully control the facts and their appraisal.

in the uk, a merits reviewer (cat) may affirm or vary the decision, or set the decision aside and either make a substitute decision or remit it to the primary decision-maker for reconsideration (‘the merits reviewer ‘‘stands in the shoes of the primary decision-maker’’’)….A further appeal is available from cat to the ‘appropriate court’ but only regarding points of law or penalty amounts.

in CEAHR, the Court annulled the Commission’s decision [declaring the absence of sufficient Community interest in continuing the investigation], since such a conclusion was vitiated by insufficient reasoning, the failure to take account of a relevant factor raised in the complaint, and manifest errors of assessment. However, the Court did not declare the existence of sufficient Community interest, because that is ec jurisdiction….the court ruled that, with a more accurate reasoning, ec could have demonstrated the absence of community interest, but failed to do so, and therefore ec had committed a manifest error of assessment in defining the relevant market, but the court did not get involved in defining the market

 In EDF, the Court annulled ec’s decision for not having applied the private investor test to appraise whether fiscal measures could be qualified as State aids. However, the Court did not apply the test

in ING, the Court stated that ec failed to prove that amendment of the repayment terms constituted an advantage for the company that a private investor in the same situation as the Netherlands State would not have granted. The Court annulled the contested decision, but did not carry out the analysis

In Deutsche Post, the Court annulled the ec decision, as ec had failed to carry out examination of whether the State payments exceeded the net additional costs of a public service obligation. However, it did not rule on whether there was State aid or not.

in adp cases (Article 102 TFEU), the court can only control the adequacy of the method of calculating the rate of recovery of costs chosen by ec and its application, including the calculations

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the role of the European courts is :

a-to control the legality of the Commission’s decisions and

b-to protect the citizen’s rights

…. but not to enforce competition law.

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a. control the legality of the EC’s decisions

ecj reviews the legality of ec’s decisions on the Article 263 TFEU grounds, namely lack of competence, infringement of an essential procedural requirement, infringement of the Treaties, or of any rule of law relating to their application, or misuse of powers.

ecj has unlimited jurisdiction only “with regard to penalties- amounts and substance of decision” (Article 261 TFEU) in European CL.

Diff:

-appeal: a full appeal on the merits:  may affirm or vary the decision, or set the decision aside , or make a substitute decision, or remit it to the primary decisionmaker for reconsideration (“the merits reviewer ‘stands in the shoes of the primary decision-maker’”)

-jr : an appeal limited to control the legality of the former court decision. Courts exercise a “supervisory” jurisdiction only. cannot go into the merits.

Article 263 TFEU does not limit the grounds of jr, and extends to the law, the facts and their appraisal.

ERRORS OF LAW AND MISUSE OF POWERS

European Courts play a comprehensive review of issues of law.

1/Courts must control whether the decision-maker had the power to act. If not, the ultra vires decision must be voided. It is noteworthy that the power to act, frequently, is also a duty to act. Then, there is also illegality when the Commission, having the duty to act, remains inactive (CEAHR).

2/Courts control errors of law in Competition law enforcement

eg. is there really an undertaking?… eg: a public entity may be regarded as an undertaking in relation to only part of its activities that are economic. On the contrary, there is no economic activity where the activity falls within the exercise of public powers.

eg.a service supplied by a public entity in use of her public powers, in return for remuneration, is not an undertaking. 

eg.  example, if the parent company and its subsidiary form a single economic unit, fines can be imposed on the parent company, without having to establish the personal involvement of the parent in the cl infringement

eg. When a legal entity ceases to exist in law, liability for its unlawful conduct is assumed by the absorbing company,[since otherwise undertakings could escape penalties by simply changing their identity through restructurings or sales]

3/Third, Courts control the misuse of powers, which results when a measure was taken for achieving an end other than that stated.. eg in Deutsche Telekom, the Court denied that when acting against the undertaking for anticompetitive behaviour the Commission really intended to act against the German authorities

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INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS

The combination of the investigative, prosecutorial and decision-making powers in the sole hands of the ec, has to be compensated by procedural guarantees, which are under the Courts’ scrutiny.

for instance, the Commission cannot deny access to the file to ensure the effectiveness of the leniency program

eg. a State aid decision could be annulled because of the Commission’s failure to carry out a detailed examination as laid down in the investigation procedure (Article 108.2 TFEU), even if it had not been established that the Commission’s assessments as to substance were wrong in law or in fact

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FACTS AND THEIR APPRAISAL

The wording of Article 263 TFEU does not mention any control of the facts. However, it is evident that control of legality also extends to control of the facts (on which the administrative decision is based)

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In the UK, the decisions of the cma can be appealed to the Cat (specialised administrative body), which carries out a control on the merits, related to fines and a control of legality, related to merger decisions. A further appeal lies from the cat to the “ordinary court” , on JR, only on a point of law, or on the amount of any penalty. However, not all errors of fact lie beyond the reach of jr.  Courts (on jr) control whether the admin decision-maker (eg cma):

-has acted in absence of the required facts to exercise the power entrusted by the legislature (error of precedent fact);

-has failed to take into account all relevant considerations and/or

-has disregarded irrelevant considerations;

-has provided enough evidence; or

-has acted under a misunderstanding or ignorance of relevant facts (error of material fact)

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when the court annuls a merger decision, in whole or in part, the concentration shall be re-examined by ec with a view to adopting a new decision (Article 10(5) of the Regulation (EC)

In sum, it ‘is not for the Court to pronounce itself on the merits of the case, and even less to take over the role of the administration in the event of an annulment to proceed to a fresh decision

The limits of judicial review stem from the principle of separation of powers, thus, public admin decisions based on discretionary powers can only be challenged by the courts, if are contrary to the legal framework and to the general principles of law.

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In Spanish Competition law, judicial review is not regarded as a sort of second instance, but as a comprehensive control of law and facts

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EU

the European Courts carry out a comprehensive review related to the facts and their appraisal, which is necessary to assess the legality of the Commission’s decisions. The decision can be made void when based on insufficient, incomplete, insignificant and inconsistent evidence.

JR is limited to focus on whether the contested decision is based on materially incorrect facts, or incur in an error of law, a manifest error of assessment or misuse of powers. In this sense, in CEAHR, the ecj annulled the Commission’s decision [declaring the absence of sufficient Community interest in continuing the investigation], on the basis that this decision was  vitiated by insufficient reasoning, the failure to take account of a relevant factor raised in the complaint, and manifest errors of assessment…why?:

-ec did not define the relevant market, but relied on a prima facie market definition to underpin its conclusion that there was a low probability of there being any infringements of Articles 101 and 102 TFUE, and on that  conclusion  based its finding that there was no evidence of disturbance of the market.

-ec rejected carrying out the investigation, while it was evident that it was in the interest of the whole Community, as well as the fact that it was the authority best placed for assuming this task.

In Hellenic Republic, the ecj General Court annulled the Commission’s decision, since it had not proved the abuse of dominant position (Article 102 TFEU). 

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MARGIN OF APPRAISAL

Courts can only substitute the ec decision, when it is quite evident that the conduct deserves another fine. Evidence has to result from the materials collected in the procedure or adduced by the applicant, since Courts are not supposed to develop their own investigations.

-eg: Courts recognized that the ec threshold method used in assessing the duration of an infringement, ignored the differences of the undertakings. However, the Court did not censure it, on condition that it complies with the principle of equal treatment and the principle of proportionality…courts may only check that the thresholds (used by ec to set the fines) are coherent and objectively justified

the ec appraisal of facts is subject to a more limited judicial review , [than the appraisal of law], as Courts only control whether there has been a manifest error of assessment of facts.

however, is very difficult to separate facts, and their appraisal, from law interpretation…. they are 2 sides of the same coin…Thus, limiting the control of facts can also lead to limit the control of law.

According to settled case law, in cases involving complex economic and technical assessments, judicial review is “limited” to verify whether:

(i) the relevant procedure rules have been complied with,

(ii) there is a comprehensive statement of reasons,

(iii) there was any error of law,

(iv) the facts are accurate, reliable and consistent

(v) and the evidence put forward contains all the relevant data that must be taken into consideration to assess a complex situation

(vi) and there has been any manifest error of assessment of those facts

(vii) or any misuse of powers or, on the contrary, they are capable of sustaining the conclusions drawn from it

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The appraisal of facts and evidence “falls within the Court’s complete discretion”, which is entitled to review the Commission’s interpretation of information of an economic nature. The courts jr on both ec facts and ec use of discretions has become more intensive over time

eg.when the definition of the relevant market is in discussion, the Courts do not hesitate in testing the Commission’s findings, as can be seen in Telefónica.

eg. in Deutsche Telekom, the Court stated that the choice of method used to establish a margin squeeze is subject to a restrained judicial review, since it corresponds with a complex economic appraisal. However, it did not prevent the Court from controlling whether the abusive practices had been properly determined by the Commission. Following the case-law, the Court concluded that the Commission was correct to analyse the abusive nature of the pricing solely on the basis of the own charges and costs of the undertaking with dominant position

But There is a limited ec margin of discretion that cannot be controlled by the Courts, since, ow, it would not be reviewing, but making decisions. eg ( In jr cases), Courts can only ascertain whether there has been a manifest error of appraisal,[ = a mode of action that falls outside the given set of reasonable modes]. if so, marginal review is applied [only marginal as the Court is otherwise at risk of substituting its own views to that of the administrative body]

eg. ec enjoys of a degree of latitude regarding the choice of the econometric instruments and the approach used, provided that those choices are not manifestly contrary to the accepted rules of economy, and are not applied inconsistently. Thus, the more novel the discussed issues or the more controversial the economic reasoning, the greater the ec margin of appraisal

For this reason, Courts can only void the Commission’s decisions when they are based on a “manifest error” of assessment. thus, the applicant has to make a special effort to show that the Commission’s decision was not based on sound economics.

In the same vein, most national jurisdictions accept some kind of deference to administrative discretionary powers.

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Instances where the ec can make competition policy options (discretionary powers= ec can choose among different policy interests):

….i think this should be done by the eu parliament, not by the ec(competition auth)

1- acting as regulator. The Commission is entitled to propose regulations (Article 289 (1) TFEU) and to address directives to ensure fulfilment of competition rules by undertakings with special or exclusive rights or by undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly (Article 106 (3) TFEU).

2-Second, the European Commission has discretionary powers to launch sector inquiries, as a way to detect anticompetitive behaviours. For instance, it is for the Commission to decide whether to focus on patent settlements in the pharmaceutical sector, or if it is better off targeting the electricity markets.

3-advocacy : ec can decide on the best way to persuade governmental bodies to design competition friendly policies and to alert consumers to the benefits of a well-functioning market.

4-ec can take into account non-competition goals when applying Competition law. Article 107(3) TFEU gives ec a wide discretion to allow State aids by way of derogation from the general prohibition laid down in Article 107(1) TFEU114.

5- more doubtful, is whether discretionary powers are provided for in Article 101(3) TFEU. if so, the ec may declare inaplicable: [The prohibition of agreements between undertakings, decisions by associations of undertakings]

-discretionary powers are subject to a limited judicial review, since Courts cannot make administrative policy choices(only public bodies can).discretionary powers grant ec the power to decide what is more convenient to achieve the Competition policy goals, by setting priorities and choosing the means and criteria by which the decision has to be reached

For instance, focusing investigations on certain sectors or allowing State aids to protect environment or culture are decisions to be taken by ec only.

It is settled case-law that jr of ec’s discretion in applying the Article 108 (3) TFEU exception is confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with, and to verifying the accuracy of the facts relied on and that there has been no error of law, manifest error of assessment of the facts or misuse of powers

The Court must also verify whether the ec followed the Guidelines requirements.  eg, in Electrolux, the General Court annulled the ec’s decision, because of the manifest error of assessment in the examination of the distortion of competition. However, the Court cannot substitute its own economic assessment for that of the Commission

Article 263 TFEU enables the Courts to annul the Ec’s decisions, but not to substitute them. Competition enforcement is entrusted to the ec, which act as investigator, prosecutor and decisionmaker. The Courts role is to verify the legality of the contested measure, testing whether the information and evidence relied on by the ec decision is sufficient to establish the existence of the alleged infringement. To a certain extent, the Court can engage in fact finding:  eg, may require parties to produce all documents and to supply all information.

the Court cannot judge on the merits of the case, and even less to take over the role of the administration.

eg. in a case, the ec stated that the claim concerned only one market or a segment of a market of limited size, with the result that their economic importance was also limited. However, the court found that consideration vitiated by a lack of reasoning, and also found an ec infringement of the duty to consider attentively all the matters of fact and of law which the applicant brought to its attention. The manifest errors of assessment made by the Commission in defining the relevant market also vitiate its conclusions concerning the low probability that Articles 101-102 TFUE were infringed, and that this ec flawed conclusion, vitiated its finding (that there was no evidence of disturbance of the market). The Court held that ec had committed a manifest error of assessment in defining the relevant market….However, the Court did not get involved in defining the market : “it is not for the Court to carry out its own analysis of the market but that it must confine itself to verifying the correctness of the findings in the decision”

eg: In EDF, the Court annulled ec’s decision for not having applied the private investor test to appraise whether fiscal measures could be qualified as State aids. However, the Court did not apply this test, but left it to ec to comply with the judgment.  courts lack jurisdiction in matters of State aid [to reverse administrative decisions], and also lack ability to carry out the analysis involved in the private investor test.

eg: in the ING case, the Court held that ec failed to prove that ‘amendment of the repayment terms’ constituted a competitive advantage. The Court annulled the ec decision, but did not take on the duty to carry out the analysis [ a court cannot carry out administrative investigations to prove whether economic advantages were or not involved].

eg: In the Deutsche Post case, the Court annulled the ec decision, on the basis that ec had carried out no relevant examination. However, it did not rule on whether there was or not State aid. [ie, the courts did not do the examination that the ec failed to do]

eg: infringement of the parties’ right of access to ec’s file prior to adoption of a ec decision cannot be remedied by the mere fact that access was made possible during the judicial proceedings

eg: ec decision that the case should not be judged by ec, but by national courts, was annuled by the courts, on the basis that since the case involved 5 member states, the claim at eu level would be more effective… the Court has jurisdiction to make this decision, since the court’s decision had neither the object nor the effect of replacing a full investigation of the case.

eg: The same happens with Article 101(3) TFEU cases, where the Court is empowered to annul the administrative decision, but cannot substitute its own economic assessment

eg: in ADP cases (Article 102 TFUE), the Court controls the adequacy of the ec method of calculating legal costs, and the calculations. However, the Court can neither suggest an alternative method, nor replace the analysis of costs

eg: when the Court annuls a merger decision, in whole or in part, the merger shall be re-examined by the ec with a view to adopting a new decision (Article 10(5) of the Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings)

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in cl cases, the Courts enjoy of “unlimited jurisdiction with regard to the penalties” (Article 261 TFEU in relation to Article 31 of Regulation No 1/2003). They are allowed not only to annul the contested decision, but also to reduce or increase the fine or periodic penalty imposed…Thus, the courts also control of the merits in fine cases, ie courts may substitute their own appraisal for the ec’s

eg: In Ventouris, the Court reduced the amount of the fine, since the Commission had punished to equal extent the undertakings that were found guilty of two infringements and those that were found guilty of only one of them, in disregard of the principle of proportionality.

eg: In Chalkor, the Court reduced the fine, since ec held that the undertaking was liable for participation only in one of the three branches of the cartel

eg: In Basf, after having partially annulled the ec decision, the Court carried out a fresh calculation of the fine to reflect the exact duration of the undertaking’s participation in the infringement,

eg: In GDF Suez, the Court reduced the total amount of the fine to amend the ec error related to the period of the infringement, although it did not in a proportional way, since it would not take into account all the relevant circumstances.

However, even in fines cases, the Court’s ability to substitute ec’s decisions, is limited:

1- Courts cannot review, of its own motion, the weighting of the factors taken into account by ec to determine the amount of the fine.

Diff:

a. pleas on matters of public policy: the Courts are required to raise of their own motion (e.g., failure to state reasons for a contested decision)

b. other please: the applicant bears the burden to identify the elements of the contested decision, formulate grounds to challenge, and adduce evidence

2- the amount of fines is set by the ec according to criteria based on both the gravity and the duration of the infringement (Article 23(3) of Regulation)

3- the ec Guidelines determine the method that ec must use in assessing the fines….However, the Guidelines are not the base of the ec decision and do not create legitimate expectations. The ec may adjust the level of fines, if justified by the objective of general prevention. According to the current Guidelines, fines have to be applied following two-steps:

1-The enforcement authority is not the Court, but the ec. For this reason, in practice, Courts have little room for amending the fine.

2-the basic amount of the fine is a proportion of the value of sales, depending on the gravity of the infringement. It allows assessing the size and economic power of the undertakings concerned. The Commission can increase the fine per year of infringement by up to 10% of this amount.

3-ec may adjust the basic amount of the fine upwards or downwards. It can be increased in presence of aggravating circumstances (reincidence, refusal to cooperate, obstruction to investigations, role of leader, etc.), and can choose the uplift to apply to the basic amount of the fine. To this end, the Commission has to take into account a number of factors, such as the nature of the infringement, the market share of the undertakings concerned, the geographic scope of the infringement….Courts control whether ec has departed from the Guidelines, and also whether the increase is or not “manifestly disproportionate”, or whether the Commission is right in refusing to regard other factors, as for instance the undertaking’s financial losses, which would have the effect of conferring an unfair competitive advantage on undertakings least well adapted to the conditions of the market….. On the other hand, the ec can reduce the basic amount if there are mitigating circumstances:

(infringement by negligence, ceasing the infringement, limited involvement, avoiding applying the anticompetitive conduct, cooperation, anti-competitive conduct of the undertaking has been authorized or encouraged by public authorities or by legislation)

-eg: the fact that an undertaking did not behave in the manner agreed with its competitors is not necessarily a mitigating circumstance, unless the undertaking is able to show that it opposed its implementation, to the point of disrupting the very functioning of it, and that it did not give the appearance of adhering to the agreement and thereby incite other undertakings to implement it.

-eg: ec is not required to treat the poor financial health of the sector as an attenuating circumstance. indeed, cartels happen when a sector is having poor health.

-eg: ec may increase the fine to exceed the amount of gains improperly made because of the infringement, where it is possible to estimate that amount

-eg: THE LENIENCY PROGRAM: the leniency program is limited, since only an obvious error of appraisal is capable of being censured. The complainant has to show that, in the absence of the information provided, the EC would not have been able to prove the infringement….ec is required to state the reasons why any information does or does not justify a reduction of the fine. On the other hand, it is inherent to the logic of immunity (leniency) from fines that only one of the cartel members can have the benefit, given that the effect being sought is to create uncertainty within cartels by encouraging their denunciation…. the Court must control whether ec provided unequal treatment to the applicants for leniency, based on whether the applicants were or not in a comparable position (precedence in supplying information to the Commission, quality and usefulness of the supplied information, etc.)….see Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission.

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