Article

Competition Policy, Globalisation & The International Competition Network: A comment to Almunia’s speech at the twelfth annual conference of the International Competition Network

Robert Miklós Babirad

J.D. Masters Diploma candidate in EU Law, King’s College London; Post Graduate Diploma in EU Law (Merit); Member of the New York Bar

 

1          Introduction

On April 24, 2013, Mr Joaquín Almunia, Vice President of the European Commission responsible for Competition Policy delivered a speech entitled “The Evolutionary Pressure of Globalisation on Competition Control”[1] at the twelfth annual conference of the International Competition Network (ICN) in Warsaw, Poland.  Mr. Almunia’s speech reflects his view of the International Competition Network’s critical role in fostering open global markets, promoting the exchange of information between competition agencies worldwide and establishing greater convergence with regard to global competition practices.[2]

Although the speech calls for greater convergence and open markets, there is a failure to sufficiently evaluate underlying national policy concerns, which have led to what Mr. Almunia views as national “trade barriers” and “misguided regulations.”[3]  The speech does not effectively demonstrate that his views with regard to global competition practices will sufficiently address difficulties concerning convergence, existing practices, and the disclosure of information on a global level in competition cases.

The term “policy” is used in this article to refer to a potentially diverse array of external objectives that may need to be reflected in any consideration regarding disclosure and its prospective limits with regard to competition cases by global competition authorities.  Policy may embody broad “non-economic objectives” and their consideration may be necessitated in applying the competition rules as has been suggested by Dr. Townley.[4]  The concept of policy could also be directly related to objectives similar to those suggested under the Treaty such as providing for “an area of freedom, security and justice without internal frontiers,” protecting the environment, and the encouraging of development that is of a sustainable nature.[5]  Policy concerns may also reflect, but are not limited to the protection afforded to certain interests from disclosure under the Transparency Regulation such as those of a commercial nature, the “privacy and integrity of the individual,” relations between countries, and concerns relating to national defence.[6]

This article will begin by briefly discussing the role of the International Competition Network.  Changes to competition policy will then be presented, particularly with regard to globalisation.  The challenges presently being faced by the ICN and both EU as well as global competition agencies will then be addressed and evaluated as well as Mr. Almunia’s position with regard to the best practices for global competition. The article will conclude by suggesting that it may be difficult to refer to national “obstacles,” “practical gaps” and regulations as “misguided” or flawed without a more critical evaluation of existing practices and concerns involving competition related objectives both within the EU and abroad, particularly if better compromises and more effective global competition practices are to be subsequently formulated.[7]

 

2          The International Competition Network

Mr. Almunia’s speech calls for continued investment and a renewal of commitment with regard to the International Competition Network.[8]  The ICN operates as a network of an informal nature with the objective of promoting the enforcement of antitrust on a global scale in order to increase effectiveness as well as efficiency with regard to businesses as well as consumers.[9]  The focus of the ICN is concentrated upon competition law and has established frameworks for analysis, tools relating to “best practices” with regard to competition, and various recommendations that have been put forth to enhance cooperation between competition agencies from differing jurisdictions.[10]  The ICN has the objective of enhancing convergence as well as cooperation when necessary, and minimising the danger of enforcement that is less than optimal as well as outcomes that are inconsistent with regard to competition.[11]

Mr. Almunia refers to the guidance provided by the ICN as “very useful” and its success as representative of the expanding relevance on a global scale of competition law’s enforcement.[12]  It is noted that the enforcement of competition law must also be cognisant of the challenges presently being encountered by the world’s societies and economies.[13]  However, the speech does not sufficiently provide instructive guidance as to how competition law enforcement may be implemented in a manner that demonstrates that it is effectively cognisant of and responsive to these challenges.  The speech notes that the ICN is closely connected with globalisation in that its objective in being created was to foster a spirit of cooperation between various global competition agencies, which would also encompass those agencies from developing and emerging nations.[14]  Encouraging cooperation between the world’s competition agencies is a positive objective of the ICN and its recognition by Mr. Almunia’s speech is instructive.

 

3          Changes to Competition Policy

Changes to the instruments and priorities of competition policy are noted and particularly that of a growth in liberalisation, expansion of the service industry, network industry privatisation, changes in technology, growth of the digital economy and a critical impact on traditional industry, because of the growing importance of climate change as well as the development of strategies to counteract its effects.[15]  However, the change of greatest importance in Mr. Almunia’s view is that of a global expansion of integration with regard to economics.[16]

Mr. Almunia notes that globalisation’s greatest effect may be seen with regard to critical, new economic players on the global level.[17]  An important point is made with regard to the close links now present between “new trading partners and competitors” as well as concerning the shared interests and investments resulting from this global economic interaction.[18]  The speech notes that a benefit of globalisation has been more affordable goods in the global marketplace as well as the extrication of millions of individuals from poverty.[19]  It is also stated that an increase in global trade has developed international cooperation, confidence and the expansion of growth.[20]  These positive attributes of globalisation are importantly noted.  However, it is not clarified as to how globalisation’s positive attributes may be reconciled with those which are negative in a manner that would enable it to be effectively used as a tool in the eventual resolution of the global financial crisis.

 

4          Challenges

Mr. Almunia does acknowledge that globalisation has brought difficulties and challenges, and suggests that an evaluation of both its positive and negative aspects should occur.[21]  However, he fails to engage in this sort of balanced evaluation in his speech.  An important statement is made in suggesting that the European Union reflects an effort at globalisation’s management and is “the only workable experiment in regional integration.”[22]  In Mr. Almunia’s view, the European Union has itself become a project, which amongst its various other objectives and goals, also embodies that of globalisation’s management, but there is a lack of elaboration upon this theory in the speech.[23]  Additionally, he suggests that the ICN is also demonstrative of this effort being directed at globalisation’s management.[24]

It is acknowledged that an increasing amount of competition cases concern undertakings, which are conducting business on a global level.[25]  It is therefore suggested that greater exchanges on a multilateral and bilateral level must occur for the facilitating of competition control under conditions that are optimal.[26]  Exchanging information regarding competition on a global level becomes increasingly important under these conditions, but concerns regarding the scope of disclosure, degree of convergence, and relevant policy considerations, which will be inherently different based upon the competition agency at issue, fail to be sufficiently accounted for or assessed.  It is suggested that international competition agencies must continue to work together and effectively exchange information.[27]  However, international competition agencies have had difficulties with regard to information of a confidential nature being exchanged where signed waivers are unavailable. [28]  Additionally, restrictions or the exemption of particular agencies may be present even where a signed waiver is available.[29]

Another obstacle to the exchange of information between global competition authorities cited is that of “blocking statutes.”[30]  These statutes require national undertakings to secure approval prior to responding to the requesting of information by foreign competition agencies.[31] Additionally, in some situations national law also prohibits a voluntary response by these undertakings.[32]  Mr. Almunia calls for continued efforts in improving confidential information being exchanged between global competition authorities, but does not discuss the necessary protection or confidentiality, which must also be afforded and subsequently balanced against any interest in disclosure.  It is stated that the ICN has a critical position in overcoming these obstacles to what are in Mr. Almunia’s view, better global competition practices.[33]  The speech advocates the importance of “open markets, vibrant competition, and a global level playing field,” but this view may not be an accurate representation of the present situation nor actual practices either within the EU or abroad.[34]

Under the EU’s competition system, “obstacles” are also present that would prevent disclosure and convergence with regard to other global competition authorities as well as within the EU itself, differing from the position otherwise advocated by Mr. Almunia’s speech.  Article 339 TFEU provides an example by prohibiting Union officials from releasing information, which is found to be protected by “the obligation of professional secrecy” and particularly “information about undertakings, their business relations or their cost components.”  Under the Transparency Regulation, the EU’s institutions may refuse to release documents in competition related matters where disclosure would hinder the protecting of “the public interest” or the “privacy and the integrity of the individual.”[35]  Additionally, refusal of access to documents may occur where the “commercial interests of a natural or legal person, including intellectual property” may be endangered.[36]

Access to documents concerning competition cases continues to be a source of difficulty within the EU, although this is not acknowledged in Mr. Almunia’s speech.  An example is that of EnBW Energie Baden-Württemberg AG, a company impacted by the prohibited anti-competitive conduct of a cartel, which sought access under the Transparency Regulation to Commission documents relating to the cartel’s activities.[37]  Access to the documents was refused by the Commission under the Transparency Regulation’s exceptions permitting non-disclosure.[38]  One of the grounds on which the General Court annulled the Commission’s decision denying access, was due to a failure by the Commission regarding its duty to “undertake a concrete, individual examination of the documents covered by the request” in applying the Transparency Regulation’s exceptions permitting non-disclosure.[39]  The case is presently being appealed,[40] which reflects the continuing difficulties still present with regard to interpreting the scope and limits of information disclosure even under the EU’s competition system.

The Court of Justice of the European Union (CJEU) also held in Pfleiderer AG v Bundeskartellamt[41] that an individual “adversely affected by an infringement of European Competition law and is seeking to obtain damages from being granted access to documents relating to a leniency procedure involving the perpetrator of that infringement” will not be prevented from doing so under Regulation 1/2003 or the EU’s law with regard to cartels.[42]  However, ambiguity is also created by the Court’s judgment with regard to accessing this information, because the individual EU Member State tribunals and courts will be the arbiters of this access and deciding based upon each Member State’s respective national law, “the conditions under which such access must be permitted or refused by weighing the interests protected by European Union law.”[43]

It is also interesting to note the statement of Alexander Italianer, Director-General for Competition in a letter to a New York Court regarding the Air Cargo Antitrust Litigation, which opposes the view of openness and convergence suggested by Mr. Almunia’s speech.  Mr. Italianer has stated that permitting US discovery proceedings to access “documents that are strictly confidential under European competition law” would have the result of being “highly detrimental to the sovereign interests and public policies of the European Union” and consequently “substantially undermine the Commission’s ability to detect and punish unlawful cartel activity in the European Union.”[44]

Additionally, in a U.S. proceeding relating to investigations performed by EU competition authorities, a motion to compel discovery of European competition related documents was denied in favor of the Commission’s position, which had argued for the documents at issue to be non-discoverable in U.S. litigation proceedings, confidential and protected by the doctrine of international comity.[45]  It is subsequently difficult to argue that clarity and convergence with regard to the disclosure of information relating to competition cases is presently or likely to become a reality in the near future either within the EU or abroad.

Mr. Almunia states that restrictions on competition are not the answer to resolving the crisis, but rather that there are “other ways to bring relief to households and firms.”[46]  However, this point is not sufficiently elaborated upon.  The speech concludes by advocating that global competition agencies must “unleash the power of the markets,” particularly during these times of economic difficulty.[47]  However, current practices reflect a very different view, which reflects ambiguity and the presence of various restrictions with regard to cooperation and the disclosure of information in competition cases, both within the EU and abroad.

 

5          Conclusion

Unfortunately, Mr. Almunia’s speech fails to adequately address existing practices regarding a failure to disclose information and a lack of convergence concerning competition cases by both EU and global competition authorities.  Additionally, the speech does not effectively assess how these issues may be resolved more effectively within the framework of the ICN.  Additionally, the negative implications of globalisation are not sufficiently presented nor why open markets and strong global competition policies will effectively counter these otherwise negative effects while still being responsive to national policy concerns including, but not limited to the appropriate degree of convergence and confidentiality in competition cases.

The need for certain regulations and restrictions, which in Mr. Almunia’s view are “misguided,” as well as matters concerning the protection of confidentiality from disclosure in competition cases are also dismissed rather than being adequately addressed.[48]  Additionally, the EU’s position concerning the disclosure of documents in competition cases remains uncertain and fails to be effectively evaluated by Mr. Almunia’s speech.


[1] Almunia, J, The Evolutionary Pressure of Globalisation on Competition Control, International Competition Network 12th Annual Conference, Speech/13/360, 24 April 2013. <http://europa.eu/rapid/press-release_SPEECH-13-360_en.htm> Accessed 30th of April 2013.

[2] See Ibid., pps. 4-5.

[3] Ibid., p. 5.

[4] Townley, C. Article 81 EC and Public Policy (Hart Publishing, Oxford 2009), p. 5.

[5] Article 3(2)-(3) TEU.

[6] Regulation (EC) No. 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (Transparency Regulation) OJ 2001, L 145/43, art. 4(1)-(2).

[7] See Almunia, pps. 4-5.

[8] Almunia, p. 6.

[9] International Competition Network, The ICN Factsheet and Key Messages, April 2009, p. 1.

< http://www.internationalcompetitionnetwork.org/uploads/library/doc608.pdf> Accessed 30th of April 2013.

[10] Ibid.

[11] Ibid.

[12] Almunia, p. 2.

[13] Ibid.

[14] Ibid.

[15] Ibid., p. 3.

[16] Ibid.

[17] Ibid.

[18] Ibid.

[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] Ibid.

[23] Ibid.

[24] Ibid.

[25] Ibid., p. 4.

[26] Ibid.

[27] Ibid.

[28] Ibid.

[29] Ibid.

[30] Almunia, p. 4.

[31] Ibid.

[32] Ibid.

[33] Ibid.

[34] Ibid.

[35] Transparency Regulation, art. 4(1)(a)-(b).

[36] Transparency Regulation, art. 4(2).

[37] Case T-344/08 EnBW Energie Baden-Württemberg AG v European Commission [2012], paras 1, 3.

[38] Ibid., paras. 5-12.

[39] Ibid., paras. 110-111.

[40] Case C-365/12 P Commission v EnBW Energie Baden-Württemberg [2012].

[41] Case C-360/09 Pfleiderer AG v Bundeskartellamt [2011] ECR I-05161.

[42] Ibid., para. 32.

[43] Ibid.

[44] Letter from Alexander Italianer (Director General for Competition) to the Honorable Viktor v. Pohorelsky, In re Air Cargo Shipping Services Antitrust Litig. No. 1:06-md-01775-JG-VVP (E.D.N.Y Oct. 12, 2011).  See also, De Stefano, G. Access of Damage Claimants to Evidence Arising Out of EU Cartel Investigations: A Fast-evolving Scenario (2012) 3 Global Competition Litigation Review 95, pps. 99-100.

[45] In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation No. 05-MD-1720-JG-JO (E.D.N.Y Aug. 27, 2010) (Loislaw, NY Caselaw) pps. 2-3.

[46] Almunia, p. 5.

[47] Ibid.

[48] See Ibid.

Article

EU Competition Policy’s Broad Application

 

Robert Miklós Babirad

 

1          Introduction

On October 18, 2012, Mr. Joaquín Almunia, Vice President of the European Commission responsible for Competition Policy delivered a speech entitled “Competition Enforcement in the EU: Beyond the Integration of Markets”[1] at the twentieth anniversary of the Academy of European Law.  Mr. Almunia’s speech reflects the important idea that EU competition policy has a broad application and impact on the EU’s citizenry.  Additionally, the scope of EU competition policy necessarily extends beyond furthering development of the Single Market and economic efficiency objectives.  It may be argued that a broad and diverse application of EU competition policy, which is not limited solely in its employment to increasing economic efficiency, will lead to greater diversity and abundance of derived benefits for all EU citizens as well as furthering the Union’s development as a whole.  A key example of an expanded application for competition policy provided by the speech is that of its use as a tool for effectively responding to the present financial crisis.[2]

 

This article will begin by briefly discussing the debate concerning the role of competition policy.  EU competition policy as a unique tool, which differs from that which may be available in other competition systems will then be discussed.  The views set forth in Mr. Almunia’s speech concerning the historical, present and future application of EU competition policy will be offered.  The article will conclude by suggesting that Mr. Almunia’s speech demonstrates the continued importance and need for competition policy to be applied in context and its necessity as an instrument with broad application for enhancing the welfare of all EU citizens.  It will also be argued that placing competition policy in the greater context of the Union’s goals as a whole, and affording competition policy the opportunity to be an instrument responsive to its societal context, is preferable over an approach that is solely concerned with generating economic efficiency.

 

2          The Role of EU Competition Policy

 It is interesting to read Mr. Almunia’s speech in the context of the debate over the “correct” role for EU competition policy.  The majority of global competition law systems presently consider the enhancing of economic efficacy to be their primary goal.[3]  Objectives related to public policy have diminished as an important consideration in these systems.[4]  The U.S. antitrust model provides an example of this approach where all effective discourse must be presented in terms of economics and no provision is made for successful, non-economic, policy related arguments.[5]  A solely economic approach would not be effective under the EU system, because different societal values including that of the Single Market, as well as the attendant policy considerations of the Treaties are at stake.

 

The alternative and perhaps more helpful viewpoint, particularly with regard to the EU, is that competition policy should apply broadly and also promote a nation’s policy objectives, or in this case those of the Union as a whole, objectives which may not be related solely to increasing economic efficiency.[6]  However, the European Commission is restricting the consideration of policy objectives within EU competition policy.[7]  Mr. Almunia notes in his speech that one important change has been a trend toward an approach that is to a greater degree economically oriented and this is reflected in the regulations for block exemptions and establishment of guidelines relating to policy in varying fields.[8]

 

Dr. Townley states that competition policy is “not an end in itself,” but is rather more appropriately employed as a tool for achieving the objectives set forth in the Treaties.[9]  Additionally, the EU competition provisions do not operate independently and it is preferable to view them instead as “part of a web of inter-related Treaty articles.”[10]  The EU Treaties and their embedded objectives provide the context in which competition policy must be interpreted.[11]  Mr. Almunia’s speech also indirectly alludes to this contextual approach for EU competition policy, but stops short of directly calling for the greater incorporation of policy under the competition provisions.  It is this contextual approach, which appears to be of the greatest helpfulness if EU competition policy is to be used as an effective tool for promoting the values of the Treaty as well as those of the EU and its citizens as a whole.

 

An example of the Commission’s limitation on considering objectives other than economic efficiency under EU competition policy is demonstrated by its statement that the objective of Article 101 TFEU (previously Art. 81 EC) is to protect competitive conditions on the Single Market with the goal of promoting consumer welfare as well as the allocation of resources in an efficient manner.[12] Goals relating to policy expressed in the Treaties, may only be considered under Article 101 TFEU if they fall within the limited conditions of Article 101(3) TFEU.[13]  However, it has also been argued that Article 101(3)’s conditions for exemption of otherwise prohibited agreements are not necessarily meant for the incorporation of policy, but are rather “economic efficiency” considerations.[14]

 

It may be argued that EU competition policy has necessarily gone beyond the role of considering solely economic efficiency and must continue to do so moving forward.  The need for its broad application as a tool not only for creating economic efficiency, but also as a contextually responsive instrument for responding to the present economic crisis appears to be evident.[15]  It is in this application that competition policy may have the greatest effect and benefit the largest number of individuals.

 

3          EU Competition Policy’s Unique Nature

Mr. Almunia’s speech demonstrates that EU competition policy differs from other competition law systems and therefore necessarily takes a different approach in its application.[16]  The European Commission, as a competition authority, is in a unique position, because its enforcement powers extend broadly to both bodies of a private as well as public nature.[17] It is important for both public and private actors to be made accountable to the competition rules and as such not only is competition increased, but greater consideration may be given to advancing the Treaty’s policy considerations with regard to both the public and private sector. Additionally, it is only through applying competition policy to both public and private actors that the Single Market and increased welfare of all EU citizens can become a functional reality.

 

Competition is safeguarded in the private sector by rules concerning antitrust, which seek to prevent the development of private restrictions to trade by businesses.[18]  Additionally, these rules operate with the objective of establishing equal operating conditions for businesses within the Single Market.[19]  In the public sector, rules concerning State aid inhibit governments from altering competitive conditions and ensure equality of opportunity in the ability of Member States to provide subsidies.[20]  The European Commission, because of its broad application of rules regulating competitive conditions is empowered with a “formidable tool,” which benefits both citizens of the EU as well as the Single Market as a whole.[21]  It is noted in the speech that neither other nations outside of the EU nor organisations operating at the international level have at their disposal the tools available within the EU competition system.   It is therefore important that these tools not be restricted by the establishment of a narrower application for EU competition policy. Additionally, a competition policy less insistent on policy will subsequently result in decreased societal benefits (namely, those advocated by the Treaties) that would have otherwise been available.

 

The application of EU competition policy is broader than that employed in most other jurisdictions and bases itself not only upon the unique situation of fostering development of a Single Market, but also upon the underlying idea of promoting the welfare of its citizens by monitoring competitive effects by both private as well as public actors.  The EU competition system’s broad application to both public as well as private actors thereby creates overall better conditions for the economy as well as its citizens than that which may occur under a more restricted interpretation.

 

 4          Application of EU Competition Policy

EU competition policy has traditionally embodied and continues to take on a broad role, not limited solely to creating economic efficiency in its application or corresponding benefits.  This is reflected by Mr. Almunia’s speech.  It appears that this is the most helpful approach and most in line with the goals of the Treaty, which necessitate the consideration of policy in applying the competition rules.[22]  The Single Market can only be effectively integrated if competition policy applies broadly, not only to public and private actors, but also through its application as an instrument for advancing the Union’s larger policy objectives.

 

The application of competition policy may focus upon and be predominantly motivated by economic considerations, but its broad application and derived impact as well as benefits have suggested a much greater influence.  The suggestion is put forth that competition policy does not operate in an isolated manner, which would insulate it from the surrounding social and economic situation.[23]  The present social and economic situation since the onset of the global financial crisis is comprised by a lack of growth, an increase in unemployment, and an elevated public debt situation.[24]  Competition policy must not only operate in this difficult context, but has the responsibility to aid in the creation of growth that is sustainable while also assisting Europe in its ability to withdraw from the present crisis.[25]  This in itself recognises an extended role for competition policy beyond that of generating economic efficiency and is clearly reflective of the important and necessary role of policy considerations.  However, it is not clear from the speech as to how competition policy should proceed in this regard nor is it evident how the competition provisions should be applied as a tool for addressing the present financial crisis.

 

Policy concerns are being implicated and alluded to in Mr. Almunia’s speech, such as that of competition policy serving a contextual purpose and being employed as a tool for responding to the present financial crisis, but how this is to be done remains unclear.  However, competition policy necessarily emerges as a tool that is most productive if enabled to be responsive to its context, rather than one which is isolated and solely focused upon the attainment of economic efficiency at the exclusion of considering the Union’s policy related Treaty objectives.

 

Competition policy is an essential tool in Mr. Almunia’s view for the continued integration of the EU, but its role is not restricted to “the preservation of a level playing field” within the Single Market.[26]  The historical development of the EU’s unique competition policy regime as well as the support, which is offered by the Treaties and its accompanying policy objectives provide substantiation for this viewpoint.[27]  Mr. Almunia states, “[w]e all know that the call of Europe’s founding fathers for economic integration had a more profound and more noble motive.”[28]  Subsequently, it may be inferred that EU competition policy goes beyond protecting economic efficiency in its application and this is demonstrated by its role as an essential instrument for Europe’s institutional and political development.[29]  One is led to believe that policy considerations remain important in the application of competition policy, particularly if it is to be used as a tool for effective political and institutional construction.  However, one is left unsure as to whether an expanded role for policy is actually being advocated or whether Mr. Almunia’s remarks relate solely to economic efficiency.

 

Competition policy has also been used as an essential tool for development of the Single Market and the EU Courts’ manner of interpreting the competition provisions have occurred in a way that furthers integration.[30]  An example includes the EU Courts’ interpretation of concepts such as “effect on trade,” “concerted practices,” and the definition of an “undertaking” being afforded an interpretation that is generous and based upon the overriding policy interest of the Single Market’s development.[31]  As such, we see another example of competition policy being broadly applied.  It was traditionally necessary and continues to be essential for the EU Courts to follow this broad manner of interpretation if advancement of the Single Market is to be successful.

 

The importance of the relationship between competition policy and Europe’s public services is also noted.[32]  The public institutions of the community have the obligation of carrying out one of the most central tenets and fundamental values of the European model, that of providing for “certain social needs and public goods.”[33]  Mr. Almunia states that in looking at the field of public services in Europe, we are provided with “no better example to illustrate the link between competition controls and our fundamental values.”[34]  However, although a link is made between key European values and the competition provisions, the actual role of policy remains uncertain.  Policy is essential and must be considered to a greater degree in the application of the competition rules if there is to be such a link.  Applying competition policy to the provision of community public services clearly goes beyond the concern of generating economic efficiency.  It reflects important policy considerations, one example being that of Member States having the support of a competition law system, which assists in their ability to provide such services in a fair, effective, and cost efficient manner.  Unfortunately, the speech again stops short of directly supporting policy under the competition provisions.  However, the need for an expanded application of competition policy does appear to emerge as an important consideration in the continued development of the EU competition law system.

 

Competition policy has also assisted the Commission’s efforts to eliminate those existing obstacles, which may obstruct the development of unified European markets in areas as diverse as the telecommunications industry, the provision of postal services, railway networks, energy distribution and air travel with the goal of furthering the development of a single and unified EU marketplace.[35] Additionally, competition policy has made the principles of the free movement rules effective in practice.[36] It is essential for policy to be considered in applying competition policy broadly, particularly because of a propensity by the Commission and EU Courts to apply similar reasoning in their application of both the free movement and competition rules.[37] Unified markets and effective free movement rules are not only positive economically, but also foster a greater sense of European national, institutional and political unity, which are policy concerns.  The strengthening of the EU has in many ways been due to its competition policy and the broad application of that policy.[38]  The EU competition system has also delivered “practical benefits” to its citizens, because of its broad application and perhaps it may be argued that these have been derived, because of the recognition of policy and an application that has traditionally been contextually responsive.[39]

 

In the field of mergers, the EU Courts have afforded the Commission the ability to inquire into practices of an anticompetitive nature as well as mergers within the Single Market with the key requirement being merely that an impact upon the EU occurs even though a company may not have a physical headquarters within the European Union.[40]  EU competition policy has necessarily had a wide application and this is demonstrated by its application to foreign companies operating within the EU.  It is important that undertakings from outside of the Union are not provided with the opportunity to escape liability for actions, which lead to the distortion of competition on the Single Market, because of a narrow application of EU competition policy.

 

A unified and shared body of law that all EU citizens are able to rely upon has also been provided by the unique application and interpretation of EU competition policy.[41]  Legal precedents have applicability throughout Europe providing a common body of law for its citizens, businesses and national competition authorities.[42]  The competition rules are also universally applicable to all undertakings and it is possible for these rules to be invoked directly by citizens as well as businesses at the Member State level.[43]  Businesses are able to operate effectively and freely across Member States, because of competition policy and its enforcement against anti-competitive practices, which provides protection and universal applicability to companies throughout the European Union.[44]  A uniform body of law that applies throughout all of the Member States has economic, societal and political benefits and is possible, because of a broad and policy cognizant application of competition policy.

 

Mr. Almunia also states that in 2008 at the onset of the financial crisis, competition policy was employed as the only shared available device for confronting and preventing the collapse of the financial system in Europe.[45]  Government bail-outs were also controlled by the timely creation of a system concerning State aid and plans presently exist for a banking union’s future development.[46]  Additionally, State aid has been flexibly employed as an integral part of the EU’s competition policy.[47]  These actions clearly demonstrate the importance of a competition policy that is necessarily wide, contextually responsive, cognizant of policy, and subsequently varied in its scope, application and derived benefits.

 

5          Conclusion

The contributions of EU competition policy have improved the standard of living within Europe because of their broad application to a wide array of areas, resulting in the improved development of the Union’s structural, political and legal composition.[48]  EU competition policy should not be limited to solely attaining economic efficiency and now more than ever must be an instrument cognizant of greater European policy concerns.  Competition policy in the EU has not been traditionally restricted in its application or corresponding benefits to economics or the objective of advancing the Single Market, which may itself be looked upon as a predominantly economic concern.[49]  It continues to be important for EU competition policy to serve as a multipurpose instrument that is aware of its operating context and Treaty obligations, particularly if it is to be an effective tool for responding to the present financial crisis and the attainment of its timely resolution.

 


[1] Almunia, P, Competition Enforcement in the EU: Beyond the Integration of Markets, The citizen at the heart of EU law: 20th anniversary of the Academy of European Law (ERA) Trier, Speech /12/742, 18 October 2012.  <http://europa.eu/rapid/press-release_SPEECH-12-742_en.htm>  Accessed 12th of November 2012.

[2] See Almunia, p. 5.

[3] Townley, C. Article 81 EC and Public Policy (Hart Publishing, Oxford, 2009), p. 14.

[4] Ibid., p. 313.

[5] Monti, G. EC Competition Law (Cambridge University Press, New York, 2007), p. 79.

[6] Townley, p. 14.

[7] Ibid., p. 11.

[8] Almunia, p. 3.

[9] Townley, p. 314.

[10] Ibid., p. 48.

[11] Ibid.

[12] Commission Notice, Guidelines on the Application of Article 81(3) of the Treaty OJ 2004 C101/97, para. 13.

[13] Ibid., para. 42.

[14] Monti, p. 45.

[15] Almunia, p. 5.

[16] Ibid., p. 3.

[17] Ibid.

[18] Ibid.

[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] See Townley, pps. 48-50.

[23] Almunia, p. 5.

[24] Ibid.

[25] Ibid.

[26] Ibid., p. 2.

[27] Ibid.

[28] Ibid.

[29] Ibid.

[30] Ibid., p. 4.

[31] Ibid.

[32] Ibid., p. 6.

[33] Ibid.

[34] Ibid.

[35] Ibid.

[36] Ibid., p. 4.

[37] Mortelmans, K. “Towards Convergence in the Application of the Rules on Free Movement?” (2001) 38 Common Market Law Review 613, pps. 613, 645-46.

[38] Almunia, p. 4.

[39] Ibid.

[40] Ibid., p. 4.

[41] Ibid.

[42] Ibid.

[43] Ibid.

[44] Ibid.

[45] Ibid., p. 5.

[46] Ibid.

[47] Ibid., p. 6.

[48] Ibid.

[49] See Commission, Article 81(3) Guidelines, para. 13.