European University Institute - Department of Law Commitment Decisions under Article 9 of Regulation 1/2003: A critical assessment and lessons learned from the current decisional practice Andreas Scordamaglia CLEEN Workshop - Norwich 11-13 June 2008 Introduction Article 9(1) of Regulation 1/2003: “Where the Commission intends to adopt a decision requiring that an infringement be brought to an end and the undertakings concerned offer commitments to meet the concerns expressed to them by the Commission in its preliminary assessment, the Commission may by decision make those commitments binding on the undertakings. Such a decision may be adopted for a specified period and shall conclude that there are no longer grounds for action by the Commission.” Andreas Scordamaglia (EUI) - Commitments Presentation layout 1. “Genesis” and Challenges of Commitment Decisions 2. Adopting Article 9 Commitment decisions 3. Content of Article 9 Commitment decisions 4. Effects and Judicial Review of Article 9 Decisions 5. Commission’s informal settlements practice 6. Concluding Remarks – Challenges Ahead Andreas Scordamaglia (EUI) - Commitments I. The “Genesis” and the Challenges of Commitment Decisions 1. 2. Emergence of Article 9 Commitment decisions Advantages 1. 2. 3. For competition authorities: (a) an early closing of a file ending b) minimises the risk of an appeals c) effectively frees up valuable resources d) a more flexible, better targeted and consensual remedies For private undertakings: a) an automatic elimination of the risk of being imposed a fine, b) saving on time and legal / economic advice fees, c) commitment decisions cannot be used for private damages claims, d) better suited solution through greater insight of the Commission’s concerns, e) avoidance of negative publicity Risks 1. 2. Lack of transparency (no follow-on actions, no precedential value) Risk of Commission abuse (ex. Alrosa judgement) Andreas Scordamaglia (EUI) - Commitments II. Adopting of Article 9 Commitment decisions 1. 2. 3. 4. 5. 6. Commission’s powers of initiative Scope of application and the risk of “indirect” regulation Preliminary assessment : form and content The undertakings’ commitment proposal The Commission’s assessment of the commitment proposal Interested parties observations – Market-testing : Article 27(4) 1. 2. Assessment of the third party observations Access to third party observations Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 III. Content of Article 9 Commitment decisions (1) 1. 2. The rules of substance i. Types and extent of commitments ii. Period of validity The Commission’s decisional practice: currently 11 decisions issued, 5 pending, 2 ongoing investigation) i. ii. Article 81 (10 cases) a. Football media right cases (Bundesliga COMP/37.214 ; Premier League COMP/38.173 b. Collective societies cases (Cannes Agreement COMP/38.681 ; BUMA & SABAM COMP/39.151 & COMP/37.749, CISAC COMP/38/698) c. The Airline Cooperation Agreement cases (AA/SAS COMP/37.749 ; Sky Team COMP/37.984) d. Vertical restraints cases (Repsol COMP/38.348 ; Daimler Chrysler etc COMP/39.143 ; Groupement des Cartes Bancaires COMP/38.606 Article 82 (3 cases) a. Coca-cola COMP/39.116 b. Distrigaz COMP/37.966 c. Alrosa/De Beers COMP/38.381 d. E.ON and RWE (MEMO/08/132) Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 III. Content of Article 9 Commitment decisions (2) Annex I: Article 9 Commitment De cisio ns cases Case Type of concern Market test notice Initiation Date of decision Time btw notice & decision O utcome Deci s ion appl ic ati on COMP/37.214 DFB-Deutscher Fussballb Art.81 Not ific ation + ex em ption 14.09.2 004 19.01.2005 4 m onths Decision 01.06.2 009 COMP/39.116 Coca-Cola Art.82 Com plaint 19.10.2 004 22.06.2005 8 m onths Decision 31.12.2 010 COMP/38.381 AL ROSA + De Beers group1 Art.82 Art.81 Not ific ation + ex em ption 03.06.2 005 22.02.2006 9 m onths Decision annulle d 01.01.2 009 COMP/38.173 Football Association PremierL eague Art.81 Com m ission + ex em ption 01.11.2 005 22.03.2006 5 m onths Decision 30.06.2 013 COMP/38.348 REPSOL Art.81 Not ific ation + ex em ption 20.10.2 004 12.04.2006 18m onths Decision 31.11.2 011 COMP/38.681 The Canne s Agreeme nt Art.81 Not ific ation + ex em ption 23.05.2 006 04.10.2006 4 m onths Decision Art.81 Com m ission 23.03.2 007 14.09.2007 6 m onths Decision 31.05.2 010 6 m onths Decision 31.12.2 010 COMP/39.143 39.140 Daim lerChrysler Toy COMP/37.966 Distriga z Art.82 Com m ission 05.04.2 007 11.10.2007 MEMO/07/413 Groupeme nt des Cartes Bancaires Art.81 Com m ission - 17.10.2007 COMP/39.152CO MP/39.153 BUMA & SABAM Art.81 Not ific ation + ex em ption 03.08.2 005 Pending dec ision COMP/37.749 Austrian Ai rlines & SAS Art.81 Not ific ation + ex em ption 22.09.2 005 Pending dec ision COMP/38.698 CISAC Agreement Art.81 Com plaint 14.06.2 007 Pending dec ision COMP/37.984 SK YTEAM Art.81 Com m ission 19.10.2 007 Pending dec ision ota,G M,Fiat Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 Rejection 25.04.2008 01.05.2 008 IV. Effects and Judicial Review of Article 9 Decisions 1. Effects on the “concerned undertaking” i. ii. Compliance safeguards (Articles 23(2) and 24 Reg.1/2003) Reopening the proceedings 2. Effects on “third parties” 3. Effects on competition enforcers (Rec.13(2) v Art.16) i. ii. iii. 4. On the Commission On NCAs On National Courts Judicial review - alignment to Article 7 decisions Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 V. The Commission’s informal settlements practice (1) 1. General Overview (2000-2005 only 10% of cases closed through formal decision procedure CPR2005) Informal settlements in post-modernisation 2. i. ii. 3. The “last-minute” cases (Gaz de France (IP/04/573) , Interbrew (IP/04/574) The “Gas Supply market” cases (Distrigaz) Other sectors i. Hollywood Studios (IP/04/1314) ii. Deutsche Telekom (IP/05/1033) iii. Phillips CD-Recordable Disk (IP/06/139) Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 V. The Commission’s informal settlements practice (2) Annex II: Informal settlements after May 1 2004 Press release number 1 IP/04/1314 2 IP/05/195 3 IP/05/710 4 IP/05/1033 5 6 Case Film distribution OMV and Gazprom Ruhrgas & Gazprom Type of concern Date Art.81 06.10.2004 Art.81 17.02.2005 Art.81 10.06.2005 Deutsche Telekom (DT) Art.82 03.08.2005 IP/06/139 Philips CDRecordable Disk Patent Licencing Art.81 and Art.82 09.02.2006 IP/08/22 Apple iTunes1 Art.81 09.01.2008 Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 V. The Commission’s informal settlements practice (3) Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 Concluding Remarks 1. 2. 3. Increasing use of “commitments” Predominance of Article 81 (notification cases) Article 82 cases - significant number ; particular interest in the gas sector 4. Informal settlements perseverance 5. Alrosa judgement : clearly accountability of the Commission 1. Commission expected to substantiate its preliminary assessment 2. Full judicial review of the proportionality 3. Clear protection of undertakings’ procedural rights 6. Lessened attraction to “commit” for the Commission although probably still useful for the future Andreas Scordamaglia (EUI) - CLEEN Workshop 2008 Thank you very much for your attention Andreas Scordamaglia (EUI) - CLEEN Workshop 2008