13 June 2018

No more hide and seek: international competition enforcement to intensify

Competition Commissioner Vestager has warned companies that they will soon have nowhere to hide from competition rules, thanks to an upcoming Directive empowering the EU’s national competition authorities. Companies should be aware that this is only one of many signs demonstrating that competition law enforcement is increasingly becoming a worldwide effort. Last week’s competition-related cooperation arrangement with Mexico is the most recent in a list of bilateral cooperation relationships the European Commission has entered into with over 30 countries. Most of these bilateral arrangements include some degree of information exchange between competition agencies on antitrust cases. The U.S. Department of Justice’s recently initiated Multilateral Framework on Procedures in Competition Law Investigation and Enforcement will further help to smooth over the differences in procedural norms among competition authorities worldwide. Companies are therefore well-advised to roll out their compliance programmes on a global scale.

The ECN+ Directive

On 30 May 2018, political agreement was reached on the Commission’s proposal for a Directive to empower EU national competition authorities. National competition authorities (NCAs) and courts are empowered to apply EU competition rules within their jurisdictions on the basis of Regulation 1/2003. To ensure the consistent application of these rules, the European Commission and the NCAs cooperate with each other in the European Competition Network (ECN). However, not all NCAs currently have the same powers to gather evidence of, or tools to impose sanctions for, EU competition law violations. In addition, differences in leniency policies among NCAs create uncertainty among leniency applicants because there are no guarantees that they are the first to approach NCAs in all relevant jurisdictions. The proposed Directive aims to fix this and will introduce fines which are expected to be more effective. Fines will not only be linked to the group’s worldwide sales, but NCAs can request other NCAs to enforce the fines imposed in their jurisdictions. As a result, as Competition Commissioner Vestager puts it: “…there will be nowhere to hide from the competition rules” anymore.

Bilateral relations and MFP

Mexico is the latest of more than 30 jurisdictions to sign a cooperation arrangement with the European Commission on competition policy issues. The cooperation arrangement facilitates the coordination of enforcement activities and the exchange of non-confidential information between the Mexican competition authority and the Commission, when working on the same or related matters. Most of the bilateral arrangements concluded with other jurisdictions provide for some degree of information exchange with the Commission on enforcement cases. Companies should be aware that the level of information exchange may even intensify in the near future. The Commission is planning to reinforce its bilateral relations by including provisions relating to, among other things, exchanges of information collected in the course of respective investigations. This could facilitate the detection and enforcement of competition cases on a worldwide basis.

Meanwhile, the U.S. Department of Justice is working on a Multilateral Framework on Procedures in Competition Law (MFP) to promote greater procedural norms and due process in competition enforcement. The MFP builds on the theme of coordinated competition enforcement set in motion by the bilateral cooperation arrangements concluded between the European Commission, the United States and other jurisdictions.

These initiatives, together with multilateral fora such as the International Competition Network, the OECD and UNCTAD, indicate that companies should be aware that antitrust enforcement is increasingly being addressed and – more importantly – coordinated and enforced on a global scale.