The Commission has recently revealed its plan to review two foundations of EU competition law enforcement: Regulation 1/2003 and the Leniency Policy.

Regulation 1/2003

On March 31, 2022, the Commission announced its intention to revise Regulation 1/2003, which sets out the Commission’s powers and its relations with national authorities.[1] The revisions will aim to modernize procedures in order to shorten investigations, provide more clarity to companies on the application of antitrust rules, and enable more decentralized enforcement. On May 19, 2022, the Commission started the revision process with the launch of an open call for tenders to conduct an evaluation support study on the performance of the procedures for the application of EU competition rules, based on experts’ analyses and on decision-making practice. The Commission will also build its evaluation on the results of an upcoming public consultation and on the long experience gathered by the Commission and national competition authorities in applying the current framework.

Although Regulation 1/2003 has achieved “remarkable success,”[2] the Commission is seeking to refresh the rules to ensure EU enforcement remains at the “forefront of the global enforcement.” In addition, the Commission has also explained the update as forming part of the Commission’s ongoing work to ensure it has a competition tool chest that is suitable for the digital economy.

As to its substance, the revision would recast both the relationship between the Commission and the national competition authorities on the one hand, and the relationship between regulators and companies on the other. Specifically, the Commission is seeking to boost its cooperation with national competition authorities and to expand their responsibilities, for example, by giving them a more important role in antitrust investigations. The Commission would also increase the amount of tailored advice competition authorities can provide to companies. This change in the governance structure is part of a broader philosophical move—most obviously embodied by the Digital Markets Act—to ex ante intervention as opposed to punishing breaches after they have already occurred. Indeed, the Commission considers that informal guidance given by Commission’s services to companies are often not followed by stakeholders, including because of the restrictiveness of current policies. A key area of investigation envisaged in this update to the law is therefore to make informal guidance issued by the Commission more “operational.”

The Commission’s Leniency Policy

On April 5, 2022, the Commission announced a review of its leniency program,[3] which is embodied in the Leniency Notice.[4] The Commission’s leniency program provides full financial incentives to companies that report cartel activity to the Commission. This program, which has assisted in the detection of a range of cartel abuses since its institution in 1996, has largely been viewed as extremely successful. Nonetheless, the Commission has identified a marked decline in leniency applications over the last five years. The review announced by the Commission is designed to address this decline. The review is therefore designed to bring about changes that will increase legal certainty for potential applicants as to what conduct falls under the EU antitrust provisions and improve incentives to report potential infringements.

Specifically, the Commission is contemplating, among other amendments, granting immunity applicants full immunity from follow-on damage claims.[5] The Commission has also committed to improve international cooperation and to strengthen bilateral discussions with other agencies as part of the review process. The Commission has observed that the creation of new leniency regimes all over the world could also explain the decline on leniency applications. In fact, having to meet an increasing number of requirements and liaise with different agencies at the same time could be too burdensome for potential immunity applicants, which might be generating a deterrent effect. Increasing international cooperation may help reduce this burden, and thus increase the number of leniency applications.

[1]      Commissioner Vestager, Competition and regulation in disrupted times, Keynote speech at the Charles River Associates Conference, Brussels, March 31, 2022.

[2]      Commissioner Vestager, Competition and regulation in disrupted times, Keynote speech at the Charles River Associates Conference, Brussels, March 31, 2022.

[3]      Deputy Head of Cartels Unit Mayock, The State of Global Cartel Enforcement, Speech at GCR Live: Cartels Conference, Washington D.C., April 5, 2022.

[4]      Commission Notice on Immunity from fines and reduction of fines in cartel cases, OJ 2006 C 298/11.

[5]      Under the current regime, the EU Damages Directive stipulates that immunity applicants are only liable to pay damages to their customers.