Monday, October 16, 2017

DID YOU KNOW?

The European Union has laid down legislations and regulations to prohibit companies holding dominant positions from imposing unfair trading conditions or placing other competitors at a competitive disadvantage (2008/C 115/01).

EDC News: EU Prohibiting Unfair Competition

The European Union has ascertained that dominant companies are abusing their position to enhance their competitive advantage. For example, the case of European Commission vs Google Inc., the search engine (google) was found guilty of breaching EU antitrust rules by giving priority to its own shopping service, thus denying other enterprises the chance to fairly compete and depriving consumers of their right of choice. For this reason, the European Commission (EC) has cultivated a policy that is aimed at prohibiting the abuse of dominance (Article 102, 2012/C 326/01 ex Article 82 TEC C2002/325/01) and unfair competition practices (Article 101 2012/C 326/01 ex 81 TEC C2002/325/01). The policy focuses on prevention rather than non-compliance to these legislations. Therefore, severe penalties, such as fines are imposed when infringements are identified.

The EC is now faced with the challenge of identifying and counteracting any infringements, hence, the introduction of the European Competition Network (ECN). The ECN is comprised of National Competition Authorities (NCA) from each Member States and the EC, who are mandated to:

  • inform each other of new cases and envisage enforcement decisions;

  • coordinate investigations, where necessary;

  • help each other with investigations;

  • exchange evidence and other information; and

  • discuss diverse issues of common interest.

Infringement cases are either reported directly to the EC or to NCAs. For instance, between 2004 and 2016 2,211 cases were reported, of which 1900 were NCA cases and 311 were EC cases. The majority of these cases were suspected of unfair competition practices (Article 101 2012/C 326/01). Conversely, the EC has a very strong standing against cartel practices as it is illegal under the EU competition law. During the period between 2013 and 2017 the EC imposed a total of 8.5 billion euros in fines against cartel companies.

The EC has found fines to be the most effective method to deter companies for abusing their position of dominance and practicing unfair competition methods. Although this is the case, the EC strongly believes in prevention and, therefore, provides guidance through regulations and brochures. In addition, the EC has developed a ‘Whistleblower tool’ to encourage individuals or companies to report related infringements. Within this tool a company in a cartel can apply for leniency in exchange for information.

For more information: