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ECN+ Directive Proposal

On 22 March 2017, the Commission issued a proposal for a Directive to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market (ECN+ Directive proposal).

The proposal for a Directive was needed, as there have been gaps in the decentralised enforcement system of EU competition law. The outcome of the anti-trust process may vary depending on the Member State in which the companies are active. This is unsustainable for the consistent functioning of the internal market. 

The Directive proposal provides for the means and powers of national competition authorities in their application of Articles 101 and 102 TFEU . The Directive proposal is divided into the following main legislative categories: fundamental rights, independence and resources, powers, fines and periodic penalty payments, leniency, mutual assistance and limitation periods.

If implemented, the Directive proposal would cause changes as, in some respects, it goes further than the Competition Act or the proposal made by the national Competition Act working group on the reform of competition legislation.

The changes would concern the possibility to conduct a continued inspection in the competition authority’s premises, for example, and imposing structural remedies, which are not provided for in the Competition Act. The right to continued inspection, in particular, would expedite and enhance the effectiveness of the competition authority’s investigation when the investigation applies to data.

Other new provisions include sanctions for infringements of interim orders and commitments. In this respect, the Directive proposal goes further than the report of the Competition Act working group, which did not propose sanctions for such infringements.

The greatest single change resulting from the Directive proposal would concern fines on industry associations. According to the proposal, the combined turnover of the members of the associations should be taken into account when determining the fine. If necessary to ensure the full payment of the fine, the national competition authorities are entitled to require the payment of the fine by any of the undertakings who were members of the decision-making bodies of the association.

To the extent that it is still necessary, national competition authorities are also entitled to require the payment of the fine by any of the members of the association that were active on the market in which the infringement occurred. However, payment cannot be required from an undertaking that did not implement the infringement and either was not aware of it or has actively distanced itself from it before the investigation.   

The Directive proposal has been debated in the EU Council of Ministers since May 2017. The process has proceeded in due course. There are solid grounds for the Directive proposal and, if implemented, it would considerably enhance the effective enforcement of EU competition regulations on the national level.