Germany: The Commission’s Notice on the Handling of Complaints Addressing the Public

Another part of the package following the introduction of Regulation (EC) 1/2003¹ ("Regulation 1/2003") is the Draft Notice on the Handling of Complaints² ("Complaints Notice"). This draft notice is designed to encourage citizens and undertakings to address themselves to the public enforcers of competition law by lodging a complaint, giving indications about the choice between complaining to the Commission or bringing a law suit before a national court (part II Complaints Notice) and explaining the procedure for the treatment of complains by the Commission (part III Complaints Notice).

The following article shall provides companies with an overview on how to address themselves to the Commission when seeking relief from suspected infringements of the competition rules.

Especially following 1 May 2004, when the new Regulation 1/2003 supersedes the old Regulation 17/62, the Commission will largely depend on information provided to it deliberately by undertakings in order to learn about possible infringements of Articles 81 or 82 EC. Depending on the nature of the complaint, a complainant may bring its complaint either to a national court or to a competition authority that acts as public enforcer.

Regulation 1/2003 empowers Member State courts to apply Articles 81 and 82 EC in their entirety alongside the Commission. It has been consistently held by the Community Courts that national courts are called upon to safeguard the rights of individuals created by the direct effect of Articles 81 (1) and 82 EC.³ Only the national courts can decide upon the nullity or validity of contracts and can grant damages to an individual case of infringement of Articles 81 and 82 EC. The Commission as well as the courts believe that especially actions for damages can make a significant contribution to the maintenance of effective competition.⁴ The effectiveness of private litigation is shown under the Clayton Act in the US, where substantial damage claims, supported by the possibility to claim triple damages, support the detection of cartels.⁵

Advantages for complainants to choose an action before national courts are the following:

• National courts may award damages for loss suffered as a result of infringement of Articles 81 or 82 EC.
• National courts may rule on claims for payment or contractual obligations based on an agreement that they examine under Article 81 EC.
• National courts may apply the civil sanction of nullity of Article 81 (2) EC.
• National courts are usually better placed than the Commission to adopt interim measures.
• It is possible to combine a claim under community competition law with other claims under national law.
• Courts have the power to award legal costs to the successful applicant which is never possible in an administrative procedure before the Commission.

The Commission declares that it may take into account in its examination of community interest when investigating a complaint, if the complainant can secure the protection of his rights by an action before a national court.

Regulation 1/2003 creates a system of parallel competence for the application of Articles 81 and 82 EC. Decentralized enforcement by Member States competition authorities is encouraged by the possibility to exchange information and to provide each other assistance with investigations. For the complainant it is important to know, which authority to turn to in order to assure that his complaint is dealt with. Whether the same complaint has been lodged with several authorities or a case has not been lodged with an authority that is well placed, the members of the network of competition authorities ("NCA") endeavour to determine within an indicative time limit of two months, which authority or authorities should be in charge of the case.

In order to achieve a fast response following the lodging of the complaint, the complainant should address the complaint directly to the well-placed authority. The authority is deemed to be well-placed if the agreement or practice has substantial direct actual or foreseeable effects on competition within its territory, is implemented within or originates from its territory and if the authority is able to effectively bring to an end the entire infringement, i.e. it can adopt a seize and desist order the effect of which will be sufficient to bring an end to the infringement and it can, where appropriate, sanction the infringement adequately. Furthermore, it can gather, possibly with the assistance of other authorities the evidence required to prove the infringement.⁶ The Commission may reject a complaint on the grounds that a Member State competition authority is dealing or has dealt with the case. When doing so the Commission must, in accordance with Article 8 of Regulation 1/2003, inform the complainant without delay of the national competition authority which is dealing or has already dealt with the case.

If the company decides that a complaint lodged with the Commission serves its interests best, the following requirements need to be considered. According to Article 7 (2) of Regulation 1/2003, natural or legal persons that can show a legitimate interest are entitled to lodge a complaint to ask the Commission to find an infringement of Articles 81 and 82 and to require that the infringement be brought to an end in accordance with Article 7 (1) of regulation 1/2003.

Any complaint lodged under Article 7 (2) of Regulation 1/2003 has to comply with Form C, which is attached to the Complaints Notice.⁷ It has to be submitted in three paper copies and if possible in an electronic copy. Furthermore, the complainant must provide a non-confidential version of the complaint. The complainant should also provide copies of relevant supporting documentation reasonably available to him and, if possible, indicate where relevant information could be obtained by the Commission. If the correspondence does not comply with the requirements, the Commission does not consider the correspondence to be a complaint but may use it as general information, which might lead to an own-initiative investigation.⁸

A formal complaint can only be lodged by persons having a legitimate interest. A legitimate interest is always assumed where the complainants are directly and adversely effected by the alleged infringement. For the doubtful cases, the Commission refers to a non-exhaustive set of examples in the notice of complaints.⁹

It is long established case law of the community courts that the Commission is not obligated to conduct an investigation in each case, but is entitled to refer to the community interest in order to determine the degree of priority to be applied to the various complaints it receives.¹⁰ In order to assess the community interest, the Commission is entitled to refer to a wide number of criteria, which may differ considerably from case to case, and to apply new criteria which had not been considered before.¹¹ One of the many reasons to reject a complaint is if the complainant can bring actions to safeguard its rights before a national court.

If the Commission ascertained the community interest, it examines the complaint under Articles 81 and 82 EC. A complaint may be rejected on the ground that it fails to establish proof of the allegations put forward.¹² The Commission is not obliged to uncover further facts by an investigation to foster the complaint.

The Commission furthermore refers to the guidance published to support the assessment of the chances of a complaint by the undertakings. Especially with the new changes under Regulation 1/2003 it has to be borne in mind that it is now necessary to assess if the agreement restricting competition might fulfil the conditions under Article 81 (3) EC, leading to the validity of the restrictive agreement even without prior notification and individual exemption by the Commission.

In the Commission’s procedure for dealing with complaints, different stages can be distinguished.

Following the submission of the complaint, the Commission examines the complaint and may collect further information in order to decide what action it will take on the complaint. In particular, the Commission may informally exchange views with the complainant to clarify factual and legal issues. In this stage, the complainant has the opportunity to supplement and add to his allegations in the light of the initial reaction of the Commission.

In the second stage, the Commission investigates the case further with a view to initiate proceedings against the undertakings complained of. If the Commission considers that there are insufficient grounds for acting on the complaint, it offers the complainant the opportunity to submit further comments within a certain time limit. If the complainant fails to make known its views within the time limit, the complaint is deemed to have been withdrawn.¹³

In the third stage, the Commission either initiates a procedure against the subject of the complaint or adopts a decision rejecting the complaint. The Commission expressly draws the attention to the fact that the rights of complainants in the procedure are less far reaching than the right to a fair hearing of the companies which are subject of an infringement procedure.

The Commission is obligated to decide on complaints within a reasonable time.¹⁴ A reasonable duration depends on the individual case in question. But in principle the Commission endeavours to inform complainants of the action that it proposes to take within an indicative time frame of four months from the reception of the complaint,¹⁵ though this time limit is not a binding statutory term.

Although the complainant is not conferred with the same procedural rights as the companies alleged to have violated Articles 81 or 82 EC, the complainant is closely participating in the process. When the Commission addresses a statement of objections to the company’s complained of, informing those companies about the allegations and the facts upon which the allegation are based, the complainant is entitled to receive a non-confidential copy of this document. He may then, within a certain time limit, comment in writing on the statement of objections. On request of the complainants, they may also, where appropriate, be afforded the opportunity to express their views at the oral hearing of the parties to which a statement of objections has been addressed.

In cases where the complainant delivered documents containing business secrets, the Commission will protect the confidential information. But the qualification of information as confidential does not prevent the Commission from disclosing and using information necessary to prove an infringement of Articles 81 or 82 EC. Complainants are entitled to withdraw the complaint at any time they wish.

If the Commission rejects a complaint by decision, it must state the reason in accordance with Article 253 EC. It must disclose in a clear and unequivocal fashion the reasoning followed by the Commission in such a way as to enable the complainant to ascertain the reasons for the decision and to enable the competent community court to exercise its power of review. But the Commission is not obliged to adopt a position on all the arguments relied upon by the complainants.¹⁶ A rejecting decision is subject to appeal before the community courts.

Following the rejection of a complaint the complainants are prevented from requiring the reopening of the investigation unless they put forward significant new evidence. But the closing of a file does not prevent the Commission from reopening it. It is important to note that a decision to reject a complaint does not prevent a Member State court or competition authority from applying Articles 81 and 82 to agreements and practices brought before it. The assessment made by the Commission may be taken into account by the Member State court or competition authorities in examining whether the agreements or conduct in question are in conformity with Articles 81 and 82 EC.

While the Commission under Article 8 of Regulation 1/2003 may on its own initiative order interim measures, complainants cannot apply for interim measures under Article 7 (2) of Regulation 1/2003. But of course they can be brought before member states courts. 

It may be interesting for undertakings to know that they can also contact the Commission and at the same time request for anonymity.¹⁷

The Commission obviously wants to support complaints against companies regarding possible infringements of Articles 81 and 82 EC. Complaints will be the major source of information for the Commission in future, now that the obligation to notify agreements for individual exemption under Article 81 (3) EC is no longer applicable. By providing a frame for the form, the timing and the assessment of complaints, the Commission gives the necessary security for lodging an effective complaint. In connection with the incentive to claim damages at a national court following a successful complaint, it is up to companies to use the tools provided to them by the Commission.

Copyright © 2007, Mayer, Brown, Rowe & Maw LLP. and/or Mayer Brown International LLP. This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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