Companies should brace themselves, as 2017 is likely to see better and more effective competition enforcement in the EU. National competition authorities will be further empowered and the number of antitrust damages actions is likely to rise as a result of the implementation of the antitrust damages directive into national law and the upcoming measures to facilitate collective redress at EU and national level. Also, more merger transactions may have to be notified to the European Commission due to upcoming changes in the EU Merger Regulation. Finally, recent statements by Competition Commissioner Vestager imply a greater focus on social aspects when enforcing the competition rules, signifying a possible shift that companies should take to heart. All in all, it promises to be an interesting year in competition enforcement, with plenty of new changes.
Empowering national competition authorities
National competition authorities (NCAs) and courts are empowered to apply the 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 28 national competition authorities of the EU work together in the European Competition Network; however, as EU commissioner for competition Margrethe Vestager has emphasised, not all NCAs currently have the same enforcement powers. Some NCAs do not have the authority to gather evidence stored on digital devices, such as smartphones or laptops, during a dawn raid. Other NCAs cannot afford to purchase the tools necessary to extract hidden data from a company's computer system. In addition, because most NCAs have their own leniency programme, a company applying for leniency cannot always be sure it is the first to approach every single relevant NCA. The European Commission will try to fix this with the introduction of - most likely - a directive empowering national competition authorities to become more effective enforcers in the second quarter of 2017.
Anticipated rise in number of antitrust damages actions
There is likely to be an increase in antitrust damages actions in the EU overall and in the Netherlands specifically due to a number of new legislative initiatives. Firstly, the due date for implementation of the directive on antitrust damages actions into the national legal systems of the EU member states was set at 27 December 2016 and the bill implementing the directive is likely to be rubber-stamped by the First Chamber of the Dutch Parliament soon. Secondly, the Dutch government is contemplating a bill dealing with civil damages actions in respect of purely national competition law infringements. Finally, a bill introducing class actions in the Netherlands was submitted to the Second Chamber of the Dutch Parliament late 2016. This is a big step forward and in line with the European Commission's recommendation on collective redress. The Commission is set to assess how to implement the recommendation and what further measures are needed by 26 July 2017.
More EU merger control filings?
As part of its evaluation of the effectiveness of the EU merger control regime, the European Commission launched a public consultation on the functioning of the EU Merger Regulation in October 2016. The consultation focuses on:
- the effectiveness of purely turnover-based thresholds in the EU Merger Regulation;
- the treatment of cases that typically do not raise competition concerns; and
- the referral mechanisms between member states and the Commission.
The evaluation is scheduled to be completed in the autumn of 2017.The outcome could result in more merger transactions having to be notified at EU level, since the Commission is exploring whether companies should notify mergers if they meet a certain transaction or data set value, even when they do not reach the turnover thresholds. This addition to the current, purely turnover-based threshold is of particular significance to certain industries, where an acquired company may have achieved little turnover as yet, but holds commercially valuable data, or has considerable market potential through innovation. This is one of the reasons why Germany plans to introduce a similar transaction test by early 2017.
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