European Union: EU Antitrust Proceedings And National Competition Authorities: A Leap In The Wrong Direction

Article by Anne MacGregor and Bogdan Gecic*

The European Court of Justice (ECJ) ruled in May 2011¹ that national competition authorities (NCAs) in the 27 EU Member States do not have the power to decide that there has been no breach of EU competition law. In other words, a company prosecuted or investigated by an NCA under EU antitrust rules (as opposed to national competition provisions) may be found guilty of a competition infringement or the procedure may be dropped on "lack of grounds for action", but the NCA cannot take a formal decision declaring that the company has not breached EU rules. That prerogative has been solely left to the European Commission (Commission) which can adopt so-called "non-applicability" decisions.

The Tele2 Polska ruling has two direct consequences. NCAs will not be able to issue binding decisions that there was no infringement of arts 101 or 102 of the Treaty on the Functioning of the EU (TFEU). Furthermore, it is now clear that NCAs are precluded from issuing individual exemptions under art.101(3) TFEU.

Apart from these most obvious effects, the judgment opens up a number of other important issues. Any non-infringement decision or individual exemption that was issued by an NCA under EU law in the period subsequent to May 2004 has now been called into question. Moreover, the scope of the powers of national courts in finding non-infringements of EU competition law remains unclear.

In addition, the Tele2 Polska judgment amounts to an implicit rejection of ne bis in idem, a fundamental European procedural principle. It further infringes legitimate expectations and creates legal uncertainty for business, and is thereby at odds with other general principles of EU law.

Facts of the case

The Polish NCA had investigated Telekomunikacija Polska, the incumbent telecoms operator in Poland, for an alleged abuse of dominance under both national and EU competition law.² Polish competition law mandates that if the NCA does not establish that a breach has been committed, it must issue a decision stating that there has been no breach of competition rules.³

At the end of the proceedings, the Polish NCA found that Telekomunikacija Polska's conduct did not amount to an abuse under both national law and art.102 TFEU. Consequently, the authority adopted a negative decision on the merits with regard to the national antitrust allegations. For the EU competition infringement, however, it simply ended the procedure on the grounds that it was "devoid of purpose" (i.e. lacked grounds for action).⁴

Tele2 Polska sp. zoo (now Netia SA), a disgruntled third party, appealed the decision before the Polish district court with jurisdiction for competition cases. The district court, later upheld by the Warsaw Court of Appeal, annulled the NCA's decision, stating that the NCA should have reached a negative decision on the merits with regard to EU law in the same manner as it had done under national provisions. Perplexed by this, the Polish NCA brought an appeal on a point of law before the Polish Supreme Court, arguing that Regulation 1/2003 did not allow it to take a negative decision on the merits as regards the application of art.102 TFEU. It took the view that art.10 of Regulation 1/2003 precluded an NCA from issuing such a decision, which was the Commission's exclusive prerogative. Otherwise, by virtue of the principle ne bis in idem, a negative decision by one NCA might prevent the Commission or other NCAs from subsequently taking contradictory decisions.

The Polish Supreme Court stayed the proceedings and referred two questions to the ECJ for a preliminary ruling⁵:

1. Whether art.5 of Regulation 1/2003 precludes NCAs from issuing a negative decision on the merits with regard to potential EU competition infringements; and
2. provided that the answer to the first question is affirmative, is art.5(2) directly applicable in mandating that an NCA can only issue a decision on lack of grounds for action, even if national law explicitly states otherwise.

In Luxembourg, Advocate General (A.G.) Mazák issued his opinion on December 7, 2010, followed by the ECJ's judgment on May 3, 2011, which is substantively the same.⁶

The A.G. suggested and the ECJ confirmed that art.5 precludes NCAs from adopting non-applicability decisions as this is an exclusive power of the Commission. It also concluded that art.5(2) was directly applicable, thus trumping national law and restricting ways in which an NCA may close or end proceedings. NCAs are limited to adopting decisions on lack of grounds for action. Such decisions are not on the merits and not legally binding, and thus cannot preclude subsequent proceedings on the basis of arts 101 and 102 TFEU by the Commission and other NCAs.

Analysis of the reasoning behind Tele2 Polska

Scope of article 5

Although the A.G. and the ECJ were meticulous in their technical interpretation, the scope and depth of their reasoning are less convincing. The A.G. and the ECJ began with an interpretation of art.5 of Regulation 1/2003, which lists some of the types of decisions that an NCA may issue when enforcing EU competition law. Article 5 reads as follows:

The A.G. and ECJ relied on a literal interpretation of art.5 and deemed the listed decisions as exhaustive (numerus clausus). Since there is no mention of non-infringement or non-applicability decisions, it was concluded that NCAs do not have the power to take these types of decisions under Regulation 1/2003. In effect, it was held that "Article 5 confines the jurisdiction of NCAs ... and sets out expressly the manner in which the NCAs are to apply [EU competition law]".⁷

Admittedly, the A.G. acknowledged the non-exhaustiveness of art.5 at least insofar as Regulation 1/2003 contains additional provisions on NCA decision-making powers such as art.29(2).⁸ Nevertheless, both the A.G. and the ECJ concluded that the type of decisions in art.5 are exhaustive with regard to inapplicability decisions.

This interpretation can be contested on a number of grounds.⁹ First, it can be asserted that the list in art.5 contains only decisions of a procedural nature and not substantive decisions.¹⁰ Although Regulation 1/2003 does not refer to non-infringement decisions, it does not explicitly say that NCAs can adopt infringement decisions. If one were to take a strict literal interpretation from Tele2 Polska there is scope to argue that NCAs are not allowed to issue infringement decisions either. Of course, this is not the case. Consequently, it is clear that art.5 refers only to procedural decisions and leaves the qualification of substantive decisions open.¹¹

In addition, the first sentence of art.5 only refers to the powers that an NCA can apply in individual cases and then lists the types of decisions available for the purposes of enforcing a substantive infringement decision. The same should be understood in the last paragraph of art.5. It merely states one of the possible procedural forms in which an NCA may issue a non-infringement or individual exemption decision.¹² Furthermore, the wording in art.5(2) "[NCAs] may likewise decide ..." (Emphasis added) implies that there are other procedural decisions at an NCA's disposal when issuing a substantive decision on non-infringement or exemption.¹³ If the EU legislature had intended for this to be the only form in which an NCA could issue negative decisions or exemptions, it would have used the word "shall" instead.

Moreover, under the old Regulation 17 (the predecessor to Regulation 1/2003), upon application, the Commission had a monopoly on the issuing of two types of decisions: (1) negative clearances confirming that there was no breach of what is now art.101(1) and art.102, and (2) individual exemptions under art.101(3) excluding agreements that would otherwise be prohibited under art.101.¹⁴ Negative clearance decisions were issued on the merits, and, were, therefore, binding for national authorities and national courts.¹⁵ Regulation 1/2003 has done away with both individual exemptions and negative clearances and abolished the Commission's monopoly.¹⁶ It is peculiar, however, that the disputed art.5 of Regulation 1/2003 contains almost the exact same wording as the now repealed art.2 of Regulation 17, which read as follows:

The current art.5 of Regulation 1/2003 reads:

Evidently, the two provisions are almost identical with one small but very important difference—NCAs can issue such decisions only on their own initiative or in response to a complaint but not upon application of the companies concerned. This wording is fully in line with the EU legislature's intention to do away with the mandatory notification and authorisation system as well as to decentralise enforcement. Consequently, the concern expressed in Tele2 Polska that allowing NCAs to issue negative decisions would lead to a reintroduction of the old system via a back door are unfounded.¹⁷

Relevance of article 10

Probably the key argument on which the A.G. and the ECJ based their findings was the interpretation of art.10 read together with Recital 14 of Regulation 1/2003. Article 10 introduces a new type of administrative act known as a "non-applicability" decision. That provision reads as follows:

Recital 14 of the Preamble to Regulation 1/2003 provides closer guidance as to when the Commission can adopt non-applicability decisions:

The A.G. and the ECJ placed decisive value on art.10 of Regulation 1/2003 and Recital 14, explaining how the Commission might adopt negative decisions in "exceptional cases" and in order to clarify and provide uniformity of the law. The ECJ stated that if NCAs were empowered to take negative decisions and individual exemptions, that would undermine the power of the Commission and risk the uniform and coherent application of arts 101 and 102, since such a decision might preclude subsequent Commission investigations.

The A.G. correctly observed that "Article 10 is not meant to cover closing of a procedure in a specific case".¹⁸ It was never intended to prescribe the manner in which the Commission should terminate proceedings in non-infringement cases. Regulation 1/2003 is completely silent on that question. In addition, it was especially important for non-applicability decisions to be applied by the Commission, only ex officio and in exceptional cases, so as to distance itself as much as possible from the old centralised notification and authorisation system under Regulation 17. It follows that art.10 was introduced to serve as, if you like, a type of "mini-block exemption" to be used in ad hoc and rare cases when it becomes necessary to influence the development and coherent application of EU competition law.

That is not to say that such a sophisticated tool, albeit of pre-emptive and minor practical relevance, should be used as a justification to radically narrow the powers of NCAs and undermine the decentralisation of EU competition law.¹⁹ In addition, it is worth mentioning that, to date, the Commission has never invoked its powers under art.10. The Commission recently said that "such an ex ante means of ensuring consistency has largely been overtaken by the extensive efforts of the [European Competition Network]²⁰ in promoting the coherent application of [EU] law".²¹ The Commission also said:

This serves to underline that contrary to the approach taken in Tele2 Polska, there is no place for an interpretation of art.5 by comparing it to art.10 of Regulation 1/2003.²³ The two are wholly different provisions intended for separate purposes. The first considers the general procedural powers of NCAs in applying EU competition law while the latter represents a minor pre-emptive device that has never been used, intended for exceptionally rare cases and not intended to cover the closing of a procedure.

Adequate procedural safeguards for preserving uniformity

In Tele2 Polska, concerns were also raised that allowing NCAs to adopt inapplicability decisions would impair the uniform application of EU competition law since the Commission would not have sufficient procedural safeguards to ensure coherency.

At the outset, it is useful to recap the various safeguards and co-operation mechanisms that Regulation 1/2003 puts in place to ensure the Commission's specific role in clarifying and guaranteeing the consistent application of EU competition law throughout the Union. With the exclusion of the contested art.10, there are several additional and significant safeguards under Regulation 1/2003 that should prevent conflicting decisions.

Any EU antitrust investigation, as opposed to a merger review, irrespective of whether it is led by the Commission or an NCA, is usually lengthy. In accordance with the principle of sincere co-operation and pursuant to art.11(1, 2, and 5), NCAs must inform the Commission and other NCAs without delay after commencing their first formal investigative measures. NCAs may consult with the Commission on any case involving EU competition rules.²⁴ Under art.16(2) of Regulation 1/2003, NCAs cannot take decisions that would run counter to an earlier decision adopted by the Commission. Under art.11(6), the initiation of proceedings by the Commission relieves NCAs of their competence to deal with the same case and if an NCA is already acting on a case, the Commission shall initiate proceedings only after consulting with the NCA. As a final point, procedural safeguards also exist at a national level since an NCA inapplicability decision would be as much subject to judicial review as an art.5 infringement decision.²⁵

Even despite the above, the A.G. in Tele2 Polska expressed concern:

It is submitted that this conclusion is unfounded. Although, strictly speaking, there is no prior information duty, sufficient safeguards are still provided for in the Network Notice, which was adopted by the Commission pursuant to Regulation 1/2003.²⁷ A systematic interpretation of the Network Notice clearly shows that the Commission predicted both the existence of other types of decisions in addition to the list in art.5 as well as mechanisms to preserve uniformity in these cases.²⁸ Paragraph 48 is to be found in s.3.1 entitled "Mechanism of cooperation (Article 11(4) and 11(5) of the Council Regulation)". Paragraphs 44, 46 and 47 cover art.11(4) while the following paragraph refers to other types of decisions. Paragraph 48 of the Network Notice states:

Further implications for negative decisions

Incoherent application and over-enforcement

The Tele2 Polska ruling now prohibits NCAs from adopting decisions that there has been no breach of arts 101 and 102, but this is not the only ramification of the judgment. Imagine a case similar to Tele2 Polska but in which the outcome was different, that is, an NCA found a breach of both EU and national competition rules and issued an infringement decision or decisions imposing fines. According to A.G. Mazák, "Regulation No 1/2003 empowers the NCAs to adopt 'positive' decisions on the merits".²⁹ By virtue of the principle ne bis in idem, such decisions would be binding for the Commission and other NCAs.³⁰ Now let us suppose for the sake of argument that the NCA's decision was wrong.³¹

At this point, there are two plausible scenarios. The company in question could successfully appeal against the decision before a national court. In that case, the question is why negative decisions were perceived as a problem when both positive and negative decisions could be "fixed" by judicial intervention.³²

On the other hand, what if the incorrect decision were to be reaffirmed by the courts and become final, and thus legally binding for the Commission, other NCAs and national courts? Such a positive decision on the merits would risk undermining the Commission's powers and the uniform application of EU competition law as much, if not more, than a negative decision.³³ In addition, an incorrect positive decision would be binding for national courts and could subsequently be used as basis for damages actions. Although aware of this, the Commission would be able to do little to prevent it. This would definitely hamper efforts for the private enforcement of EU competition law, flying in the face one of the main objectives of Regulation 1/2003.³⁴

By contrast, even if an NCA, as in Tele2 Polska, were to adopt a legitimate decision on the lack of a breach of national competition rules (which are in most cases a carbon copy of EU rules) and, based on the same findings, came to the same result under EU antitrust rules, it could not adopt a non-infringement decision. It seems that while attempting to ensure uniformity, the ECJ with its ruling in Tele2 Polska, instead, put in jeopardy the coherent application of EU competition law.

Trumping national laws and creating legal uncertainty

The judgment overrides the national laws of any Member State that previously empowered its NCA to issue non-infringement decisions based on arts 101 and 102 TFEU. For example, in the United Kingdom, the OFT is authorised to issue decisions that there are no grounds for action either because the conditions of the prohibition in art.101(1) are not met or because the agreement satisfies the conditions of art.101(3) or the conditions of prohibition in art.102 are not met.³⁵

The OFT's newly adopted guidance recognises two types of decisions for closing a case: (1) "on the grounds of administrative priorities" and (2) on "no ground for action".³⁶ In the first, the OFT will not issue a finding that there was no breach of competition law but instead a provisional closing letter and reserve the right to continue its investigation at a later date.³⁷ For the latter type of decisions, if the OFT does not find evidence of a competition law infringement it will publish a reasoned no ground for action decision.³⁸ Based on the distinction between the two decisions it is clear that the first is of a procedural nature (the authority wants to invest its time and resources elsewhere) while the latter is a decision on the merits (the authority lacks the evidence to find an infringement).

In addition, other UK antitrust regulators are reported to have issued formal non-infringement decisions under art.102.³⁹ These and similar decisions are now in legal limbo since, following Tele2 Polska, their legality has been called into question.⁴⁰ In practice this means that companies that had previously managed to obtain such decisions may be deprived of their benefits in the future. In other words, such decisions will probably no longer serve as a sufficient shield against damages claims in private litigation. Finally, the Tele2 Polska ruling may also affect the validity of any judgment that had been issued on the basis of a non-infringement decision. In any event, whether for past or ongoing business activities, the Tele2 Polska judgment has opened a door to legal uncertainty for companies.⁴¹

Special consideration for individual exemptions

According to the Tele2 Polska judgment, NCAs are precluded from issuing decisions listed under art.10 of Regulation 1/2003. In addition, the so-called "exhaustive list" of NCA decisions under art.5 does not mention individual exemptions. Consequently, it follows that after Tele2 Polska, NCAs can no longer adopt individual exemptions under art.101(3) of TFEU.⁴² This runs contrary to some of the primary reasons for modernisation that resulted in the adoption of Regulation 1/2003 in the first place.⁴³

The EU legislature's intention to grant NCAs and national courts the power to issue individual exemptions was time and again confirmed at various stages in the modernisation process. The Commission's White Paper that triggered the modernisation discussion suggested that for effective enforcement to be achieved it was vital that the Commission relinquish its monopoly on the application of art.101(3) and confer on NCAs and national courts the power to issue individual exemptions.⁴⁴ This was reaffirmed in the Commission's explanatory memorandum supplementing the proposal for adoption of Regulation 1/2003:

Finally, Recital 4 of Regulation 1/2003 reads as follows:

Prior to Tele2 Polska, there was considerable consensus that NCAs and national courts have the power to apply art.101 in its entirety, including to declare that the conditions under art.101(3) are satisfied.⁴⁶ Now, with this no longer the case, another question remains open—what happens to all of the individual exemptions issued by NCAs since the adoption of Regulation 1/2003?⁴⁷

Powers of national courts

Article 6 of Regulation 1/2003 empowers national courts to apply arts 101 and 102 TFEU. Similarly to NCAs preceding Tele2 Polska, it has long been held that national courts are authorised to apply EU competition rules without limitation.⁴⁸ According to settled ECJ case law, arts 101(1) and 102 were already directly applicable by national courts. It seems that art.6 was added to explicitly empower national courts to apply art.101(3) in the aftermath of the abolition of the centralised system under Regulation 17.⁴⁹

Although national judges settle issues of individual rights, when applying EU competition law, their judgments must consider issues of applicability as well. Accordingly, national courts in practice may adopt negative decisions.⁵⁰ Admittedly, such judgments bind only the parties to the proceedings and are thus of limited legal effect. In addition, there are safeguards under arts 15 and 16 of Regulation 1/2003 that should ensure uniform application of EU competition law. Nevertheless, with current moves to adopt US-like class actions in different Member States that may encompass vast numbers of applicants, it is questionable for how long the legal effect of such decisions will remain narrow in scope.

Following the Tele2 Polska judgment it may be that the the Commission and the ECJ look again at the unlimited powers of national courts to apply arts 101 and 102.⁵¹

Infringement of the ne bis in idem principle

The ruling in Tele2 Polska signifies an implicit rejection of the principle of ne bis in idem (double jeopardy).⁵² In essence, no undertaking should be prosecuted or fined more than once for the same infringement. The principle of ne bis in idem is well established and has binding effect in most Member States, under the European Convention on Human Rights (ECHR) and the case law of the European Court of Human Rights, and the Charter of Fundamental Rights of the European Union (EU Charter).⁵³ In recent judgments the European courts in Luxemburg have accepted ne bis in idem as a general principle of EU law. There is also considerable ECJ case law on the application of ne bis in idem in competition law cases.⁵⁴

For example, in its 2002 LMV judgment, the ECJ confirmed that, in competition matters, the principle of ne bis in idem precludes an undertaking from being found guilty or proceedings from being brought against it a second time on the grounds of anti-competitive conduct in respect of which it has been penalised or declared not liable by a previous unappealable decision.⁵⁵

Since the 2002 LMV decision, on May 1, 2004, Regulation 1/2003 came into force and with it introduced a system of parallel competence between the Commission and the NCAs. The possibility of parallel and subsequent actions has given the principle of ne bis in idem a new relevance under the modernised decentralised regime.⁵⁶ In the old system, Regulation 17 gave the Commission a monopoly in enforcement and thus, although it was a possible issue, in practice ne bis in idem was not of great importance. Now, with 27 NCAs and the Commission all equally competent to commence proceedings and apply the same substantive EU competition rules, a correct application of ne bis in idem becomes paramount. Viewed in the context of follow-on private enforcement before national courts, the issue becomes even more pertinent.

There is general agreement that infringement decisions can be adopted by both the Commission and the NCAs and that ne bis in idem applies.⁵⁷

In contrast, the ruling in Tele2 Polska implicitly rejects the principle of ne bis in idem with regard to non-infringement decisions issued by NCAs. A.G. Mazák stated:

Since NCA non-infringement decisions are not considered to be on the merits, and are thus deprived of a legally binding effect (erga omnes), such decisions cannot be regarded as formal "acquittals" in the sense of ne bis in idem. This means that under Tele2 Polska companies can, in theory, be prosecuted more than once, at least when the first investigation is conducted by an NCA. Consequently, when an NCA issues a fine or other sanction ne bis in idem applies but when the very same NCA issues a decision that based on its findings there is no evidence of an infringement ne bis in idem becomes inapplicable. This creates a paradoxical situation and constitutes an infringement of ne bis in idem, which is a general principle of EU law, and guaranteed under the ECHR.

It seems that the reasoning behind the incorrect ruling in Tele2 Polska is based on Commission practice that can be traced back to the old Regulation 17. This practice has, in the meantime, become outdated and out of step with the changed legal reality brought about by Regulation 1/2003.⁵⁹ Under Regulation 17, the Commission would upon application either issue a negative decision (so-called "strong" clearance) or, based on its discretion and more often, it would issue only a comfort letter (so-called "weak" clearance). A comfort letter was not legally binding but had "persuasive authority."⁶⁰ Clearance decisions were abolished by Regulation 1/2003, leaving only the exceptional art.10 decisions in their place, of which, to date, there have been none. Consequently, if the Commission does not find enough evidence to proceed it will simply close the case without adopting a negative decision on the merits or issuing any reasoned decision whatsoever. This is true irrespective of how far the Commission was in the investigation and whether a statement of objections and an oral hearing has been held.⁶¹

Céline Gauer, a Commission official and one of the drafters of Regulation 1/2003, stated that:

Since it practically never issues negative decisions on the merits,⁶³ which could be regarded as a formal "acquittal", the Commission defeats the purpose of the prohibition of double prosecution, and potentially infringes both the EU Charter and the ECHR.⁶⁴

Regrettably, A.G. Mazák has chosen to bless this Commission practice by citing it as one of the justifications for invalidating the NCAs' powers. In doing so, the A.G. and the ECJ have arguably perpetuated the dissemination of a negative EU practice down to Member State level. In his opinion, A.G. Mazák stated:

One may anticipate future probes into Commission procedures by the ECJ in Luxembourg and the court in Strasbourg. It remains to be seen whether the Tele2 Polska judgment will withstand the test of time.

Footnotes

* Anne MacGregor is Special Counsel and Bogdan Gecic is a law clerk in the Brussels office of Cadwalader, Wickersham & Taft LLP.

1 Prezes Urzędu Ochrony Konkurencji i Konsumentów v Tele2 Polska sp. z o.o. (now Netia SA) (C-375/09) [2011] OJ C186/4.

2 Article 3(1) of Regulation 1/2003 on the implementation of the rules on competition laid down in arts 81 and 82 of the Treaty ([2003] OJ L1/1), as amended by Regulation 411/2004 repealing Regulation 3975/87 and amending Regulations 3976/87 and 1/2003, in connection with air transport between the Community and third countries ([2004] OJ 68/1) and Regulation 1419/2006 repealing Regulation 4056/86 laying down detailed rules for the application of arts 85 and 86 of the Treaty to maritime transport, and amending Regulation 1/2003 as regards the extension of its scope to include cabotage and international tramp services ([2006] OJ L2691) (Regulation 1/2003). Article 3(1) states that whenever NCAs apply national law to any abuse prohibited under art.102 TFEU they must apply art.102 TFEU as well (parallel application of national and EU law).

3 Articles 5 and 8 of the Law on Competition and Consumer Protection (Ustawa o ochronie konkurencji i konsumentów, Dz. U. 2005), No.244, item 2080.

4 The term "devoid of purpose" is a citation from the ECJ judgment in Tele2 Polska [2011] OJ C186/4 at [11]. By contrast, A.G. Mazák, in his Opinion, uses the phrase "grounds for action". See Opinion of A.G. Mazák, delivered on December 7, 2010 at [6].

5 Article 267 TFEU provides for a "preliminary ruling procedure". National courts of EU Member States are responsible for ensuring that EU law is properly applied in each national jurisdiction. There is a potential risk that courts in different Member States might interpret EU law in different ways. In order to ensure the uniform application of EU law, art.267 TFEU enables and, in some instances, mandates national courts to make a reference to the Court of Justice for a preliminary ruling on a question of EU law that national courts have to resolve prior to handing down their own ruling. See, further, Alan Dashwood, Michael Dougan, Barry Rodger, Eleanor Soaventa and Derrick Wyatt, European Union Law, 6th edn (Hart Publishing, 2011), pp.209–231.

6 Tele2 Polska A.G. Opinion December 7, 2010.

7 Tele2 Polska A.G. Opinion December 7, 2010 at [32].

8 Tele2 Polska A.G. Opinion December 7, 2010 at [23].

9 For further arguments on the non-exhaustiveness of the list under art.5 see C.S. Kerse and N. Khan, EC Antitrust Procedure, 5th edn (2005), pp.261–262.

10 See also Michael Grenfell and Caroline Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, pp.6–8; and Silke Brammer, "Full effectiveness and uniform application vs. procedural autonomy — Rights, powers and duties of NCAs after Tele2 Polska and VEBIC", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

11 Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, pp.6–8; and Brammer, "Full effectiveness and uniform application vs. procedural autonomy", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

12 Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, pp.6–8; and Brammer, "Full effectiveness and uniform application vs. procedural autonomy", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

13 Brammer, "Full effectiveness and uniform application vs. procedural autonomy", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

14 Articles 2, 4–6 of Regulation 17: First Regulation implementing articles 85 and 86 of the Treaty [1962] OJ L13/204–211.

15 Lennart Ritter and W. David Braun, European Competition Law: A Practitioner's Guide (Wolters Kluwer Law & Business, 2005), p.1051 para.4.

16 The decentralisation of the Commission's powers was one of the key reasons for adoption of Regulation 1/2003. For example Grenfell and Janssens state that "[t]he decentralisation of such powers to national competition authorities and national courts was a deliberate policy, and fundamental to the modernisation embodied in Regulation 1/2003": Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, pp.6–8; see also Nicolas Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011].

17 Tele2 Polska A.G. Opinion December 7, 2010 at [41]: "[The Explanatory Memorandum accompanying the Proposal for modernisation] stated that inapplicability decisions 'can be adopted only at the Commission's own initiative and in the [EU] public interest. These conditions ensure that decisions making a finding of inapplicability cannot be obtained on demand by companies'. Such a possibility would seriously undermine the principal aim of the reform" (Emphasis added); and fn.36: "The Commission was clearly adamant that Article 10 of Regulation No 1/2003 was not to be allowed to be used as a backdoor route for notifications which could jeopardise the main objective of that regulation."

18 Tele2 Polska A.G. Opinion December 7, 2010 at [46].

19 See also Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, pp.6–7 and Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011].

20 The European Competition Network (ECN) is an organisation with no legal status but is envisaged as a forum under Regulation 1/2003. For further information on the functioning of the ECN see http://ec.europa.eu/competition/ecn/index_en.html [Accessed November 25, 2011].

21 See, e.g. Commission staff working paper accompanying the Communication from the Commission to the European Parliament and Council — Report on the functioning of Regulation 1/2003, COM(2009)206 final/SEC/2009/0574 final, p.36, para.114.

22 Commission staff working paper accompanying the Communication from the Commission to the European Parliament and Council — Report on the functioning of Regulation 1/2003, COM(2009)206 final/SEC/2009/0574 final, p.36, para.114.

23 The A.G. and the ECJ based their interpretation of the scope of art.5 on a comparative analysis with art.10. See Tele2 Polska A.G. Opinion December 7, 2010 at [33], inter alia, and Tele2 Polska [2011] OJ C186/4 at [24].

24 In order to fully incorporate non-applicability decisions it would be preferable to amend art.11(4), although this would not materially affect the ECJ's ruling in Tele2 Polska, as explained below.

25 See also Brammer, "Full effectiveness and uniform application vs. procedural autonomy", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

26 Tele2 Polska A.G. Opinion December 7, 2010 at [48].

27 Commission Notice on co-operation within the Network of Competition Authorities (Text with EEA relevance) [2004] OJ C101/43–53 (Network Notice).

28 The list of decisions in Network Notice para.48 further supports the argument against the Tele2 Polska interpretation on the non-exhaustive scope of art.5 of Regulation 1/2003.

29 Tele2 Polska A.G. Opinion December 7, 2010 at [29].

30 Argumentum e contrario, the effects of ne bis in idem were recognised as one the concerns if NCAs were to be empowered to issue negative decisions: Tele2 Polska A.G. Opinion December 7, 2010 at [30]; see also Tele2 Polska [2011] OJ C186/4 at [15]. Although the scope of the effects of ne bis in idem in EU competition law is yet unresolved, there is minimum consensus that decisions imposing fines would at least bar the Commission "from initiating proceedings against the same undertakings for the same infringement on the same territory with a view to impose another fine": Celine Gauer, "Due Process in the Face of Divergent National Procedures and Sanctions" (March 7, 2005), p.11 para.2. See also Silke Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (Hart Publishing, 2009), pp.359–360, 374–382 and 409–410.

31 See also Brammer, "Full effectiveness and uniform application vs. procedural autonomy", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

32 Brammer, "Full effectiveness and uniform application vs. procedural autonomy", 54th Lunch Talk of the GCLC (October 24, 2011), p.13, http://www.coleurope.eu/file/content/gclc/documents/GCLC_Tele2%20and%20VEBIC_slides%20only.pptx [Accessed November 25, 2011].

33 This was one of the ECJ's arguments stated against granting binding effect to negative decisions. See Tele2 Polska [2011] OJ C186/4 at [27] and [28].

34 In his Opinion, the A.G. stated: "Inter alia, to allow an NCA to declare that Articles 101 and 102 TFEU are inapplicable ... [would] be likely to dissuade victims of conduct which they suspect of being unlawful from bringing individual actions against the perpetrator and from thus contributing to the private enforcement of EU competition law (whereas Regulation No 1/2003 is meant to endorse private enforcement)": Tele2 Polska A.G. Opinion December 7, 2010 at [10].

35 Competition Act 1998 (Office of Fair Trading's Rules) Order 2004 (2004/2751) r.7(2). See also Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.6.

36 OFT, A guide to the OFT's investigation procedures in competition cases: Guidance (March 2011), OFT 1263, Ch.10. The OFT draft guidance dated August 2010 used the expression "non-infringement decision" instead of "no ground for action" as it is in the final version. See also Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.6. Presumably the A.G.'s Opinion in Tele2 Polska influenced this change in wording, since it was issued in the period between the publishing of the draft and the adoption of the final guidance. One might speculate that the OFT wanted to avoid its new guidance being in direct conflict with a pending ECJ judgment. However, the final choice of wording does not greatly modify the effects of the two different types of decisions.

37 The British solution provides a well-balanced response to concerns of lack of resources and need for greater prosecutorial discretion while at the same time preserving legality. Some have, however, seen the Tele2 Polska judgment as a welcomed development in granting NCAs greater prosecutorial discretion and ability to prioritise. See for example Fabien Zivy, "Rights, Powers and Duties of NCAs: A Review of recent ECJ Rulings", GCLC Lunch Talk, Brussels (October 24, 2011), http://www.coleurope.eu/template.asp?pagename=gclclunchtalkarchive⊂=20111024 [Accessed November 25, 2011].

38 In contrast, the Commission never publishes a reasoned negative decision on the merits. See Best Practices in proceedings concerning arts 101 and 102 TFEU [2011] OJ C308/6–32, paras 76 and 144.

39 Ogfem, the energy regulator, and ORR, the rail regulator in the UK. See Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.6.

40 Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.6. See also Nicolas Petit, who stated that "this suggests that a number of NCAs have lived in a state of illegality for the past 7 years": Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011].

41 Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.6; Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011].

42 See also Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011]; and Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.6.

43 Nicolas Petit calls the ECJ ruling in Tele2 Polska "a joke (actually a bad one)": Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011].

44 White Paper on Modernisation of the Rules Implementing Articles 85 And 86 of the EC Treaty (now Articles 101 And 102 TFEU), Commission Programme No.99/027 [1999] C132/01; see also Kerse and Khan, Antitrust Procedure (2005), para.1009 p.7.

45 Explanatory Memorandum to Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and 82 (now 101 and 102) of the Treaty and amending Regulations 1017/68, 2988/74, 4056/86 and 3975/87 (Brussels: September 27, 2000), COM(2000) 582 final, p.11 para.4. See also Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.7.

46 See Kerse and Khan, Antitrust Procedure (2005), para.1-021 p.19; Nicolas Petit stated that: "[s]ince the inception of Regulation 1/2003, however, many — including me — have repeatedly stated that decentralisation was all about empowering NCAs to take Article 101(3) TFEU decisions": Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011]; Grenfell and Janssens asserted: "[t]he decentralisation of such powers to national competition authorities and national courts was a deliberate policy, and fundamental to the modernisation embodied in Regulation 1/2003": Grenfell and Janssens, "An assault on modernization", Competition Law Insight, April 5, 2011, p.8.

47 See section above entitled "Trumping national laws and creating legal uncertainty", and see also Petit, "The European Court of Justice adopts a preliminary ruling in a telecom case depriving NCAs of the power to take negative decisions while enforcing competition rules under EU Reg. 1/2003 (Tele2 Polska)", para.14, http://www.concurrences.com/article.php3?id_article=37121〈=fr [Accessed November 25, 2011].

48 See Kerse and Khan, Antitrust Procedure (2005), para.1-021 p.19; Gian Luigi Tosato and Leonardo Bellodi, EU Competition Law: Volume I, Procedure: Antitrust — Merger — State Aid (Claeys & Casteels, 2006), para.8.8 pp.221–224; and Bernard van de Walle de Ghelcke, "Limits to the Power of National Authorities in Application of European Competition Law" (2011) 2(5) Journal of European Competition Law & Practice 477.

49 Tosato and Bellodi, EU Competition Law: Volume I (2006), para.8.8 pp.221–224.

50 De Ghelcke, "Limits to the Power of National Authorities in Application of European Competition Law" (2011) 2(5) Journal of European Competition Law & Practice 477, 479.

51 A.G. Mazák has implied this in his opinion in relation to the application of art.10 by stating: "[i]ndeed, one of the main fears voiced during the adoption of Regulation No 1/2003 was that the empowerment of NCAs and national courts to apply EU competition law in full would endanger the consistent application of those rules": Tele2 Polska A.G. Opinion December 7, 2010 at [31]; see also Zivy, "Rights, Powers and Duties of NCAs: A Review of recent ECJ Rulings", GCLC Lunch Talk, Brussels (October 24, 2011), http://www.coleurope.eu/template.asp?pagename=gclclunchtalkarchive⊂=20111024 [Accessed November 25, 2011].

52 Dr Assimakis Komninos, Recent Procedural Developments, Hellenic Competition Commission, http://www.gvh.hu/domain2/files/modules/module25/17200E6D1565843FA.pdf [Accessed November 25, 2011].

53 Protocol 7 of the Convention for the Protection of Human Rights and Fundamental Freedoms, as amended by Protocols and Article 50 of the Charter of Fundamental Rights of the European Union [2010] OJ C83/02.

54 See, inter alia, Limburgse Vinyl Maatschappij v Commission (C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P) [2002] E.C.R. I-8375, [2003] 4 C.M.L.R. 10; Aalborg Portland v Commission (C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P) [2004] E.C.R. I-123, [2005] 4 C.M.L.R. 4; SGL Carbon v Commission (C-308/04 P) [2006] E.C.R. I-5977; [2006] 5 C.M.L.R. 16; and SGL Carbon v Commission (C-328/05 P) [2007] E.C.R. I-3921, [2007] 5 C.M.L.R. 1. As for the General Court, see Kyowa Hakko Kogyo and Kyowa Hakko Europe v Commission (T-223/00) [2003] E.C.R. II-2553. See also Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (2009), chapter entitled "The Principle of Ne Bis In Idem", pp.344–419.

55 Limburgse Vinyl Maatschappij v Commission (LVM) [2002] E.C.R. I-8375; [2003] 4 C.M.L.R. 10 at [3], [59]. Also referred to as the PVC II case.

56 For example, Brammer suggests that "[the parallel application of EU competition law] is a crucial element clearly distinguishing this case from all of the case law available to date in which the [Union] Courts considered the possible application of the ne bis in idem principle": Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (2009), p.403 para.3, and p.359. See also Frédéric Louis and Gabriele Accardo, "Ne Bis in Idem, Part 'Bis'", (2011) 34(1) World Competition: Law and Economics Review 97.

57 There is, however, still dispute in relation to the temporal and territorial scope of the application of ne bis in idem to infringement decisions. See above fn.29. See also Frédéric Louis and Gabriele Accardo, "Ne Bis in Idem, Part 'Bis'", (2011) 34(1) World Competition: Law and Economics Review 97.

58 Tele2 Polska A.G. Opinion December 7, 2010 at [30].

59 As mentioned, pursuant to Regulation 1/2003, 27 new NCAs have been introduced and national courts have been encouraged to facilitate private enforcement of EU competition law. A Commission decision on the merits has binding effect, irrespective of it is findings, on both NCAs and national courts.

60 Ritter and Braun, European Competition Law (2005), p.1051.

61 Best Practices in proceedings concerning articles 101 and 102 TFEU [2011] OJ C308/6–32, paras 76 and 144.

62 Gauer, "Due Process in the Face of Divergent National Procedures and Sanctions" (March 7, 2005), p.11 fn.37. Céline Gauer is the deputy head of the unit in charge of antitrust policy and scrutiny at DG Comp and contributed to the drafting of the White Paper and of the Commission's proposal and was member of the team in charge of the negotiation of Regulation 1/2003 in the Council. See CV at E-Competitions/Concurrences, http://www.concurrences.com/cv.php3?id_auteur=76 [Accessed November 25, 2011].

63 An exception is art.10 decisions that are intended for different purposes (to serve as "mini-block exemptions") and that have never been issued to date.

64 On the relevance of the EU Charter and the ECHR on parallel antitrust proceedings see also Adrianna Andreangeli, EU Competition Enforcement and Human Rights (Edward Elgar Publishing, 2008), pp.207–212; and Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (2009), pp.344–355. See also Frédéric Louis and Gabriele Accardo, "Ne Bis in Idem, Part 'Bis'", (2011) 34(1) World Competition: Law and Economics Review 97. The possibility for acquittals in competition cases led by the Commission has already been implicitly confirmed by the ECJ judgment in LVM [2002] E.C.R. I-8375; [2003] 4 C.M.L.R. 10. See also Brammer, Co-operation between National Competition Agencies in the Enforcement of EC Competition Law (2009), p.361 para.2.

65 Tele2 Polska A.G. Opinion December 7, 2010 at [31].

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