Reasons for the Commission to Conclude Cases through Commitment Decisions

Commitment decisions, under some circumstances, can be attractive to the Commission as well. If the Commission does not intend to impose a fine and the anticompetitive practice concerned can be ended with the same result that would have been achieved by a prohibition decision the Commission may prefer to make commitments binding upon the undertakings concerned in order to close the investigation in an easier, and perhaps quicker and less controversial way.⁶² In such situations, commitment decisions can help the Commission to reduce an institutional cost that would arise under a prohibition decision, thereby enabling it to tackle more cases.

Similar to the undertakings concerned, the Commission may prefer to follow commitment proceedings if an investigation requires complex and complicated economic analyses. Following the establishment of the guidance on the application of Article 102 TFEU, the Commission has been confronted with a heavier evidentiary and methodological burden in investigations over abuse of dominance.⁶³ The Commission is required to develop plausible and well-articulated theories of harm that are supported by economic evidence in order to establish dominance and the abuse of it. The rise of an economic-based approach in antitrust enforcement policy may encourage the Commission to circumvent the economic complexity through commitment proceedings especially where economic theory does not provide a solid foundation for prohibiting a certain conduct but where the empirical evidence points out a tangible risk of harmful

61 W. Wils, ‘The Use of Settlements in Public Antitrust Enforcement: Objectives and Principles’ (2008) Vol.31 World Competition 335, p. 340

62 Lang, supra n 4, 265-324

63 Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings (2009) OJ C45/7

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exclusion.⁶⁴ In such situations, through Article 9 procedures, the Commission could reach commitments that eliminate all of its concerns without dealing with the complexity of Article 102 TFEU.⁶⁵

Another advantage of commitment decisions from the Commission’s point of view could be a weak form of judicial review against commitment decisions.⁶⁶ This may increase the incentive of the Commission to finalise investigations through commitment decisions in cases for which there might be a greater need to establish a legal precedent through a prohibition decision, since the more novel the theory of harm, the greater the risk of annulment by the European Court.⁶⁷ In Alrosa, the Court of Justice held that judicial review for Article 9 decisions is limited to whether the Commission’s assessment is manifestly incorrect.⁶⁸ When this weak form of judicial scrutiny is combined with a softened form of the proportionality test, this implies that wide remedial discretion is granted to the Commission under the Article 9 procedures. As clarified by the Court of Justice, ‘the General Court could have held that the Commission had committed a manifest error of assessment only if it had found that the Commission’s conclusion was obviously unfounded, having regard to the facts established by it’.⁶⁹ In other words, as long as the Commission imposes the least onerous commitments necessary to address its concerns from among those offered by the parties the decision is deemed to pass judicial scrutiny.⁷⁰ Besides, although the undertakings concerned can challenge the refusal of the Commission to accept the commitments suggested by the undertakings, it seems unlikely that such an appeal would succeed.⁷¹ As the General Court claimed, the

64 Botteman and Patsa, supra n 44, 8; Papp, supra n 49, 5

65 Lang, supra n 4, 265-324

66 It has been argued that this softened judicial scrutiny may result from the voluntary nature of commitment proceedings. Even if this is the case, the intensity of the judicial review of commitment decisions should be equivalent to that of merger control decisions, as will be discussed below. Lionas, supra n 60, 38-48

67 M. Mariniello, ‘Commitments or Prohibition? The EU Antitrust Dilemma’ (2014) Vol.2014/01Bruegel Policy Brief, p. 5

68 Case C-441/07 P Alrosa Company Ltd v Commission [2010] ECR I-5949, para.42

69 Ibid, para.63

70 Cengiz supra n 10, 150

71 In the judgment Alrosa and De Beers offered joint commitments for the investigation under Article 101 TFEU. However, because of the negative outcomes of the market testing, the Commission did not impose them. Instead, a set of commitments proposed by De Beers under a commitment proceeding under Article 102 TFEU was imposed. One of the objections that Alrosa raised during the appeal was the non-imposition of the joint commitments since they were less onerous.

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Commission is never obliged to accept commitments instead of giving a prohibition decision so as to bring proceedings to an end.⁷² Consequently, commitment proceedings under Article 9 provide discretionary leeway to the Commission without any serious degree of judicial supervision.⁷³ In the light of such discretion, it can be argued that the Commission is able to implement its own sectorial policies through commitment-based enforcement as seems to happen in the energy markets.⁷⁴ Therefore, other motivations of the Commission to conclude investigations through commitment proceedings might be to obtain quasi-regulatory commitments that would not be imposed under prohibition decisions given the strict application of the principle of proportionality.⁷⁵ The capability of the Commission under Article 9 to impose commitments that could help to achieve regulatory policy objectives within regulated markets may lead to misuse of this process.⁷⁶ It seems that, regarding the Commission’s tendency to employ EU competition law aggressively to dispel regulatory market failures, the abuse of Article 9 procedures by the Commission may continue in this way.

Last but not least, the disposition of the Commission with regard to relying on commitment decisions may derive from the policy orientation of the Commissioner responsible for competition policy. To greater or lesser extent enforcement priorities in EU competition policy may change pursuant to the socio-economic agenda of the Commissioner.⁷⁷ For instance, during Joaquin Almunia’s⁷⁸ term as Vice President of

72 Case T-170/06 Alrosa v Commission [2007] ECR II-260 para.130; Whish and Bailey, supra n 19, 255-261

73 Lionas, supra n 60, 38-48; H. Schweitzer, ‘Judicial Review in EU Competition Law’ in I. Lianos and D.

Geradin (eds.), Handbook on European Competition Law: Enforcement and Procedure (Edward Elgar 2013), p. 491

74 Schweitzer, ibid; See Commission, ‘Speech: Statement on the Google Investigation’ of J. Almunia (the Vice President of the European Commission responsible for the competition policy) SPEECH/14/93. He claims that ‘the concessions we extracted from Google in this case are far-reaching and have the clear potential to restore a level playing-field in the important markets of online search and advertising’.

75 Schweitzer, supra n 11, 11; Georgiev, supra n 47, 975; Whish and Bailey, supra n 19, 255-261; K.

Talus, Vertical Natural Gas Transmission Capacity, Upstream Commodity Contracts and EU Competition Law (Wolters Kluwer 2011)

76 Petit, supra n 15, 350; Geradin and Sidak, supra n 55, 517-553; Geradin and O’Donoghue, supra n 15, 416-419; Cengiz supra n 10, 135-139

77 Botteman and Patsa, supra n 44, 13-17

78 Mr. Almunia was on duty from 2010 until 2014, under the second Barroso Commission. Margrethe Vestager will take his place from 1 November 2014.

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the European Commission responsible for competition policy the Commission has adopted fourteen commitment decisions and four prohibition decisions.⁷⁹ According to Almunia, Article 9 procedure is ‘an excellent tool to keep good competitive conditions in the Single Market’.⁸⁰ This may be indicative of a preference on the part of the Vice President for negotiated outcomes. However, this approach raises the question of whether this is a new trend in EU antitrust enforcement policy, which will be pursued regardless of changes at the top of the Directorate General for Competition.

The next section will assess the application of commitment proceedings in the EU, and discuss possible detrimental effects of the generalised use of commitment-based enforcement particularly in energy. Before that, the findings in this section regarding the advantages and disadvantages of commitment decisions for the Commission and the undertakings concerned will be summarised in Table 5.

79 For the purpose of such review, the search function on the website of the Directorate-General for

Competition of the European Commission has been used, see

<http://ec.europa.eu/competition/elojade/isef/index.cfm> accessed 14/03/2014; Regarding the context of this chapter, prohibition decisions mean that any infringement decisions related to the infringement of Article 101 and 102 TFEU, but cartel decisions.

80 Commission, ‘Speech: Remedies, commitments and settlements in antitrust’ of J. Almunia SPEECH/13/210, p. 5

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Table 5: Advantages and disadvantages of commitment proceedings for the European Commission and energy companies (*Source: Own illustration) A relatively short procedure Less likely to result in a

successful appeal

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E. A General Analysis of and the Likely Detrimental Effects of