Bringing Regulatory Processes Back In: The Reform of EU Antitrust and Merger Control

Abstract

The dominant view in the literature depicts the modernisation of the antitrust rules and the reform of the Merger Regulation as a struggle for control between the European Commission and the member states, from which the Commission emerged triumphant. This article rejects this ‘power politics’ interpretation, arguing that its proponents misrepresent the reform process, overstate the power of the Commission, and overlook the wider ideational context that influences competition law and policy. Drawing on original research conducted by the authors, it argues that a regulatory processes perspective is more sensitive to the dynamics of decision-making and policy change in this key area. Re-interpreting the two reforms, it demonstrates that more was at play than a simple power struggle between the Commission and the member states, that the reforms were influenced by an international expert community, and that the outcome was shaped by classic techniques of regulatory conflict management.

Acknowledgements

We should like to thank the 33 current and former officials from the European Commission, member state administrations, and national competition authorities, as well as the consultants and lawyers who kindly agreed to discuss the subjects discussed in this article. The interviews were granted on the condition that comments would not be attributable. We are grateful to the ESRC Centre for Competition Policy at UEA for funding our fieldwork, and to the editors and two anonymous referees for their very helpful comments. All errors remain, of course, our own.

Notes

1. Italy and the Netherlands had no competition rules. Belgium and Luxembourg ‘had competition legislation of an anti-abuse type’, while ‘only France and Germany had competition rules of a prohibition type’ (Norberg 2007: 528).

2. The proposal to create a European Cartel Office floated at various times since the 1980s was a response to DG COMP's workload and the length of time it took to clear cases.

3. The procedure was triggered when the undertakings concerned had a combined worldwide turnover of more than five billion ECU and the turnover for two or more undertakings surpassed 250 million ECU in the Community, unless two-thirds of the latter for each of the participants was earned in the same member state.

4. Claus-Dieter Ehlermann, a former Director General of DG IV, described the White Paper as: ‘the most important policy paper the Commission has ever published … It suggests a legal and cultural revolution in proposing the fundamental reorganization of existing responsibilities between the Commission, national authorities and national courts’ (2000: 537). See also Gerber (2001: 126–8).

5. Whilst the ‘German clause’ allowed the Commission to take responsibility for large national mergers, the ‘Dutch clause’ permitted a member government to invite the Commission to undertake an investigation on its behalf (Wilks 2005b: 121).

6. Note that, although there were regular criticisms of how it handled its caseload, the Commission's central role was never in question (Norberg 2007: 528).

7. Interviews were conducted with officials from nine NCAs during 2008. As an official in the NCA of a large member state commented when we approached him for an interview, ‘the reality is not as thrilling as you may think’. A similar point was made by an official of the Council Secretariat, interviewed on 14 September 2005.

8. Council Document 5158/01 Council Secretariat to delegations, 11 January 2001.

9. T-342/99 Airtours v Commission[2002] ECR II-2585 ; T-310/01 Schneider Electric v Commission[2002] ECR II-4071; T05/02 Tetra Laval v Commission[2002] ECR II-4381.

10. The heads of the UK and Irish competition authority were apparently both key players, to an extent in cooperation with the French, but the change in test could not be presented as an Anglo-Saxon proposal in the Council. In fact the UK/Irish position was presented as ‘extreme’ in order to bring other member states into the ‘centre’ ground of SIEC, although SLC and SIEC are now viewed as many as functionally identical (interviews, European Commission, 7 September 2005, 25 April 2006).

11. According to Norberg (2007: 527), the normal procedure would have involved the creation of working groups composed of representatives of all the Directors concerned with reports considered at the weekly Monday Directors' meeting, chaired by the Director General.

12. The danger is that if these internal processes are neglected, the arguably more important question of why an actor wants what it wants, as opposed to how it attempts to get what it wants, is also overlooked (see Wildavsky 1987). We are grateful to Dionyssis Dimitrakopoulos for this point.

13. The Commission had attempted in 1996 to strengthen NCAs, but only seven governments had taken the necessary action to allow their national authorities to enforce EU law within their jurisdictions.

14. The first incarnation of the group ‘included a Director and two Heads of Unit of Directorate A, four anti-trust Directors and their representatives, and an experienced antitrust Head of Unit’ (Norberg 2007: 527). Its membership expanded after September 1997 to include two members of the Legal Service, itself exceptional in that such work would usually prior to inter-services consultation be restricted to officials within the service concerned.

15. See Norberg (2007) for an insider's perspective on the modernisation group. Note that the modernisation group is distinct from the working group established in the early 1990s and which submitted its report in September 1994 discussed by Laudati (1996: 250). According to private correspondence (European Commission, 10 July 2008), the earlier group ‘had no impact whatsoever’.