At the Commission’s Discretion: Cartelbusting and Fining Infringements Under the EU’s Restrictive Practices Policy
| Author | Lee Mcgowan |
| DOI | http://doi.org/10.1111/1467-9299.00222 |
| Date | 01 September 2000 |
| Published date | 01 September 2000 |
AT THE COMMISSION’S DISCRETION:
CARTELBUSTING AND FINING
INFRINGEMENTS UNDER THE EU’S
RESTRICTIVE PRACTICES POLICY
LEE McGOWAN
Although the last decade has seen an increased interest from political science in
many aspects of EU competition policy the issue of cartelbusting has been almost
totally neglected. This is a curious situation given that this remains by far the major
aspect of the European Commission’s activities in the competition arena. By merg-
ing the available, albeit extremely limited, public administration and policy studies
literature with the legal literature the article endeavours to begin to redress the
balance by examining the EU’s restrictive practices policy. It pays particular atten-
tion to the European Commission and its Directorate General responsible for com-
petition policy (DGIV) and their activities in their enduring war against cartels. At
its core this article analyses the Commission’s quasi-judicial authority in relation to
cartel arrangements, identifies the extent to which the decision-making process is
open to substantial degrees of administrative discretion within DGIV and makes
specific reference to its policy on fining infringements.
INTRODUCTION
From a political science/public administration perspective competition
policy has until recently been a rather neglected area of research interest.
This reality was striking given the centrality of competition policy to market
integration in both the Treaties of Paris (1951) and Rome (1957) and in
terms of governance given the quasi-judicial autonomy accredited to the
European Commission in the administration and the making of compe-
tition policy.
Generally, political science interest in the institutions and machinery of
European competition policy occurs against the backdrop of the single mar-
ket. The emergent literature has focused on four principal areas. The first
examines the institutional framework (Doern and Wilks 1996; Cini and
McGowan 1998) while another has focused on state aids (Hancher et al.
1993; Lavdas and Menindrou 1999; Stuart 1996). A third stream has ana-
lysed the liberalization of the public utilities, most notably telecommuni-
cations, energy and air transport (Gardner 1995; O’Reilly and Stone Sweet
1998) and a fourth has dealt with merger control (Bishop 1993; Bulmer 1994;
McGowan and Cini 1999).
Lee McGowan is in the Institute of European Studies at The Queen’s University of Belfast.
Public Administration Vol. 78 No. 3, 2000 (639–656)
Blackwell Publishers Ltd. 2000, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street,
Malden, MA 02148, USA.
640 LEE McGOWAN
In contrast, restrictive practices policy has been almost totally over-
shadowed. This reality owes much to the wealth and complexity surround-
ing the legal and economic interpretations of restrictive practices (Goyder
1999; Whish 1993; Fishwick 1993; Neven, Papandropoulos and Seabright
1998). Nevertheless it is important for political science to tread directly into
these economic and legal minefields as questions of governance and discre-
tion are present at the very heart of the decision-making process. The mak-
ing of competition policy is by its very nature highly contentious. EU rules
may be meant to be ‘applied objectively and legalistically’, but politics are
rampant (Peterson and Bomberg 1999, p. 66).
Decision making itself in competition policy is unique within the frame-
work of the EU as both the Council and the European Parliament, the legis-
lative organs of the EU, are unable to exert any direct influence on the
entire policy-making process (Cini and McGowan 1998). At the institutional
heart of EU competition policy sit the European Commission and the Euro-
pean Courts. The interaction between both is pivotal in terms of the day-
to-day administration and the broader evolution of policy and makes for
a fascinating case study of European policy making. It also raises some
important normative questions about the accountability of governance in
the competition sphere.
True, all formal decisions that are made by the Commission can be
appealed to the European Courts. Yet, a point that cannot be overemphas-
ized, the overwhelming number of competition cases fall outside the
judicial review process. Much of the Commission’s work in relation to the
pursuit of restrictive practices is never made public (relates specifically to
informal agreements as discussed below) and may not therefore be chal-
lenged in the Courts. In other words the Courts are only able in practice
to exert control over the Commission in what effectively amounts to a small
number of cases. Consequently, they are not in a position to ‘alter the fact
that the Commission enjoys substantial discretion in the shaping, making
and implementation of competition policy’ (Neven et al. 1998, p. 6).
Some forty years after the signing of the Treaty of Rome cartelbusting
not only consumes the sizeable bulk of DGIV’s time, efforts and energy,
but has also matured into arguably the most significant and the best
developed aspect of EU competition policy. Despite its often less than glam-
orous image its prominence is maintained through deep political commit-
ment, ongoing Commission investigations and constant notification of new
cases. Karel van Miert’s (Competition Commissioner 1993–99) remark on
taking up the competition portfolio that he intended ‘to make it
(cartelbusting) a priority’ for the period of his mandate was far from being
an idle promise and with hindsight clearly set the tone for his period as
Commissioner. This saw the imposition of the highest fines to date for
infringements of the EU rules on restrictive practices and the adoption of
new Notices on decentralization (Davison and Fitzpatrick 1998), Green
Blackwell Publishers Ltd. 2000
To continue reading
Request your trial