“Negative decisions on the merits” pursuant to Regulation No 1/2003/EC : NCAs v European Commission?


By judgement delivered on May 3, 2011 in case  Tele 2 Polska (C-375/09), the Court of Justice of the European Union (ECJ) clarified that National Competition Authorities (NCAs) are not allowed to adopt “negative decisions on the merits” pursuant to Regulation No 1/2003, stating that a certain conduct by an undertaking does not infringe Articles 101 or 102 of the Treaty on the Functioning of the European Union (TFEU).

A clarification on this point was requested by the Polish Supreme Court which, by reference for a preliminary ruling, asked the ECJ to interpret the powers vested in the NCAs pursuant to Article 5 of Regulation No 1/2003/EC.

As known, in the wake of the EU law Modernisation process Regulation No 1/2003/EC has enacted a decentralization in the enforcement of Articles 101 and 102 TFUE essentially by means of the conferral of powers on NCAs and national courts. According to Article 5, NCAs have the power to apply Articles 101 and 102 of TFUE in individual cases. For this purpose, acting on their own initiative or on a complaint NCAs may take the following decisions:

–        requiring that an infringement be brought to an end,

–        ordering interim measures,

–        accepting commitments,

–        imposing fines, periodic penalty payments or any other penalty provided for in their national law.

On the other hand, where on the basis of the information in their possession the conditions for prohibition are not met, pursuant to Article 5 NCAS may decide that “there are no grounds for action on their part” in the individual case in question.

In applying Articles 101 or 102 pursuant to Article 5, NCAs shall deliver the appropriate decision according to their national procedural law by dint of the principle of “procedural autonomy”.

In the case under review, the Polish Supreme Court asked (in essence) whether the Polish NCA was allowed to issue a negative decision on the merits (stating that a certain conduct did not infringe Article 102 TFEU) since this power was actually provided under the Polish procedural law which was applicable to the case in question.

The ECJ clarified that – under the decentralized mechanism envisaged by Regulation No 1/2003/EC – the European Commission has exclusive competence to adopt negative decisions on the merits. This power is clearly conferred to the Commission by Article 10 of Regulation No 1/2003/EC which states that, where the EU public interest relating to the application of Articles 101 and 102 of TFEU so requires, the Commission, acting on its own initiative, may adopt a negative decision thus ensuring the coherent application of EU competition law.

As effectively pointed out by Advocate general Mazàk, by conferring to the European Commission sole competence on the matter Regulation No 1/2003/EC aims at avoiding any risks that, by virtue of the ne bis in idem principle, a negative decision by a NCA might prevent the Commission or other NCAs from subsequently establishing an infringement of Articles 101 or 102 of TFEU.

In this respect AG Mazàk interestingly notes, however, that in practice (to date) the European Commission has had no reason to proceed under Article 10 since the related ex ante means of ensuring consistency has largely been overtaken by the extensive efforts of the European Competition Network (ECN) in promoting the coherent application of the EU competition rules.

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