Antitrust and the Political System – Part II: EU

Part II of our series – this time focusing on the decision-making process in the EU and within the European Commission.

We kicked off this series with our post on Germany and on where the Bundeskartellamt sits in the political system. This time, we will deep dive into the European antitrust hierarchy and see if and how politics might structurally come into play.

The European Commission – more than an antitrust enforcer?

The Commission in Brussels is at the heart of and responsible for interpreting and enforcing European competition law. Within the EU, the Commission has a dominant prominent position when it comes to antitrust matters – not only can it decide to deal with a case itself and thus relieve national authorities of their competence, but decisions by national authorities may not conflict with decisions of the Commission in cartel or dominance matters (i.e., in the application of Art. 101 and 102 TFEU). For concentrations with a community dimension within the meaning of the European merger regime (i.e., cases reaching the European thresholds), the Commission (generally) remains the only competent authority.

But the Commission in the broader sense is far more than a competition authority: It is the executive branch of the European Union consisting of a College of 27 “Commissioners”, which are nominated based on suggestions made by the national governments, one per Member State. Each Commissioner oversees a certain area such as agriculture, economy, or even competition – similar to departments or ministries in a more classical governmental structure. For the technical preparation of decisions, the Commissioners can rely on their respective civil service unit (so called Directorates General (DG)).

Against this background, it does not come as a surprise that the Commission is much more than a fact-finding and fine-imposing machinery. It also plays a vital role in the European legislative process by having the right to propose new legislative measures, but also by adopting, inter alia, block exemption regulations.

Collegiality meets hierarchy

In practice, antitrust lawyers, especially in straightforward merger control cases, mainly deal with case teams steering the process without, at least on the surface, necessarily involving anybody from the hierarchy. This obviously changes the moment it gets tricky– the phrase “this has to be discussed with the hierarchy” is clearly a favourite among European antitrust lawyers.

So, what does “hierarchy” mean, exactly?

The basic concept of the Commission’s decision-making process is as follows: The Commission is collectively responsible for its decisions and acts as a collegial body. Now, in principle this means that all members of the College participate in the decision-making process and are responsible for each decision adopted, always requiring the majority of the member’s votes. Drafts of the decisions originate from the pen of the respective Commissioner and its DG. An exception to collegiality is the so-called “empowerment procedure”, where the Commission authorizes one of its Commissioners to take clearly defined management and administrative measures on behalf of the Commission. The procedure is aimed at relieving the Commission from having to deal with simple routine decisions.

In antitrust proceedings, the Competition Commissioner and its DG have been empowered with quite a large number of procedural decisions (statement of objections, RFI decisions, decision not to raise objections in unproblematic merger cases and so on). Still, when it is getting interesting and final, e.g., termination or fining decisions, difficult merger cases etc., the College needs to be involved. This might also explain why members of the case team are often reluctant to promise anything. Still, no decision can be adopted without the groundwork and the preparation of DG Comp and the respective case teams.

DG Comp is led by a Director General and three Deputy Directors General. Besides, there is a Chief Economist directly reporting to the Director General. Overall, there are nine administrative units, most of them with responsibilities for certain industry sectors basically covering the whole range of antitrust topics. Similar to the Bundeskartellamt’s structure, there also is a special unit for cartels, while others focus on policy, strategy or state aid. As formal decisions must be vetted by the Legal Service, an internal department of the Commission mainly responsible for providing legal advice to the Commission and its services (and to represent the Commission in all court cases), DG Comp works in close cooperation and coordination with the Legal Service.

Going with the trend – or setting it?

Where does this leave us in terms of political oversight? It seems fair to say that the Commission, by its very nature and its embedment in the political system, is not designed to be entirely free from political influence – rather the opposite. Many cases, as highlighted on this blog, have shown that. But the Commission and its antitrust branch are also not backing-off from the big political debates of our time. For example with a view to the Commission’s Green Deal, Ms Vestager highlighted early on that competition authorities “need to make sure that we’re doing what we can to help”.

Only yesterday, the Commission published a “Communication on a competition policy fit for new challenges” outlining the potential role of competition policy in terms of green and digital transition. It particularly stresses that the existing tools allow for flexibility, clearly showing that the Commission is open for considering political trends and goals under the well-known umbrella.