Competition: EU agrees to radical reform of antitrust rules, November 2002

The competition rules of the European Union are to undergo their most radical reform since they were introduced in 1962 following an unanimous agreement between ministers from the EU Member States at the Competitiveness Council in Brussels on 26 November 2002.

The reform, which will take effect from 1 May 2004 when the candidate countries join, aims to simplify the way in which the Treaty's antitrust rules are enforced throughout the European Union and cut down the red tape and cost for companies. Key to the reforms are:

• The introduction of a new rule whereby businesses will no longer have to notify their agreements to the European Commission to obtain clearance under the EU's antitrust rules

• The onus will now be put on companies to ensure that they do not break EU antitrust rules

• The new right of competition inspectors to search private homes during investigations to prevent managers keeping relevant documents at home when the company property is searched

• The decentralisation of powers to allow the EU competition authority to focus on large cartels whilst national regulators and cartels will have to apply EU law, instead of national law, when investigating cartels and abuses across the EU

• The establishment of a network of European competition authorities (ECN) to coordinate the co-operation between the European Commission Competition body and the national competition authorities with an allocation of cases according to the principle of the best-placed authority

The new package of measures were proposed by the European Commission in September 2000 as it realised that a system that was established when there were only six Member States and no well developed 'competition culture' would not be able to deal with the workload created by a European Union of twenty-five. Moreover, forty years of anti-trust practice in the EU and the resulting case-law from the European Court of Justice, the European Court of First Instance and the European Commission has made antitrust enforcement a mature system that is sufficiently clear to undertakings and their legal advisers.

The European Commission hopes that the new rules will allow it to focus on cracking the huge cartels such as the vitamins cartel in 2001 when eight companies were fined a record €855 million. Mario Monti, the European Commissioner for Competition has made the breaking up of cartels one of the main priorities for his team over the last years and he called the Council decision 'a crucial step in the process' of reforming the EU's competition policy. Mr Monti has promised to turn his attention now to the reform of the merger process which has been strongly criticised in recent months after two key rulings against the European Commission in the European courts.

Links:
Council of the European Union:
	26.11.02:	Press release: Competitiveness Council, Brussels, 26 November 2002 [PRES/02/360]
European Commission:
	26.11.02:	Press release: Landmark reform simplifies and strengthens antitrust enforcement [IP/02/1739]
	26.11.02:	Memo: Antitrust Reform: Frequently Asked Questions [MEMO/02/268]
	DG Competition: Homepage
European Sources Online: Financial Times:
	27.11.02:	Brussels extends powers to crack down on cartels
European Sources Online: Topic Guides:
	The Competition Policy of the European Union

Helen Bower
Compiled: Wednesday, 27 November 2002

The competition rules of the European Union are to undergo their most radical reform since they were introduced in 1962 following an unanimous agreement between ministers from the EU Member States at the Competitiveness Council in Brussels on 26 November 2002.