Settling or Learning: Commitment Decisions as a Competition Enforcement Paradigm

Summary:

An increasingly important aspect of EU competition enforcement, since the implementation of the modernization package, has been the Commission’s use of a procedure for resolving cases without finding a violation based on remedial commitments offered by the undertakings. Similar non-adversarial tools have been used by national competition authorities and in other regulatory fields. Their common characterization as settlement procedures for the negotiated closure of cases has fuelled concerns about possible overuse to reorganize markets and contractual relationships. This is particularly so given that commitments are relatively opaque, afford limited judicial review and have been used in cases where existing rules and precedents do not clearly point to a violation.

This article argues that the settlement view may not sufficiently capture either the design or the potential of the commitments procedure as a policy-learning device in cases where there is doubt about the nature and gravity of competition concerns in unfamiliar and changing market environments.

In light of the transformation towards an effects-based EU competition law, commitment-based decisions may not be a second-best alternative, but the preferred and sometimes only mode of enforcement. Given the now overwhelming concerns about the legitimate use of this instrument, the article discusses how existing mechanisms could supply accountability without sapping the advantages of commitments as a policy-learning device, including an alternative role for judicial review.