Neelie Kroes European Commissioner for Competition PolicyAssessment of and perspectives for competition policy in Europe Celebration of the 50th anniversary of the Treaty of RomeBarcelona, 19th November 2007

20 octobre 2021 Pierre Perrin-Monlouis

Celebration of the 50th anniversary of the Treaty of Rome
Barcelona, 19th November 2007

It is my pleasure to share with you this celebration of the 50th anniversary of the Treaty of Rome and of competition policy in Europe.

It is impossible to look back without both pride at a Union founded on the desire to preserve peace and make progress together. The world has changed dramatically over the decades; Europe has built a unique model of integration on the basis of shared traditions, institutions and values, creativity, commerce, political leadership and ever-increasing involvement of our citizens.

Although the competition articles in the Treaty have changed their numbering, their substance has remained the same throughout the years. Competition is an area where the Community has exercised real influence through direct action for more than 50 years (Also under the Treaty of Paris of 1952.). The objective has always been simple: to benefit consumers and the European economy.

50 years of EC antitrust enforcement

The Commission is entrusted with the roles of public enforcer and guardian of the Treaty’s antitrust provisions. Together with the Court of Justice, the Commission has been an independent driving force to promote antitrust compliance to bring better products, greater choice, and lower prices to the citizens of Europe.

The Commission was first given enforcement powers in 1962. In the years that followed, the Commission was a pioneer, breaking new ground and setting the foundations of EC antitrust law. Through its regulations and other guidance as well as its enforcement decisions in individual cases, the Commission has provided clarity as to what is legal and what is illegal, prohibiting and punishing the latter.

From 1965 onwards, the Commission adopted block exemption regulations, granting exemption under Article 81(3) EC to categories of agreements. The first block exemptions classified contractual clauses, – irrespective of their economic context – into white and black lists. Assessment was easy – companies stayed within the white and out of the black – but that did not always lead to the most efficient behaviour by business.

In 1987 the Commission issued the “de minimis Notice” to create a safe harbour for agreements which had no real effects on competition.

In 1989, the Council entrusted the Commission with prior review of mergers and acquisitions, bringing a measure of pan-European legal certainty to these important commercial operations.

In the mid to late 1990s, the Commission began a re-evaluation of many areas of its antitrust policy: the assessment of vertical restraints, horizontal cooperation agreements and car distribution agreements were all revisited to introduce a more economic approach. Block exemptions no longer contain lists of positive and negative clauses. Only anticompetitive clauses are listed, and comprehensive guidelines explain how to assess agreements in their economic context. The same approach was followed for technology transfer agreements in 2004.

Throughout all this, the Commission had of course continued to pursue individual cases. But the need to deal with notifications in both antitrust and mergers, and the difficulty of uncovering cartels, often meant that resources were stretched thinly.

So as well as revisiting the substantive rules, the Commission looked at what it could do on the procedural side to improve enforcement. In 1996, the Commission introduced a Leniency Programme. It was a brave step to conclude that the legitimate but wishful desire to punish all cartelists was outweighed by the desire to detect, end and deter more cartels than previously. But the choice was well-made: leniency has proved a tremendously useful tool, especially after the improvements made in 2002 and just last year.

Ending the antitrust notification system in 2004 allowed the Commission to fix priorities and be more proactive than before. The Council Regulation that made this change also gave the Commission new powers of investigation and enquiry; and the possibility to adopt commitment decisions and structural remedies.

In 2005, making use of this wider and more effective tool-box, I announced a new impetus in the fight against cartels and dedicated a Cartel Directorate to this task. This year we have taken action in areas as diverse as lifts and escalators, gas insulated switchgear, zips and fasteners and most recently bitumen. We have imposed fines of more than € 2.5 billion on the offending companies, and the year is not yet over.

However the credibility of the Commission as enforcing agency also depends on its capacity to detect cartels even in the absence of a leniency application. In this respect, I am pleased to note that about a quarter of our cartel investigations are initiated on our own initiative.

A settlement procedure for cartel cases.

Although this is an impressive record, I still believe that more can be done. I’d like to use the rest of my time today to address the further measures we are introducing to help us prosecute cartels more efficiently.

In the last weeks we have presented for public consultation a package of measures that will introduce a new rapid settlement procedure for cartel cases. The package – proposed amendments to Commission Regulation (EC) Nº 773/2004 and a draft Notice on Settlements – is designed to allow for the settlement of cases where companies admit to their involvement in a cartel and their liability for it, provided that they also agree to a faster and simplified procedure.

What we want to do is simplify and speed up the procedure leading to the adoption of a formal decision once the core investigation has taken place. We will therefore reward cooperation that allows us to save time in the procedure and to free up enforcement resources.

This cooperation is different from cooperation under the Leniency Notice. There, the Commission rewards the voluntary production of evidence during the investigative stage, where that evidence triggers or advances the Commission’s investigation.

Under the Settlement proposals, on the other hand, the Commission will reward admissions of liability by companies that are made after the investigative stage, and that lead to procedural savings on the part of the Commission.

The incentive for companies to continue to ask for leniency will remain strong. First, the reduction of fine under the leniency program will be more significant than under the settlement procedure. Second, once the settlement procedure starts, companies will no longer be able to ask for leniency. And finally, reductions of the fine for leniency and for settlement will be cumulative.

Companies that want to get the maximum reduction of fine will therefore have a strong interest to ask for leniency. And, as the reductions of fine are cumulative, companies will always have an incentive to ask for settlement too.

Leniency and settlements will therefore be separate and complementary tools in the Commission’s enforcement arsenal.

The settlement proposals only apply to cartel cases: it is in the cartel field where we are more likely to reach a common understanding with the companies involved relatively quickly on the basis of the evidence gathered against them.

Adopting cartel decisions mainly depends in practice on the extent and quality of the evidence available in the file. Often there is little dispute as to the substance of the case once it becomes clear that the Commission can prove the behaviour. In most cartel cases, parties litigate to reduce the level of the fine, rather than to deny that the anticompetitive behaviour took place.

That being said, cartel cases are typically long and procedurally complex. Our experience shows that procedural burdens are exacerbated in the handling of cartel cases because the procedure involves multiple parties, each raising specific confidentiality issues. The average cartel file numbers tens of thousands of pages, all of which have to be screened for confidentiality issues. Finally, parties to a case often request the use of multiple different languages for the administrative procedure.

If even some of these issues can be avoided while fully respecting rights of defence, there is a tremendous scope to make substantial procedural savings, such that would justify a reward for cooperation.

In other antitrust cases the procedural issues are often – though not always – less complex, and the relevant substantive issues are more often related to the balance of anti- and pro- competitive effects of particular agreements or conduct. In those cases, settlement discussions are likely to delay rather than accelerate the final decision.

Even in cartel cases, settling is an option available only if parties submit a written request, and only if the Commission finds the case suitable for settling. Not every case will be suitable.

In deciding whether or not to settle a case, the Commission will look at:

the likelihood of reaching a common understanding on the facts,
the scope of the objections or of liability
the likelihood of achieving procedural efficiencies.
This flexibility is possible because the standard enforcement procedure remains in force and will be applicable to cartel cases by default. Moreover, the standard procedure becomes the fall-back procedure if the settlement process fails. So what does the proposed settlement procedure entail?

In brief, the procedure would allow for bilateral discussions between the Commission and the parties

after the core investigation has taken place,
but before the statements of objections have formally been notified.
Let me be very clear. These discussions are not about bargaining or negotiating. The Commission will not bargain about evidence or objections.

The settlement procedure is therefore very different to the US plea bargaining system. Plea bargaining in the US is used to gather evidence of cartel behaviour from companies who are not “the first in” for immunity. That purpose is already covered in the EU by rewarding (early) cooperation with “reductions of fines” under the Leniency Notice that I mentioned a few moments ago. We do not need to create a settlement system to gather evidence. The system that we have proposed is therefore focussed solely on procedural economy.

In the bilateral discussions, the parties will be made aware of the alleged facts, their classification, the gravity and the duration of the infringement and on the liability for the individual involvement in the cartel. This includes informing the companies about the range of potential fines net of any other reduction. The parties will also be made aware of the evidence supporting the findings that the Commission has in mind.

Parties will therefore have the opportunity to influence the Commission’s objections through argument before the notification of the formal statement of objections.

Only then will the parties have the opportunity to admit to the envisaged findings by introducing a formal, written settlement submission.
If the parties provide a submission, the statement of objections could be streamlined and the rest of the procedure could be simplified considerably – because, following the parties’ confirmation, procedural steps such as further access to the file or the oral hearing would become redundant.

The final decision would follow swiftly.

So that is a quick overview of what will change as a result of these proposals.

Some things, of course, will not change.

Parties’ rights of defence under the settlement procedure remain the same as in the ordinary procedure. They are simply exercised in the framework of bilateral discussions both orally and by means of a written submission, in anticipation of the formal notification of objections.

By introducing a settlement phase, the Commission increases companies’ options to be informed earlier of potential objections and of the evidence supporting them. It is a unique opportunity to be informed of the likely range of fines prior to the adoption of the final decision. On the basis of these facts and documents, the parties will have the opportunity to express their views to the Commission, in line with the case-law of the Court of Justice as mentioned in particular in article 16 of the Commission’s notice. This will allow companies to influence even the contents of the statement of objections and, thereby, of the decision itself. Full access to file remains available after the Statement of Objections for those who do not settle, as is the case today, and parties the parties may decide at any moment to stop the settlements discussions or not to send a settlement submission.

One other thing that will not change is that settlements will continue to lead to a formal decision. The Commission will not close the procedure informally, or let companies get away with participating in a cartel.

There will be a thorough investigation. Where the Commission can prove the existence of a cartel, that investigation will continue to lead to a formal decision that will establish the infringement and impose fines.

Of course the Decision will inevitably be much shorter than a traditional – contentious – decision – but it will remain a Decision adopted pursuant to Articles 7 and 23 of Regulation Nº 1/2003. It will remain subject to judicial review by the Community courts.

Supervision by the Community courts will continue, as will the legal effects of the Commission’s decisions.


Ladies and gentlemen,

I believe that our proposals for a new system of direct settlement will have numerous benefits to companies, the Commission and European consumers alike.

Companies involved will benefit:

by having the opportunity to be informed of the objections against them and to be heard on those objections earlier in the procedure;
by being able to draw a line under their past illegal behaviour quicker than before, and
by obtaining a reduction of the fine in return for their cooperation.
The Commission will benefit by freeing up resources to pursue more cartels.

The public interest – European consumers – will benefit because more cartels would be punished more quickly.

Our package is in public consultation until 21 December, and I can only encourage all of you to submit your comments and reactions. I hope to present the package to the College of Commissioners for final adoption in 2008.

Let me conclude by thanking you for this opportunity to celebrate the last fifty years of European competition policy with you. We have a lot to be proud of. But as you can see, we are not resting on our laurels: our commitment to designing ever better competition policy and enforcement is as strong as it was fifty years ago.

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