130. The implications of the Commission's proposals
for national courts, in particular the direct applicability of
Article 81(3), also raise a number of questions. Witnesses expressed
concern that the "litigation floodgates" would be opened.
There was a risk of forum shopping. Most fundamentally, a number
of witnesses had serious reservations as to the justiciability
of certain criteria in Article 81(3). In short, the criteria of
Article 81(3) were matters of economic judgement and balancing
advantage and disadvantage. Application of Article 81(3) was a
matter for administrative bodies and not a suitable job for judges.
131. How different national judges will adapt to
the direct applicability of Article 81(3) is uncertain. That they
should be able to do so is, however, a key feature of the Commission's
reform package enabling the Commission to escape the burden of
notifications. Even with judicial training, application of the
Competition Rules in toto (the large part, Articles 81
(1) and (2) and 82, is already directly applicable) will not be
easy. The concerns expressed by legal practitioners and, not least,
those by the judges themselves have to be taken seriously. The
success or failure of the "automatic" decentralisation
effected by the replacement of the current notification/authorisation
regime by making Article 81(3) a directly applicable exception
is heavily dependent on the capacity of the national judicial
systems to apply the criteria in Article 81(3) in a systematic
and coherent manner.
132. A separate, consistency, question arises from
the nature of the tests in Article 81(3) which, as mentioned,
involve assessing countervailing benefits in which consumers share.
Tribunals with different attitudes and different economic philosophies
are inevitably going to come to different decisions. It cannot
be discounted that on the same set of facts a tribunal in one
Member State will come to one decision and a tribunal in another
might come to an opposite decision. Both decisions may be within
the scope of the law. They may differ because different views
of economic factors have been taken. In a domestic situation inconsistency
of approach can be removed through operation of the appeal system.
A common appeal system does not, of course, exist in the Union.
133. To a large extent the White Paper points to
the two Community institutions, the Court of Justice and the Commission,
for the answer to both the above issues. The shift from an authorisation
scheme to one based on the notion of exception légale
would gradually change the way Article 81(3) is viewed and applied.
It is reasonable, we believe, to suppose that the law on Article
81(3) will develop. The ECJ can be expected to play its part in
this process. One would expect that, at least in the early years,
there would be an increase in the number of references (made under
Article 234) from national courts to the ECJ. The Court will not
neglect its definitive interpretative role in this important area
of Community law and will no doubt seek to ensure the uniform
application in practice of the Competition Rules. The Commission
has also said that it will make new block exemptions and that
it will issue notices and guidelines to assist in the detailed
application of the elements of Article 81(3). These measures should
assist in maintaining a degree of consistency in the application
of the Competition Rules, albeit that they would not necessarily
remove the possibility of different assessments of economic evidence
134. The Commission would also have an enhanced role
to play before national courts. Mention has already been made
of the Commission's 1993 Notice on co-operation between national
courts and the Commission in applying the Competition Rules. It
is remarkable, however, what little use has been made of this
facility. Under the White Paper the Commission would be able to
appear before national courts in order to assist the judge in
particular in the application of Article 81(3).
135. As we have said in previous reports we see no
objection to the Commission appearing as "friend of the court"
in a UK or other national court.
Beyond that, the issue as we see it is essentially one of resources.
Although the Commission could, with leave of the court, have a
right of audience before a national court it is impractical to
imagine that the Commission will actually wish to exercise that
right in every case in which a Community competition issue arises.
We doubt whether it would be feasible or practical for the
Commission to be notified of every case in which a competition
issue might arise. In principle it should be for national
courts to apply Community law and to decide when the Commission
should intervene. No doubt one or more of the parties would alert
it to the possibility. But the matter would need to be kept under
review. If it appeared that there were, notwithstanding Commission
regulations, notices and guidelines and the developing jurisprudence
of the ECJ, large divergences of approach by national courts in
the application of Article 81 then something more formal might
have to be considered. There might be a need to introduce uniform
(and possibly complex) rules stipulating at what stage in the
litigation and how the Commission would have to be notified.
136. Any involvement by the Commission in litigation
before national courts would inevitably take up resources. But,
as the Commission accepted, it might not be necessary in all cases
for its representative to attend and to participate in the oral
proceedings. A written opinion or other information might be sent
to the court. This raises the question of what the status and
effect of such a written communication from the Commission opinion
would be. We see this as probably a greater problem for common
law jurisdictions than others because of the rules of evidence.
Harmonisation across the Member States should not be necessary.
UK courts should not be denied the benefit of receiving the
Commission's views orally or in writing and they should where
necessary be given the power to permit such intervention. How
best this could be achieved is a matter to which the Government
should give detailed consideration in consultation with the judiciary.
137. Forum shopping is a separate problem. As regards
the jurisdiction of national courts to hear cases involving the
application of the Competition Rules, the Brussels Convention
will apply. But it cannot be denied that without more narrowly
defined rules as to which courts have the right to hear a case
and harmonised rules with regard to such matters as procedure,
discovery of documents, evidence, and rights of appeal, forum
shopping is potentially a significant problem. It is, however,
probably unrealistic to imagine setting up a separate system of
jurisdiction and recognition rules just for cases involving Articles
81 and 82. Nevertheless we are concerned that the White Paper
does not pay sufficient attention to this problem.
138. Under the Brussels Convention, a decision of
a national court in one Member State applying Article 81 and 82
will be recognised and enforced throughout the Union. It was suggested
that parties might choose their court and manufacture a cause
of action in order to obtain a favourable declaratory judgment.
This possibility cannot be excluded, but it may not be as damaging
as first appears. The judgment of the national court, though widely
enforceable, would only be binding on the parties to the action
and would not operate erga omnes. A court in different
proceedings in another Member State (or even in the same Member
State) might look critically at a declaration obtained in such
circumstances. Further, the Commission would, under the present
proposals have its own reserve powers. It could investigate ex
officio and take a decision to which national courts would
have to pay regard. We consider these powers further at paragraph
ROLE OF THE COMMISSION
139. Even though the Commission wishes to decentralise
the enforcement of the Competition Rules, the Commission would
remain a major player in the day to day enforcement of the Competition
Rules. It would continue to investigate cases and prosecute infringements.
No one questions that it should retain these functions. The Commission
would also retain a central role as policy-maker for the Community.
It will need to retain hands on experience. Member States would
be expected to apply the Competition Rules, sometimes in preference
to their own domestic laws. As a consequence they should have
a greater sense of ownership of the Rules and could legitimately
expect to have greater involvement in policymaking. As mentioned
in paragraph 128 above, the Advisory Committee would have enhanced
responsibilities in this regard. But the Committee might not be
the only forum for policy setting. Further thought is needed as
to how Member States might become more involved. In a decentralised
system there would be a case for a much closer and stronger role
for the Member States. While the Commission would continue to
take a strategic role in the setting of policy it might work more
closely with national authorities.
140. The Commission would also have a major role
to play in delivery of a successful decentralised system and would
have a special role in maintaining consistency on a day to day
basis. Reference has already been made to the possibility of the
Commission intervening in proceedings before national courts.
What is controversial is whether the Commission should have the
powers (a) to take cases away from national competition authorities,
and (b) where a decision of a national competition authority or
court is open or subject to appeal to adopt a contrary decision.
141. The power to take over cases from national authorities
seems entirely justifiable. It is not new. Such a power has existed
since 1962 (in Article 9(3) of Regulation 17) though it has rarely,
if ever, been used because of the relative inactivity of Member
States in enforcing the Competition Rules. Under the proposed
regime, there might well be cases where it is more appropriate
for the Commission to act, for example where the agreement or
practice in question affects a number of Member States and it
would most efficient for it to be dealt with centrally. But we
believe that the removal of a case by the Commission from a national
authority should only be in exceptional circumstances. If decentralisation
is to work there must be mutual confidence and trust between the
Commission and the national authorities. The second is more controversial.
In theory the situation should rarely arise. But we accept that
it may be necessary for the Commission to have such powers, if
only for their deterrent effect. Because of the practical limitations
and political implications involved we envisage the Commission's
use of the power to adopt a contrary decision as being the exception
rather than the rule. It might be appropriate, for example, to
deal with the case where parties have manufactured a positive
declaration from a national court, as in the situation described
in paragraph 138 above.
23 Competition Practice, 8th Report
See para 35 of 8th Report 1981-82. Back
Para 38 of 8th Report 1981-82. Back
Enforcement of Community Competition Rules, 1st
Report 1993-94. Back
Para 126 of 1st Report 1993-94. Back
Reg. 2790/99 of 22 December 1999 on the application of Article
81(3) of the Treaty to categories of vertical agreements and concerted
practices.  O.J. L336/21. Back
Reg. 4064/89 of 21 December 1989 on the control of concentrations
between undertakings, as amended. Back
The success of the Community regime has spawned numerous "look-alike"
merger control laws in the Member States, with the consequence
that industry has asked for more cases to be transferred to the
Commission, in order to avoid the problems of multiple notifications.
See our Report, Review of the EC Merger Regulation, 4th
Report 1996-97. Back
White Paper, paras 11-13. Back
White Paper, para 79. Back
 OJ C313/1. Back
 OJ C39/6. Back
White Paper, para 62. Back
The UK has so far only taken limited powers: see The E.C. Competition
Law (Arts 88 and 89) Enforcement Regulations 1996. S.I. 1996 No
2199. These powers have only been used once, in relation to the
proposed collaboration of British Airways and American Airlines. Back
Described at footnote 14 above. Back
White Paper, para 106. Back
12th Report 1987-88, para 80, and 1st Report 1993-94,
para 132. Back