Between Enforcement and Regulation
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Katharina Voss Between Enforcement and Regulation A Study of the System of Case Resolution Mechanisms Used by the Between Enforcement and Regulation Between European Commission in the Enforcement of Articles 101 and 102 TFEU Katharina Voss ISBN 978-91-7797-570-0 Department of Law Doctoral Thesis in European Law at Stockholm University, Sweden 2019 Between Enforcement and Regulation A Study of the System of Case Resolution Mechanisms Used by the European Commission in the Enforcement of Articles 101 and 102 TFEU Katharina Voss Academic dissertation for the Degree of Doctor of Laws in European Law at Stockholm University to be publicly defended on Friday 12 April 2019 at 10.00 in Nordenskiöldsalen, Geovetenskapens hus, Svante Arrhenius väg 12. Abstract This thesis examines the current design of the system of case resolution mechanisms used by the European Commission (the Commission) where an infringement of Articles 101 and 102 TFEU is suspected and advances some proposals regarding this design. Infringements of Articles 101 and 102 TFEU cause considerable damage to the EU economy and ultimately, to consumers. Despite intensified enforcement of Articles 101 and 102 TFEU and ever-growing fines imposed for such infringements, the Commission continues to discover new infringements, which indicates a widespread non-compliance with EU competition rules. This raises the question of whether the enforcement currently carried out by the Commission is suitable for achieving compliance with Articles 101 and 102 TFEU. The thesis is divided into four main parts: First, the objectives pursued by the system of case resolution mechanisms used by the Commission are identified. Second, taking stock, the case resolution mechanisms currently employed are assessed in the light of these objectives. Third, the question of whether and how the different case resolution mechanisms could be viewed through the lens of regulatory enforcement is considered. Fourth, an assessment is made as to whether a different approach to case resolution could be employed based on a prescriptive theory of regulatory enforcement, responsive regulation. The research conducted shows that the main objectives pursued by the system of case resolution mechanisms used by the Commission are: to bring infringements to an end, to punish and deter infringers, to prevent infringements and to clarify competition rules. These objectives shall be achieved in an effective and efficient manner. The case resolution mechanisms that are assessed are Article 7 decisions, Article 9 decisions and cartel settlements. These mechanisms pursue varying sets of objectives. Their fulfilment depends, on the one hand, on the legal and procedural modalities of each case resolution mechanism and, on the other, on the types of cases allocated to that case resolution mechanism. The assessment returns varied results showing that some objectives are difficult for the Commission to achieve. Moreover, the choices made by the Commission when allocating case resolution mechanisms to cases are sometimes counterproductive with regard to the fulfilment of the relevant objectives. Taking into account the different characteristics exhibited by the case resolution mechanisms, an attempt is made to categorise these mechanisms as pursuing different regulatory enforcement styles. The conclusion is that this is not fully possible, exposing the multi-faceted nature of the case resolution mechanisms currently at the Commission’s disposal. Finally, a potential design of a case resolution system based on the theory of responsive regulation is advanced. This design is specifically aimed at remedying some of the deficiencies identified in the current approach to resolving potential infringements of Articles 101 and 102 TFEU. Instead of choosing a case resolution mechanism on a case-by-case basis, a prescriptive system based on infringement history and the cooperation offered by the undertaking would determine what case resolution mechanism to employ. The aim of such case resolution mechanisms would be to reduce the focus on fines. Instead, focus would be placed on cooperation as a means of bringing infringements to an end and preventing infringements by way of corporate compliance programmes. Keywords: EU competition law, enforcement, compliance, antitrust, Regulation 1/2003, case resolution mechanism, regulatory enforcement theory, responsive regulation, corporate compliance programme. Stockholm 2019 http://urn.kb.se/resolve?urn=urn:nbn:se:su:diva-163542 ISBN 978-91-7797-570-0 ISBN 978-91-7797-571-7 Department of Law Stockholm University, 106 91 Stockholm BETWEEN ENFORCEMENT AND REGULATION Katharina Voss Between Enforcement and Regulation A Study of the System of Case Resolution Mechanisms Used by the European Commission in the Enforcement of Articles 101 and 102 TFEU Katharina Voss ©Katharina Voss, Stockholm University 2019 ISBN print 978-91-7797-570-0 ISBN PDF 978-91-7797-571-7 Cover Picture: Forth Railway Bridge, Scotland: the Fife cantilever under construction during October 1888 The image and information shown here are provided by © Universal Images Group Printed in Sweden by Universitetsservice US-AB, Stockholm 2019 Für Opa Acknowledgements Writing this doctoral thesis has many times been a rather lonely journey. Yet, at the end of it, there are so many people I would like to thank as there have been numerous helping hands over the years that have, in one way or the other, contributed to my journey towards this finished product. First of all, I would like to thank my supervisors, Antonina Bakardjieva Engelbrekt and Vladimir Bestidas Venegas. The two of you make up the perfect team, complementing one another and providing support at different times. Antonina, without your dedication to detail, numerous comments and questions, this thesis would never have become what it is today. Thank you for that. Vladimir, thank you for supporting me right from the start, for being curious about learning more and for always pushing me further. I would also like to thank those who have read and commented the manuscript at various stages: Erling Hjelmeng, Lars Henriksson, Jane Reichel, Claes Lernestedt, Michaela Ribbing and Mauro Zamboni. I also owe a great deal to Moritz Jesse, without whose encouragement I would never have pursued a doctoral degree in the first place. I would like to thank Elisabeth Eklund and Johan Sahl for their insights from the ‘real world’ of competition law enforcement. I also learned a great deal during my 3-month internship at DG Competition and would in particular like to thank Rainer Becker and Josefine Hederström for their kindness and patience. Thank you to Louise Ratford for language editing the manuscript. Without the community of doctoral students at Stockholm University, my years as a doctoral student would never have been the same. I would like to thank you one and all for sharing ups and downs and for (unwittingly) teaching me Swedish. No need to mention names as you know who you are. A special thanks to Louise Dane without whom these last few months of work on the thesis would have been much harder to bear. I am grateful to Stockholm University and the Swedish Competition Authority for their financial support throughout my time as a doctoral student as well as to Stiftelsen av den 28 oktober, Winroths stipendiestiftelse and Elsa Eschelssons stiftelse. Last, but definitely not least, I would like to thank my family for their unfailing support over the years. Cedric, without you this thesis would never have been written. Thank you for all your help, for being understanding and so supportive always. Samson, du bist Mamas kleiner Schatz, vergiss das nie. Contents 1 Introduction ...................................................................................................... 1 1.1 Aim and research questions ............................................................................................. 5 1.2 Scope ............................................................................................................................... 7 1.3 Terminology .................................................................................................................... 9 1.3.1 Law Enforcement ................................................................................................ 9 1.3.2 Consequentialist and retributionist theories of punishment ............................... 10 1.3.2.1 Deterrence ................................................................................................... 11 1.3.2.2 Retribution ................................................................................................... 13 1.3.3 Regulation ......................................................................................................... 14 1.3.4 Compliance ....................................................................................................... 18 1.4 Method .......................................................................................................................... 20 1.4.1 Approach to research findings from social sciences .......................................... 22 1.4.1.1 Meta studies ................................................................................................. 25 1.4.1.2 Quasi-experimental studies .......................................................................... 25 1.4.1.3 Vignette studies ........................................................................................... 26 1.4.1.4 Surveys .......................................................................................................