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Enforcement and compliance - overviewEU and UK institutions
The principal EU institutions involved with competition law are:
Council of Ministers
Court of Justice of the European Union
Within the Commission, the Directorate General for Competition (DG Comp) is specifically charged with responsibility for competition policy and enforcement of competition rules.
In the UK there are a number of enforcement bodies including:
Office of Fair Trading
concurrent regulators such as OFCOM, Ofgem, Ofwat and the Office of Rail Regulation (ORR)
Competition Appeal Tribunal
Serious Fraud Office
Each regulator is a member of the European Competition Network (ECN) and can exchange information and cooperate with national competition authorities (NCAs) in other member states on the enforcement of competition rules.
Council Regulation 1/2003 (the Modernisation Regulation) represented a complete overhaul of competition rules in the EU. It abolished the system of notifications and exemptions and established a structure under which the NCAs have the power to apply article 101 and 102 of the Treaty on the Functioning of the European Community (TFEU) (formerly arts 81 and 82 of the EC Treaty) and the ability to exchange information and cooperate with each other. The NCAs are members of the ECN. Each member has the power to enforce articles 101 and 102 TFEU in parallel with other members of the ECN.
In the UK concurrent powers are given to the OFT and the sectorial regulators to enforce the Chapter I and Chapter II prohibitions and article 101 and 102 TFEU (formerly articles 81 and 82 of the EC treaty).
The interaction of the various bodies empowered to enforce competition rules and the allocation of cases between them is dealt with in the Commission's Notice on cooperation within the Network of Competition Authorities, also known as the Network Notice.
The NCAs and the European Commission each have specific information gathering powers, so if a client is under investigation, it is important to know the identity of the investigating body at the outset. Inspectors have the right to inspect business premises, vehicles, homes, and access computer files. Documents that are subject to legal professional privilege will be excluded from production.
The sanctions for breach of competition rules include:
As well as judicial penalties, a breach of the rules may also result in adverse publicity, loss of management time in dealing with an investigation and the heavy legal costs of defending infringement proceedings.
A compliance programme should be aimed at preventing any breach occurring. The existence of such a programme may affect a regulatory authority's decision on whether a fine should be imposed for a breach.
Many competition authorities around the world have introduced leniency programmes in order to facilitate the detection and elimination of cartels. The information gathered from a leniency application may result in a cartel investigation.
There are various types of leniency application. A party seeking leniency must cooperate in any investigation and make full disclosure of information it has relating to the cartel. Careful consideration should, however, be given to the consequences of disclosure and any onward disclosure by the authorities.
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