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Part B Practical Approach to Consumer Participation, 6 Consumer Involvement in Public Competition Law Enforcement: Towards Acceptable Alternatives

From: Consumer Involvement in Private EU Competition Law Enforcement

Maria Ioannidou

From: Oxford Competition Law (http://oxcat.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 27 October 2020

Subject(s):
Complaints

(p. 151) Consumer Involvement in Public Competition Law Enforcement

Towards Acceptable Alternatives

1.  Introduction

The analysis presented in this chapter moves on to explore the possible opportunities for consumer participation and the promotion of the consumer interest in public competition law enforcement. The reasons for the shift from private to public enforcement are twofold: first, it is indicated that, despite the Commission’s efforts, consumer involvement in private competition law enforcement is unlikely to be enhanced in the near future; second, it corresponds to a fused approach towards competition law enforcement in which both public and private enforcement share the same objectives of deterrence and compensation, albeit with differing intensities. Consumer participation in public enforcement is viewed as an alternative to private enforcement but it also has an intrinsic value in itself.

Public enforcement encapsulates the avenues open to consumers to alert the competent antitrust authorities of an alleged competition law violation and/or market failure, as well as participation in ongoing proceedings by means of intervention (public enforcement stricto sensu).1 It also covers mixed enforcement mechanisms in which a competition authority provides some form of redress to the affected consumers in the course of public enforcement (public enforcement lato sensu).2

(p. 152) The analysis presented in section 2 discusses the fused approach to competition law enforcement and argues that public mechanisms can be structured in a way that promotes the same endemic functions as private enforcement and brings additional institutional benefits. Section 3 assesses the current avenues of consumer participation in public competition law enforcement and suggests ways in which these could be improved (public enforcement stricto sensu). Section 4 discusses different mechanisms for the provision of compensation to affected consumers in the course of public enforcement (public enforcement lato sensu). Public enforcement stricto sensu heavily entails the element of consumer participation whereas the latter mechanism delivers benefits to consumers without the necessary element of consumer participation. However, they both have the capacity to advance the endemic/functional aims of competition law enforcement as well as the ancillary institutional benefits.

2.  Fused Approach to Enforcement: The Benefits

2.1  Rethinking the deterrence—Compensation dichotomy

The traditional view of EU competition law enforcement supports a clear distinction between deterrence and compensation, attributing the former to public enforcement and reserving the latter for private enforcement mechanisms.3 However, in the context of EU competition law, this traditional approach is not supported by either the Court’s jurisprudence or by the EU institutions’ pronouncements. In Chapter 3 the binary nature of private enforcement was discussed extensively. The aim here is to show that the same holds true for public competition law enforcement as well, and that, despite its primary deterrent role, it may also be used as a compensatory mechanism. In addition, it will be argued that, contrary to the views advanced by commentators, the fact that public enforcement mechanisms could potentially deliver compensation does not negate the need to advance effective private enforcement mechanisms, but functions as a second-best solution in cases in which pragmatic constraints impede effective private enforcement.

(p. 153) The Macrory Report on regulatory sanctions supports employing public enforcement mechanisms in delivering redress.4 Building on the latter report, Hodges advocated a linkage between regulatory sanctions and compensation.5 The compensation provided in the course of public regulatory enforcement accounts for another type of regulatory sanction, either negotiated with, or imposed by, the public authority. Hodges argues that both public and private enforcement could serve the six penalties principles identified in the Macrory Report,6 although public enforcement is more effective in attaining them. Therefore, there is no justification for private enforcement. He proposes, instead, a fused approach in which compensation is provided in the course of public enforcement. However, two observations regarding this proposal are warranted. First, it responds to the question on the compatibility of the compensatory function with public enforcement mechanisms in the affirmative by employing an enforcement approach based on wider regulatory theories, in this case the responsive regulation theory that influenced the Macrory Report.7 Private litigation is seen as contrary to responsive regulation since it increases the regulatory burdens on businesses.8 However, despite the fact that responsive regulation theory points to the need for less intrusive penalties to ensure compliance, such as, for example, advocacy mechanisms, persuasion, and warning letters, it still does not do away with more severe penalties, such as fines.9 To the extent that compensation could increase the financial penalty for the incumbents, it could be said to improve the deterrent function of fines. Where fines for competition law violations are beyond the optimal level,10 additional financial penalties are needed, regardless of the fact that advocacy mechanisms could, indeed, prove to be beneficial.

(p. 154) The second observation concerns the public enforcement system’s potential to deliver compensation without the concomitant existence of effective private enforcement mechanisms. The compensatory function of public enforcement does not necessarily entail the abandonment of private enforcement mechanisms. If, as Hodges concedes, both enforcement avenues are able to serve these principles, one should look to their complementary relationship rather than disregard one of them completely. The Macrory Report supports this approach, since it upholds the Financial Conduct Authority’s point that not all cases should include a restorative element; it may be that the harm is not quantifiable or would be more efficiently and effectively addressed if the individuals were able to directly pursue claims with the firm concerned.11 As the UK government conceded, ‘giving the public authority a role in delivering redress is not a substitute for encouraging private actions [as] all of the burden would fall on the state in a time of increasingly tight public resources and, furthermore, it would not help to tackle anti-competitive behaviour that the OFT has not yet addressed, a key objective of encouraging private actions’.12 Thus, public enforcement mechanisms may, indeed, adopt a compensatory function, although effective private enforcement mechanisms are still needed.

The complementary nature of public and private enforcement and the compensatory potential of public enforcement mechanisms is supported by the Commission and NCAs as their past practice reveals.13 Furthermore, in its Resolution on the White Paper, the European Parliament has indirectly taken a positive stance on the compensatory potential of public enforcement by stating that:

in order to encourage undertakings to compensate the victims of illicit behaviour as quickly and effectively as possible, the competition authorities are asked to take account of the compensation paid or to be paid when determining the fine that is to be imposed upon the defendant undertaking; … calls on the Council and the Commission explicitly to incorporate into Regulation (EC) No 1/2003 those fining principles and further improve and specify them in order to comply with the requirements of the general legal principles.14

(p. 155) In addition, the UK government has accepted the compensatory function of public enforcement, since it noted that, ‘while regulatory aims and objectives are usually strategic and not specifically focused on compensatory objectives, this does not preclude their adaptation for this purpose’.15 This general approach has been exemplified both in consumer and competition law. In its White Paper entitled ‘A Better Deal for Consumers: Delivering Real Help Now and Change for the Future’, which focused on consumer policy, it further discussed the option of encouraging businesses to provide voluntary compensation to consumers, while reserving formal public enforcement actions for businesses that refuse to exercise this option.16 The OFT has also acknowledged the compensatory potential of public competition law enforcement.17 More recently, in its consultation on reforming private actions, the UK government acknowledged that ‘empowering those who have suffered loss to take direct action against those who have caused it is the best way, in general, to increase deterrence and secure redress. However, alongside a strong private actions regime, the Government recognizes that there are some situations where it may be appropriate for the public enforcement body to consider mechanisms for redress, as part of its administrative settlement of cases’.18 The majority of respondents to the consultation supported this proposal,19 which now features in the Consumer Rights Act 2015.20

2.2  Ancillary institutional benefits

Apart from the potential to deliver redress to affected consumers, public enforcement mechanisms also have the potential to contribute to consumer education and empowerment as well as increase the legitimacy of competition policy.21 These are promoted not only through public enforcement lato sensu,22 but also (p. 156) by encouraging more active consumer participation. The latter can be achieved through the improvement of the current enforcement avenues discussed below. Consumers can act as informants to the Commission and NCAs and the question addressed is whether the processing of such information and the subsequent case selection could be applied in a more consumer-friendly manner.

Complaints launched by consumer organizations may reveal anti-competitive practices in retail markets and signal the need for articulating a valid consumer harm theory for the finding of an anti-competitive practice. Increased consumer involvement in raising complaints may possibly shift the substantive competition law enforcement standard towards a real consumer welfare standard. In addition, it may offer valuable support to EU competition policymaking, raise consumer awareness, and signpost the linkage between competition and consumer law, and the importance of responsible consumer behaviour in taming market forces.

3.  Current Avenues for Consumer Participation: Public Enforcement Stricto Sensu

3.1  Complaints to the Commission

The Commission encourages private parties, both undertakings and consumers, to inform public enforcers of alleged competition law violations.23 Consumers can become involved in public competition law enforcement either by lodging a complaint with the Commission or by providing market information to spur a subsequent sector inquiry.24 Consumer complaints may contribute to the detection of a competition law violation, thereby increasing the deterrent effect of the enforcement system. Indirectly, they promote the compensatory aim as well, since they are able to incentivize consumer organizations to launch complaints with a view to subsequently raising follow-on damages actions.

In the past, consumers have raised numerous complaints.25 Their complaints have mainly concerned consumer guarantee systems in the automobile sector, consumer electronics, and perfumes.26 Complaints filed in the field of motor (p. 157) vehicle distribution agreements played a role in the adoption of the first Motor Vehicle Block Exemption Regulation.27 As the Commission points out, there was a significant fall in the number of consumer complaints within one year of the adoption of the Block Exemption Regulation.28 The Commission recognizes the potential of consumer contribution in revealing competition law violations but also points to the fact that their involvement is minimal. Furthermore, it acknowledges that increased participation on behalf of consumer organizations would be desirable,29 and in the past such participation has led to the termination of anti-competitive practices, as in the case of an Italian consumer organization (Altroconsumo), which filed a complaint with the Commission regarding an Italian digital broadcasting regulation. This complaint led the Commission to issue a reasoned opinion on its incompatibility with EU competition law.30 Also, Which?, the UK consumer organization, filed two complaints with the Commission, the first concerning ticket sales arrangements for the 2006 World Cup31 and the second with regard to an allegedly anti-competitive agreement between Apple and major record companies, which resulted in higher prices for UK consumers than others in the EU when downloading music.32

The involvement of individual consumers, not through consumer organizations, can also play a role in the detection and punishment of competition law violations, as Greek Ferries reveals.33 In that case, the Commission fined cartelists (p. 158) following a letter from a single consumer. The fact that consumer organizations and, occasionally, individual consumers raise complaints with the Commission is to be praised, as it reveals awareness on the part of consumers and may increase the wider acceptance of competition policy. Even in cases in which complaints do not actually amount to the finding of a competition law violation, they can still contribute to the development of competition law jurisprudence.34 Whether this important legitimizing function can be further cultivated rests with the Commission’s handling of the respective complaints, to which point attention will now be turned.

3.1.1  The legitimate interest requirement

Consumers/consumer organizations can lodge a complaint before the Commission, provided that they show a ‘legitimate interest’.35 Both the Commission and the GC accept the potential of consumer organizations to lodge complaints as long as they can show that their members are liable to be directly and adversely affected.36 The same applies to individual consumers whose economic interests are adversely affected when they are the purchasers of goods and services that are the subject of an infringement.37 This may be considered to be a broad reading of the ‘legitimate interest’ requirement but the GC has justified it in the light of the EU competition law goals by stating that:

the ultimate purpose of the rules that seek to ensure that competition is not distorted in the internal market is to increase the well-being of consumers. That purpose can be seen in particular from the wording of Article [101 TFEU] … Competition law and competition policy therefore have an undeniable impact on the specific economic interests of (p. 159) final customers who purchase goods or services. Recognition that such customers—who show that they have suffered economic damage as a result of an agreement or conduct liable to restrict or distort competition—have a legitimate interest in seeking from the Commission a declaration that Articles [101 and 102 TFEU] have been infringed contributes to the attainment of the objectives of competition law.38

Therefore, the ‘legitimate interest’ requirement, which is dependent on the direct and adverse effect of the infringement on consumers’ economic interests (individually or as members of a consumer association), can be identified as the first condition for the complaint’s admissibility.

The legitimate interest requirement is an important prerequisite of the complainant’s status, which is further associated with important procedural rights in the event of proceedings being initiated or the rejection of a complaint.39 However, if the complainant fails to demonstrate its legitimate interest, the Commission is entitled to dismiss the complaint.40 In the case of complaints raised by consumer organizations, the Commission appears receptive to accepting a lower information threshold. By so doing the Commission seems to recognize the difficulties associated with the gathering of information in cases of complaints by consumer organizations.41 This should also apply to individual consumer complaints. In addition, even in cases in which the legitimate interest requirement is not fulfilled, the Commission retains the right to initiate proceedings on its own initiative,42 an option that the Commission should use in the event of consumer complaints in the light of the benefits of consumer involvement.

3.1.2  The Union interest requirement

The Commission may reject a complaint for lack of ‘[Union] interest’.43 The complainant’s legitimate interest and the nature of the complaint being in the Union’s interest may be broadly construed as admissibility requirements, even if the former is technically a prerequisite for allowing the complaint to reach the stage of assessment, regardless of whether or not it is in the Union’s interest. In the latter case, the Commission recognizes that the complainant has a legitimate interest; however, it disposes of the complaint because of lack of Union interest after examining the substance of the complaint. Therefore, the end result is the same in both cases. The (p. 160) Commission rejects the complaint and bears an obligation to provide adequate reasons for this rejection, as will be discussed below. However, if a complaint is dismissed for lack of ‘Union interest’, the complainant retains its procedural rights under Regulation 773/2004.

The review of the Commission’s past practice and the EU courts’ case law suggests that ‘Union interest’ affords greater latitude to the Commission with regard to rejecting complaints, as it functions as a case prioritization criterion. This is despite the EU courts having articulated strict conditions regarding the required Commission justifications when rejecting a complaint for lack of ‘Union interest’.

The Commission still enjoys discretion regarding case prioritization,44 especially in the light of the fact that, in assessing the ‘[Union] interest’ condition, it is allowed to apply new criteria not considered before in the light of the factual and legal background of the case presented before it.45 The ‘general supervisory task entrusted to the Commission’ does not entail an obligation on its part ‘to rule on the existence or otherwise of an infringement’ and therefore the Commission can prioritize the cases submitted to it.46 The Commission should still carefully examine the legal and factual background of a complaint before rejecting it.47 As an administrative authority, acting in the public interest, the Commission can prioritize its cases based on the criterion of ‘Union interest’ as long as it provides adequate justifications for its prioritization.48 The complainant can then challenge the rejection of its complaint under 263(4) TFEU and, in the event that no formal rejection decision is provided, launch an action against the Commission for failure to act under 265 TFEU.49

As has been alluded to previously, the ‘Union interest’ criterion affords the Commission considerable discretion in dealing with the cases brought before it. AG Colomer observed that:

[Union] interest … is no more than an abbreviated formula, a shortcut, to describe, succinctly, the discretion—neither unfettered nor arbitrary, since it is subject to judicial (p. 161) review—which the Treaties confer on the Commission for its examination of a complaint alleging the existence of anti-competitive practices. The substance of that concept varies very considerably, to the same extent as the widely differing circumstances which surround cases involving infringements of the competition rules.50

Notwithstanding the Commission’s discretion, certain patterns can be discerned in the CJEU jurisprudence for assessing the ‘Union interest’ criterion.51 In particular, it has been held that the Commission can reject a complaint if the complainant is able to bring an action to assert his right before the national courts.52 In the event that evidence is adduced to support the fact that the national system does not provide adequate protection for complainants’ rights, the Commission cannot reject a complaint based on this argument.53 However, national systems of civil procedure do not afford adequate protection to consumer rights54 and, therefore, the Commission should not reject consumer complaints based on this ground.55 Even if the Commission retains the case, one could question how an individual complainant’s rights are to be safeguarded. It is suggested here that the Commission’s policy choice of not addressing a complaint because national courts can safeguard individual rights provides a hint of the added value attributed by the Commission to private claims before national courts and of the complementary nature of public and private enforcement.

In the event that the alleged antitrust infringement does not present a threat to the functioning of the internal market the Commission may as well reject the complaint for lack of ‘Union interest’.56 In this case consumers/consumer associations may refer to their national authorities but, given their limited resources, it seems unlikely that they would raise a second complaint, which leaves consumers unprotected.

The GC accepted the above criteria in a case involving an action brought by consumer organizations. BEUC v Commission57 has been listed as an important victory by consumer advocates.58 The case commenced when BEUC and NCC launched a complaint before the Commission alleging that an agreement between UK and Japanese car manufacturers, which entailed import quotas for Japanese cars in the UK market, was anti-competitive. The Commission did not accept this complaint since the ‘Union interest’ condition was absent because (i) the (p. 162) alleged anti-competitive agreement was about to expire; (ii) the agreement was known to, or even encouraged by, UK authorities; and (iii) it did not satisfy the effect on inter-State trade requirements.59 The complainants brought an action for annulment before the GC. The GC rejected the Commission’s arguments and annulled its decision not to investigate the complaint since no proper factual and legal analysis had been conducted before rejecting the complaint.60 This is an important judgment as it reveals the readiness of the GC to thoroughly review Commission decisions in rejecting the complaint in a case involving consumer organizations acting in the consumer interest. However, the fact remains, ultimately, that it is for the Commission to set its enforcement priorities provided that it gives adequate reasoning for so doing.

3.2  Making complaints to the Commission more effective

3.2.1  Improving standing

The shortcomings encountered by consumers/consumer organizations in launching complaints are, to some extent, alleviated by the rather broad definition given to the ‘legitimate interest’ requirement and the partial dispensation with the obligation to obtain detailed information on the complaint.61 However, the latitude for case prioritization afforded to the Commission may inhibit the success of such claims. Even if the Commission is correct in its assessment of ‘Union interest’, the rejection of a complaint may still have an adverse impact on the consumer interest.

3.2.2  The consumer complaints allocation mechanism

As has been argued in the previous chapter, effective private enforcement mechanisms for consumer claims in the competition field are not to be found in the majority of Member States. There are two options for their implementation: either devise the necessary collective action mechanisms for the additional reason of supplementing the Commission’s enforcement efforts or look at alternative public enforcement mechanisms. Given that individual Member States, to a large extent, replicate the EU model of public competition law enforcement,62 some coordination mechanism (p. 163) is required for the Commission to allocate these consumer cases to the relevant national competition authority directly, instead of rejecting them outright.

Recital 18 of Regulation 1/2003 provides that ‘the Commission [should not be prevented] from rejecting a complaint for lack of [Union] interest … even if no other competition authority has indicated its intention of dealing with the case’. This recital, as well as the Notice on cooperation between the Commission and NCAs,63 could be amended in order to provide for a ‘consumer complaints allocation mechanism’. This would be along the lines that, in the event that the Commission rejects a complaint, it would have to send the file of the case directly to the most appropriate NCA. Following allocation of the complaint, the NCA would then decide how to proceed with it depending on the information supporting the complaint and its own workload. This proposal may require a legislative amendment of Regulation 1/2003 or Regulation 773/2004.64

3.3  Sector inquiries

The second participation avenue is the provision of information that falls short of justifying legitimate interest for launching a complaint under Article 7(2) of Regulation 1/2003. However, consumer information can trigger a sector inquiry.65 In any case, the Commission is committed to treating the information provided in accordance with good administrative practice.66 Sector inquiries, unlike UK market investigations,67 do not provide the Commission with powerful enforcement tools. However, information requests from different market players do provide the Commission with the opportunity to form an opinion of the functioning of the respective sector and may also result in the opening of infringement proceedings against specific undertakings.68 Thus, sector inquiries could potentially (p. 164) have a deterrent value. The mere opening of sector inquiries may have beneficial effects, as the price reduction in the leased lines sector inquiry reveals.69 Also, in the context of sector inquiries (even if these do not concern the retail sector) the Commission can take into account the impact of certain business practices on consumers and suggest a certain course of action to businesses.70 Sector inquiries are not restricted to the competition law field, and they also present a beneficial bridging function between consumer and competition remedies.71 This is evident in the sector inquiry in the retail banking sector, in which the Commission expressly stated that:

The sector inquiry into retail banking contributes to this agenda by shedding light on the operation of the market; highlighting possible market failures; and identifying where market failures can be tackled through competition law and, where appropriate, other measures.72

The Commission has predicted that the use of the sector inquiries tool will gain pace,73 following the modernization and decentralization of competition law (p. 165) enforcement with Regulation 1/2003, and rightly so, since the Commission has completed five sector inquiries and one is ongoing. The five sector inquiries undertaken by the Commission since the entry into force of Regulation 1/2003 are in the following sectors: media, energy, retail banking, business insurance, and pharmaceuticals. On 6 May 2015, the Commission announced the launch of a sector inquiry into the e-commerce sector.74 In particular, the Commission acknowledges that:

sector inquiries have become one of its key investigative tools and have enabled it to identify shortcomings in the competitive process of the gas and electricity, retail banking, business insurance and pharmaceutical sectors. They have provided a wealth of factual material that has supported the Commission’s enforcement of Articles [101] and [102] in individual cases.75

The tool of sector inquiries provides an avenue for consumers and consumer organizations to alert the Commission to possible competition law problems, thereby indicating the potential to legitimize competition policy.76 Furthermore, the Commission record to date indicates that sector inquiries can be of great value to the Commission in discerning different trends in markets and potential competition law infringements.77

3.4  Improvements to sector inquiries: Priorities, structure, and outcome

The Commission could incorporate some changes into its sector inquiries regime so as to increase its relevance for consumers. These changes are related to the choice of sectors and the actual conduct of the sector inquiries. First, the Commission could more actively pursue sector inquiries in retail markets so as to point to the competition law relevance for consumers in the chosen sectors. However, even when Commission sector inquiries concern intermediate markets, they are still conducted in ‘key sectors of the EU economy which directly impact consumers’.78 (p. 166) In such cases, the Commission reports should expressly point to the potential benefits of its proposals for consumers. Note, for example, the final Report in the pharmaceutical sector inquiry, in which the benefits for consumers are mentioned throughout the Report although there is not a separate section dedicated to this point.79

Furthermore, the design of the conduct of sector inquiries should take consumer interests into account more explicitly. The questionnaires used during sector inquiries should be drafted in a manner that takes into account not only the business but also the consumer perspective.80 The Commission should, thus, seek consumers’ views and not just those of the business community and, indeed, it has done so in the past.81 Consumers’ views can further be encouraged through the introduction of a mechanism akin to the UK super-complaint procedure discussed below.

The third amendment concerns the strengthening of the Commission’s remedial powers. Revision of the EU sector investigation regime so as to increase the Commission’s remedial powers could prove to be beneficial for the consumer interest and increase consumer organizations’ incentives to bring possible competition law violations or market problems to the attention of the Commission. However, Regulation 1/2003 did not grant the Commission such broad enforcement powers. This may suggest that there is no political will to furnish the Commission with more enforcement powers during the course of sector inquiries. In the subsequent section, this proposal is further discussed in relation to the UK markets regime.82

3.5  ‘Super-complaints’: The European way

In this section, the possibility of formalizing a communication channel between consumer organizations and the Commission, akin to the UK super-complaints (p. 167) procedure, is discussed. Indeed, it has been suggested that the introduction of an ‘EU super-complaints procedure’, modelled upon the current UK ‘super-complaints’ regime, could assist with increased consumer involvement in competition law enforcement.83 As consumer organizations point out, complaints focus on a specific competition law infringement and lack the potential to tackle wider market problems.84 Since consumer organizations are, indeed, better placed to draw attention to consumer problems in retail markets,85 a formal procedure of alerting the Commission should be considered as complementary to an efficient complaint-handling process.

The UK markets regime is briefly reviewed with a view to assessing the contribution of super-complaints to a more consumer-friendly competition policy.86 No detailed account of the UK markets regime and its recent reform is provided in the scope of the present enquiry,87 since the aim here is to make a much narrower point, namely, to show that the contribution of consumer involvement through super-complaints is beneficial to the functioning of UK markets. This argument is employed to buttress the proposal to introduce a similar mechanism at the EU level.

The EA 2002 provides that designated consumer bodies can make a complaint to the CMA and sectoral regulators when any feature of a market88 in the UK appears to be significantly harming the interests of consumers.89 The UK government was considering extending the super-complaint regimes to SMEs as well.90 This proposal (p. 168) could possibly detract from the flagship role of the super-complaints procedure, which is correcting market failures in the consumer interest.91 Therefore, the government dropping this proposal, in the light of the criticism generated, should be viewed as a positive development.92

Under the super-complaints regime, the 90-day deadline within which the CMA must publish a response stating how it intends to proceed with the complaints is of particular importance.93 Thus, the UK super-complaints procedure imposes a tight deadline on the CMA to justify its proposed actions, and so institutionalizes the dialogue between the competition authority and consumer organizations. Following a super-complaint, the options open to the CMA range from taking no action to launching a market study or making a market investigation reference.94 To date, 14 super-complaints have been raised with the OFT, (the CMA’s predecessor) the most recent with regard to travel money, on 21 September 2011.95 It is striking that, out of these super-complaints, four market studies and three market investigations were undertaken. This data verifies the OFT’s pledge to consider possible consumer detriment when choosing to undertake a market study.96 The remaining super-complaints have also resulted in benefits for consumers, following the solutions negotiated with the industry.

Furthermore, the relationship between super-complaints and market investigations provides an additional argument in favour of consumers’ potential to contribute to the well functioning of markets. Interestingly, one of the criticisms (p. 169) of the UK markets regime that led to its reform was the low number of market investigations conducted.97 Thus, it appears striking that out of the 13 market investigation references up until March 2011, three followed a super-complaint.98 The number of market investigation references has increased quite significantly; during the period 2011–2014, five more market investigations were completed and two are ongoing.99 This would suggest that super-complaints might have begun to wane. Still though, the track record for market investigations following super-complaints is important and indicates the potential for designated consumer bodies to alert the competent competition authorities to competition problems in retail markets, since market investigations are the instrument for determining whether competition is working effectively in the markets as a whole.100

The UK market regime is unique, as it encourages the involvement of designated consumer organizations and provides the competent authorities with powers to implement behavioural and structural remedies.101 Generally, the UK regime is thought to be successful, and the recent reform concerning the broadening of the scope of market investigations and reductions in timescale102 could potentially improve it even further.

In the light of this, the Commission could propose the adoption of an EU super-complaints procedure103 building on the UK model, as well as national super-complaints procedures. In regards to EU super-complaints, the procedures and deadlines within which the Commission must respond could be introduced via an amendment to Regulation 1/2003, whereas the national super-complaint mechanisms could be introduced via emulation of the EU model by the Member States.104

The standing of consumer organizations to bring super-complaints should also be regulated. To that end, consumer organizations designated to raise collective (p. 170) actions will also be entitled to raise super-complaints with the NCAs.105 In Chapter 5 it is argued that the criteria for the designation of consumer organizations should be regulated by EU legislation.106 The same criteria could apply to the assessment of the authority of a consumer organization with regard to raising super-complaints.

3.6  Other participation avenues: Intervention

In addition to raising complaints with the Commission, consumers/consumer organizations can apply to be heard by the Commission as third parties provided that they can demonstrate a sufficient interest.107 The Commission Best Practices provide that ‘[u]‌pon application, the Commission shall also hear other natural or legal persons which can demonstrate a sufficient interest in the outcome of the procedure in accordance with Article 13 of the Implementing Regulation. The hearing officer takes the decision on whether such third persons are admitted to the proceedings’.108

Consumer organizations are expected to take advantage of this option, and have done so in the past,109 since individual consumers are likely to be unaware of ongoing competition law procedures. In fact, the Commission itself seems to encourage this consumer involvement avenue, since it states that:

consumer associations that apply to be heard should generally be regarded as having a sufficient interest, where the proceedings concern products or services used by the end-consumer or products or services that constitute a direct input into such products or services.110

If the Commission statement above is taken at face value, consumer organizations will be granted authorization to intervene in a large number of competition law cases. Furthermore, consumer organizations can intervene in ongoing proceedings before European courts.111 Interventions of this kind are beneficial in bringing (p. 171) consumer input into consideration and highlighting the consumer interest in competition law analysis. However, despite the positive influence of consumer intervention,112 as has been shown in Chapter 2, consumer interests bear a sparing and sporadic influence on the competition law enforcement standard employed by the European courts. Hence, they need to be supplemented by additional measures.

Article 13(3) of Regulation 773/2204 provides that ‘[t]he … Commission may invite any other person to express its views in writing and to attend the oral hearing of the parties to whom a statement of objections has been addressed’. It is suggested that the Commission should interpret the requirement of sufficient interest liberally and actively encourage consumer organizations to intervene in ongoing procedures concerning retail markets.113

4.  Public Enforcement Lato Sensu: Towards a Mixed Approach to Competition Law Enforcement

In this section, mechanisms and instances to date are covered in which compensation or alternative benefits were provided in the course of public enforcement. The employment of public enforcement mechanisms to bring relief to affected parties has been coined as ‘public compensation’.114 Instances where compensation reached the affected parties in the course of public enforcement procedures are analysed first and examples are drawn both from the Commission and Member States’ practice, before discussing the potential formalization of such an approach.

Public compensation presents a flexible mechanism that can feed into different existing public enforcement procedures depending on the nature of the competition law infringement (eg Article 102 TFEU and commitment proceedings; Article 101 TFEU and cartel settlement proceedings) and the number of affected parties.115 Depending on the nature of the violation, public compensation can be (p. 172) either formal or informal, thereby exhibiting different levels of formalization. In addition, depending on the number of injured parties, it may have a strict compensatory function when, for example, there are few injured parties, or a wider relief function when there is a large number of affected parties, each sustaining very low damage. In the latter case, public compensation possesses the potential to promote the collective consumer interest. In the light of the fused approach to competition law enforcement discussed above and the inadequate development of private enforcement in the consumer interest, public compensation presents the potential to improve this situation.

4.1  Instances of ‘public compensation’

4.1.1  EU cases

The Commission’s practice suggests that, despite employing public compensation sparingly, it did do so early on. In General Motors, the Commission found that General Motors (GM) had abused its dominant position by imposing excessive prices and engaging in price discrimination that impeded parallel trade.116 GM reimbursed the excessive amount in two instances, a fact that the Commission considered in GM’s favour when setting the amount of the fine.117

In Pre-Insulated Pipe Cartel, the Commission reduced the fine imposed on one of the cartel members (ABB) because it had provided substantial compensation to its damaged competitor. In fact this was the only accepted extenuating circumstance.118 ABB and its competitor (Powerpipe) reached a settlement that involved a payment of substantial compensation. The parties agreed that the terms and conditions of the settlement would remain confidential.119

In Nintendo, the Commission found that the respective distribution system had severely restricted intra-brand competition and partitioned the single market and it imposed high fines on the implicated undertakings. Nonetheless, the Commission took into consideration the fact that Nintendo had cooperated with it and at the instigation of the Commission offered substantial financial compensation to the affected parties as an extenuating circumstance. As a result it granted a fine reduction, although compared to the fine imposed, this reduction was rather minimal. In the three cases discussed above, the Commission found an infringement and fined the incumbents. The voluntary compensation provided (p. 173) was treated as an extenuating circumstance but ultimately that remains at the discretion of the Commission.120

In Deutsche Bahn, the Commission accepted the commitments offered by Deutsche Bahn (DB) to dispel its concerns about margin squeeze in relation to DB Energie pricing practices. DB Energie amended its pricing system for traction current (ie electricity used to power locomotives) to apply uniformly to all railway companies and to allow other electricity suppliers to provide traction current to railway companies. In addition, the commitments offered entailed an element of public compensation since DB Energie committed to providing a 4% discount on the traction current supplied to railway companies not belonging to DB based on their preceding year’s invoices, thereby ensuring that the latter benefited immediately from the lower prices.121

Deutsche Bahn constitutes the first use of public compensation in the context of commitment proceedings. Nonetheless, prior to the official enactment of such proceedings with Article 9 of Regulation 1/2003, there have been instances of public compensation in cases closed informally. In Macron, the Commission ended its investigation after Angus Fire pledged to comply with Article 102 TFEU in the future and provided an ex gratia payment to the complainant, Macron.122

In Rover, Rover Group revised its discount scheme and notified the Commission and the OFT.123 Furthermore, it committed to compensating its dealers and donating £1 million to the Consumer Association (now Which?). This donation was to be overseen by an independent board and spent on consumer information services. In its annual competition report for that year the Commission clarified that the donation did not affect consumers’ right to compensation.124

In Sony/Phillips Licensing Agreement, an amended Standard Licensing Agreement was drafted and cleared by the Commission by means of a comfort letter. Philips also committed to making a payment to each licensee of $10,000 on (p. 174) royalties due.125 Therefore, it seems that informal contacts between parties may provide an economic benefit of some sort for the victims. However, the alleged victims should possess bargaining power against the incumbent undertakings, a condition unlikely to be fulfilled by consumer organizations, and even less by individual consumers.

4.1.2  National cases

Competition law enforcement in different Member States depicts some sparse instances of public compensation. One of the most discussed cases at national level is UK Independent Schools, concerning an information exchange agreement on future prices between 50 fee-paying independent schools.126 Following the issuance of the statement of objections, the implicated schools approached the OFT and voluntarily offered to provide compensation in lieu of a fine. Following discussions, the schools accepted liability for the infringement of Chapter I prohibition (Article 101 TFEU equivalent) and made an ex gratia £3 million payment to an educational charitable trust for the benefit of students attending the schools in the relevant period. In return, only nominal fines were imposed.127 The treatment of this case represented a pragmatic compromise in the light of the possible effects of any fine leading to an increase in student fees.128

Examples of public compensation are also found in the Netherlands. First, in Interpay, which concerned an agreement between eight banks to establish Interpay as the single provider of network services for PIN payments, the imposed fines were reduced following the creation of a €10 million fund with the aim of promoting an efficient payment system. This case also had an abusive practice element since Interpay was allegedly charging excessive PIN tariffs. The Dutch Competition Authority discontinued its investigations into this matter since it would have been very complex and time consuming. In addition, a compensatory scheme was reached between the banks and retailers offering PIN payments to consumers.129 Second, the Dutch Competition Authority also encouraged the provision of compensation during the settlement procedures in the construction (p. 175) cartel case.130 A 10% fine reduction was granted provided that the implicated undertakings reached a compensation agreement with the Dutch government, which had been damaged by the respective cartel.

In Germany, examples of public compensation stem from the energy sector. The investigation into alleged excessive gas prices was closed following the commitments offered by 29 gas suppliers to refund €127 million to the affected customers through bonus payments and credits on future accounts. In a similar manner, in Stadwerke Uelzen, a local gas supplier was ordered to reimburse its customers, and the remedy was upheld by the German Supreme Court.131 In the electric heating market, the Bundeskartellamt concluded its abuse proceedings following commitments offered by the incumbents that included, amongst other things, the reimbursement of affected customers. In 2010, 13 providers committed to reimbursing approximately 530,000 electric heating customers the amount of €27.2 million,132 and in 2012 the Bundeskartellamt issued a ruling on abusive pricing against Entega ordering it to pay out €5 million to 23,000 electric heating customers.133

The cases mentioned above indicate that the Commission, as well as NCAs, have in the past employed innovative ways of providing compensation during the course of public enforcement procedures. However, if these procedures are really to be employed in the consumer interest they need to be institutionalized. This possibility is discussed in section 4.3.

4.2  Categorization of cases

The cases of public compensation to date can be categorized according to two criteria: first, the number of injured parties; and, second, the provision of public compensation after a formal infringement decision or informal settlement.

(p. 176) The first category includes instances such as the UK Independent Schools, Rover, Interpay, and German energy cases, in which the injured parties are numerous and cannot be individually identified. This category covers all infringements that affect a large number of consumers. The second category concerns cases with a limited number of victims that are direct customers or competitors, where each one suffers a high level of harm. This was the case in Nintendo, General Motors, Pre-Insulated Pipe Cartel, Macron, and Sony/Phillips Licensing Agreement. With regard to the first category, attainment of the compensatory aim of EU competition law enforcement would be very difficult. This presents a gap that public compensation might fill. As will be discussed below, the economic benefits accruing to affected consumers resemble those flowing from collective actions, as discussed in Chapter 5.

Based on the second criterion, the first category contains cases in which formal infringement procedures were initiated and a fine was imposed (eg Independent Schools, Nintendo, General Motors, Pre-Insulated Pipe Cartel) and the second comprises cases that were closed without issuance of an official infringement decision or the imposition of a fine (eg Deutsche Bahn, Rover, Sony/Phillips Licensing Agreement). Depending on the level of formality, the approach to public compensation needs to be regulated accordingly; however, for the latter type of cases any approach can only remain informal in the light of the nature of the respective procedures.

4.3  Institutionalizing a public compensation approach

The sparse and sporadic use of public compensation points to the possible institutionalization of the relevant procedure by drawing insights from experience to date.134 At the same time, public compensation has been employed in a diverse range of cases and in many different forms, which suggests that it is difficult to formalize it with a sufficient degree of accuracy. Arguably, it may not only be difficult but also undesirable, since the very advantage of such an approach lies in its flexibility. However, public compensation could be incorporated into the current enforcement mechanisms in a more formal, structured, and principled manner. This section develops both a formal and an informal approach to public compensation. The former is appropriate in cases where an infringement decision is adopted and a fine imposed while the latter may be applied in the course of more informal proceedings, such as commitment proceedings.

An institutionalized approach to ‘public compensation’ will increase its visibility, improve legal certainty,135 and render the functioning of the EU authorities (p. 177) (in this case, the Commission) as well as NCAs more transparent.136 At the same time, both formal and informal public compensation would signal the potential of competition law to benefit the victims of anti-competitive practices, thereby furthering the ancillary institutional benefits.

Public compensation serves distributive justice as it brings benefits back to the affected parties. However, it does not present an accurate quantification of the damage inflicted and therefore departs from the notion of compensatory damages, correlativity, and corrective justice.137 Public compensation provides a flexible mechanism that brings benefits back to the injured parties, who are identified on an individual basis, or to the injured class.

The proposed formal mechanism views compensation as a type of behavioural remedy that supplements the fine imposed.138 It will be structured primarily as a remedy to be considered in cartel cases and alternatively as a less formal remedy where there is some voluntary element of participation by the infringer. Finally, voluntary public compensation in the course of commitment proceedings will be discussed.

Public compensation could be incorporated into existing enforcement mechanisms. Article 7 of Regulation 1/2003 enables the Commission to impose behavioural and structural remedies provided that they are proportionate and necessary in order to end an infringement. Public compensation could thus be seen as a form of behavioural remedy to be imposed in appropriate cases.139 The discount offered in Deutsche Bahn constitutes such a remedy. However, the commitment procedure allows the Commission more leeway to impose remedies, thereby evading the risk of being challenged before the EU courts, which may find the behavioural remedies imposed disproportionate.140

(p. 178) Public compensation could form part of the pecuniary penalties imposed following the finding of an infringement, namely the fine plus the purported economic benefits to the affected parties. The Fine Guidelines could be amended so as to reflect this approach. In particular, the Commission could increase the fine in appropriate cases in order to improve deterrence; the Guidelines provide that ‘the Commission will also take into account the need to increase the fine in order to exceed the amount of gains improperly made as a result of the infringement where it is possible to estimate that amount’.141 This paragraph chimes well with the redistributive aim of public compensation and can be coupled with the consideration that this extra amount should benefit the affected parties. The calculation of public compensation will be decided on a case-by-case basis and should not exceed the maximum permitted level of fines.142 Public compensation as an addition to the fine can be incorporated in cartel settlement procedures that permit a more efficient approach to cartel cases and may prove to be a very powerful tool in the light of their more frequent use and the Commission’s accumulated experience.143

In addition and reflecting a voluntary approach to public compensation, the Fine Guidelines could add the provision of voluntary compensation as a mitigating factor for the reduction of the imposed fine.144 This approach is in line with the Directive on Damages Actions, which stipulates that ‘actions for damages are only one element of an effective system of private enforcement of infringements of competition law and are complemented by alternative avenues of redress, such as consensual dispute resolution or public enforcement decisions that give parties an incentive to provide compensation’.145 Article 18(3) of the (p. 179) Directive on Damages Actions provides that national competition authorities may consider the voluntary provision of compensation prior to a decision imposing a fine as a mitigating factor. Thus, consistency considerations advocate in favour of the Commission adopting such an approach and amending its Fine Guidelines accordingly. The UK Consumer Rights Act goes a step further in blending private and public competition law enforcement as it empowers the CMA to approve redress schemes.146

Finally, and as the Commission’s recent approach in Deutsche Bahn suggests, public compensation can be employed in Article 9 of Regulation 1/2003 commitment proceedings.147 The flexible nature of commitment decisions allows the Commission to request the provision of innovative remedies.

Public compensation, either formal or informal, should be complementary to private enforcement, so injured parties should not be barred from launching damages actions. This corresponds with the Commission’s approach in Rover. In cases where public compensation has been offered, the injured parties may still have the incentive to claim damages in court. Where part of the public compensation is paid directly to the injured parties, that sum could be deducted from any future damages that they obtain through the court. However, follow-on actions are unlikely in cases in which victims suffer a low level of damage.

4.4  Serving the collective consumer interest

The collective consumer interest can thus be served both by appropriately structured collective actions and through public compensation, where appropriate. The means of quantification and distribution of damages to affected consumers are similar. Channelling back the economic benefits in cases involving a large number of victims resembles the distribution conundrum in opt-out collective actions.148 In this case the employment of cy-près distribution through the establishment of a consumer fund may prove workable. The distribution should primarily encourage consumers to claim their individual damage if possible, and employ cy-près as the second best option. The cases discussed above that involve a large number of affected parties suggest that competition authorities have been particularly innovative in the distribution of compensation, either through the establishment of a fund (UK Independent Schools, Interpay), donation to a consumer organization (Rover), or bonus payments on customers’ future accounts (German gas cases).

In multiparty consumer cases, in the light of the unsatisfactory approach in the Commission Recommendation149 and its flexible remedial nature, public compensation may fill the current gap in promoting the collective consumer interest in competition law.

(p. 180) 5.  Conclusion

In this chapter the current participation avenues open to consumers to become involved in public competition law enforcement, as well as their relevant shortcomings, have been assessed. A normative argument was put forward for suggesting certain changes in the respective public enforcement mechanisms. The proposed changes contribute to the overall deterrence potential of the enforcement system, and simultaneously bring ancillary institutional benefits. Even the proposal regarding the institutionalization of the public compensation approach, and the introduction of compensatory elements to public enforcement, is important, not only for promoting compensation but also for the advancement of deterrence and the ancillary aims as well. The proposals to enhance public participation avenues are mutually reinforcing and complementary.

The system could function such that a consumer or consumer organization complaint is brought first before the Commission or before an NCA. Second, the competition authority should seriously address the complaint and provide reasons for choosing to dismiss it, if it decides to do so. If the Commission rejects the complaint for lack of EU interest, it should forward the complaint to the most relevant NCA. If the complaint is examined and a fine is contemplated, the competition authority could, in addition to the fine, examine the possibility of imposing public compensation. Also, the incumbent undertaking could consider the option of making an offer for compensation with a view to reducing the fine imposed. Consumer participation in public enforcement could, thus, strengthen the functioning of the enforcement system as a whole.

Footnotes:

1  An alternative term to describe these actions is ‘privately triggered public enforcement’, as employed in F Jacobs and T Deisenhofer, ‘Procedural Aspects of the Effective Private Enforcement of EC Competition Rules: A Community Perspective’ in CD Ehlerman and I Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Hart 2003) 187, 197.

2  Consultation with consumer organizations prior to the adoption of secondary competition legislation, although very important in increasing the transparency and quality of European policymaking, falls outside the scope of this book. It is true that this input has a significant role to play in defending the consumer interest; however, it is not connected with the actual enforcement of competition law norms. See Commission (EC), ‘European Transparency Initiative’ (Green Paper) COM(2006) 194 final; Commission (EC), ‘Third Strategic Review of Better Regulation in the European Union’ (Communication) COM(2009) 15 final, 6–7. See, for example, BEUC, ‘Response to the White Paper on Damages Actions’ (2008); Commission (EC), XXIXth Report on Competition Policy 1999, SEC(2000) 720 final, 35–36; Commission (EC), ‘Staff Working Document Accompanying the Report on Competition Policy 2008’, COM(2009) 374 final, paras 19, 26.

3  W Wils, ‘The Relationship between Public Antitrust Enforcement and Private Actions for Damages’ (2009) 32 W Comp 3, 12. However, Wils does not reject the provision of compensation through public enforcement procedures. Ibid 21. On the deterrence function of public enforcement see Commission (EC), ‘Guidelines on the Method of Setting Fines Imposed Pursuant to Article 23(2)(a) of Regulation No 1/2003’ [2006] OJ C210/2 (Fine Guidelines), para 4; Joined Cases 100/80 to 103/80 Musique Diffusion française and others v Commission [1983] ECR 1825, para 106; Case C-76/06 P Britannia Alloys & Chemicals v Commission [2007] ECR I-4405, para 22. On the compensatory potential of private enforcement see Commission (EC), ‘Damages Actions for Breach of the EC Antitrust Rules’ (White Paper) COM(2008) 165 final, para 1.2; Commission (EC), ‘Staff Working Paper Accompanying the White Paper on Damages Actions for Breach of the EC Antitrust Rules’ SEC(2008) 404, 2 April 2008, paras 14–15. For a different proposal on a market-based enforcement policy see C Hodges, ‘A Market-Based Competition Enforcement Policy’ (2011) 22 EBLR 261; C Hodges, ‘European Competition Enforcement Policy: Integrating Restitution and Behaviour Control’ (2011) 34 W Comp 383.

4  R Macrory, ‘Regulating Justice: Making Sanctions Effective’ (November 2006) (Final Report) <http://webarchive.nationalarchives.gov.uk/+/http://www.bis.gov.uk/files/file44593.pdf> accessed 13 July 2014 (Macrory Report).

5  C Hodges, The Reform of Class and Representative Actions in European Legal Systems (Hart 2008) 213–216; C Hodges, ‘Encouraging Enterprise and Rebalancing Risk: Implications of Economic Policy for Regulation, Enforcement and Compensation’ (2009) 20 EBLR 1231, 1261.

6  Namely that a sanction should aim to: (1) change the offender’s behaviour; (2) eliminate any gains resulting from the breach; (3) be responsive; (4) be proportionate; (5) restore the inflicted harm; and (6) deter future non-compliances. Macrory Report (n 4) 10.

7  See also P Hampton, ‘Reducing Administrative Burdens: Effective Inspection and Enforcement’ (HM Treasury, March 2005) <http://webarchive.nationalarchives.gov.uk/+/http://www.bis.gov.uk/files/file22988.pdf> accessed 13 July 2014, paras 2.13ff. The Macrory Report (n 4) built upon the findings in the Hampton Report. On responsive regulation see I Ayres and J Braithwaite, Responsive Regulation—Transcending the Deregulation Debate (OUP 1992) 4–7, 35–41.

8  C Hodges, ‘Competition, Enforcement, Regulation and Civil Justice: What is the case?’ (2006) 43 CMLRev 1381, 1392. Hodges views this approach as contrary to the Commission’s ‘Better Regulation’ agenda. On ‘Better Regulation’ see Hodges, Encouraging Enterprise (n 5) 1231–1234. Relevant documents available at <http://ec.europa.eu/governance/better_regulation/key_docs_en.htm> accessed 13 July 2014.

9  See J Braithwaite, Restorative Justice and Responsive Regulation (OUP 2002) 29–34, arguing that ‘[t]‌his means that consistent punishment and consistent persuasion are foolish strategies. The hard question is to decide when to punish and when to persuade’.

10  JM Connor and RH Lande, ‘How High Do Cartels Raise Prices? Implications for Optimal Cartel Fines’ (2006) 80 Tul L Rev 513, 559–564; C Veljanovski, ‘Cartel Fines in Europe: Law, Practice and Deterrence’ (2007) 30 W Comp 65, 81, 84. A Stephan, ‘The Direct Settlement of EC Cartel Cases’ (2009) 58 ICLQ 627, 643.

11  Macrory Report (n 4), paras 2.5–2.6. See also Hodges, who accepts that ‘there is some evidence that enforcement officials may traditionally have been reluctant to assume responsibilities’. Hodges, Encouraging Enterprise (n 5) 1264–1265.

12  BIS, ‘Private Actions in Competition Law: A Consultation on Options for Reform’ (April 2012), para 6.33.

13  On these cases see section 4.1 of this chapter. This practice challenges the statement in Commission (EC), ‘Proposal for a Council Directive Governing Actions for Damages for Infringements of Article 81 and 82 of the Treaty’ (Draft Damages Directive) (Document withdrawn before publication—on file with the author), Explanatory Memorandum, para 1.2, according to which ‘[c]‌ompensation for harm caused by infringements of Articles [101] and [102] of the Treaty cannot be achieved through public enforcement of the competition rules; it is a specific function which is of the domain of courts and of civil law and procedure’. For a similar statement see Commission (EC), ‘Staff Working Document—Accompanying Document to the White Paper on Damages Actions for Breach of the EC Antitrust Rules’ (Impact Assessment) SEC(2008) 405 (Brussels, 02/04/08), para 1.

14  European Parliament, Resolution of 26 March 2009 on the White Paper on Damages Actions for Breach of the EC Antitrust Rules (2008/2154(INI)), para 11.

15  Ministry of Justice, ‘The Government’s Response to the Civil Justice Council’s Report: Improving Access to Justice through Collective Actions’ (July 2009), para 18.

16  BIS, ‘A Better Deal for Consumers: Delivering Real Help Now and Change for the Future’ (July 2009) Cm 7669, 49. The White Paper also discussed the appointment of a Consumer Advocate armed with the power to bring actions on behalf of consumers following a violation of consumer law when no other route to obtain compensation is available and distribute compensation to consumers from illegal funds seized by overseas enforcement authorities. The Consumer Advocate would also be responsible for the administration of voluntary compensation. Ibid 60–61, 63–64.

17  For the OFT’s views regarding redress in the context of administrative settlements see OFT, ‘Private Actions in Competition Law: Effective Redress for Consumers and Business’ (Recommendations) (OFT 916resp) (November 2007), paras 11.16–11.19.

18  BIS Consultation (n 12), paras 6.26–6.27. Providing compensation to affected consumers is not specific to competition law. On similar powers of the FCA, OFCOM, and OFGEM see ibid, paras 6.27, 6.38–6.40.

19  BIS, ‘Private Actions in Competition Law: A Consultation on Options for Reform— Government Response’ (January 2013), para 6.27.

20  See Schedule 8 Consumer Rights Act amending CA 1998. On voluntary redress schemes see new ss 49C–49E. CMA, ‘Guidance on the CMA’s Approval of Voluntary Redress Schemes’ (2 March 2015) (Draft, CMA40con).

21  On these two ancillary benefits as a by-product of effective competition law enforcement see Chapter 3, section 3.

22  See text to n 2.

23  Commission (EC), ‘Notice on the Handling of Complaints by the Commission under Articles 81 and 82 of the EC Treaty’ [2004] OJ C101/65 (Notice on Complaints), paras 2–3. See also J Almunia, ‘Competition—What’s in It for Consumers?’ (European Competition and Consumer Day Poznań, 24 November 2011, Speech/11/803).

24  Notice on Complaints (n 23), paras 3–4.

25  However, it is questionable as to whether the consumer involvement in raising complaints before competition authorities is indeed satisfactory. See M Hutchings and P Whelan, ‘Consumer Interest in Competition Law Cases’ (2006) 16 CPR 182, 184–185.

26  See, for example, complaints by individuals and BEUC regarding the Ford Germany guarantee scheme in Commission (EC), Thirteenth Report on Competition Policy 1983 (Brussels, Luxembourg 1984) <http://bookshop.europa.eu/is-bin/INTERSHOP.enfinity/WFS/EU-Bookshop-Site/en_GB/-/EUR/ViewPublication-Start?PublicationKey=CB3883823> accessed 2 February 2014, paras 104–106; also BEUC complaints on guarantee schemes resulting in the Commission issuing a bulletin warning manufacturers in Commission (EC), Sixteenth Report on Competition Policy 1987 (Brussels, Luxembourg 1988) <http://bookshop.europa.eu/is-bin/INTERSHOP.enfinity/WFS/EU-Bookshop-Site/en_GB/-/EUR/ViewPublication-Start? PublicationKey=CB4886060> accessed 2 February 2014, para 56.

27  Commission Regulation (EEC) 123/85 of 12 December 1984 on the Application of Article [101(3)] of the Treaty to Certain Categories of Motor Vehicle Distribution and Servicing Agreements [1985] OJ L15/16.

28  Commission (EC), Seventeenth Report on Competition Policy 1988 (Brussels, Luxembourg 1989) <http://bookshop.europa.eu/is-bin/INTERSHOP.enfinity/WFS/EU-Bookshop-Site/en_GB/-/EUR/ViewPublication-Start?PublicationKey=CB5087340> accessed 2 February 2014, para 34.

29  XXIXth Report (n 2) 21–22.

30  Commission (EC), ‘Competition: Commission Formally Requests Italy to Comply with EU Rules on Electronic Communications’ (Press Release) IP 07/1114. Altroconsumo has also filed complaints before the Italian Competition Authority. See ECCG, ‘Opinion on Private Damages Actions’ <http://ec.europa.eu/consumers/empowerment/docs/ECCG_opinion_on_actions_for_damages_18112010.pdf> accessed 30 October 2014, 58. This section addresses only ways to improve the complaints process before the Commission and not NCAs.

31  Commission (EC), ‘Competition: Commission Welcomes Improved Access to Tickets for the 2006 World Cup’ (Press Release) IP/05/519.

32  Commission (EC), ‘Annex to the Report on Competition Policy 2007’ (Staff Working Document) SEC(2008) 2038, paras 327–328. Commission (EC), ‘Antitrust: European Commission Welcomes Apple’s Announcement to Equalise Prices for Music Downloads from I-Tunes in Europe’ (Press Release) IP/08/22. For more recent complaints raised by consumer associations see ECCG, ‘Minutes of the ECCG Competition Subgroup Meeting’ (28 June 2011, Brussels) <http://ec.europa.eu/consumers/empowerment/docs/eccg_comp_sub_group_minutes_062011_en.pdf> accessed 30 October 2014, 8, 9.

33  Greek Ferries (Case IV/34.466) Commission Decision 1999/271/EC [1999] OJ L109/24, 1. See also consumer complaints in Peugeot (Cases COMP/E2/36623, 36820, and 37275) Commission Decision 2006/431/EC [2006] OJ L173/20, para 27. See C Dussart, ‘Parallel Imports of Motor Vehicles: The Peugeot Case’ [2006] CPN 49, 51.

34  See also Volkswagen (Case COMP/F-2/36.693) Commission Decision 2001/711/EC [2001] OJ L262/14, 1. On appeal Case T-208/01 Volkswagen v Commission [2003] ECR II–5141, which deals with the notion of ‘agreement’ in EU competition law; Case C-74/04 P Commission v Volkswagen [2006] ECR I-6585.

35  Council Regulation 1/2003 on the Implementation of the Rules on Competition Laid Down in Articles [81] and [82] of the Treaty [2003] OJ L1/1 (Regulation 1/2003), Article 7(2); Commission Regulation 773/2004 Relating to the Conduct of Proceedings by the Commission [2004] OJ L123/18 (Regulation 773/2004), Article 5(1); Notice on Complaints (n 23), para 40; S Weatherill, ‘Public Interest Litigation in EC Competition Law’ in HW Micklitz and N Reich (eds), Public Interest Litigation before European Courts (Nomos 1996) 169, 173, argues that the Commission adopted a broad approach towards the ‘legitimate interest’ requirement. See J Stuyck, ‘EC Competition Law after Modernisation: More than Ever in the Interest of Consumers’ (2005) 28 JCP 1, 14 in the same vein.

36  Notice on Complaints (n 23), paras 37–38. Cf Case T-114/92 BEMIM v Commission [1995] ECR II-147, para 28 regarding the legitimate interest of an association of undertakings. See also Case C-321/95 P Stichting Greenpeace v Commission [1998] ECR I-1651 restricting standing for environmental organizations. Arguably, consumer organizations are more privileged compared to environmental organizations because of the competition-specific enforcement mechanism provided by Regulations 1/2003 (n 35) and 773/2004 (n 35).

37  Ibid. Cf Cases T-213/01 and T-214/01 Österreichische Postsparkasse AG v Commission of the European Communities [2006] ECR II-1601, paras 109–110, 113–114. Prior to the adoption of Regulations 1/2003 and 773/2004 it was more difficult for consumers to satisfy the legitimate interest requirement. See Case 246/81 Lord Bethell v Commission [1982] ECR 2277.

38  Österreichische Postsparkasse AG (n 37), para 115.

39  Regulation 773/2004 (n 35), Articles 6–8; Regulation 1/2003 (n 35), Article 27(1). Notice on Complaints (n 23), paras 64–73. Complainants may also challenge the Commission decision. An important procedural right is access to the non-confidential version of the statement of objection. See Österreichische Postsparkasse (n 37), paras 106–107.

40  Notice on Complaints (n 23), para 40.

41  Regulation 773/2004 (n 35), Article 5(1); Notice on complaints (n 23), para 31; R Wezenbeek, ‘Consumers and Competition Policy: The Commission’s Perspective and the Example of Transport’ [2006] EBLR 73, 78–80.

42  Notice on Complaints (n 23), para 40. See also Österreichische Postsparkasse (n 37), paras 90–92 in which the applicant was granted complainant status, even though the complaint was submitted after the initiation of proceedings on the Commission’s initiative.

43  Notice on Complaints (n 23), paras 41–45.

44  Case T-24/90 Automec srl v Commission of the European Communities [1992] ECR I-2223, para 77. On the Commission margin of discretion see W Wils, ‘Discretion and Prioritisation in Public Antitrust Enforcement, in Particular EU Antitrust Enforcement’ (2011) 34 W Comp 353, 357–360.

45  Case Case C-117/97 P Ufex v Commission [1999] ECR I-1341, paras 79–80. Notice on Complaints (n 23), para 43.

46  Automec (n 44), paras 74–77; Case T-74/92 Ladbroke Racing v Commission [1995] ECR II-115 (Ladbroke I), para 58; Cf Case 125/78 Gema v Commission [1979] ECR 3173, para 18 stating that ‘that in no way implies that the applicant within the meaning of [Article 7(2) of Regulation 1/2003] is entitled to require from the Commission a final decision as regards the existence or non-existence of the alleged infringement’; Ufex (n 45), paras 88–89; Case C-344/98 Masterfoods Ltd v HB Ice Cream Ltd [2000] ECR I-11369, para 46; Case T-229/05 AEPI v Commission [2007] ECR II-84 (T-AEPI), paras 39–40; Case C-425/07 P AEPI v Commission [2009] ECR I-3205, para 31; Case T-306/05 Scippecercola and Terzakis v Commission [2008] ECR II-4, para 92. Notice on Complaints (n 23), para 28.

47  Case T-548/93 Ladbroke Racing v Commission [1995] ECR-II 2565, paras 50–51.

48  Automec (n 44), paras 79, 81, 85; Ladbroke I (n 46), para 58; Ufex (n 45), para 90; Notice on Complaints (n 23), paras 74–75. For a concise depiction of the case law on the Commission’s discretion in rejecting complaints see Scippecercola (n 46), paras 94–97, 174, 187, 189–190. See also Case T-114/92 BEMIM v Commission [1995] ECR II-147. On the notion of ‘[Union] interest’ and its role as a jurisdictional threshold of case allocation see Weatherill (n 35) 177–183.

49  Notice on Complaints (n 23), para 77. Weatherill (n 35) 172. The other avenue would be to raise the issue before the Ombudsman. See Article 228 TFEU; Article 43 of the Charter of Fundamental Rights of the European Union [2000] OJ C364/1.

50  C-449/98 P IECC v Commission [2001] ECR I-3875, Opinion of AG Colomer, para 57.

51  See Notice on Complaints (n 23), para 44 for a concise enumeration.

52  Automec (n 44), para 88.

53  In Automec, however, the GC stated that the applicant had not produced any evidence showing that national law (in this case Italian law) provides no satisfactory legal remedies for the protection of the applicant’s rights, a fact that was taken into account in order to rule that the Commission did not have an obligation to examine the complaint. Automec (n 44), paras 94, 97. See also Case T-575/93 Koelman v Commission [1996] ECR II-1, para 79; T-AEPI (n 46), paras 44–45.

54  See Chapter 5, section 5.

55  In the same vein see C Cseres and J Mendes, ‘Consumers’ Access to EU Competition Law Procedures: Outer and Inner Limits’ (2014) 51 CMLRev 483, 500–501.

56  Automec (n 44), para 86.

57  Case T-37/92 BEUC and NCC v Commission [1994] ECR II-285.

58  M Goyens, ‘A Key Ruling from the ECJ’ (1994) 4 CPR 221.

59  See BEUC v Commission (n 57), paras 10–11 for the Commission’s reasoning.

60  BEUC v Commission (n 57), paras 43–61. For a recent decision of the GC annulling the Commission’s decision for lack of proper factual and legal analysis see T-427/08 CEAHR v Commission [2011] 4 CMLR 14, paras 49, 176. Following this decision the Commission decided to open formal proceedings, which were subsequently closed. See ‘Case AT.39097—Watch Repair: Decision Rejecting a Complaint Pursuant to Article 7(2) of Regulation 773/2004’ <http://ec.europa.eu/competition/antitrust/cases/dec_docs/39097/39097_3089_3.pdf> accessed 31 October 2014.

61  See section 3.1.1 of this chapter.

62  Regulation 1/2003 (n 35), recitals 8, 15, 18, Article 3, and Article 11. On soft convergence under the auspices of the ECN see R Whish and D Bailey, Competition Law (7th edn, OUP 2012) 288–289.

63  Commission (EC), ‘Notice on Cooperation within the Network of Competition Authorities’ [2004] OJ C101/43.

64  See Chapter 7, section 4.

65  Regulation 1/2003 (n 35), Article 17. See, for example, the complaints about electricity price increases that resulted in the energy sector inquiry. P Chauve and M Godfried, ‘Modelling Competitive Electricity Markets: Are Consumers Paying for Lack of Competition?’ [2007] CPN 18. Commission (EC), ‘Report on Competition Policy 2004’ (vol II) <http://ec.europa.eu/competition/publications/annual_report/2004/2004_volume2_en.pdf> accessed 3 November 2014, 167.

66  Notice on complaints (n 23), para 4. See Charter of Fundamental Rights (n 49), Article 41; Ombudsman (EC), ‘The European Code of Good Administrative Behaviour’ (2005) <http://www.ombudsman.europa.eu/en/resources/code.faces;jsessionid=5DCFB7F16FD3276EF3BFC692DD747792> accessed 3 November 2014.

67  See P Marsden and P Whelan, ‘When Markets are Failing’ (2007) 6(2) CLI 6 for a concise account of the differences between the two regimes. It should be noted, though, that sector inquiries can be broader in scope, as they are not restricted to a particular market. In this regard, sector inquiries resemble UK market studies. See G Niels, H Jenkins, and J Casanova, ‘The UK Market Investigations Regime: Taking Stock after 5 Years’ (2008) 7 Comp Law 346, 347 on sector inquiries as an ‘information gathering exercise’.

68  Commission (EC), ‘Citizens’ Summary—EU Competition Inquiry into the Pharmaceutical Sector’ <http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/citizens_summary.pdf> accessed 3 November 2014. A Rosen, ‘Sector Inquiries under the Microscope’ (2005) 4(14) CLI 9; M Holmes and A Jones, ‘Investigating the Business Insurance Industry’ (2005) 4(16) CLI 12. See also MasterCard, EuroCommerce and Commercial Cards (Case COMP/34.579, 36.518, and 38.580) Commission Decision of 17 December 2007 [2009] OJ C264/8. On this case, following the retail banking sector inquiry, see L Repa and others, ‘Commission Prohibits MasterCard’s Multilateral Interchange Fees for Cross-border Card Payments in the EEA’ [2008] CPN 1; Commission (EC), ‘Competition: Commission Sector Inquiry Finds Major Competition Barriers in Retail Banking’ (IP/07/114) (31.01.2007). The Commission decision was challenged before the European Courts. See Case T-111/08 MasterCard, Inc. and others v Commission [2012] 5 CMLR 5; on appeal, Case C-382/12 P MasterCard Inc and others v Commission [2014] 5 CMLR 23. On cases following the energy sector inquiry see N Dunne, ‘Commitment Decisions in EU Competition Law’ (2014) 10 JCLE 399, 408.

69  M Monti, ‘Increasing Competition in Leased Lines—The Benefits for European Businesses and Consumers’ (Brussels, 22 September 2000, Speech /00/333); D Wood and N Bavarez, ‘Sector Inquiries’ (2005) 4(2) CLI 3, 4.

70  Commission (EC), ‘Staff Working Document Accompanying the Communication from the Commission Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on Business Insurance’ (Final Report) SEC(2007) 1231, para 5.4; DG Competition, ‘On the Initial Findings of the Sector Inquiry into Mobile Roaming Charges’ (Working Document) (13 December 2000) <http://ec.europa.eu/competition/sectors/telecommunications/archive/inquiries/roaming/working_document_on_initial_results.pdf> accessed 3 November 2014, para 6.6 on improving consumer awareness.

71  For example, the Commission, in its Reports on Sector Inquiries, often refers to the disclosure of information (identified as a widely used remedy in consumer law) as a proposed course of action for businesses. See, for example, Commission (EC), ‘Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on Business Insurance’ (Final Report) COM(2007) 556 final, para 22. Commission (EC), ‘Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on Retail Banking’ (Final Report) COM(2007) 33 final (Retail Banking Report), para 33. Commission (EC), ‘Staff Working Document Accompanying the Communication from the Commission Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on Retail Banking’ (Final Report) SEC(2007) 106 (Retail Banking SWD) 14 (on price transparency), 15 (on information asymmetries and high switching costs).

72  Retail Banking Report (n 71), para 4.

73  Commission (EC), ‘Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty’ (White Paper) COM(99) 101 final, para 115; Commission (EC), ‘A Pro-active Competition Policy for a Competitive Europe’ COM(2004) 293 final, para 4.1. Sector inquiries were available under Article 12 of Regulation 17/1962 as well.

74  See Commission (EU), ‘Staff Working Document: Ten Years of Antitrust Enforcement under Regulation 1/2003’ COM(2014) 453, para 209. Commission (EU), ‘Commission Launches E-commerce Sector Inquiry’ (6 May 2015) (Press Release, IP/15/4921).

75  See also Commission (EC), ‘Report on the Functioning of Regulation 1/2003’ (Communication) COM(2009) 206 final (Report on Regulation 1/2003), para 11. The observation on the rarity of the sector inquiry instrument seems outdated. C Kerse and N Khan, EC Antitrust Procedure (5th edn, Sweet and Maxwell 2005), para 1.038.

76  Dealing with problem markets possesses an important legitimizing function. In problem markets, it is not clear whether a competition law problem exists. See F Ilzkoviitz and A Dierx, ‘Problem Markets: The EU Experience’ (Presentation at the CCP 10th Annual Conference) (12–13 June 2014) <http://competitionpolicy.ac.uk/documents/107435/6361808/Ilzkovitz+%26+Dierx+Presentation+2014/37775596-5939-45fd-b7ae-b1dfea77566b> accessed 28 November 2014.

77  For a criticism on this practice see N Dunne, ‘Between Competition Law and Regulation: Hybridized Approaches to Market Control’ (2014) 2 JAE 225, 245–248.

78  Report on Regulation 1/2003 (n 75), para 8. This is in line with the most common factors for case selection in relation to market studies according to an ICN report. See ICN, ‘Market Studies Project Report’ (Prepared by the ICN Advocacy Working Group) (June 2009), para 1.21.

79  Commission (EC), ‘Executive Summary of the Pharmaceutical Sector Inquiry Report’ (July 2009) <http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/communication_en.pdf> accessed 3 November 2014 (Pharma Report) 2, 7–8.

80  Marsden and Whelan (n 67) 8.

81  See Pharma Report (n 79) 6; Retail Banking SWD (n 71) 9.

82  The UK markets regime has been amended by the Enterprise and Regulatory Reform Act 2013 (ERRA 2013). ERRA 2013 introduced a significant institutional change as it merged the two UK competition authorities (OFT and CC) into a unitary authority (CMA). Reference will be made to the CMA where possible, except, for example, in instances where previous case law, practices, and policy documents are discussed. In relation to the markets regime, ERRA 2013 amended the EA 2002 and any references to sections of the EA 2002 are as amended by ERRA 2013. The main changes concern the cross-market investigations and the reductions in time limits for market investigations. The main guidance on the UK market regime comprises OFT, ‘Market Investigation References: Guidance about the Making of References under Part 4 of the Enterprise Act’ (OFT 511) (March 2006); OFT, ‘Market Studies: Guidance on the OFT Approach’ (OFT 519) (2010); CMA, ‘Market Studies and Market Investigations: Supplemental Guidance on the CMA’s Approach’ (January 2014) (CMA3); CC, ‘Guidelines for Market Investigations: Their Role, Procedures, Assessment and Remedies’ (April 2013) (CC3 revised). On the UK market investigation potential to tackle wider market problems see J Pickering, ‘UK Market Investigations: An Economic Perspective’ (2006) 5 Comp Law 206, 207–210; H Cartlidge and N Root, ‘The UK Market Investigations Regime: A Review’ (2009) 8 Comp Law 312, 315–316. On the potential of the UK market investigation regime to tackle tacit collusion problems see OFT 511, para 2.5. On the inadequacy of sector inquiries in tackling this problem see B Sufrin and M Furse, ‘Market Investigations’ (2002) 1 Comp Law 244, 245.

83  P Evans, ‘Making Competition Real: EU Super-Complaints’ (2005) 15 CPR 187.

84  O Dayagi Epstein, ‘Representation of Consumer Interest by Consumer Associations— Salvation for the Masses?’ (2007) 3 Comp L Rev 209, 237. A Murray, ‘Consumers and EU Competition Policy’ (Centre for European Reform, September 2005) <http://www.cer.org.uk/sites/default/files/publications/attachments/pdf/2011/policybrief_consumers-839.pdf> accessed 3 November 2014, 4.

85  Hutchings and Whelan (n 25) 191 with further reference to Evans (n 83).

86  As Fingleton concedes, ‘The super complaints process has given greater impetus to the [consumer] group, often underrepresented in the policy debate’: J Fingleton, ‘Market Studies: Finding and Fixing Problem Markets’ (OFT Market Studies Conference, 4 June 2008).

87  BIS, ‘A Competition Regime for Growth: A Consultation on Options for Reform’ (March 2011) (BIS Consultation); BIS, ‘Growth, Competition and the Competition Regime’ (March 2012) (Government Response to Consultation). For a discussion of the Government’s proposal see J Aitken and A Jones, ‘Reforming a World Class Competition Regime: The Government’s Proposal for the Creation of a Single Competition and Markets Authority’ (2011) 10 Comp Law 97; J Lever, ‘Fusion of the OFT and the CC: Ask for the Evidence’ (2011) 10 Comp Law 126; S Wilks, ‘Institutional Reform and the Enforcement of Competition Policy in the UK’ (April 2011) 7 Euro CJ 1. On the changes introduced see CMA3 (n 82).

88  See EA 2002, Section 11(9)(a) and Section 131(2) on the content of this notion.

89  EA 2002, Section 11(1). See OFT, ‘Super-Complaints: Guidance for Designated Consumer Bodies’ (July 2003) (OFT 514) (OFT Super-Complaints Guidance). EA 2002, Section 205; The Enterprise Act 2002 (Super-complaints to Regulators) Order 2003 (SI 2003/1368); OFT Super-Complaints Guidance, paras 3.1–3.4; OFT, ‘Terms of Reference of the Concurrency Working Party’ (OFT 548) (November 2003); CMA, ‘Regulated Industries: Guidance on a Concurrent Application of Competition Law to Regulated Industries’ (March 2014) (CMA10), paras 4.22 and 4.23.

90  BIS Consultation (n 87), paras 3.14–3.16.

91  M Ioannidou, ‘Reforming UK Competition Law Regime: The Consumer Perspective’ (2012) 11 Comp Law 28, 34–35.

92  Government Response to Consultation (n 87), paras 4.8–4.9. The Federation of Small Businesses has been designated as super-complainant to the Financial Conduct Authority (FCA) under s 234C as inserted by s 40 of the Financial Services Act 2012. See ‘Financial Services Super-complainants Confirmed by Government’ (19 December 2013) <https://www.gov. uk/government/news/financial-services-super-complainants-confirmed-by-government> accessed 4 November 2014; HM Treasury, ‘Guidance for Bodies Seeking Designation as Super-complainants to the Financial Conduct Authority’ (March 2013).

93  EA 2002, Section 11(2).

94  OFT Super-Complaints Guidance (n 89), para 2.25. Market studies undertaken under s 5 of the EA 2002 bear many similarities to Commission sector inquiries. They are not limited to markets in the economic sense. In the course of market studies, the CMA can examine practices across a range of goods and services that are causing adverse effects on competition and that originate either with business and consumer behaviour or government regulation and public policy, with a view to formulating proposals in order to improve the functioning of the markets. See OFT 519 (n 82), paras 2.2–2.3, 2.8. Market investigations are detailed investigations into the possible adverse effects of competition in the relevant markets. Market investigations confer on the CMA significant remedial powers, since they can influence, or even change, the structure of the market (eg divestiture). CC3 (revised) (n 82). On the impact of market investigations and consumer law remedies see C Ahlborn and D Piccinin, ‘Between Scylla and Charybdis: Market Investigations and the Consumer Interest’ in B Rodger (ed), Ten Years of UK Competition Law Reform (Dundee University Press 2010) 169, 181–183, 193–195.

95  Materials on these super-complaints and the OFT handling of them can be found at <http://webarchive.nationalarchives.gov.uk/20140402142426/http://www.oft.gov.uk/OFTwork/markets-work/super-complaints/> accessed 4 November 2014. On 21 April 2015, Which? made a super-complaint to the CMA about ‘grocery retailing in the UK’. See <https://www.gov.uk/cma-cases/groceries-pricing-super-complaint> accessed 11 May 2015.

96  C Glover and R Owen-Howes, ‘The Consumer Face of the OFT: How Does Consumer Protection Fit in with Competition Law?’ (2009) 8(6) CLI 3, 5. OFT, ‘Market Studies: Guidance on the OFT Approach’ (OFT 519) (2010), paras 3.1–3.7.

97  BIS Consultation (n 87), para 3.5.

98  Ibid. The BIS Consultation mentions 11 market investigation references. Following its publication, the OFT made five more market investigation references to the CC; these concerned the markets for aggregates, cement and ready-mix concrete in Great Britain; the market for statutory audit services to large companies in the UK; the private healthcare market; the private motor insurance market; and the payday lending market. On 6 November 2014, the CMA announced its decision to undertake a market investigation into the PCA and banking services for SMEs sectors. In addition, OFGEM made a market investigation reference to the CMA in relation to the energy market. See the list on the OFT’s site, <http://webarchive.nationalarchives.gov.uk/20140402142426/http://www.oft.gov.uk/OFTwork/markets-work/references/> accessed 4 November 2014. For the more recent cases see <https://www.gov.uk/cma-cases?keywords=&case_type[]=markets&opened_date[from]=&opened_date[to]=> accessed 3 November 2014.

99  See n 98.

100  OFT 511 (n 82), para 2.2. However, see Marsden and Whelan (n 67) 7 who point to the argument that this can be attributed to the tight response deadline and the threat of judicial review of the OFT’s decision not to make a market investigation reference. See The Association of Convenience Stores v OFT [2005] CAT 36 for a challenge to the OFT’s decision not to make a market investigation reference.

101  In fact, this is only possible in the UK and Israel. See BIS Consultation (n 87), para 3.4.

102  On the adopted proposals see Government Response to Consultation (n 87) 27–39; ERRA 2013, ss 33–38.

103  See the proposal made by Evans (n 83) 189. For a similar proposal see Murray (n 84) 4.

104  See Chapter 7, section 4.

105  The UK designation criteria may be informative in that regard. See BERR, ‘Super-Complaints: Guidance for Bodies Seeking Designation as Super-Complainants’ (March 2009); HM Treasury, ‘Guidance for Bodies Seeking Designation as Super-complainants to the Financial Conduct Authority’ (March 2013).

106  See Chapter 5, section 6.1.

107  Regulation 1/2003 (n 35), Article 27(3); Regulation 773/2004 (n 35), recital 11 and Article 13(1). See also Article 11(c) of Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing Council Regulation (EC) No 139/2004 on the Control of Concentrations between Undertakings [2004] OJ L133/1 on consumer organizations’ right to be heard in merger control.

108  Commission (EU), ‘Notice on Best Practices for the Conduct of Proceedings Concerning Articles 101 and 102 TFEU’ [2011] OJ C308/6, para 105.

109  See, for example, consumer organizations’ intervention in Intel (Case COMP/C-3/37.990) Commission Decision of 13 May 2009 (provisional non-confidential version) <http://ec.europa.eu/competition/antitrust/cases/dec_docs/37990/37990_3581_11.pdf> accessed 6 November 2014, paras 27, 1611.

110  Regulation 773/2004 (n 35) recital 11. See also Commission (EU), ‘Decision of the President of the European Commission on the Function and Terms of Reference of the Hearing Officer in Certain Competition Proceedings’ [2011] OJ L275/29, recital 12 and Article 5(2).

111  CJEU Statute [2008] OJ C115/210, Article 40(2) and 53(1). See, for example, Joined Cases 228 and 229/82 Ford of Europe Incorporated and Ford Werke AG v Commission [1984] ECR 1129; T-9/92 Automobiles Peugeot SA and Peugeot SA v Commission [1993] ECR II-493; Cases 41/73 R and others, Suiker Unie v Commission [1973] ECR 1465 (intervention by Italian consumer organization); also T-336/07 Telefónica and Telefónica de España v Commission [2007] OJ C269/55 in which the GC granted Ausbanc Consumo permission to intervene.

112  In that regard see also Burgess v OFT [2005] CAT 25, paras 84, 286–290, 344, in which Which? was granted permission to intervene, causing the CAT to pay increased attention to the consumer choice element. This point raised by Epstein, (n 84) 218.

113  Cf A Asher, ‘Enhancing the Standing of Competition Authorities with Consumers’ (ICN Conference Korea, 15 April 2004) <http://www.internationalcompetitionnetwork.org/uploads/library/doc509.pdf> accessed 6 November 2014, 4.

114  See A Ezrachi and M Ioannidou, ‘Access to Justice in European Competition Law—Public Enforcement as a Supplementary Channel for “Corrective Compensation” ’ (2011) 19 Asia Pac L Rev 195; and A Ezrachi and M Ioannidou, ‘Public Compensation as a Complementary Mechanism to Damages Actions: From Policy Justification to Formal Implementation’ (2012) 6 JECLAP 536. This section builds on the analysis undertaken therein. Note that the term ‘compensation’ is used here in the wider sense of bringing benefits to the affected parties, either in the form of compensating their damage (actual compensation) or in the form of ancillary benefits.

115  Andreas Schwab, the EP Rapporteur for the Directive on Damages Actions has commented that ‘a regulatory redress option appears to be a successful mechanism to ensure a fast and cost-efficient compensation tool’. See A Schwab, ‘Finding the Right Balance—the Deliberations of the European Parliament on the Draft Legislation Regarding Damage Claims’ (2014) 5 JECLAP 65, 67.

116  General Motors Continental (Case No IV/28.851) Commission Decision 75/75/EEC [1975] OJ L29/14, paras 8–11.

117  Ibid, para 18.

118  Pre-Insulated Pipe Cartel (Case No IV/35.691/E-4) Commission Decision 1999/60/EC [1999] OJ L24/1, paras 127, 172. The total amount of the fine imposed on ABB was ECU 70 million and the respective fine reduction was ECU 5 million.

119  Ibid, para 127. ABB has supplied the Commission with a copy of the respective agreement.

120  Case T-59/02 Archer Daniels Midland Co v Commission [2006] ECR II-3627, paras 354–355.

121  Commission (EU), ‘Antitrust: Commission Accepts Legally Binding Commitments from Deutsche Bahn Concerning Pricing of Traction Current in Germany’ (Press Release, 18 December 2013); Commission Decision of 18 December 2013 (Case COMP/AT.39678/Deutsche Bahn I; Case COMP/AT.39731/Deutsche Bahn II) (non-confidential version) <http://ec.europa.eu/competition/antitrust/cases/dec_docs/39678/39678_2514_15.pdf> accessed 27 October 2014. See also T Steinvorth, ‘Deutsche Bahn: Commitments End Margin Squeeze Investigation’ (2014) 5 JECLAP 628.

122  Reference to this case in PR Beaumont and S Weatherill, EU Law (3rd edn, Penguin 1999) 909–910. See also Seventeenth Report on Competition Policy (n 28), para 81.

123  No official decision was issued on this case. See Commission (EC), XXIIIrd Report on Competition Policy 1993 (1994), para 228. See P Evans, ‘Consumer Interest and Supercomplaints’ (Consumers’ Association Presentation) <http://www.incsoc.net/conf-2ppt5.ppt> accessed 6 November 2014; see also R Mulheron, ‘Cy-pres Damages Distribution in England: A New Era for Consumer Redress’ (2009) 20 EBLR 307, 320–21 pointing to the lack of information regarding this case; G Howells and R James, ‘Litigation in the Consumer Interest’ (2003) 9 ILSA J Int’l & Comp L 1, 40; and Nicholson Lord, ‘Rover “Pays” 1m Pounds Compensation’ (The Independent, 17 November 1993).

124  XXIIIrd Report (n 123).

125  See Commission (EC), XXXIIIrd Report on Competition Policy 2003, SEC(2004) 658 final, 197–200; On this case see MA Pena Castellot, ‘Commission Settles Allegations of Abuse and Clears Patent Pools in the CD Market’ [2003] 3 CPN 56–59.

126  OFT Decision No CA98/05/2006 (UK Independent Schools), paras 1–2, 6.

127  Ibid, para 36.

128  J Lawrence and M Sansom, ‘The Increasing Use of Administrative Settlement Procedures in UK and EC Competition Investigations’ (2007) 6 Comp Law 163, 168.

129  See the Netherlands Competition Authority ‘NMa herziet boetes banken en Interpay’ (Press Release, 22 December 2005) <http://www.nma.nl/documenten_en_publicaties/archiefpagina_nieuwsberichten/nieuwsberichten/archief/2005/05_46_interpay.aspx> accessed 6 November 2014 (in Dutch). See also J Bourgeois and S Strievi, ‘EU Competition Remedies in Consumer Cases: Thinking Out of the Shopping Bag’ (2010) 33 W Comp 241, 250. See also P Kalbfleisch, ‘The Dutch Experience with Plea Bargaining/Direct Settlements’ in CD Ehlermann and M Marquis (eds), European Competition Law Annual 2007 (Hart 2008) 481, 483–484; P Bos, ‘International Scrutiny for Payment Card Systems’ (2006) 73 Antitrust LJ 739, 756–761; M Spoek, ‘The Dutch Competition Authority Considers Cooperation and Joint Selling of Network Services for Pin-Transactions To Be an Infringement of the Cartel Prohibiton (Interpay)’ (e-Competitions) <http://www.concurrences.com/article.php3?id_article=35979&lang=fr> accessed 6 November 2014.

130  See O Brouwer, ‘Antitrust Settlements in the Netherlands: A Useful Source of Inspiration’ in Ehlermann and Marquis (n 129) 489, 492–493.

131  There are references to these two cases in C Canenbley and T Steinvorth, ‘Effective Enforcement of Competition Law: Is There a Solution to the Conflict between Leniency Programmes and Private Damages Actions?’ (2011) 2 J Eur CL & P 315, 325. See Bundeskartellamt, ‘Preismissbrauchsverfahren gegen Gasversorger weitgehend abgeschlossen’ (Press Release, 1.12.2008) on the first case. See Stadtwerke Uelzen BGH, Decision of 10 December 2008—KVR 2/08—OLG Celle, on the second case.

132  Bundeskartellamt, ‘Successful Conclusion of Abuse Proceedings Against Electric Heating Providers’ (29 September 2010) (Press Release) <http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2010/29_09_2010_Heizstrom.html;jsessionid=D5DECDEABC4D4B88530073EB51D637A7.1_cid362?nn=3591568> accessed 23 December 2014.

133  Bundeskartellamt, ‘Bundeskartellamt Issues Ruling on Abusive Practices against Entega’ (20 March 2012) (Press Release) <http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2012/20_03_2012_Entega.html> accessed 23 December 2014. See also U Scholz and S Purps, ‘The Application of EU Competition Law in the Energy Sector’ (2013) 4 JECLAP 63, 70.

134  See R Cichowski, The European Court and Civil Society (CUP 2007) 5 on the term ‘institutionalization’, in which she states that ‘institutionalisation can be measured in terms of whether the current EU institutions (rules and procedures) governing the legal domain become more binding, precise and enforceable and whether they expand in scope’.

135  Since Guidelines limit the Commission’s discretion and may produce legal effects. See Joined Cases C-189/02 P, C-202/02 P, C-205-208/02 P, and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, 211.

136  See Macrory Report (n 4) 10, 33. Macrory asks regulators to enforce in a transparent manner and be transparent in the way they determine administrative penalties.

137  For a succinct discussion on corrective and distributive justice see I Lianos, ‘Competition Law Remedies in Europe: Which Limits for Remedial Discretion?’ (January 2013) CLES Research Paper Series 2/2013 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2235817> accessed 6 November 2014, 26–33. See also S Perry, ‘On the Relationship Between Corrective and Distributive Justice’ in J Horder (ed), Oxford Essays in Jurisprudence (OUP 2000) 237. On the notions of corrective justice and correlativity as central premises in private law relations see E Weinrib, Corrective Justice (OUP 2012); E Weinrib, The Idea of Private Law (OUP 2012).

138  Ezrachi and Ioannidou (n 114). See also Canenbley and Steinvorth (n 131) 324–326 for a similar proposal; however, as a mechanism to avoid conflicts between private enforcement and leniency programmes and as an alternative (not a supplement) to private enforcement.

139  ‘Public compensation’ presents characteristics of both sanctions and remedies. The OECD distinguishes between remedies and sanctions in that ‘[r]‌emedies cure, correct, or prevent, whereas sanctions penalise or punish. Typically, remedies aim to stop a violator’s unlawful conduct, its anticompetitive effects, and their recurrence, as well as to restore competition. Sanctions are usually meant to deter unlawful conduct in the future, to compensate victims, and to force violators to disgorge their illegal gains’: OECD, ‘Remedies and Sanctions in Abuse of Dominance Cases’ (2006) (DAF/COMP (2006)19) 18. Arguably though the objectives of remedies and sanctions intersect.

140  As happened in Case T-395/94 Atlantic Container Line AB v Commission [2002] ECR II-875, para 140. On the limited judicial review of commitment decisions see F Wagner von-Papp, ‘Best and Even Better Practices in Commitment Procedures after Alrosa: The Dangers of Abandoning the “Struggle for Competition Law” ’ (2012) 49 CMLRev 929. See Case C-441/07 P Commission v Alrosa [2010] ECR I-5949.

141  Fine Guidelines (n 3), para 31.

142  See Regulation 1/2003 (n 35), Article 23(2) and (3) on calculating the amount of fines. See Fine Guidelines (n 3), paras 32–33 on the maximum legal levels of fines.

143  Commission Regulation (EC) No 622/2008 of 30 June 2008 amending Regulation (EC) No 773/2004; as regards the conduct of settlement procedures in cartel cases, [2008] L171/3, recital 4; Commission (EC), ‘Notice on the Conduct of Settlement Procedures in View of the Adoption of Decisions Pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in Cartel Cases’ [2008] 167/1. As at December 2014 the Commission had reached 17 settlements, more recently in Swiss Franc interest rate derivatives and in paper envelopes. See Commission (EU), ‘Commission Settles Cartel on Bid-Ask Spreads Charged on Swiss Franc Interest Rate Derivatives’ (IP/14/1190) (Press Release, 21 October 2014); Commission (EU), ‘Commission Fines Five Envelope Producers over €19.4 million in Cartel Settlement’ (IP/14/2583) (Press Release, 11 December 2014).

144  Mitigating factors are described in the Fine Guidelines (n 3), para 29. Temple Lang also proposed a similar inclusion in the Commission’s Leniency Notice. See J Temple Lang, ‘European Community Competition Policy: How Far Does it Benefit Consumers?’ (2004) 18 Boletin Latinoamericano de Competencia 128, 133. See J Lever, ‘Whether, and if so How, the EC Commission’s 2006 Guidelines on Setting Fines for Infringements of Articles 81 and 82 of the EC Treaty are Fairly Subject to Serious Criticism’ (Opinion) <http://www.bdi.eu/download_content/Publikation_BDI_Gutachten__Opinion__zu_EU_Bussgeldleitlinien.pdf> accessed 6 November 2014 for a proposal for a two-step approach on the imposition of fines, the first concerning the finding of liability and the second the imposition of fines and compensation offered by the undertaking. This has already been adopted in the Netherlands and Spain. See NMa Fining Code 2007, para 49 (in Dutch); Spanish Competition Act 15/2007 of 3 July, Article 64(3)(c). In a similar vein in the UK, see Macrory Report (n 4) 49.

145  Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on Certain Rules Governing Actions for Damages under National Law for Infringements of the Competition Law Provisions of the Member States and of the European Union [2014] OJ L 349/1, recital 5.

146  See n 20.

147  See Bourgeois and Strievi (n 129) 246–248.

148  See Chapter 5, section 6.3.

149  See the analysis in Chapter 5.