European Commission Work Programme 2005 – Competition Law and Criminal Law Highlights

March 17, 2005

Introduction

The European Commission publishes an annual work program setting out its priorities for the year ahead.  This note summarizes the ‘legislative’ priorities in the competition policy arena.  Unsurprisingly, after several years of major substantive and procedural changes, 2005 is marked by a series of ‘soft law’ proposals.

This note also touches on the priorities for the Commission in the criminal law arena.  The European Union is increasingly engaged in seeking to find pan-European solutions to pan-European crime such as maritime pollution and human trafficking.  Inspired by Sarbanes-Oxley, corporate governance is unlikely to be far behind. 

These developments touch many sensitive nerves.  They obviously have clear implications for national sovereignty.  They also raise the question whether the EU is headed towards criminal sanctions for antitrust violations.

Competition Law

a) Green paper on private enforcement

Drafting of Green Paper by the Commission services is due to be finished towards the end of March, and its publication is scheduled for December 2005.  Private enforcement of the EU competition rules is lagging far behind public enforcement.  The lack of a clear set of rules for claims of damages in the EU Member States means that there is presently virtually no successful private litigation for damages resulting from infringements of the EU competition rules.  The Green Paper will be used as the springboard for launching a general policy review and to consult stakeholders, a prerequisite to the launching of any formal proposal in this area. Any formal proposal would have as its main objective a higher level of compliance with the EU competition rules. 

b) Article 82 guidelines

For the moment, the Commission are still conducting an internal review of Article 82.  Only once this internal process has been completed will there be a formal decision as to whether guidelines developed internally within the Commission should become more official, i.e., produce guidance that would be published. The timing for the review has not been announced, but it is underway and it is understood that the current thinking is to publish draft guidelines for public consultation in the second half of 2005 and to adopt formal guidelines during the course of 2006.

c) Draft guidelines on setting of fines, Article 23(2) Regulation 1/2003

In June 2005, the Commission will publish draft new guidelines on the method of setting fines imposed pursuant to Article 23(2) of Regulation 1/2003.  The new guidelines will revise the methodology applicable to the calculation of fines imposed on undertakings for infringements of Articles 81 and 82.

d) Access to the file

In June 2005, the publication of a Commission notice on the rules for access to the Commission file in cases pursuant to Articles 81 and 82 of the EC Treaty is expected, following a public consultation in 2004.  The Commission will update and simplify the relevant procedural rules allowing undertakings to have access to the Commission file in antitrust and merger cases.

e) Leniency notice

A revised draft Commission notice on immunity from fines and reduction of fines in cartel cases is due in September 2005.  The intention is to update and complete the 2002 Notice in order to ensure a greater efficiency of the Commission Immunity/Leniency program.

f) Notice on concept of concentration

A public consultation will be launched by the Commission in December 2005 on a draft Commission Notice on the concept of a concentration, on the concept of undertakings concerned, of full-function joint ventures, and on calculation of turnover under Council Regulation (EC) No 139/2004.  Thereafter the Commission will revise and consolidate the existing Notices on the interpretation of the jurisdictional scope of the Merger Regulation.

Criminal Law

a) Criminal Sanctions for Intellectual Property

Criminal sanctions in the field of intellectual property: the Commission will bring forward a legislative initiative in June 2005 aimed at ensuring that in Member State all serious infringements of an intellectual property right, as well as attempts at, participation in and instigation of such infringements, are treated as a criminal offence.

b) Exchange of information on criminal convictions and mutual recognition of previous convictions: the European Criminal Record

The Commission (under instructions from the Council) is developing an electronic information exchange on previous convictions and developing a mutual recognition mechanism to take into account “foreign” convictions as a repeat offence when sentencing. The text is expected in April 2005.

c) Mutual recognition of non-custodial supervision measures – bail:

Following on from a Green Paper in 2004 on the same issue, the Commission is developing a mutual recognition instrument to allow bail conditions handed down in one Member State to be executed in another – principally the Member State of residence. This is expected in December 2005.

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Gibson, Dunn & Crutcher lawyers are available to assist clients in addressing any questions they may have regarding these issues. Please contact the Gibson Dunn attorney with whom you work, or any of the following attorneys:

Peter Alexiadis – Brussels: +32 2 554 7200; palexiadis@gibsondunn.com

David Wood – Brussels: +32 2 554 7210; dwood@gibsondunn.com

James Ashe-Taylor – Brussels/London: +44 20 7071 4221; jashetaylor@gibsondunn.com

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