The European Commission, the custodian of EU competition rules, needs to scale up its market oversight to better control mergers and abuses of dominant positions, especially in the digital economy, the European Court of Auditors said in a report published on Thursday 19 November.
“In the last decade, the Commission has been using its powers in merger control and antitrust proceedings effectively”, said Alex Brenninkmeijer, Member of the Court. But the Commission “now needs to scale up market oversight to be fit for a more global and digital world. It needs to get better at proactively detecting infringements and select its investigations more judiciously”, he added.
Antitrust proceedings remain lengthy (they can take up to eight years). “The slowness of proceedings may have a negative impact on the effectiveness of competition rule enforcement, particularly in the case of rapidly growing digital markets, where it is important to react promptly to avoid possible harm. The reasons for the delays are not only the Commission’s fault; the companies under investigation are also responsible”, the auditors said, who reviewed 50 cases of cartels, abuses of dominant position and proposed mergers launched between 2010 and 2017.
The auditors also found that the Commission had imposed record fines on companies, but that it had never assessed their deterrent effect. Between 2010 and 2019, the Commission imposed fines totalling EUR 28.5 billion, the report states.
The Court of Auditors also points out that the Commission has not devoted sufficient resources to market oversight.
According to the Court, the turnover thresholds taken into consideration in deciding whether an operation would distort competition in the internal market do not necessarily ensure that all significant transactions are subject to review by the Commission.
The Commission generally cooperated well with National Competition Authorities (NCAs), but it did not know very much about the NCAs’ own enforcement priorities. Furthermore, the Commission and NCAs did not closely coordinate their market oversight. An early warning mechanism has been put in place to optimise case allocation and avoid the need for many NCAs to examine the case of a company with similar practices in different markets. However, NCAs have rarely used it.
These conclusions confirm the relevance of the Commission’s proposals, expected at the beginning of December, on the new regulation for digital companies (Digital Services Act and Digital Market Act).
There will be new rules for ‘structuring platforms’ such as Facebook, Google or Amazon and to create new tools for market oversight in order to be able to intervene before a dominant position is established.
Link to the report: https://bit.ly/32Vz9fF (Original version in French by Lionel Changeur)