Concept and Foundations of the Network of Competition Authorities
The Network of Competition Authorities (in English: European Competition Network, ECN) is a cooperation system initiated by the European Union, which enables the exchange of information, coordination, and effective enforcement of European and national competition law among the competition authorities of the Member States and the European Commission. It forms the institutional framework that ensures the efficient application of the competition rules of the Treaty on the Functioning of the European Union (TFEU) and facilitates the EU-wide combating of anti-competitive behavior.
Legal Basis
Primary and Secondary Legal Sources
The Network of Competition Authorities is based on several legal sources. The central ones are:
- Articles 101 and 102 TFEU: They form the core of European competition law, prohibiting anti-competitive agreements and the abuse of dominant market positions.
- Regulation (EC) No 1/2003 (so-called Modernisation Regulation): This regulation governs cooperation between national competition authorities (NCAs) and the European Commission and establishes the formal foundation for the network.
Other relevant legal bases include Implementing Regulation (EU) No 2015/1348 and the Commission Notice on Cooperation within the European Competition Network.
Development of the Network
The network emerged as part of reforms to European competition law, in particular through the Modernisation Regulation, which came into force on 1 May 2004, ending the system of centralized notification to the Commission and putting greater emphasis on the decentralized enforcement of competition law.
Structure and Organization of the Network of Competition Authorities
Members
The network comprises the European Commission (in particular the Directorate-General for Competition, DG COMP) as well as the national competition authorities of the Member States of the European Union. Each national authority has comprehensive powers within its country of origin to enforce EU and national competition law.
Cooperation Mechanisms
The network is based on horizontal and vertical cooperation. Central mechanisms include:
- Exchange of Information: The authorities inform each other at an early stage about new proceedings and planned measures.
- Jurisdiction Rules: In principle, the authority best placed to take effective action is responsible for the procedure (principle of the ‘best-placed authority’).
- Coordination of Investigations: In cross-border cases, coordinated enforcement by multiple authorities may take place.
- Possibility to Comment and Take Action in Proceedings of Other Authorities: Member authorities may submit comments in proceedings of other authorities or take action themselves if the public interest so requires.
Tasks and Powers within the Network
Cartel Enforcement
The main task of the network is to effectively prosecute infringements of Articles 101 and 102 TFEU. This particularly includes:
- The investigation and sanctioning of price-fixing, market-sharing agreements, and other anti-competitive practices
- The identification and prosecution of abusive conduct by dominant companies
Enforcement of Union Rules
The members are jointly obliged to ensure the uniform application and interpretation of European competition law. Parallel proceedings should be avoided and coherence between European and national decisions should be ensured.
Investigation and Sanctioning Powers
The authorities in the network have, based on the Modernisation Regulation and national provisions, wide-ranging investigation powers, including:
- Conducting inspections (so-called dawn raids)
- Questioning companies, witnesses, and experts
- Ordering the submission of relevant documents
- Imposing fines and other sanctions
Procedures and Enforcement within the Network
Course of Proceedings
Initiation of Investigations and Determination of Jurisdiction
The initiation of proceedings often takes place at the national level or with the European Commission. The investigation is announced within the network (‘case allocation’), and it is agreed which authority will handle the matter.
Information Obligations and Protection of Party Rights
A special feature is the obligation to inform affected authorities about proceedings and intended measures. In the proceedings, companies and third parties are guaranteed procedural safeguards such as the right to be heard and access to the file. The protection of business and trade secrets must be equally ensured by the authorities.
Coordination and Parallel Investigations
When several authorities conduct parallel investigations, close cooperation is maintained to avoid contradictory decisions. The Commission directs and supervises this coordination with the aim of ensuring consistent interpretation and application of competition law.
Legal Remedies and Judicial Review
Sanctions and measures can be reviewed by the courts of the Member States or – for acts of the Commission – by the Court of the European Union. As a result, decisions within the network are subject to dual judicial review: both at the national and European level.
Significance and Assessment of the Network of Competition Authorities
Significance for Competition Supervision in the European Union
The Network of Competition Authorities is essential for effective, decentralized, and coherent enforcement of competition law in the internal market. It encourages national enforcement practices to align with EU legal requirements and thus contributes to ensuring a level playing field in all Member States.
Challenges and Prospects for Development
Challenges arise from the differing resourcing and legal frameworks among the Member States. Differences in enforcement intensity, resources, and investigative powers can lead to inconsistencies. The further development and harmonisation of the legal foundations therefore remain a central goal for the future of the network.
Literature and Additional Legal Sources
- Council Regulation (EC) No 1/2003 of 16 December 2002
- TFEU, in particular Articles 101 and 102
- Notices of the European Commission on cooperation within the ECN
- European Commission, Directorate-General for Competition: Guidelines and working documents
The Network of Competition Authorities represents the backbone of decentralized European competition law enforcement and significantly shapes the effectiveness of the European competition system. Its further development is therefore of central importance for the consistent enforcement of competition law.
Frequently Asked Questions
How does cooperation between Member States in the Network of Competition Authorities take place legally?
Cooperation between the Member States in the Network of Competition Authorities (European Competition Network, ECN) is governed primarily by Council Regulation (EC) No 1/2003 of 16 December 2002. This regulation provides that the European Commission as well as the national competition authorities of the EU Member States coordinate their investigative and enforcement powers in order to ensure the uniform application of Articles 101 and 102 TFEU. Cooperation includes, among other things, the exchange of information, coordination in selecting the authority responsible for a particular investigation, as well as the mutual transmission of essential procedural steps (e.g. statements of objections or decisions on proceedings). The regulation also provides explicit mechanisms for assistance, such as mutual legal assistance in searches and investigations. National data protection laws and European requirements, such as the GDPR, must, however, be observed when exchanging information.
What legal obligations exist for national authorities in the context of information exchange?
National competition authorities are obliged under Regulation (EC) No 1/2003 to provide each other and the European Commission with all information necessary for the application of competition rules, provided this seems necessary for the performance of their tasks. Pursuant to Article 12 of the regulation, the exchange may take place both spontaneously and on request. Authorities must maintain the confidentiality of information, especially when it concerns company or trade secrets or personal data. The legally restricted use of the shared information is strictly limited to competition proceedings, meaning that information obtained in a national investigation may not be used for other purposes or in civil damages proceedings without further authorisation.
To what extent are there legal limits on mutual assistance within the Network of Competition Authorities?
Mutual assistance is one of the central pillars of the ECN. It includes measures such as searches, securing evidence, and hearing witnesses. However, there are explicit legal limits. Under Article 22 of Regulation (EC) No 1/2003, a national authority may exercise investigative powers on behalf of another authority, but only within the limits of its own legal competences and while respecting fundamental procedural rights (such as the right to be heard and protection against self-incrimination). Furthermore, a requested authority may refuse to execute the measure if it would affect fundamental national interests, such as public order or national security.
How is the uniform application of competition law ensured legally?
The secure guarantee of uniform application of European competition law is provided through coordinated action within the framework of the ECN. Legal bases such as Articles 11 and 16 of Regulation (EC) No 1/2003 oblige both the European Commission and the national authorities to inform each other of key investigative and procedural steps and to respect decisions at the European level. For example, where the Commission has issued a decision, national courts and authorities are bound by it and may not adopt conflicting decisions. The authority that is first seised of a case can generally proceed with the procedure (the so-called ‘one-stop-shop’ principle), to avoid parallel investigations.
Are the decisions and measures of the network subject to judicial review?
All decisions and measures of the competition authorities within the network are subject to comprehensive judicial review. Both acts of the European Commission and those of national authorities can be challenged before the respective competent courts. For Commission decisions, these are the General Court and the European Court of Justice. National authorities are subject to review by the relevant national courts. Fundamental procedural rights, such as the right to an effective defence and to a fair trial, must be fully guaranteed. The network itself does not make legally binding decisions, but serves as a means of coordination and information exchange. Nevertheless, reciprocal measures may be subject to judicial review, for example regarding the legality of information exchange or the exercise of investigative powers.
What legal requirements apply to the transmission of sensitive company data within the network?
The transfer of sensitive company data within the Network of Competition Authorities is subject to a number of legal requirements. According to Article 12 of Regulation (EC) No 1/2003, the exchange of evidence and sensitive data is permitted only to the extent necessary for the application of European and national competition provisions. The receiving authority is strictly bound by the purpose limitation and confidentiality requirements, especially with regard to trade secrets and personal data. Violations of these obligations may have both national and European legal consequences, including the possibility of judicial review and sanctions. The protection under the GDPR must also be strictly observed.
To what extent and under what legal conditions may national authorities conduct investigations for other authorities?
National authorities are authorized, at the request of another authority, to carry out investigative measures that would also be permissible for their own investigations (Article 22 Regulation (EC) No 1/2003). However, compliance with national regulations on investigative and enforcement powers—such as regarding searches, seizures, or witness interviews—is always required. The requested authority is not obliged to carry out investigations if these would conflict with fundamental national legal principles or impair significant national interests. Legal remedies against such measures are generally governed by national law, but the overriding procedural law of the EU must be observed.
