Introduction

In the system of competition law enforcement, complaints play an essential role as a source of information for the Commission.[1] When receiving a complaint, the Commission has two choices: it can either initiate proceedings or reject the complaint. However, for every complaint, the Commission is obliged to examine ‘carefully the factual and legal elements brought to its attention by the complainant’.[2] The Commission has a wide discretion when deciding whether or not to reject a complaint and is in no way obliged to initiate proceedings after receiving a complaint. It can reject complaints for a number of reasons, namely: lack of legitimate interest of the complainant, lack of substantiation or foundation of the complaint, lack of connection with articles 101 and 102 TFEU, the existence of an exempt agreement, the fact that an NCA is already dealing with the case, and finally, lack of EU interest.[3] At least one of these reasons should be stated in sufficient detail when rejecting a formal complaint, in order for judicial review to be possible.

The rejection of complaints procedure involves three stages:

1. Firstly, after an initial assessment by the Commission, the complainant will be informed by the Commission of the action it proposes to take. Where it plans to reject the complaint, the Commission should set out the reasons for this intention.
2. When complainants ask for a more detailed explanation regarding the rejection, the Commission is obliged to send a formal letter pursuant to article 7(1) of Regulation 773/2004 before rejecting the complaint, after which the complainant can submit observations.
3. Lastly, if the complainant has submitted observations and insists on obtaining a formal decision, the Commission examines the additional information provided by the complainant and has to issue a rejection decision based on article 7(2) of Regulation 773/2004 if it wants to finally reject the complaint.[4]

In June 2023, during a conference celebrating 20 years of EU antitrust enforcement under Regulation 1/2003, it was stated that the Commission is considering the abolishment of the formal complaints procedure. Reasons for this were the ‘long and painful process of rejecting a complaint by a decision’ which necessitates a ‘sizable’ use of resources.[5] But is this really true and does it weigh up to the benefits of having a formal procedure?

Advantages of the formal complaints procedure

Source of information: First of all, complaints are a way in which the Commission becomes aware of possible competition law infringements. Complainants can provide insider information that could otherwise be very difficult to obtain for the Commission, thereby making competition enforcement more efficient.

Legitimacy: The formal complaints procedure ensures transparency and accountability, which enhances the legitimacy of the proceedings and ensures that it is not purely a top-down exercise.

Procedural safeguards: By having a formal complaints procedure, complainants are granted several procedural rights provided in articles 6 to 8 of Regulation 773/2004. When proceedings are initiated, they have, for example, the right to be closely associated with the proceedings, the right to be informed, the right to get access to a non-confidential version of the Statement of Objections and the right to submit observations. During a formal complaints procedure, the complainant has the right to turn to the Hearing Officer, to request access to documents on which the Commission based its provisional assessment, and the right to challenge the rejection decision before the EU courts. By removing the formal complaints procedure, thereby only leaving the possibility for informal complaints, the current procedural rights granted to these complainants disappear, and they are left to the Commission’s discretion.

Disadvantages of the formal complaints procedure

Administrative burden and delays: Due to the several stages of the formal complaints procedure, the Commission is obliged to commit resources to the examination of complaints that often get rejected in the end. This obligation can potentially delay work on other enforcement priorities.

Risk of backlog: When faced with a large number of complaints that need to be dealt with in a certain way, a backlog can be created, slowing down the overall enforcement of competition law.

Comments

The main argument put forward by the Commission to abolish the formal complaints procedure is the time- and resource consuming nature of it. In the 2024 staff working document on the evaluation of regulations 1/2003 and 773/2004, it is said that the formal rejection of complaints takes on average almost six full-time employees per year.[6] This debunks the narrative that significant time is spent dealing with complaints that are rejected in the end. When balanced against the increase in legitimacy of the system together with the creation of procedural rights for complainants, the latter should take precedence over time concerns. Procedural efficiency is only one of the considerations regarding competition law enforcement, and this aspect should not overshadow the importance of procedural safeguards. Instead of abolishing the formal complaints procedure in its entirety, the Commission could also think about introducing more stringent conditions for the filing of a complaint or better communicating its priorities to market actors, without however misusing these tools. A formal complaints procedure with a strong prioritisation policy by the Commission allows it to focus its resources on the most harmful infringements while still upholding complainants’ rights and fostering the system’s transparency and legitimacy.

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[1] Recital 5 Regulation 773/2004.

[2] Paragraph 42 Notice on the Handling of Complaints.

[3] Article 5, 9 Regulation 773/2004; Paragraph 45, 47 Notice on the Handling of Complaints; Recital 18, article 13 Regulation 1/2003.

[4] Paragraphs 139-141 Commission Notice on best practices for the conduct of proceedings concerning articles 101 and 102 TFEU.

[5] https://vimeo.com/user126290491/review/840005687/ea689de96e.

[6] Commission Staff Working Document – Evaluation of Regulations 1/2003 and 773/2004, Brussels, 5 September 2024, SWD(2024) 216 final, p. 67.

Introduction

On 20 April 2023, the Court of Justice rendered a judgement in the Amazon Buy Box case concerning parallel investigations by the Commission and the Italian competition authority.[1] The Italian authority had launched an investigation into Amazon’s “Buy Box” tool in April 2019, after which the Commission opened formal investigations into the same practice in November 2020.[2] When defining the geographical scope of its investigation, the Commission explicitly carved out Italy.[3] In this blogpost, we will take a look at the division of competences between the Commission and the national competition authorities, examine the judgements in the Amazon Buy Box case and see what this case means for parallel investigations under article 102 TFEU.

Procedural boundaries between the Commission and NCAs

Regulation 1/2003 established a system of parallel competences where both the Commission and the member states are competent to apply articles 101 and 102 TFEU. However, this principle is limited by article 11(6) of this regulation, which states that ‘the initiation by the Commission of proceedings for the adoption of a decision under Chapter III shall relieve the competition authorities of the member states of their competence to apply articles 101 and 102 of the Treaty.’ This is repeated in paragraph 51 of the Commission’s Cooperation Notice, where it can be read that the initiation of proceedings by the Commission ‘shall relieve all NCAs of their competence’.  Furthermore, paragraph 5 of this notice states that ‘under this system of parallel competences, cases will be dealt by: a single NCA, several NCAs acting in parallel, or the Commission’. The notice thus does not seem to allow an investigation which is conducted both by the Commission and by an NCA at the same time, and this situation is normally avoided by applying article 11(6) of Regulation 1/2003.

Judgment in Amazon Buy Box

When initiating proceedings against Amazon, the Commission defined the geographical scope of its investigation as covering the whole EEA, with the exception of Italy. This carve-out was justified by the Commission by reference to the ongoing investigation of the Italian competition authority which, despite covering nearly identical practices, addressed ‘partially similar concerns’ with ‘a particular focus on the Italian market’.[4] The Commission added that there would be close cooperation between the two authorities during the investigation.

Amazon appealed this opening of proceedings by the Commission in 2021 insofar as it excluded Italy from its scope. Amazon argued that this decision deprived it of the protection against parallel proceedings granted by article 11(6) of Regulation 1/2003. The General Court dismissed Amazon’s action on the basis that the opening of proceedings did not alter Amazon’s legal position as it was merely a preparatory act, rendering the action inadmissible.[5] Furthermore, it held that article 11(6) did not grant Amazon a right to have its case handled exclusively by the Commission.

On appeal, the Court of Justice confirmed the General Court’s judgment, emphasizing in paragraph 31 that ‘the protection afforded by Article 11(6) of Regulation No 1/2003 applies only in the event of parallel proceedings brought by the competition authorities of the member states and the Commission against the same undertakings in respect of the same allegedly anticompetitive conduct occurring in the same product or geographical markets and over the same period or periods.’ This was not the case here precisely because of the Commission’s carve-out of Italy from its geographical scope.

Comments on the case

When looking at the Commission’s Cooperation Notice, there does not seem to be a possibility for the Commission to simultaneously handle a case in parallel with an NCA. Moreover, it is stated that the initiation of proceedings by the Commission relieves ‘all’ NCAs of their competence. When dealing with the same behaviour, it is preferable to have a single investigation covering the whole relevant geographical scope, concluded by a single decision. This can avoid conflicting decisions and prevents an unnecessary use of resources.

Moreover, an NCA is not allowed to take decisions that run counter to a Commission decision according to article 16(2) of Regulation 1/2003. This means that when the Commission concludes that an infringement has been committed, the NCA would be obliged to adopt the same decision. This in turn can trigger a ne bis in idem issue. According to cases Bpost and Nordzucker, there are three cumulative conditions for such an issue to arise: unity of the identity of the facts, of the offender and of the legal interest protected.[6] Limiting parallel investigations to cases where the carved-out market presents specific characteristics that make the relevant NCA better placed to handle the case, would avoid problems like this and ensures that there can only be two decisions when justified.

Lastly, it is true that the opening of proceedings is not a challengeable act since it is of preparatory nature and does not affect the parties’ legal positions. In principle, parties should wait until the final decision in order to appeal. However, can the same be said about the specific carve-out made by the Commission in the opening decision? Although the General Court and the Court of Justice did not think this made any difference, it can be debated whether a party’s legal position is affected by the fact that they are forced to face two proceedings.

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[1] Judgement of 20 April 2023, Amazon and others v Commission, Case C‑815/21 P, ECLI:EU:C:2023:308.

[2]https://en.agcm.it/en/media/press-releases/2019/4/A528; https://ec.europa.eu/competition/antitrust/cases/dec_docs/40703/40703_67_4.pdf.

[3] https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_20_2077/IP_20_2077_EN.pdf.

[4] https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2077; https://www.concurrences.com/en/bulletin/news-issues/april-2023/the-eu-court-of-justice-confirms-that-the-eu-commission-can-exclude-a-member.

[5] Judgement of 14 October 2021, Amazon and others v Commission, Case T-19/21, ECLI:EU:T:2021:730.

[6] Judgement of 22 March 2022, Bpost v Commission, Case C‑117/20, ECLI:EU:C:2022:202; Judgement of 22 March 2022, Nordzucker, Case C-151/20, ECLI:EU:C:2022:203.