Public and private enforcement of competition law
Dr Marek Martyniszyn recently invited guest speaker, David George, to share his thoughts on public and private enforcement of competition law with undergraduate students taking a Competition Law module here at Queen's University Belfast.
Last Friday, David George (pictured centre), Référendaire at Competition Appeal Tribunal in London, gave a lecture to undergraduates taking my Competition Law module here at Queen’s University Belfast. David is a specialist in competition law, with significant experience of contentious antitrust matters.
David spoke about public and private enforcement of competition law and how they interact and afterwards, David posted his own thoughts on the lecture and on this issue:
“This topic is very much in the spotlight right now with the passing of the Damages Directive, which is due to be transposed into UK law by 27 December. Ahead of the class, I had asked the students to read a somewhat unorthodox article written in 2003 by Wouter Wils (since 2010 a Hearing Officer at the European Commission). The article argues against the expansion of private actions on the grounds that (i) private enforcement would likely undermine public enforcement and (ii) public enforcement is in any case cheaper and more efficient. Wils’ preferred solution for improving enforcement (at least in 2003) was an expanded use of criminal law sanctions, including their introduction at the EU level.
We explored Wil’s first contention through a game where pairs of student ‘volunteers’ roleplayed cartelists having to decide whether or not to ‘blow the whistle’ to obtain immunity from the competition authority (me) or to stay quiet and carry on with their cartel. We then looked at how their incentive to uncover the cartel might be dampened by the prospect of private damages actions. We went on to discuss how the Damages Directive seeks to address this issue by blacklisting disclosure of leniency statements (Arts 6-7) and curtailing the joint and several liability of the immunity recipient (Art 11).
I sought to test Wils’ second contention by looking at the National Audit Office’s recent report on the UK competition regime. This found, in essence, that the public regime ‘must try harder.’ A particularly stark finding was a survey which revealed that 20% of UK businesses had never even heard of competition law, let alone felt they were reasonably familiar with it.
Overall, I am not nearly as pessimistic as Wils about the contribution that private actions might make towards improving enforcement. I don’t doubt that a balance needs to be struck between both modes, nor do I question the necessity of public enforcement – it is obviously very valuable. However, to me it is clear that private actions can complement public enforcement, particularly by opening up smaller ‘standalone’ actions which it would not be appropriate to pursue using limited public funds, despite their being potentially meritorious. Since the introduction of new rules last October the CAT has already received three “fast-track” applications in relation to smaller claims. This may indicate that the reforms are easing access to the courts.
I suspect there may also be room for further innovation in the public enforcement of competition law too. While criminal law has an important part to play, I doubt it represents a panacea. Criminal enforcement is significantly more resource intensive than civil enforcement, and so may not significantly widen an authority’s enforcement footprint. I wonder whether there is a greater role to be played through civil enforcement against individuals (as opposed to corporates, as is currently the norm).
One possibility, for appropriate cases, might be the imposition of administrative fines on individuals as is possible under Dutch law.”