Submission
Privacy Policy
Code of Ethics
Newsletter

A Fundamentally Unsound Approach to Fundamental Rights Protection? Where Directive 2019/1 Went Wrong in Empowering National Competition Authorities

There are a number of anticompetitive practices in the European Union (EU), both agreements (Article 101 TFEU) and abuses of dominant positions (Article 102 TFEU). The EU competition law infringements are tackled either by the EU Commission or national competition authorities (NCAs). In 2010s, the Commission, having gathered a decade of experience with this decentralized enforcement system, identified an obstacle to effective public enforcement by NCAs: some NCAs did not have all the tools they needed to enforce Articles 101-102 TFEU effectively. The Commission argued that the EU should take measures to address the identified problems, because the NCAs were applying EU rules having a cross-border dimension. This issue was addressed by Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market (Directive). I am writing these words on 11 December 2024, the sixth anniversary of the Directive.

The Directive provided for a minimum set of NCAs’ powers, but at the same time made it possible for the Member States to endow NCAs with additional powers beyond the core set to further enhance their effectiveness. National provisions were to be completed by 4 February 2021. Only five Member States have adapted their legal frameworks to align them with the Directive within this deadline. The majority of Member States were delayed. Amongst the late ones, Estonian decision-makers are the winners: they have not implemented the Directive yet, and a formal infringement procedure has been initiated by the Commission (Case C-577/23).

The Commission was bound to present a report to the European Parliament and to the Council on the transposition and implementation of the Directive by 12 December 2024, when appropriate, to review the Directive, and, if necessary, to present a legislative proposal. The Commission has monitored the implementation of the Directive in the Member States by conducting compliance assessments on the national transposition measures, and adopted the report COM(2024) 558 final on 29 November 2024. The main message from this report is that, with regard to NCAs’ powers, there are improvements brought about by the Directive in the Member States. The report shows how Member States transposed the “main provisions” of the Directive (part 4 of the report) on: independence and resources, investigative powers and decision-making powers, fines and periodic penalty payments, leniency, mutual assistance, limitation periods, as well as general provisions (Chapters III-IX of the Directive).

However, on the other side of the coin there is a requirement that the exercise of the powers, conferred by the Directive on NCAs, should be subject to appropriate safeguards (should ensure respect for fundamental rights of undertakings in EU competition law enforcement proceedings). Even more so when fines (including very severe fines) have become a common feature of the competition law enforcement landscape in the EU and Member States. Therefore, I believed that the unification of the protection of the rights of undertakings involved in competition law investigations and proceedings may be achieved by the implementation of the Directive. Nothing could be further from the truth. These safeguards for the fundamental rights are provided for in Chapter II (Article 3) of the Directive. Remarkably, it is even not mentioned in part 4 of Commission’s report. No, it is not considered as a category of the “main provisions” of the Directive. Only its paragraph 3 is mentioned in brackets in the part listing the expected case law developments relating to the Directive (more precisely a preliminary request from Italy, Case C-588/24).

The question is, therefore, what its disadvantages (or hurdles to its implementation) are. It should be indicated that safeguarding of fundamental rights of undertakings in EU competition law enforcement proceedings is a complex topic, and many elements need to be taken into account when designing it. However, in the Directive there is no definition of the scope of these rights that need to be harmonized, and neither Article 3 nor the preamble allow to deduce it easily.

Deliberations of researchers have led to a conclusion that from the perspective of the right of defense in competition law enforcement proceedings, the following concepts are important: the right to a fair trial (Article 47 of the Charter of Fundamental Rights of the European Union); the presumption of innocence (Article 48(1) of the Charter); the protection of the confidentiality of communications between a lawyer and an undertaking, i.e. legal professional privilege (LPP) (at the EU level, derived in particular from Article 48(2) of the Charter); the principles of proportionality and legality of penalties, including the non-retroactivity of the law (Article 49 of the Charter); the ne bis in idem principle (Article 50 of the Charter); the right to privacy (in the context of searches); and the freedom from self-incrimination, i.e. privilege against self-incrimination.

Article 3(1) of the Directive is very general in character stating that “proceedings concerning infringements of Article 101 or 102 TFEU, including the exercise of the powers referred to in this Directive by national competition authorities, shall comply with general principles of Union law and the Charter of Fundamental Rights of the European Union.” In the remaining parts of Article 3, the EU decision-makers have developed a bit more detailed provisions. Article 3(2) regards the undertakings’ rights of defense, listing the right to be heard and the right to an effective remedy before a tribunal, even though it does not define requirements regarding “appropriate safeguards” of these rights. In addition, Article 3(3) requires explicitly a reasonable timeframe of NCAs’ enforcement proceedings and the use of a statement of objections. Recital (14) lists also the right to good administration.

While there seems to be general EU support for the harmonization of the safeguards in question, Article 3(1) of the Directive merely repeats what has already followed from the previous status quo. It focuses on what does not provide any added value compared to the previous status quo. However, when analyzing Article 3 of the Directive, it is essential to take into account not only the rights that are explicitly listed, but also those unmentioned therein. For example, right to the confidentiality of communications between a lawyer and an undertaking, that is legal professional privilege (LPP), is an unmentioned element of the right of defense referred to in Article 3(2). Furthermore, Article 3 does not explicitly include a framework for the privilege against self-incrimination (PASI) that should also be matched with the rights of defense, but instead is narrowly contained in Chapter IV (“Powers”).

Against this background, an analysis of the laws and policies of Member States reveals that some Member States seem to pretend that what is not explicitly mentioned in the Directive does not count as a requirement that needs to be analyzed in legislative processes, while others do not. Even though the point of departure for implementation processes is different in various Member States, differing (and “convenient”) interpretations of the same provisions of Article 3 of the Directive maintained or developed by Member States can be seen.

For instance, France, Hungary, Italy, Latvia, the Netherlands, the Czech Republic and Sweden, did not envisage the transposition of Article 3 of the Directive into their national laws, and this approach raises a point of whether these were not in fact ill-considered decisions (at least some of them). Second, Malta, Portugal, Spain and Croatia felt encouraged to the introduction of a “programmatic” provision reflecting Article 3(1). This may be seen as a statutory superfluum due to the overall principle of the primacy of EU law, but might become an additional argument that certain procedural safeguards apply in the case of uncertainty regarding their application. Third, Austria, Bulgaria, Lithuania, Luxembourg and Malta decided that in addition to programmatic provisions mirroring Article 3(1) they should introduce more elaborated solutions. Fourth, Cyprus, Denmark, Finland, Germany, Poland, Slovenia and Slovakia complemented their legal frameworks regarding the protection of undertakings’ fundamental rights, but not with programmatic provisions. Within the third and fourth group, one should distinguish, however, between Member States that have increased the level of protection of undertakings and Member States that have taken a step back under the veil of the transposition of the Directive (e.g. Polish LPP or Czech timeframes of competition law enforcement proceedings). Some Member States remain silent about a number of issues that have been known for many years, but have never been (properly) transposed (e.g. Austrian LPP).

The open-ended and general legal framework contained in Article 3 may lead to a paradox, whereby NCAs might be granted (almost) equal investigative and sanctioning powers on the one hand, but, on the other hand, undertakings might still face a state of disparity with respect to the level of protection of their fundamental rights in competition law enforcement proceedings between various NCAs.

The overly laconic report COM(2024) 558 final that does not even mention Article 3 of the Directive is, to say the least, surprising. The same can be said about the lack of a legislative proposal to complement the Directive. Regrettably, it seems we have actually missed an excellent opportunity to introduce a single model of safeguards for the fundamental rights falling within the ambit of Article 3 of the Directive.


Anna Piszcz – an Associate Professor at University of Białystok, Poland; attorney-at-law. ORCID: 0000-0001-7163-3292. She is a member of the Advisory Scientific Committee to the Financial Ombudsman from 2023. Between 2014 and 2016, she was a member of the Advisory Board to the President of the Office of Competition and Consumer Protection. Her main field of research is competition law (prohibition of anticompetitive practices in substantive, procedural and institutional perspectives). She acknowledges that this text refers to research results achieved within the project “Enhancing competition enforcement by the competition authorities of the EU Member States: Procedural issues in the Czech Republic and Poland” co-financed by the Polish National Agency for Academic Exchange (project no. PPN/CZ/2019/1/00007/U/00001) and published as an article: Piszcz Anna, Petr Michal. (Dis)Respect for Fundamental Rights in EU Competition Law Enforcement Proceedings Before National Authorities: In What Way Does Article 3 of the ECN+ Directive Prove To Be too Open-Ended?. IIC (2023). https://doi.org/10.1007/s40319-023-01353-4