WHAT IS THE AIM OF THE REGULATION?
It governs how the European Commission deals with cartels1 and anti-competitive practices. It sets out the procedures which must be followed when it investigates allegations of such behaviour.
Under Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) (previously Articles 81 and 82 of the Treaty establishing the European Community) cartels and abuse of a dominant position respectively are illegal.
KEY POINTS
The Commission may:
- open an investigation at any time and make public its decision to do so;
- interview individuals and question company employees when carrying out an inspection;
- determine the terms and conditions under which it rewards companies being investigated for their cooperation;
- decide whether to accept or reject any complaints it receives alleging illegal behaviour.
When launching an investigation, the Commission:
- issues a statement of objections informing the companies concerned of the allegations against them and giving them an opportunity to reply in writing;
- may set a time limit within which the companies may decide to engage in settlement discussions2;
- gives the companies the right to present their case at a private oral hearing presided over by an independent Hearing Officer;
- grants the companies access to the evidence and documents being used against them, unless these contain business secrets, confidential information or internal Commission or national documents.
The Commission’s leniency programme offers:
- immunity from fines for a company which first submits evidence that a cartel exists;
- reduced fines for companies which subsequently provide additional substantive evidence of the alleged illegal activity.
Any person may file a complaint with the Commission alleging illegal behaviour. To do so, they must:
- show they have a legitimate interest in the issue;
- provide full details of their own identity and business;
- set out details of the alleged behaviour and submit appropriate evidence.
FROM WHEN DOES THE REGULATION APPLY?
It has applied since 1 May 2004.
BACKGROUND
To protect both consumers and companies, EU rules outlaw cartels that fix prices or carve up markets between competitors (Article 101 TFEU). These also aim to prevent firms from abusing their dominant position in a market by charging unfair prices or limiting production (Article 102 TFEU).
For more information, see:
KEY TERMS
- Cartel: a group of 2 or more firms who try to restrict competition by price fixing, limiting supply, or other restrictive practices in order to control selling prices.
- Settlement discussions: a procedure in which a company acknowledges participation in an illegal cartel and its liability.
MAIN DOCUMENT
Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, pp. 18-24)
Successive amendments and corrections to Regulation (EC) No 773/2004 have been incorporated into the basic text. This consolidated version is of documentary value only.
RELATED DOCUMENTS
Consolidated version of the Treaty on the Functioning of the European Union — Part Three — Union policies and internal actions — Title VII — Common rules on competitions, taxation and approximation of laws — Approximation of laws — Chapter 1 — Rules on competition — Section 1 — Rules applying to undertakings — Article 101 (ex Article 81 TEC) (OJ C 202, 7.6.2016, pp. 88-89)
Consolidated version of the Treaty on the Functioning of the European Union — Part Three — Union policies and internal actions — Title VII — Common rules on competitions, taxation and approximation of laws — Approximation of laws — Chapter 1 — Rules on competition — Section 1 — Rules applying to undertakings — Article 102 (ex Article 82 TEC) (OJ C 202, 7.6.2016, p. 89)
Council Regulation (EC) No 1419/2006 of 25 September 2006 repealing Regulation (EEC) No 4056/86 laying down detailed rules for the application of Articles 85 and 86 of the Treaty to maritime transport, and amending Regulation (EC) No 1/2003 as regards the extension of its scope to include cabotage and international tramp services (OJ L 269, 28.9.2006, pp. 1-3)
Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, pp. 1-25)
See consolidated version.
