Judicial Review in American and European Competition Law

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Despite differences, antitrust enforcement models in the U.S. and Europe have some features in common.

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Antitrust enforcement follows different models in the United States and Europe.  In the United States, enforcement is entrusted to the courts, by means of civil and criminal actions.  In Europe, by contrast, the enforcement of competition law is entrusted primarily to the European Commission, an administrative body.

However, despite these differences, the antitrust regimes in the U.S. and Europe do approach each other in certain essential ways.  In America, administrative authorities do still carry out important functions in antitrust enforcement. With respect to cartels, the American administrative authorities do not have decision powers, but they do have the powers of investigation and proposal, which may be decisive.  The authority to approve mergers is also held by administrative authorities, whose decisions may be challenged by the States and by individuals.

Moreover, the picture of antitrust enforcement in Europe is more complicated, especially after the European administrative law system was modified in 2003. True, when competition law rules are directly applied by the European Commission, the system remains administrative. However, when Member States apply the European Competition law rules, they may decide to entrust enforcement to administrative authorities, courts, or both. Within this framework, the interested party may in some cases opt for a complaint before the administrative authorities or directly lodge proceedings before the courts, as happens in Spain, for instance.

Furthermore, both systems address the same crucial question about the extent to which courts are entitled to control administrative decisions. In the United States, the appellate review model rests on the assumption that the initiating institution—the administrative agency—is understood to have superior competence in questions of fact, while the reviewing institution has superior competence in issues of law, and will decide the latter issues independently. This assumption leads the courts to be deferential to agency decisions.

Alternatively, in all European jurisdictions, courts are not confined merely to reviewing legal questions, but they can fully review the facts as well as their appraisal.  European Courts are entitled to carry out a comprehensive control of the legality of the European Commission’ decisions, which extends to the law as well as to the facts and their appraisal. Bear in mind that what European courts see at stake is the protection of citizens’ rights through an independent and impartial instance. These courts have a so-called “unlimited jurisdiction” related to fines, by which they not only can void but can also amend sanctions as well.

Of course, the European legal framework entrusts the European Commission, not the courts, with the task of defining and implementing competition policy. As such, the role of the European courts is to control the legality of the Commission’s decisions and to protect the citizens’ rights, but not to enforce competition law. This allocation of power does raise some limits on the institution of judicial review in Europe.

Even when European courts are entitled to annul the Commission’s decision on competition matters, they cannot pronounce on the merits of the case. Courts are not supposed to get involved in making economical appraisals, providing evidences and taking executive decisions.

Furthermore, even when the exercise of administrative discretionary powers is challenged, courts cannot substitute their own discretion for that of the European Commission. For the same reason, in complex economic and technical issues, judicial review can eventually be limited to verifying whether the Commission made a manifest error in the assessment of the facts.  Courts’ scrutiny has definitely become more intense over time, but the principle still holds that when there is a margin for choice, it is for the Commission, not for the courts to make the decision.

In fact, unlimited jurisdiction in relation to fines for the European judiciary does not prevent the courts from leaving the European Commission significant leeway in their application. Ultimately, the power to impose fines is regarded as a means conferred on the Commission to carry out a general competition policy.

In short, the American and European antitrust enforcement models clearly differ. However, in spite of these differences, we can also find they have some essential common concerns – chief among them being the challenges in allocating authority between administrative agencies and the courts as well as in deciding how much deference the courts should give to decisions made by agencies.

José Carlos Laguna de Paz

José Carlos Laguna de Paz is Professor of Administrative Law at the Valladolid University Faculty of Law (Spain). This post draws from the author’s recent article in the Journal of Antitrust Enforcement, “Understanding the Limits of Judicial Review in European Competition Law” (2013).