Competition law

Nothing to disturb the tranquillity:

The Lisbon Treaty and Competition law
Damian Collins assesses the impact of the Lisbon Treaty on competition law

The practice of EC competition law in role under the State aid rules extends to
Brussels (and in the member States) approving bail-outs for national champions
revolves around four core elements in sensitive industrial sectors (car makers,
of the competition policy of the EU: steel foundries and airlines are a few
examples). The scope for conflict with the
antitrust enforcement, merger control,
member States is obvious.
State aid and market liberalisation. In It is often forgotten that services such
each of these areas, the Community has as transport, energy, postal services and
significant (but not always exclusive) telecommunications have not always
competence and the European been as open to competition as they are
Commission has a prominent (and today. The role of the Commission in
often decisive) role. In practical terms, opening up these markets to competition
the entry into force of the Lisbon has been vital and to achieve its objective,
the Commission has tended to rely on
Treaty will have very little impact on
a combination of the powers granted to
the practice of competition law. it in the Treaties. Article 86 which is
As far as antitrust enforcement is also part of EC competition law gives
concerned, the focus of the EC system the Commission the power to supervise
is primarily on the investigation and national organisations with exclusive or
prosecution of price fixing cartels Damian Collins
monopoly rights. Since the late 1980s,
(prohibited by Article 81 of the EC initially as part of Peter Sutherland’s drive
would allow requests by companies for
Treaty) and the abuse of monopoly or to open up the markets for air transport
the transfer of their merger control cases
market power (prohibited by Article 82 and communications, article 86 has been
to the Commission where they would
of the EC Treaty). There is no change a key component in the Commission’s
otherwise have been reviewed by a number
in the substantive prohibitions of anti- armoury by which it achieved market
of Member States.
competitive conduct, which have remained liberalisation.
These first two elements of competition
untouched since they were introduced in The application of the rules on State
policy relate to the market activities of
the Treaty of Rome in 1957. There was aid and market liberalisation tends to pit
firms and businesses. The focus of the
a major reform of the rules on antitrust the Commission against member states
remaining sets of rules (State aid and
procedure earlier this decade, resulting and often results in disputes culminating
market liberalisation) is on the member
in the adoption of Council Regulation in solutions influenced both by legal and
States and on preventing State intervention
(EC) No 1/2003 which enhanced the role political factors. However, despite heavy
in markets that might lead to distortions of
of the national competition agencies and criticism, the Treaty rules on State aid
competition and of the Internal Market.
national courts in the enforcement of the and market liberalisation on which the
The State aid rules are set out in
EC competition rules and encouraged Commission has relied for some of its
considerable detail in the EC Treaty and
cooperation between the national bodies most controversial interventions have
establish a system giving the Commission
and the Commission. The 2003 Regulation emerged unscathed from the European
extensive powers to ensure that government
confirmed the Commission’s extensive Constitution/Lisbon Treaty process.
interventions such as grants, subsidies,
powers in antitrust enforcement and the In summary, the rules on which
guarantees or tax reliefs do not distort
remainder of the decade has provided plenty competition lawyers advise and on which
competition and intra-Community trade.
of examples of its commitment to vigorous the Commission relies to bring the cases
Article 87(1) prohibits State aid in broad
enforcement action. The Commission has challenging restrictions of competition are
terms; article 87(2) and (3) set out a
emphasised that the current financial and not really changed by the Lisbon Treaty.
broad variety of grounds related to social,
economic crisis will make it more, rather One thing will change, however, and this
regional and industrial policies on which
than less, determined to pursue cartels and may be a minor annoyance for lawyers,
state aid measures can be cleared and
the abuse of market power. particularly those of us who have been
taken outside of the scope of the article
Merger control is a relatively late practising in this area for some time. Due
87(1) prohibition. Only the Commission
addition to the Commission’s competition to the changes elsewhere in the Treaties the
can grant these clearances and in order to
tool box. It is not provided for in the EC numbering of the Treaty’s competition law
obtain a clearance, a member state must
Treaty (and does not make an appearance Articles on which we advise will change:
notify the proposed measure in advance
in the Lisbon Treaty). The Commission Article 81 will become Article 101 and
to the Commission. This requirement
acquired its extensive powers to investigate Article 82 will become Article 102. The
essentially means that aid should only
and block big corporate mergers and State aid rules will be found in Articles
be implemented after the Commission
acquisitions through a Council Regulation 107-109. I think we’ll cope.
has issued a positive finding. Frequently,
in 1989 which was updated and amended
the Commission will impose or extract
in 2004. The Commission’s merger Damian Collins is a partner and Co-
conditions as the price for clearance (as it
control procedure is generally hailed as Head of Competition, Regulated
did when it cleared the Irish Government’s
a success, so much so that the business Markets & EU Law Group at McCann
guarantee of the Irish banking system
sector successfully lobbied in 2004 FitzGerald
in October last year). The Commission’s
for the inclusion of a procedure which

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