Lawyers seek clarity as EU hands power to domestic courts

Competition lawyers face a wave of inconsistent court decisions and a raft of additional regulation as a new regime rolled out across the EU - including its ten accession states - last week.

Under an EU regulation (1/2003), powers currently held by the Brussels-based competition directorate - including the application of articles 81 and 82 of the Treaty of Rome, where there is an effect on inter-state trade within the EU - were last week transferred to domestic authorities.

The notification system - under which businesses notified their restrictive vertical agreements to the European Commission to get an exemption - was replaced with a 'legal exception' regime, whereby agreements that fall within the prohibition but meet the exemption criteria are automatically exempt.

Jane Whittaker, a competition law partner at City firm Macfarlanes, said the most serious issue would be whether the law is applied consistently across different EU members.

She said: 'If one country gets a reputation for less rigorous enforcement, this could lead to forum shopping - that is, people flocking to the courts or national authorities of that country.'

She added: 'It may, realistically, be too much to expect to ask the [new member states'] national judges and competition law authorities to apply from one day to the next competition rules with which they are likely to have had limited experience through transitional periods.'

She said these countries are being required to apply the new rules 'in a novel and complex scenario...

which is arguably challenging for even the current (experienced) 15 member states.'

Nigel Parr, a competition law partner at City firm Ashurst, said: 'It's inevitable that there will be discrepancies...

it will take some time before we end up with a completely consistent application of the law.'

He added: 'Within the whole EU, we are dealing with new procedures, but among the old EU member states the underlying principles will be familiar.

It will take longer for the new member states to get accustomed to these.'

Jeremy Fleming