Valentin Mircea: Do you think that the competition rules enforced by the European Commission are clear enough to set a safe path in the business for the undertakings?

Ewoud Sakkers: I think what the Commission has done, in a system where companies can no longer apply for an individual exemption, which used to be the case until 2004, is to ensure a lot of transparency about the interpretation of the rules. So for instance, can companies join and do research and development - this will be an agreement between competitors that may impact on competition and therefore it could be prohibited. However, such agreements have been generally seen as pro-competitive, they will lead to benefits for consumers, so the interpretation is, in general, that those agreements should be allowed.

We've issued guidance on research and development agreements, but also on many other aspects of the competition rules, both on agreements between competitors and on abuse of dominance - what we call unilateral conduct: one company in a dominant position abusing that position. When this does arise? When is a company dominant and what kinds of practices are not allowed?
A company in a dominant position, can it operate a rebate scheme?  In principle yes, but there are certainly restrictions, if it wants to ensure the company's loyalty from its customers. All those things may be looked upon critically.
All that is explained in our regulations and notices.So I think we are doing a lot for transparency.
One other thing what we have done, which goes into the question of compliance, is to try to explain the no-go arias for companies.


We have issued a brochure, “Compliance matters”, it is not only about the compliance programmes which are good and necessary, it is also about explaining what the basic rules are and the “no-go” areas are for companies in terms of price fixing and anti-competitive behaviour by dominant companies.

Valentin Mircea: As long as there is no”one-size-fits-all” in the competition compliance, are they any ”Golden rules” to observe when trying to comply with the competition rules?  Can you identify one, two, three Golden rules, if there are any?

Ewoud Sakkers: It is a science in itself; there you see many consultancy firms, law firms being engaged with companies to make sure that there is a tailor-made compliance programme for companies. So we have not put ourselves in a position where we would advise companies on what is the best compliance programme for that individual firm.

The purpose of the brochure that I've just showed you is to ensure that there is clarity about the rules. Yes, to give some very basic parameters about what any compliance programme should probably contain, but we really stop there. So in terms of the competition authority giving particular advice, that it is not something we are doing.

Nevertheless, I can reflect on what it is in the brochure, oN what companies should have as golden rules in a compliance programme. First of all, it is important for companies to understand the business they are in in, how risky it is for these companies, when they get in touch with each other - between competitors -, to go over the line and instead of discussing more technical, environmental issues in the sector, to start discussing other issues, cost of production, perhaps prices, market shares, future prices etc. So it is important for companies, and in particular companies which are in a dominant position, to assess the environment that they are in.

This risk assessment is a key feature of the compliance programme that companies should have to start with.

Then I think there is an absolute necessity for the highest level of management of the company to be involved in compliance - they must show that they take it seriously, that there is not just a sort of bureaucratic internal process, they ultimately determine the culture within the firm. That engagement of the firm should also mean that it should be lasting.

A continuous monitoring is necessary, training should be there, last but not least, something that any authority would say, but particularly those which have a leniency programme,  compliance efforts offer in a certain way an opportunity.So if a particular horizontal conduct (i.e. cartel) is discovered, through the compliance programme, there is a leniency programme available, so companies can get immunity from the fines if they are coming as the first company at the door – and that they can do to through the European Commission or through national competition authorities, and that can be a benefit of such compliance programme; if you discover something, be the first in the door to report it and get the benefit of immunity. So those would be a few key features.


Now what is the best place to get advice for compliance? The ICC, the International Chamber of Commerce, has done an extensive exercise in designing a model compliance programme, that is not merely a short bullet-point explanation of what programme should contained, but a very detailed way of what to do but also and how to implement within the companies including SMEs. The ICC information can be found also through the Commission website, we have a compliance corner on the Competition website of the European Commission, so that information is accessible, anyone can see it.

Valentin Mircea: The third question is more direct. It refers at the European Court of Justice. In a recent decision, the European Court of Justice refused to admit that good faith competition expert advice obtained by an undertaking and followed by it may serve as a basis to exclude or even to mitigate its liability in the administrative procedures opened by the Commission in respect of the contract for which the expert advice was sought. How this stance would conciliate with the encouragement of the voluntary compliance with the competition rules?
Do you think that such an attitude by the Court will have a chilling effect?
The commission was involved, you may not say too much.

Ewoud Sakkers: Well, you put forward an excellent point. We had that question raised for us in a different context.
My firm answer is "no". It should not discourage compliance [...] let me start with the question that we often get and then I will return to your point.
We often get the question "Why doesn't the competition authority give some credits to the good faith efforts of the companies to prevent infringements, in spite of the fact that they do actually occur?" In other words, a company does all that is necessary, and has a compliance programme that is fitted to its particular size, and nevertheless, somewhere in the organization something occurs and ultimately it turns out to be an infringement. Why not then give a reduction of fines, to recognize these best efforts of the company? It is something we don't do. Are we discouraging compliance? I don't think we are. Are we saying that compliance programmes were badly designed, because an infringement was actually taken place? I don't think we are saying that either, certainly in the brochure you will not find it. Any compliance programme and expert advice may be extremely effective to prevent a lot of potential infringements. If there is anadvice giving the company the comfort to say that it doesn't seem as an infringement and it later turned out to be, and then it turns out to be, that can happen". A compliance programme may not prevent all infringements, but for sure prevents a lot of them. So I think we are now in an age when you can notify an agreement - self-assessment by company - it takes place on an everyday basis, we give transparency, about the rules, and how those exercises are highly effective. It is a very difficult exercise to assess how precisely was made, put in place, and distributed in the company.

So perhaps in the division of roles, we have to take a step back and look at the reality of an infringement, and therefore the underlined advice that might have been given as such could not play any role for us. The outcome in the court case - there is no exoneration for the advice that has been given.

Valentin Mircea: My last question: how important, based on your expertise, do you think is for a proper competition compliance the independence of the persons entrusted with this task from the management of the company, I will make a parallel with the financial audit, a person is responsible before the law. Would you recommend such position, as a matter of principle, a person should be independent in how reports?

Ewoud Sakkers: Your point  is one important, I'm going to give you a personal, academic point of view rather than the position of the EC - we haven't said anything particular in our brochure, on how it should be the best managed the position of the compliance officer - either integral part of the organization, or as an outside policeman for the company, who would be not under the influence of the management, as actually this person is meant to control.

There are two schools of thought: one - the outside independent person, they can allow themselves to scrutinize the company behavior to the maximum possible, without having the risk to be influenced in that task by the management. It can be more efficient in the company.

The other school of thought says: no, no, if you really want to influence the company’s behavior and  you want the people come to be part of the discussion within the business unit, you need to be a part of that company.So you are a credible internal, not-threatening entity who filters the behavior  and the risks of the company - and for that reason it (this method) is more effective in bringing up the issues and remedies.

I think a common feature to these two schools of thoughts is access to the highest management. So whether you operate from outside and you get the task of looking inwards to find the problems or you do it from within as you have access to the boardroom, bringing these issues forward so that they may receive the proper remedies, which brings me to one aspect:
If one company doesn`t get into trouble it means that a cartel cannot form itself, generally.

Another aspect of our policy is to fine parent companies. Parent companies are fined because they are the ones who can ensure for the future that compliance is rolled out inside the entire group, rather than being limited to a small part of a company. It is that management which, therefore, ensures that the compliance efforts are effective. Hence, emerges the necessity of a compliance officer that has access to the highest level of management.  
There is no clear golden rule, of making it an outside person or function, or keeping it an inside function.

VIDEO Answering a question from a business representative, during the seminar "Competition Professionals", Bucharest, 28 November 2013

Question: I'd like to know if you can explain form your experience, how effective in practice are those compliance programs out of your practical experience, do they really cover most of the issues, in the end, is it all about human behavior, common sense, fear, compliance with rules, in general, like with any other rules?






Links (ro.)

In premiera, in Romania, video-dezbatere interactiva Bucuresti-Bruxelles "Profesionistii-concurentei": Afectarea reputatiei, cea mai grea pierdere in cazurile de inalcare a regulilor concurentei. Nu este exclusa raspunderea penala individuala

Transcrierea interventiei d-lui Ewoud Sakkers la Seminarul "Profesionistii Concurentei) (ro.)

In premiera,video-interventie din Bruxelles de la Comisia Europeana, DG Competition, la seminarul pe tema Concurentei in practica: riscuri, studii de caz, solutii. Ultimele locuri disponibile. Cele mai interesante informatii vor fi difuzate de EurActiv.ro

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