Background: What is the EC’s Competition Directorate?

Agency is considered to be one of world’s most sophisticated antitrust enforcers

European Union Commissioner for Competition Margrethe Vestager. Photograph: Virginia Mayo/AP Photo

European Union Commissioner for Competition Margrethe Vestager. Photograph: Virginia Mayo/AP Photo

 

The European Commission’s notoriously secretive Directorate-General for Competition has wide powers to investigate, including search and seizure in the member states, and to penalise breaches of EU competition law.

Currently under widely respected Danish commissioner Margrethe Vestager, it has made headlines recently with a record fine of €2.4 billion against Google for abusing its market position to assist its price comparison business.

The Directorate-General is considered to be one of the most sophisticated antitrust enforcers in the world alongside the US agencies,[the Federal Trade Commission and the Antitrust Division of the Department of Justice.

It often operates with national competition authorities in investigations, and it is likely that it co-operated with Ireland’s Competition and Consumer Protection Commission (CCPC) in the raids on the Irish motor insurance industry.

The latter decided in December last year to launch an inquiry – likely to be a separate inquiry — into the motor insurance business and potential possible breaches of the law when industry participants openly signalled an increases in premiums.

‘Unspoken co-ordination’

CCPC chairwoman Isolde Goggin said at the time that statements signalling price hikes could results in “a degree of unspoken co-ordination” between rivals.

In all of the EU jurisdictions, either a court warrant or an inspection decision granted by the national competition authority is required in order to conduct an inspection in business premises. In Ireland a warrant is required.

It grants the right to seize documents and digital data and to ask questions during the inspections.

In Ireland it also authorises members of An Garda Síochána to attend and assist the searches , and obstruction can result in a fine of up to €3,000 and/or a maximum six-month term of imprisonment under section 45 of the Competition Act, 2002.

The European Commission has regarded the insurance industry as within its competition remit since as early as 1972.

In its Second Report on Competition Policy it insisted that competition rules apply to the industry and the European Court of justice confirmed this in 1987 when it found a recommendation by an insurance association to its members on the level of gross insurance premiums was at odds with the EU competition rules.

The UK’s Office of Fair Trading (OFT) in 2012 decided to refer its private motor insurance market to Directorate-General after it found evidence that insurers were competing in a dysfunctional way that may push up premiums for drivers by £225 million (€279 million) per year. The findings followed a market study launched by the OFT in December 2011.

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