The European Commission has stressed the importance and the need for effective enforcement of EU competition rules by the National Competition Authorities (‘’NCAs’’) and considers that, while NCAs have notably increased their enforcement activities in recent years, much more needs to be done to improve cartel detection rates particularly at a national level. Although all NCAs have the competence and indeed sometimes the obligation to enforce Articles 101 and 102 of the Treaty on the Functioning of the European Union (‘’TFEU’’), there is still a gap in practice because several NCAs do not have the necessary means and instruments to enforce them effectively.
The Directive and its objectives
Directive (EU) 2019/1 of the European Parliament and of the Council to empower the competition authorities of Member States to be more effective enforcers and to ensure the proper functioning on the internal market was signed into law on 11 December 2018 and published in the Official Journal of the European Union on 14 January 2019 (‘’the Directive’’). The Directive aims at aligning the enforcement of EU competition rules in the digital age, in order to strengthen the fight against illegal competition practices across the EU. Specifically, its objective is to ensure the independence and resources of NCAs as well as to improve their respective enforcement and fining powers allowing them to more effectively apply Articles 101 and 102 TFEU.
The deadline for the transposition of the Directive by Member States is 4 February 2021.
The proposed amendments to Cyprus Competition Laws
As a result, in May 2020, the Cyprus Commission for the Protection of Competition (‘’the CPC’’) launched a public consultation on:
(a) a proposed Law on the protection of competition of 2021 (‘’the proposed Law’’), which shall replace the laws on the Protection of Competition of 2008 and 2014 (‘’the current Law’’); and
(b) the proposed Immunity from and Reduction of Administrative Fines in cases of Restrictive Collusions Infringing Section 3 of the Law and/or Article 101 of the TFEU (Leniency Programme) Regulations of 2021, (‘’the proposed Leniency Programme Regulations’’), which are aimed to replace the existing Leniency Programme Regulations which were enacted back in 2011 (‘’the current Leniency Programme Regulations’’).
The proposed amendments are considered necessary for the transposition into Cyprus law of the Directive and ultimately to empower the CPC to reach its full potential and be a more effective enforcer.
(a) The proposed Law
The main points covered by the proposed Law are the following:
(b) The proposed Leniency Programme Regulations
Furthermore, the current Leniency Programme Regulations have been reformulated in order to be more comprehensible and accessible and to encourage companies wishing to cooperate with the CPC.
It is also proposed to modify the scope of the current Leniency Programme Regulations so that they apply in the event that an undertaking participating in a secret cartel, regardless of what the other undertakings participating in the cartel do, cooperates in the investigation of the CPC by voluntarily providing information on the collusion and its role in it, against which the undertaking in question secures exemption from the imposition of an administrative fine or a reduction of the administrative fine for its participation in the cartel.
In conclusion, the objective of the proposed amendments is to ensure that the CPC has the necessary guarantees of independence, adequate resources and personnel, as well as enforcement and sanctions powers which are necessary to implement antitrust rules effectively. In addition, they aim to ensure that the CPC has a Leniency Programme in place which encourages companies to hand over evidence in relation to illegal collusive practices. However, the effectiveness of the additional enforcement tools and generally the impact that the proposed amendments could have in practice in detecting and punishing anticompetitive practices, remains to be seen in the future.
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