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Intelectual Property Law,

Intellectual Property Rules: The European Commission has presented more effective changes

The Commission is presenting amended rules that will make the protection of industrial designs throughout the EU cheaper, quicker, and more predictable.

The suggestions are in response to the Intellectual Property Action Plan,[1] which was established in November 2020 and aims to reform EU design protection legislation. It reflects calls from stakeholders, the Council, and the European Parliament for the modernization of the legislation and aims to build on the results of a thorough examination of the reform of the EU trademark legislation. It is also in response to requests from stakeholders, the Council, and the European Parliament for the Commission to modernize and further unify EU industrial design law.

A product’s industrial design is its outside look, as defined by its lines, curves, or shape. The recommendations for a revised Regulation[2] and Directive[3] on industrial designs modernize the 20-year-old Community design framework[4] and counterpart national design regimes.[5] The updated regulations will further enhance the circumstances for corporate innovation. In addition, the guidelines implement a more balanced approach to design protection. This ensures that designs may be replicated for spare components, giving consumers more options when repairing complex products like automobiles.

Objective of the proposal

Each proposition will simplify and expedite the process for EU-wide design registration.

In particular, the new rules will make registered Community design protection more accessible, efficient, and affordable, particularly for individual designers and SMEs, by making it easier to present designs in an application for registration (such as by submitting video files) or by combining multiple designs in a single application, as well as by lowering the fees to be paid for the first ten years of protection.

Processes and guarantee compatibility with national design systems will be harmonized: the new framework intends to guarantee more complementarity between EU-level and national design protection legislation, for example regarding registration requirements and the simplification of invalidation criteria for registered designs. This will assist to level the playing field for European enterprises.

Permit reproduction of original designs for complex product repairs: By incorporating an EU-wide “repair clause” into the Design Directive, the new rules will help to boost spare parts market access and competition. This is especially significant in the auto repair industry, where it should become permitted in all EU member states to replicate identical “must match” car body pieces for repairs in order to restore the vehicle’s original appearance. The proposed ‘repair clause’ should have immediate legal effect only for future designs, while existing designs should be protected during a ten-year transitional period.

The two suggestions will be forwarded to the European Parliament and the Council for consideration in accordance with the normal legislative procedure.

Next Steps

The two proposals will now be forwarded to the European Parliament and the Council for consideration in accordance with the normal legislative procedure.

The revised rules of the Directive will be incorporated into national law within two years of the adoption of the new proposals.

A portion of the modifications to the Community Design Regulation will become applicable within three months of the regulation’s entry into force, while the remainder will become applicable when the delegated and implementing acts are implemented (18 months after entry into force).

Sources

  1. https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2187
  2. https://single-market-economy.ec.europa.eu/publications/proposal-regulation-community-designs_en
  3. https://single-market-economy.ec.europa.eu/publications/proposal-directive-legal-protection-designs-recast_en
  4. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32002R0006
  5. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:31998L0071
ראיות-דיגיטליות-במשפט-פלילי
Law,

E-Evidence proposal and its public involvement of private actors

Background Analysis

Since its incorporation into the Tampere Conclusions, the issue of the admission of evidence obtained in cross-border criminal proceedings in the EU has been on the table. Article 82(2) of the Treaty on the Functioning of the European Union (TFEU)[1] grants the European Parliament and the Council the ability to establish fundamental rules for the reciprocal admission of evidence. Common minimum standards on how evidence is to be gathered and transferred – and also on a limited set of exclusionary rules – are required to protect fundamental rights and facilitate judicial cooperation at the EU level, especially given that e-evidence introduces a cross-border element into virtually every criminal investigation and procedure. Due to the rapid digitalization of private and public spheres, as well as professional and non-professional activities, the importance of a common set of evidence standards, and in particular e-evidence standards, has increased. Furthermore, the repercussions of COVID-19 have a multiplier effect on the impact of e-evidence at the EU level, as the epidemic has caused a significant movement towards digitalization and a notable change towards the collection of e-data for security purposes (mainly geolocation, and to potentially track contacts of infected persons).

Recent legislative initiatives (Directive 2014/41/EU on the European Investigation Order (EIO)[2] in criminal proceedings and Council Regulation (EU) 2017/1939[3] implementing greater cooperation on the establishment of the European Public Prosecutor’s Office, EPPO) have addressed this issue in part. However, the EIO provides no regulations governing the admissibility or rejection of evidence. The admissibility of evidence gathered in a foreign country will rely on how it was obtained and compliance with any applicable restrictions. Moreover, Article 37 of the EPPO Regulation[4] essentially creates an inclusionary rule, leaving all possible grounds for evidence exclusion unaddressed.

As a result, there is no uniform policy among EU member states. The diversity of solutions in each Member State impedes the creation of what has been termed a “zone of free movement of criminal evidence” and may have a severe impact on the rights of defendants. In the past, Member States may have concluded that supranational standards on admissibility of evidence were not strictly required, and that, as a result, the principles of subsidiarity and proportionality for EU legislation would not be followed. However, the situation has changed dramatically over the past few decades as a result of obvious shifts in the modern “digital society.”

The Evidence Package

The European Commission proposed the “E-Evidence” legislative package (E-Evidence)[5] on 17 April 2018 to overcome the widely discussed issues associated with the traditional instruments for cross-border gathering of electronic evidence. The main innovation of this proposal consists of allowing law enforcement in one member state to directly compel service providers in another member state to produce or preserve data.[6] Internet service providers (ISPs) already play a significant role as gatekeepers for the data they possess, particularly in the context of voluntary cooperation. Due to restricted enforcement options, the frequently global context of data collection, and the economic clout of big ISPs, it is their decision whether or not to submit data to authorities. While the final text of the EPO Regulation is still being negotiated, I argue in this post that the proposal for the E-Evidence regulation (in all of its available versions) does not solve the problem of such “privatisation” of enforcement in the context of e-evidence collection, and I explain why this is problematic.[7]

E-Evidence legislation has been in the legislative process for some time. While the EU Council agreed its broad strategy very swiftly,[8] on 7 December 2018, The European Parliament’s (EP) extensive deliberations lasted over two years. On 11 November 2020, the EP delivered its Report on the draft Regulation, which differed significantly in some respects from the Council’s general approach, which was generally comparable to the Commission’s proposal.[9]

The notification system, which establishes the criteria under which the authority originating the access request must notify the authorities in the executing member states, is one of the most contentious aspects.

For governments represented in the EU Council, making this process overly burdensome would negate the aim of the rule, but MEPs and civil society want protections for protected groups such as journalists, lawyers, and political activists. The member nations were successful in meeting the so-called “residence criterion.” In other words, if the individuals in question are residents of the member state executing the order, there is no need to notify the authorities of the executing country about the location of their data storage. If the requested information can only be used to identify a person, no notification is necessary.

In exchange, MEPs gained the notification’s suspensive effect. In the event that a law enforcement agency requests content and traffic data, the other member states will have ten days, or eight hours in the event of an emergency, to object. The suspension effect stipulates that the service provider must safeguard the requested communication but will be unable to disclose it until the deadline has passed and no rejection has been raised.

The executing member states may appeal the order if it violates the legal framework’s fundamental rights or immunities, such as press freedom. The legislature adopted the notion of dual criminality, which states that the persecuted crime must also be recognized in the country of execution.

Special safeguards against alleged infringement of basic rights have been added to orders refused by member states whose rule of law has been officially brought into question by the activation of EU procedures, such as Hungary and Poland at present.

Political problem that is yet to be resolved

Unresolved from a political standpoint is whether the executing member states ‘may’ or ‘shall’ oppose the order if one or more reasons for rejection are discovered. The Parliament favors the latter formulation because legislators want to guarantee that these precautions are applied effectively.

In accordance with the GDPR, the EU’s data protection regulation, the order must be sent to the data controller, the entity that determines why and how the data is processed. The authorities will only refer directly to the data processor, the organization that processes the data on behalf of the controller, in exceptional circumstances. The co-legislators of the EU only agreed in principle to the establishment of a common European exchange, an EU-wide platform for issuing orders that would guarantee the secrecy and legitimacy of the orders to service providers.

While the interinstitutional meeting, or trilogue in jargon, resulted in significant progress on a number of key issues, according to two knowledgeable sources, the gaps between the co-legislators may still be too substantial to be resolved at the technical level. The French negotiators were under significant political pressure to find an agreement before the end of their Presidency on Friday, and on Thursday they even requested a new political trilogue. However, the European Parliament could not meet such a short deadline.

Private actors and potential conflicts of interest

In light of the preceding, the E-Evidence package will establish a new connection between law enforcement agencies and ISPs, regardless of the establishment of the mandatory notification system. These are expected to become extended arms of law enforcement, replacing national authorities in the tasks of receiving, complying with, and reviewing orders.[10] ISPs will unavoidably become more of a public authority than a private actor, although lacking the characteristics of public authorities, such as accountability, impartiality, and independence.

This shift of public responsibilities to ISPs, as envisaged by the E-Evidence package, is not novel in European law, but rather conforms to a pattern that has intensified over the past few years.[11] Indeed, private players’ participation in crime prevention has increased. This tendency is exemplified by the AML regulatory[12] framework: private actors, particularly banks and financial institutions, are required to create risk prevention measures and report to competent authorities in order to avoid money laundering or terrorism funding. In this sense, the E-Evidence proposal codifies a quantum leap in the role of private actors: not only are they involved in crime prevention, but they are also required to play an active (proactive) role in enforcement by directly responding to requests from a law enforcement authority and evaluating the validity and legitimacy of these requests.[13]

This role poses various questions. ISPs, as private actors, are entities that are profit-driven and answerable to their owners or stakeholders. These traits have (at least) a double bearing on their ability to fulfill this public function. First, ISPs will make decisions based on their commercial interests. In fact, unlike public actors, when ISPs must choose between competing ideals, they do so at the risk of punishment for noncompliance or reputational damage, which may have a direct impact on their financial interests. Moreover, even if private actors present themselves as acting for the greater good, they will only engage in this manner if it serves their financial interests. The commercial reasoning also influences the accountability and duty of ISPs. A democratic system of accountability controls value judgments in the public realm; private firms (i.e. ISPs) are answerable to their owners first and foremost.[14]

Lastly, additional practical issues relating to the implementation of such power may arise due to the potential for ISPs to abuse their authority. For instance, what about ISP personnel who are offered bribes to influence the judgments they execute? This sort of corruption, however, no longer affects the private sphere, as it is not a violation of the entity’s duty. This circumstance more closely resembles public corruption but is not covered by the applicable regulations.[15]

Conclusion

There appears to be a need for cooperation between law enforcement agencies and ISPs, given the latter possess information that may be crucial to criminal investigations. This new interaction between public bodies and commercial players cannot be governed by the current regulatory system. Consequently, legislative intervention is required, and the E-Evidence package has the ability to eliminate one of the most significant barriers facing contemporary criminal investigations. However, a more complete framework is required to ensure that the rights of impacted individuals are adequately protected and that their fate is not contingent on the commercial interests of private enterprises.

The issue of the public duty of ISPs is not confined to the collection of electronic evidence. Similar issues and arguments can be raised in relation to online content control and the Digital Services Act discussion (DSA).[16] The challenges in negotiating both legislative proposals (E-Evidence and DSA) highlight how difficult it is to manage a domain in which private players wield so much effective enforcement capacity and de facto adjudicative authority. To guarantee the fairness of the procedures and the correct protection of the fundamental rights of the affected parties, however, a precise set of boundaries is required. If shared adjudication is to be recognized, a significantly more robust structure must be established to protect the rights of those affected.

  1. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12008E082
  2. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0041
  3. https://eur-lex.europa.eu/eli/reg/2017/1939/oj
  4. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32017R1939
  5. https://ec.europa.eu/info/policies/justice-and-fundamental-rights/criminal-justice/e-evidence-cross-border-access-electronic-evidence_en
  6. https://europeanlawblog.eu/2018/10/12/the-european-commissions-e-evidence-proposal-toward-an-eu-wide-obligation-for-service-providers-to-cooperate-with-law-enforcement/
  7. https://journals.sagepub.com/doi/pdf/10.1177/1023263X18792240
  8. https://data.consilium.europa.eu/doc/document/ST-15020-2018-INIT/en/pdf
  9. https://www.europarl.europa.eu/doceo/document/A-9-2020-0256_EN.html#_section1
  10. https://www.sciencedirect.com/science/article/pii/S026736492100087X
  11. https://www.uu.nl/sites/default/files/rebo-renforce-PRIVATE%20REGULATION%20AND%20ENFORCEMENT%20IN%20THE%20EU-Introduction.pdf
  12. https://finance.ec.europa.eu/financial-crime/eu-context-anti-money-laundering-and-countering-financing-terrorism_en
  13. https://journals.sagepub.com/doi/full/10.1177/2032284420919802
  14. https://academic.oup.com/edited-volume/28191/chapter-abstract/213102034?redirectedFrom=fulltext
  15. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32003F0568&from=EN
  16. https://www.sciencedirect.com/science/article/pii/S026736492100087X
digital-service-act-ue-eu-europa
Financial Law, Law,

Digital Service Act approved by the European Parliament: new features on online intermediaries

The European Parliament has recently passed the Digital Services Act[1], a regulation that replaces and novates the previous liability regime for information society service providers, consisting of the E-commerce Directive EC Directive 2000/31[2]. This contribution will analyze the main novelties and the continuities between the old and the new regimes.

European DSA (Digital Service Act)

European DSA (Digital Service Act)

Introduction

5 July represents a very important milestone in the roadmap of European digital regulation. In fact, this is the date on which the European Parliament approved the Digital Services Act (DSA), presented by the Commission in December 2020 and on which political agreement had already been reached on April 23, 2022.

This regulation’s stated objective is to contribute to the proper functioning of the internal market for intermediary services by establishing harmonized rules for a safe, predictable, and reliable online environment that facilitates innovation and in which the fundamental rights enshrined in the European Charter of Fundamental Rights, including the principle of consumer protection, are effectively protected.

In other words, it aims to redefine the rules applicable to online platforms by amending the Directive 31/2000, the so-called ‘E-commerce Directive’ and the main regulatory reference with regard to “provider liability’ or “secondary liability’. Indeed, the digital transformation and the increased use of digital services have given rise to new risks and challenges for individual service recipients, for businesses, and for society as a whole, hence the need to revisit the previous regulatory framework, now more than 20 years old.

Main novelties

The new regulatory framework applies to ‘information society services’, i.e. entities offering services at a distance, by electronic means, at the request of a recipient, ‘normally for remuneration’.

The overall architecture of the E-commerce Directive is preserved, but new rules on transparency, disclosure requirements, and accountability are adopted, primarily reflecting existing case law. The choice of regulation rather than directive as the form for the new legislation is a significant continuity solution. The direct applicability of the DSA is anticipated to help eliminate disparities between national E-commerce Directive transpositions.

However, the responsibility exemption for providers engaged in mere conduit, caching, and hosting activities remains preserved. This exemption, which focuses on hosting providers, is based on the condition that the provider of such an information society service is not liable for data maintained at the recipient’s request. All of the above, if the provider lacks actual knowledge of illegal activity or illegal content and, with respect to claims for damages, is unaware of facts or circumstances from which the illegal activity or illegal content is apparent; and, upon acquiring such knowledge or awareness, acts expeditiously to remove or disable access to the illegal content.

Similarly, the absence of a general obligation to monitor the platform for user activity is maintained, but certain exceptions are added. In addition, the DSA introduces a sort of “Good Samaritan” language to highlight that intermediaries are permitted to conduct bona fide voluntary investigations or other efforts aimed at finding and deleting illegal content without the risk of losing exemptions for that reason alone.

In addition to replicating the above exemption framework, the Digital Services Act imposes:

1. due diligence obligations for some specific categories of intermediary service providers.

2. new rules for implementation, enforcement, cooperation and coordination between Member States on digital services.

Perhaps the most significant novelty is the introduction of a ‘scaled’ discipline with four categories of providers and a progressive increase in the obligations, proportionate to the influence played, and responsibilities placed on the platform due to belonging to one or the other of the specified categories. These obligations are summarized here in the Table below.[3]

The categories would be intermediary services, hosting (e.g. cloud), online platform (e.g. social media) and very large platforms.

Intermediary services

Hosting
services
Online
platforms

Very large
platforms

Transparency measure for the online platform Transparency Reports

X

X

X

X

Requirements on terms of service that take into account fundamental rights

X

X

X

X

Notification, intervention and obligation to provide information to users

X

X

X

Transparency of user-facing online advertising

X

X

Transparency of recommendation systems

X

Supervision structure to deal with the complexity of the online space Cooperation with national authorities following orders

X

X

X

X

Contact points and, if necessary, legal representative

X

X

X

X

Complaint, redress and out-of-court dispute resolution mechanism

X

X

External and independent audit, internal compliance function and public accountability

X

Cooperation in response to crises

X

Measures against illegal goods, services, or content online Trusted flaggers

X

X

Measures against abusive service and counter-notification

X

X

Special obligations for marketplaces, e.g. verification of credentials of third-party providers (‘KYBC’), compliance by design, random checks.

X

X

Reporting offences

X

X

Risk Management Obligations

X

X

Codes of Conduct

X

Access by researchers and authorities to key data Sharing data with authorities and researchers

X

The establishment of new national authorities to oversee the DSA’s implementation is an additional innovation of note. In Chapter IV of the proposal, the procedural structure of this body is outlined. This individual is known as the Digital Services Coordinator, and he or she will be responsible, in each Member State, for overseeing the precise application of the DSA with respect to the platforms that have their main establishment in that Member State. The Digital Services Coordinator[4] will have three powers: investigative; enforcement, such as the power to order the cessation of violations, to impose corrective measures or interim measures aimed at avoiding the risk of serious harm; and the power to impound platforms that violate the DSA.

Finally, where the previous measures prove ineffective, coordinators also have the power to:

  1. to require the adoption of an action plan setting out the measures necessary to bring the infringement to an end and to ensure that the provider takes such measures, and to report on the measures taken
  2. to request the competent judicial authorities of that Member State to order the temporary restriction of access of the recipients of the service affected by the infringement.

Finally, platforms may also be sanctioned for submitting incorrect, incomplete or misleading information, as well as for failing to reply or rectify the same information, and for failing to submit to inspections. In these cases, however, penalties may not exceed 1 per cent of annual income or turnover (Article 42(3)).

Next steps

After the European Parliament adopted the DSA at first reading in July 2022, the text must be approved by the Council of the European Union. The DSA will be signed by the Presidents of both institutions and published in the Official Journal following acceptance by the Council. Then, twenty days following its publication in the Official Journal, it will enter into force.

With the exception of the responsibilities for big online platforms and large online search engines, which will apply four months after their designation, the DSA will be directly applicable throughout the EU after 15 months or on 1 January 2024, whichever is later.[5]

  1. https://digital-strategy.ec.europa.eu/en/policies/digital-services-act-package
  2. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32000L0031
  3. The Digital Services Act: An Analysis of Its Ethical, Legal, and Social Implications <https://www.researchgate.net/publication/357803324_The_Digital_Services_Act_An_Analysis_of_Its_Ethical_Legal_and_Social_Implications>
  4. https://www.lawinsider.com/dictionary/digital-services-coordinator-of-establishment
  5. https://ec.europa.eu/commission/presscorner/detail/en/IP_22_2545
tax deduction, déduction d'impot, crowdfunding, lévée de fond, tax law, fiscality, tax regime, fiscalité, droit fiscal, régime fiscal, directive européenne, européen directive, national competences, compétences nationales, impot sur le revenu, direct tax,
Law,

The institution of the common market and the ECN directive

Towards the establishment of the single market

The institutions of the European Union play a fundamental role in the realisation of the single European market, notably through the adoption of treaties, their interpretation by European judges or the control of the institutions over the actors who impact on this market. However, it cannot be achieved without the active intervention of the Member States, which must respect the Union’s rules and ensure that they are respected by both natural and legal persons. National institutions play an essential role in monitoring the correct application of regulations within the States.

One of the pillars of European Union law is its competition policy, which is one of the means of achieving the European internal market and above all the four freedoms: free movement of services, capital, goods and persons. This involves a ban on abuses of dominant positions and agreements between companies that would distort competition. Moreover, state aid paid to certain companies that would restrict competition is also prohibited, although certain exceptions are allowed.

The different competition authorities of the European Union member states

To ensure that competition policy is respected, in each of the Member States, competition authorities monitor that companies’ actions comply with the competition rules. In order to strengthen European competition policy, the institutions have put in place various measures. The first step was the adoption of the regulation 1/2003 which created a European Competition Network (ECN) in which national competition authorities enforce competition law in a decentralised way while cooperating with each other and with the European Commission.

The European Union has embarked on a new phase in its competition policy. This aims to consolidate and strengthen the role of national competition authorities by harmonising their powers, means of intervention and operating rules. To this end, the directive (EU) 2012/1 of the 11th of decembre 2018 The aim of this directive is to provide the competition authorities of the Member States with the means to implement the competition rules more effectively and to guarantee the proper functioning of the internal market. The aim of this directive is to ensure uniform application of European competition law, in particular by strengthening cooperation within the European Competition Network between the Commission and the national authorities. The system governing European competition law is decentralised and based on trust and dialogue between the authorities and the Commission. The new EU Directive does not fundamentally change the ECN, it only aims at strengthening cooperation between the actors and harmonising the implementation of EU competition rules in all Member States.

tax deduction, déduction d'impot, crowdfunding, lévée de fond, tax law, fiscality, tax regime, fiscalité, droit fiscal, régime fiscal, directive européenne, européen directive, national competences, compétences nationales, impot sur le revenu, direct tax,

The search for independence of national authorities

As regards the institutions themselves, the aim of the Directive is to “ensure that NCAs [National Competition Authorities] have the guarantees of independence, resources and powers of coercion and fine-setting necessary to be able to apply Articles 101 and 102 of the Treaty on the Functioning of the European Union effectively“. This includes the possibility for the authorities of each Member State to impose effective, proportionate and dissuasive fines on companies that engage in behaviour that is contrary to European competition rules. The Directive provides that the fine will be set in proportion to the company’s worldwide turnover.

Initially, the power or lack of power for Competition Authorities to sanction actors that violate competition law depended on the States. For example, in Ireland, the Competition Authority could not itself impose sanctions on companies that engaged in anti-competitive behaviour, it had to look to the courts to impose sanctions, but it was found that this system was ineffective and in fact very few sanctions were imposed.

French situation

In France, there was already a system of administrative sanctions that could be imposed by the Competition Authority. The main change brought about by this new directive is that of the opportunity to prosecute provided for in Article 4(5) of the directive : « National administrative competition authorities shall have the power to set their priorities in order to carry out the tasks necessary for the application of Articles 101 and 102 of the Treaty on the Functioning of the European Union, as referred to in Article 5(2) of this Directive. To the extent that national administrative competition authorities are required to examine formal complaints, these authorities have the power to reject such complaints on the grounds that they do not consider them a priority. This is without prejudice to the power of NCAs to reject complaints on other grounds defined by national law. » National administrative competition authorities shall have the power to set their priorities in order to carry out the tasks necessary for the application of Articles 101 and 102 of the Treaty on the Functioning of the European Union, as referred to in Article 5(2) of this Directive. To the extent that national administrative competition authorities are required to examine formal complaints, these authorities have the power to reject such complaints on the grounds that they do not consider them a priority. This is without prejudice to the power of NCAs to reject complaints on other grounds defined by national law, in the article L462-8 of the Code de commerce . With this new competence, the question arises as to whether this new system is totally at the discretion of the Competition Authority, as Article 4 does not define the principle of discretionary prosecution, and the risk of abuse must be taken into account, particularly with regard to the lobbying of companies targeted by the complaint. Moreover, it implies that some cases may be treated in priority to others, what recourse will there be in the event of too long a delay due to this new principle of expediency of proceedings?

Secondly, in order to strengthen the powers of the national authorities, the Directive introduces investigative powers for these authorities, powers that will ensure the effective application of Articles 101 and 102 of the TFEU. In the course of these investigations, the Competition Authorities will be able to issue any interim measure they deem necessary, in accordance with Article 11 of the Directive, which provides that  Member States shall ensure that, at least in cases of urgency justified by the risk of serious and irreparable damage to competition, national competition authorities are empowered to act on their own initiative to order, by decision on the basis of a prima facie finding of an infringement of Article 101 or 102 of the Treaty on the Functioning of the European Union, the imposition of interim measures on undertakings and associations of undertakings. This possibility offered to the competition authorities constitutes a new power in many countries, as is the case in Ireland, where the powers of the Competition Authority were previously limited.

The question then arises as to what impact this directive will have on companies. Will they have to make special arrangements to prepare for the new rules? The competition rules are not intended to change with this directive, it only aims to strengthen the authorities of each Member State, therefore, it will influence the activity of companies at international level because they will be able to obtain more easily the respect of the competition rules in all the States of the Union, this is allowed by the fact that it encourages a homogenization of the rights and the rules of procedure.

In France, however, the Directive may have a significant impact on trade associations in which many companies are involved. Article 15 of the directive provides that “the maximum fine that national competition authorities may impose on each undertaking or association of undertakings participating in an infringement of Article 101 or 102 of the Treaty on the Functioning of the European Union shall not be less than 10% of the undertaking’s or association of undertakings’ total worldwide turnover in the business year preceding the decision. In France, the maximum amount of the tax was set at €3 million, but from now on it will be raised to 10% of the total turnover of the company or association. This change may be significant for some professional associations. However, it should be remembered that the Competition Authorities are subject to the principle of proportionality of the sanction they impose in relation to the facts in dispute. Consequently, this ceiling may only be imposed very rarely. This measure is justified by the principle of harmonisation of European Union law and is accompanied by the principle of financial responsibility of companies sanctioned as a result of the cartel.

The Irish Situation

In addition to the introduction of a ceiling, the Directive provides for the introduction of civil financial penalties. This provision makes major changes to certain laws, such as Irish law. Until the entry into force of the Directive, only criminal fines could be imposed by the Irish Competition Authority, which meant that the courts had to intervene to implement it and the Authority had to prove the infringement of the competition rules before the courts, without any doubt. This complex system meant that the Authority only imposed criminal fines for the most serious competition law infringements and where the cartel was characterised. The introduction of civil sanctions is likely to lead to an increase in sanctions and activity by the Irish Competition Authority, due to increased enforcement powers. These measures should introduce a more effective competition law regime in Ireland but also in most EU countries.

Finally, it can be seen that this directive has not had the same impact in all Member States. While some countries, such as France and Spain, already applied most of the rules, in other countries, the power granted to the Competition Authority was less, as was the case in Ireland. Therefore, in the latter, the directive will have a greater impact.