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Competition Law Toolkit : Enforcement Mechanisms
L. Role of the Courts
Decision-Making, Appeals and Direct Actions
Any system of competition law must decide what role to give to the courts. In some jurisdictions, it is the courts that actually make the decisions in competition law. This may be referred to as the judicial model. An example is the US: the Department of Justice has a role as a prosecutor, but it is the courts that actually impose fines on the members of a cartel or prohibit mergers. In some countries, such as Finland and Sweden, the competition authorities can find an infringement of competition law but only the courts can impose fines.
In other jurisdictions, competition authorities can investigate, decide, and impose sanctions themselves. This is often referred to as the administrative model. In this situation, it is important that there should be an effective appeal system which gives the court the opportunity to review the competition authority's decision. In some countries, the court will merely carry out a judicial review, looking at the legality of the decision and ensuring procedural fairness. In other systems, the court may be asked to conduct a full appeal, with the power, should it so wish, to substitute its own opinion for that of the competition authority. A full appeal of this kind can provide important reassurance to companies and other stakeholders who might have anxieties that the competition authority has too much power. However, it is obvious that judges in courts deciding on complex competition cases must have the necessary training in competition law, policy, and economics to be able to discharge their functions effectively.
There is no simple answer to the question of whether the judicial or the administrative model is to be preferred. A starting point would be to consider the constitutional position of any particular country. In some countries, there may be a constitutional objection to one body having the combined functions of prosecutor, judge, and jury; in which case, it will not be possible to adopt an administrative model. Even if there is no constitutional objection to the administrative model, it may be thought desirable to separate the various functions to some extent. One way of doing this is to divide the roles of investigation and decision-making by leaving it to the courts to actually decide cases. An alternative would be to have a single competition authority that has independent investigators and decision-makers within it.
An argument against the judicial model is that judges in courts—who may have to deal with a variety of cases spanning many different areas—simply do not have the expertise to make decisions in the area of competition law, where there may be very complex issues of economics and policy. The advantage of creating competition authorities is that they can be staffed with individuals, both at the investigatory and decision-making level, with a real expertise in matters of competition policy. Another possible objection to the use of courts as the primary decision-making institution is that, in some countries, there may be very serious delays in the judicial process, whereas decisions in competition cases need to be made as expeditiously as possible in order to ensure that markets can be made to work well for consumers.
In determining whether to adopt a judicial or administrative model, and which variant to adopt, there is much to be said for looking at practices in other countries in the region. See links to the relevant laws of within Asia and the Pacific in Countries That Have Adopted Systems of Competition Law.
A further point about the use of courts is that in certain countries, the victims of anti-competitive behavior are entitled to bring an action for damages to obtain compensation for the injury suffered. This is something that is usually reserved to the courts rather than competition authorities.
One final point that may be made in relation to the use of courts is that when a country has both sector-specific regulators and a competition authority, there is much to be said for giving one and the same court an appellate responsibility in relation to both types of institution. This may be an effective way of ensuring that there is a reasonable degree of coherence as to the way regulatory and competition rules are applied in practice.
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