Memorandum by Dr William Bishop CRA International
1. DELAY
The desideratum driving this reform proposal
from the CBI is avoidance of delay in merger control. This aim
is obviously meritorious. To the extent that creating a new Competition
Court is necessary to reduce such delays I support it.
2. LANGUAGE
But the only important item of delay avoidance
pointed out by the CBI is dispensing with the need for translation
into French. Again, this is clearly desirable. Whether creation
of a new institution is necessary to achieve this aim is a delicate
political-institutional matter that I am not well placed to judge.
If the CFI itself could just change its own rules on language
and translation then there would be no need for a new institution.
3. REPLACE OR
REFORM?
I note that when some state institution is not
doing its job well there seems to be some tendency, instead of
reforming the institution, to create a new institution to do the
real job while leaving the existing one in place, often as a quasi-vestigial
entity. Thus, in the 1980s, the ECJ did a thoroughly bad job of
keeping Commission administrative abuses in check. Instead of
making the ECJ work better we created the CFI to do the work the
ECJ should have been doing in the first place. Now a new CC will
perhaps come into existence because we are unwilling to reform
the CFI. And at home, we might recall that in the long ago the
cabinet replaced the privy council.... Multiplication of institutions,
for want of reform is hardly edifying. Is it necessary?
4. MERGERS ONLY
Merger cases are indeed the cases where delay
is most serious and, moreover, most obnoxious. It is essential
if the rule of law in merger control is to be maintained and enhanced
that notifying parties have a credible, commercially realistic
check on potential abuse of power by the Commission. Anyone with
experience of merger control since 1999 is in no doubt that the
Commission's three major defeats in 2002, and the Commissions
own reforms consequent on those defeats, have greatly improved
the role of objectivity and decreased the role of officials' amour
propre in the determination of decisions. Nonetheless, the CBI
is right to say that much more can and should be done to further
improve the process. Non-merger cases are generally much less
affected by the terror of delay: so a reform such as this should
indeed be confined to merger cases.
5. LAWYERS ONLY?
Restriction of full court membership to lawyers
is an anachronism. Note that in France, Professor Frederic Jenny,
an economist, was recently Vice President of the French competition
court (Conseil de la Concurence) and is today a Judge of the French
supreme court (Cour de Cassation). The EU restriction dates from
a time when it would not have occurred to anyone that a non-lawyer
had anything relevant to contribute. But no competent observer
thinks that today. The restriction makes little more sense than
the one that not long ago in this country confined judicial appointments
to barristers to the exclusion of solicitors. It is something
of a trade union restrictive practice—for a rather well-heeled
trade union.
6. APPEALS
There is little more merit in multiplying appeals
than in multiplying institutions (see 3 above). Appeals from the
new CC should lie to the ECJ. Two appeals is quite enough.
7. REFERENCES
References from national courts to the community
courts come in various flavours. Those requiring serious factual
analysis might perhaps go to a court (ie the CFI) which sees factual
analysis as a major part of its remit. But I would not favour
any mechanistic assignment of cases. Instead the presidents of
the CFI and ECJ should confer and assign each reference to the
most appropriate panel. References from member states in matters
of mergers perhaps could even go to the new competition court.
8. A REFORM TOO
FAR?
I am not persuaded that efforts at reform should
be confined to those of the type the CBI has suggested. The core
problem in merger control is that the investigator-prosecutor
is also the judge-adjudicator. But these roles should be systematically
separated. It is not realistic to expect a person who has spent
four months getting the evidence against a company to put on a
cap labelled "judge", then turn around and say "My
evidence is insufficient: you can go ahead". The case to
block should be presented by the Commission and adjudicated on
by the Court. I see no real opposition to this coming from member
states. The real opponent is the Commission, which loves the power.
Brussels functionaries practically dance when they recall that
Jack Welch and Bill Gates had to come to pay them court. In fact
the treaties are amended frequently—so long as the Commission
likes it. The treaties should be reformed here too. Incidentally,
for merger control in the US, Canada and South Africa, the two
functions I referred to above are indeed in the hands of separate
institutions.
20 October 2006
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