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Townley - Coordinated Diversity - SSRN 2013

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DRAFT [email protected] 1 Co)ordinated diversity: revolutionary suggestions for EU competition law (and for EU law too) Dr Christopher Townley 1 United in Diversity (the EU’s motto) Abstract: The overwhelming view is that the EU competition rules should be applied uniformly. By placing the competition rules in a wider EU context, specifically Article 101 TFEU (antiE competitive arrangements), this paper argues that the national competition authorities (NCAs) should be able to diverge in their application of Article 101. This better respects the EU legal order’s substantive and procedural diversity. It also helps learning. There are limits, however. The paper then suggests coEordinating this diversity in networks where the NCAs and the Commission can share policy solutions and ideas (the ECN). This network can be replicated to help in other areas of EU law. Take the network of national and EU bodies that discuss proposed technical regulations’ compatibility with Articles 34 and 36 TFEU under Directive 98/34, as amended. The paper explores how insights from the ECN can improve policy learning in this free movement network too. Keywords: Articles 34, 36 and 101 TFEU, competition, free movement, uniformity, diversity, network 1. Introduction European economies stagnate and our peoples are scared, divided, and increasingly dissatisfied with attempts to placate them. 2 We populate an ever more complex space. ‘The increased heterogeneity, political, economic and cultural…inevitably brings an increase in the heterogeneity within the functioning of…[the EU’s] institutions and policies…’ 3 As a result, the EU Treaties are riddled with constitutional conflicts. Like all multiElevel systems, we need to know what powers reside where. Power ebbs and flows between the EU and the Member States. Belief in the market and desire for more state intervention changes over time too. Sewn through it all is a tension between diversity and uniformity. This applies to substantive conflicts (market integration and the environment, for example); as well as how to regulate such conflicts (state measures or private action). Section 2 of this paper highlights five major challenges in the EU’s regulatory game. They are competition v. coEoperation; the importance of public policy; appropriate mechanisms for achieving regulatory aims; EU/ Member State power distribution; and uncertainty. These five challenges affect the EU and the Member States’ ability to agree the appropriate type and level of intervention. PolicyEmakers struggle with these five challenges. We are used to this in many key areas of EU law, such as free movement of goods and employment law. In fact, the paper uses the free movement provisions to illustrate how many of the challenges listed above are accommodated. The solutions are often contested. There is much discussion about how the EU can and should respond to these challenges. Pollack, Wallace and Young highlight three trends in EU policyEmaking: 1 King’s College London. Thanks to MarieELise van Veenstra, for her research assistance; and to Nina Boeger, Roger Brownsword, Anna Gerbrandy, Penny Green, Alison Jones, Rainer Lindberg, Imelda Maher, Giorgio Monti, Okeoghene Odudu, Federico Ortino, Jan Oster, Gozde Deniz Sanrah, Michael Schillig, Heba Shahein, Oona Ştefan, Mariana Tavares, Alex Türk, Hans Vedder, Tjarda van der Vijver, Richard Whish, Wouter Wils, Lorenzo Zucca and the participants at Gareth Davies’ Corporate Social Responsibility and Production Standards Amsterdam 2013 workshop for their comments. For my family: Heba, Jalila and Samiha. 2 For example, PewResearchCenter, The New Sick Man of Europe: the European Union, 13 May 2013. 3 de Búrca and Scott, ‘Introduction’ in de Búrca and Scott (eds), Constitutional Change in the EU: from uniformity to flexibility? (Hart 2000), 2. DRAFT [email protected] 2 “…experimentation with and adoption of new modes of policyEmaking, often in conjunction with more established modes…; renegotiation of the role of Member States…in the policy process; and erosion of traditional boundaries between internal and external policies.” 4 This paper’s significance lies in its analysis of who should generate EU competition law’s substantive policy, in the light of the wider EU context and regulatory theory. It focuses on experimentation with new modes of policyEmaking; and renegotiating Member States’ roles, visEàEvis the Commission. For example, in EU competition law there are disagreements on aims (goals) and methods (how to achieve the goals). Should the Commission stifle them as damaging (often national) fragmentation, unilaterally imposing its own regulatory vision; or, celebrate these useful experiments in areas of doubt, pressure valves in case of difference? This paper brings these issues to the fore. Resolving this issue is particularly important given the quantity of Article 101 cases brught by the NCAs. 5 Due to differing views within the EU and individual Member States on how best to deal with our five challenges, Section 3 asks whether Member States have any freedom to adopt diverse positions, specifically in their application of the EU’s free movement of goods case law, Articles 34 and 36. It examines this core competence and notes that some Member State diversity is permissible there. Then the paper examines Article 101, antiEcompetitive arrangements. The dominant view in the EU is that Member States’ courts and NCAs should closely follow one, the Commission’s, application of Article 101. 6 Yet, two highly reputable jurisdictions (the USA and Germany) encourage, within limits, disagreements on their own competition laws’ aims, and on the methods to achieve them. 4 Wallace, Pollack and Young (eds), PolicyGMaking in the European Union (Sixth edn, OUP 2010) 482. 5 [refer to wouter paper, page 7 and following] 6 This is explicit in Parliament, Resolution on the Commission White Paper on modernisation of the rules implementing Articles 85 and 86 of the EC Treaty (COM(1999) 101 & C5G0105/1999 & 1999/2108(COS)) (1999), para 6; the Opinion of AdvocateEGeneral Mazák, Case CE375/09 Prezes Urzędu Ochrony Konkurencji i Konsumentów v Tele2 Polska sp. zoo, now Netia SA w Warszawie, 3 May 2011, nyr, para 14; Luis Ortiz Blanco & Alfonso Lamadrid de Pablo, EU Competition Law Enforcement: elements for a discussion on effectiveness and uniformity, (2011) Fordham 38th Conference on International Antitrust Law and Policy, DRAFT, 46E7; Cengiz, ‘MultiElevel Governance in Competition Policy: the European Competition Network’ European Law Review; Jones and Sufrin, EU Competition Law: text, cases and materials (Fourth edn, OUP 2010); Scott, ‘The Evolution of Competition Law and Policy in the United Kingdom’ LSE Law, Society and Economy Working Papers <http://www.lse.ac.uk/collections/law/wps/WPS2009E09_Scott.pdf> , 5; Dougan, National Remedies Before the Court of Justice: issues of harmonisation and differentiation (Hart 2004), 120; Lowe, ‘The Role of the Commission in the Modernisation of EC Competition Law’ (Modernisation of EC Competition Law: uncertainties and opportunities); Lenaerts, ‘Modernisation of the Application and Enforcement of European Competition Law: an introductory overview’ in Stuyck and Gilliams (eds), Modernisation of European Competition Law (Intersentia 2002), 36E7; Tesauro, ‘The Relationship Between National Competition Authorities and Their Respective Governments in the Context of the Modernisation Initiative’ in Ehlermann and Atanasiu (eds), Constructing the EU Network of Competition Authorities (Hart 2002), 273; Gerber, ‘Modernising European Competition Law: a developmental perspective’ 22 European Competition Law Review, 123E6; Kingston, ‘A 'New Division of Responsabilities' in the Proposed Regulation to Modernise the Rules Implementing Articles 81 and 82 EC? A Warning Call’ibid; Wißmann, ‘Decentralised Enforcement of EC Competition Law and the New Policy on Cartels’ 23 Journal of World Competition, 147E8; Schaub, ‘Modernization of EC Competition Law: reform of Regulation No. 17’ 23 Fordham International Law Journal, 754, 764; and Whish, ‘National Courts and the White Paper: a commentary’ in Ehlermann (ed), The Modernisation of European Competition Law: the next ten years (CELS Occasional Paper No 4 1999), 77. Others assume that uniformity is desirable, Whish and Bailey, Competition Law (Seventh edn, OUP 2012), 288; Temple Lang, ‘The Duties of CoEoperation of National Courts under European Union Law: principles and unresolved issues’ in Sharpe QC (ed), Lincoln's Inn Lectures on European Law and Human Rights (Wildy, Simmonds & Hill Publishing 2012), 70; OFT, Article 101(3) G A Discussion of Narrow versus Broad Definition of Benefits: discussion note for an OFT breakfast roundtable on 12 May 2010 (2010), 3; Goyder and AlborsELlorens, Goyder's EC Competition Law (Fifth edn, OUP 2008), 526; Wigger and Nölke, ‘Enhanced Roles of Private Actors in EU Business Regulation and the Erosion of Rhenish Capitalism: the case of antitrust enforcement’ 45 Journal of
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Page 1: Townley - Coordinated Diversity - SSRN 2013

DRAFT& & [email protected]

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Co)ordinated&diversity:&revolutionary&suggestions&for&EU&competition&law&(and&for&EU&law&too)&

Dr&Christopher&Townley1&

United'in'Diversity'(the'EU’s'motto)'

Abstract:& The2 overwhelming& view2 is2 that2 the2 EU2 competition2 rules2 should2 be2 applied2uniformly.2By2placing2the2competition2rules2in2a2wider2EU2context,2specifically2Article21012TFEU2(antiEcompetitive2 arrangements),2 this2 paper2 argues2 that2 the2 national2 competition2 authorities2 (NCAs)2should2be2able2to2diverge2in2their2application2of2Article2101.2This2better2respects2the2EU2legal2order’s2substantive2 and2 procedural2 diversity.2 It2 also2 helps2 learning.2 There2 are2 limits,2 however.2 The2 paper2then2 suggests2 coEordinating2 this2 diversity2 in2 networks2 where2 the2 NCAs2 and2 the2 Commission2 can2share2policy2solutions2and2ideas2(the2ECN).2This2network2can2be2replicated2to2help2in2other2areas2of2EU2 law.2 Take2 the2 network2 of2 national2 and2 EU2 bodies2 that2 discuss2 proposed2 technical2 regulations’2compatibility2with2Articles2342and2362TFEU2under2Directive298/34,2as2amended.2The2paper2explores2how2insights2from2the2ECN2can2improve2policy2learning2in2this2free2movement2network2too.2

Keywords:&Articles234,2362and21012TFEU,2competition,2free2movement,2uniformity,2diversity,2network2

2

1. Introduction&

European2economies2stagnate2and2our2peoples2are2scared,2divided,2and2increasingly2dissatisfied2with2attempts2to2placate2them.22We2populate2an2ever2more2complex2space.2‘The2increased2heterogeneity,2political,2 economic2 and2 cultural…inevitably2 brings2 an2 increase2 in2 the2 heterogeneity2 within2 the2functioning2 of…[the2 EU’s]2 institutions2 and2policies…’32 As2 a2 result,2 the2 EU2 Treaties2 are2 riddled2with2constitutional2conflicts.2Like2all2multiElevel2systems,2we2need2to2know2what2powers2reside2where.22

Power2ebbs2and2flows2between2the2EU2and2the2Member2States.2Belief2in2the2market2and2desire2for2more2 state2 intervention2changes2over2 time2 too.2 Sewn2 through2 it2 all2 is2 a2 tension2between2diversity2and2uniformity.2 This2 applies2 to2 substantive2 conflicts2 (market2 integration2 and2 the2 environment,2 for2example);2as2well2as2how2to2regulate2such2conflicts2(state2measures2or2private2action).2

Section2 22 of2 this2 paper2 highlights2 five2 major2 challenges2 in2 the2 EU’s2 regulatory2 game.2 They2 are2competition2v.2coEoperation;2the2importance2of2public2policy;2appropriate2mechanisms2for2achieving2regulatory2aims;2EU/2Member2State2power2distribution;2and2uncertainty.2These2five2challenges2affect2the2EU2and2the2Member2States’2ability2to2agree2the2appropriate2type2and2level2of2intervention.22

PolicyEmakers2struggle2with2these2five2challenges.2We2are2used2to2this2in2many2key2areas2of2EU2law,2such2as2free2movement2of2goods2and2employment2 law.2 In2fact,2 the2paper2uses2the2free2movement2provisions2to2 illustrate2how2many2of2 the2challenges2 listed2above2are2accommodated.2The2solutions2are2often2contested.2There2 is2much2discussion2about2how2the2EU2can2and2should2respond2to2these2challenges.2Pollack,2Wallace2and2Young2highlight2three2trends2in2EU2policyEmaking:2

222222222222222222222222222222222222222222222222222222222222212King’s2College2London.2Thanks2to2MarieELise2van2Veenstra,2for2her2research2assistance;2and2to2Nina2Boeger,2Roger2 Brownsword,2 Anna2 Gerbrandy,2 Penny2 Green,2 Alison2 Jones,2 Rainer2 Lindberg,2 Imelda2 Maher,2 Giorgio2Monti,2 Okeoghene2Odudu,2 Federico2Ortino,2 Jan2Oster,2 Gozde2Deniz2 Sanrah,2Michael2 Schillig,2 Heba2 Shahein,2Oona2 Ştefan,2Mariana2 Tavares,2 Alex2 Türk,2Hans2Vedder,2 Tjarda2 van2 der2 Vijver,2 Richard2Whish,2Wouter2Wils,2Lorenzo2Zucca2and2the2participants2at2Gareth2Davies’2Corporate2Social2Responsibility2and2Production2Standards2Amsterdam220132workshop2for2their2comments.22For2my2family:2Heba,2Jalila2and2Samiha.222For2example,2PewResearchCenter,2The'New'Sick'Man'of'Europe:'the'European'Union,2132May22013.232 de2 Búrca2 and2 Scott,2 ‘Introduction’2 in2 de2 Búrca2 and2 Scott2 (eds),2 Constitutional' Change' in' the' EU:' from'uniformity'to'flexibility?2(Hart22000),22.22

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“…experimentation2with2and2adoption2of2new2modes2of2policyEmaking,2often2in2conjunction2with2more2established2modes…;2 renegotiation2of2 the2 role2of2Member2 States…in2 the2policy2process;2and2erosion2of2traditional2boundaries2between2internal2and2external2policies.”42

This2paper’s2significance2lies2in2its2analysis2of2who2should2generate2EU2competition2law’s2substantive2policy,2in2the2light2of2the2wider2EU2context2and2regulatory2theory.2It2focuses2on2experimentation2with2new2modes2of2policyEmaking;2and2renegotiating2Member2States’2roles,2visEàEvis2the2Commission.2For2example,2 in2 EU2 competition2 law2 there2 are2 disagreements2 on2 aims2 (goals)2 and2 methods2 (how2 to2achieve2the2goals).2Should2the2Commission2stifle2them2as2damaging2(often2national)2fragmentation,2unilaterally2 imposing2 its2 own2 regulatory2 vision;2 or,2 celebrate2 these2 useful2 experiments2 in2 areas2 of2doubt,2pressure2valves2in2case2of2difference?22This2paper2brings2these2issues2to2the2fore.2 2Resolving2this2issue2is2particularly2important2given2the2quantity2of2Article21012cases2brught2by2the2NCAs.52

Due2to2differing2views2within2the2EU2and2individual2Member2States2on2how2best2to2deal2with2our2five2challenges,2 Section2 32 asks2whether2Member2 States2 have2 any2 freedom2 to2 adopt2 diverse2 positions,2specifically2 in2their2application2of2the2EU’s2free2movement2of2goods2case2 law,2Articles2342and236.2 It2examines2this2core2competence2and2notes2that2some2Member2State2diversity2is2permissible2there.22

Then2the2paper2examines2Article2101,2antiEcompetitive2arrangements.2The2dominant2view2in2the2EU2is2that2Member2States’2courts2and2NCAs2should2closely2follow2one,2the2Commission’s,2application2of2Article2101.62Yet,2two2highly2reputable2jurisdictions2(the2USA2and2Germany)2encourage,2within2limits,2disagreements2on2their2own2competition2laws’2aims,2and2on2the2methods2to2achieve2them.22

222222222222222222222222222222222222222222222222222222222222242Wallace,2Pollack2and2Young2(eds),2PolicyGMaking'in'the'European'Union2(Sixth2edn,2OUP22010)2482.25 [refer to wouter paper, page 7 and following] 62 This2 is2 explicit2 in2 Parliament,2 Resolution' on' the' Commission' White' Paper' on' modernisation' of' the' rules'implementing'Articles'85'and'86'of'the'EC'Treaty'(COM(1999)'101'&'C5G0105/1999'&'1999/2108(COS))2(1999),2para2 6;2 the2 Opinion2 of2 AdvocateEGeneral2 Mazák,2 Case2 CE375/092 Prezes' Urzędu' Ochrony' Konkurencji' i'Konsumentów'v'Tele2'Polska'sp.'zoo,'now'Netia'SA'w'Warszawie,232May22011,2nyr,2para214;2Luis2Ortiz2Blanco2&2Alfonso2Lamadrid2de2Pablo,2EU'Competition'Law'Enforcement:'elements'for'a'discussion'on'effectiveness'and'uniformity,2 (2011)2Fordham238th2Conference2on2 International2Antitrust2Law2and2Policy,2DRAFT,246E7;2Cengiz,2‘MultiElevel2 Governance2 in2 Competition2 Policy:2 the2 European2 Competition2 Network’2 European2 Law2 Review;2Jones2and2Sufrin,2EU'Competition'Law:'text,'cases'and'materials2(Fourth2edn,2OUP22010);2Scott,2‘The2Evolution2of2 Competition2 Law2 and2 Policy2 in2 the2 United2 Kingdom’2 LSE2 Law,2 Society2 and2 Economy2 Working2 Papers2<http://www.lse.ac.uk/collections/law/wps/WPS2009E09_Scott.pdf>2 ,2 5;2 Dougan,2 National' Remedies' Before'the' Court' of' Justice:' issues' of' harmonisation' and' differentiation2 (Hart2 2004),2 120;2 Lowe,2 ‘The2 Role2 of2 the2Commission2 in2 the2 Modernisation2 of2 EC2 Competition2 Law’2 (Modernisation2 of2 EC2 Competition2 Law:2uncertainties2 and2opportunities);2 Lenaerts,2 ‘Modernisation2of2 the2Application2 and2Enforcement2of2 European2Competition2 Law:2 an2 introductory2 overview’2 in2 Stuyck2 and2 Gilliams2 (eds),2 Modernisation' of' European'Competition' Law2 (Intersentia2 2002),2 36E7;2 Tesauro,2 ‘The2 Relationship2 Between2 National2 Competition2Authorities2 and2 Their2 Respective2Governments2 in2 the2 Context2 of2 the2Modernisation2 Initiative’2 in2 Ehlermann2and2 Atanasiu2 (eds),2 Constructing' the' EU' Network' of' Competition' Authorities2 (Hart2 2002),2 273;2 Gerber,2‘Modernising2European2Competition2Law:2a2developmental2perspective’2222European2Competition2Law2Review,2123E6;2 Kingston,2 ‘A2 'New2 Division2 of2 Responsabilities'2 in2 the2 Proposed2 Regulation2 to2 Modernise2 the2 Rules2Implementing2 Articles2 812 and2 822 EC?2 A2 Warning2 Call’ibid;2 Wißmann,2 ‘Decentralised2 Enforcement2 of2 EC2Competition2 Law2 and2 the2 New2 Policy2 on2 Cartels’2 232 Journal2 of2 World2 Competition,2 147E8;2 Schaub,2‘Modernization2of2EC2Competition2Law:2 reform2of2Regulation2No.217’2232Fordham2 International2 Law2Journal,2754,2 764;2 and2 Whish,2 ‘National2 Courts2 and2 the2 White2 Paper:2 a2 commentary’2 in2 Ehlermann2 (ed),2 The'Modernisation'of'European'Competition'Law:'the'next'ten'years2(CELS2Occasional2Paper2No2421999),277.2Others2assume2that2uniformity2is2desirable,2Whish2and2Bailey,2Competition'Law2(Seventh2edn,2OUP22012),2288;2Temple2Lang,2 ‘The2Duties2 of2 CoEoperation2of2National2 Courts2 under2 European2Union2 Law:2principles2 and2unresolved2issues’2in2Sharpe2QC2(ed),2Lincoln's'Inn'Lectures'on'European'Law'and'Human'Rights2(Wildy,2Simmonds2&2Hill2Publishing22012),270;2OFT,2Article'101(3)'G'A'Discussion'of'Narrow'versus'Broad'Definition'of'Benefits:'discussion'note' for' an' OFT' breakfast' roundtable' on' 12' May' 20102 (2010),2 3;2 Goyder2 and2 AlborsELlorens,2Goyder's' EC'Competition' Law2 (Fifth2 edn,2 OUP2 2008),2 526;2 Wigger2 and2 Nölke,2 ‘Enhanced2 Roles2 of2 Private2 Actors2 in2 EU2Business2Regulation2and2 the2Erosion2of2Rhenish2Capitalism:2 the2case2of2antitrust2enforcement’2452 Journal2of2

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Diversity2in2EU2competition2law2has2many2advantages.2Economics2and2political2science2show2that2it:2furthers2 tolerance,2 helps2 solve2 jurisdictional2 problems,2 increases2 democratic2 legitimacy2 and2accommodates2diverse2national2views2of2the2good2life,2both2substantively2and2through2openness2to2different2mechanisms2for2achieving2such2goals.2Ultimately2this2helps2to2preserve2Member2State2and2EU2identity2and2allows2for2multiple2problemEsolving2strings2in2the2face2of2uncertainty.2Yet,2diversity2can2 undermine2 the2 internal2market,2 increase2 the2 cost2 of2 international2 trade,2 raise2 the2 spectre2 of2externalities2and2races2to2the2bottom,2and2retard2the2development2of2a2unified2body2of2case2law.22

Controversially,2 I2argue2that2Article21012should2accommodate2some2(limited)2diversity.2This2 is2a2call2for2change2in2the2substantive2EU2competition2policyEmaking2roles:2as2the2EU2Treaties2change;2as2the2internal2 market2 becomes2 more2 integrated;72 and2 as2 citizens2 demand2 more2 respect2 for2 national2interests.2 There2 is2 not2 ‘…one2 inexorable2 path2 of2 integration2 implying2 harmonization2 and2 gradual2unification,2 but2 rather2 commitment2 to2 a2 broad2 commonality2within2which2 room2exists2 for2 varying2degrees2of2difference2and2diversity.’82Only2 then2can2we2be2united2 in2diversity.2 I2believe2 that2 this2 is2possible2without2amending2the2existing2competition2procedural2regulation.2

However,2too2much2diversity2could2rip2the2EU2apart.2Some2commonality2is2needed2if2unity2is2not2to2be2 lost.2 First,2 the2 EU2 Courts’92 case2 law2 must2 be2 respected.2 For2 the2 spaces2 between2 EU2 Court2judgments,2I2offer2coEordinated2diversity;2between2absolute2diversity2and2uniformity.102I2examine2the2interaction2 between2 the2 political2 and2 legal2 landscapes2 to2 chart2 the2 limits2 of2 the2Member2 States’2freedom,2formal2reasoning2is2not2enough.112The2limits2are2more2procedural2than2substantive.2Insights2222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222Common2 Market2 Studies,2 500;2 Geradin2 and2 Petit,2 ‘Judicial2 Remedies2 under2 EC2 Competition2 Law:2 Complex2Issues2 arising2 from2 the2 ‘Modernisation’2 Process’’,2 ,’2 in2Hawk2 (ed),2 International' Antitrust' Law'&' Policy' 20052(Fordham2Corporate2 Law2 Institute2 2006),2 402E3;2 Forrester,2 ‘Diversity2 and2 Consistency:2 can2 they2 cohabit?’2 in2Ehlermann2 and2 Atanasiu2 (eds),2Constructing' the' EU'Network' of' Competition' Authorities2 (Hart2 2002),2 342E3;2Monti2in2Ehlermann2and2Atanasiu2(eds),2Constructing'the'EU'Network'of'Competition'Authorities2(Hart22002),28;2 Siragusa,2 ‘The2 Commission's2 Position2 within2 the2 Network:2 the2 perspective2 of2 the2 legal2 practitioners’2 in2Ehlermann2and2Atanasiu2(eds),2Constructing'the'EU'Network'of'Competition'Authorities2(Hart22002),233,2256E7;2Commission,2Commission'Explanatory'Memorandum,'Proposal'for'a'Council'Regulation'Implementing'Articles'81'and'82'of'the'Treaty2(2000),26E7,214;2and2Nehl,2‘Changes2in2Legislation:2constitutional2reform2and2the2role2of2the2 administrator’2 in2 Ehlermann2 (ed),2 The'Modernisation' of' European' Competition' Law:' the' next' ten' years2(CELS2Occasional2Paper2No2421999),222E6.2On2the2importance2of2uniformity2generally,2Case2CE126/972Eco'Swiss'v'Benetton'International'[1999]2ECR2IE3055,2para2402and2Opinion2of2AdvocateEGeneral2Saggio,2para231.2A2few2authors2endorse2diversity2in2Article2101,2often2obliquely:2Svetiev,2‘Networked2Competition2Governance2in2the2EU:2 delegation,2 decentralisation,2 or2 experimentalist2 architecture?’2 in2 Sabel2 and2 Zeitlin2 (eds),2Experimentalist'Governance' in' the' European' Union:' towards' a' new' architecture2 (OUP2 2010);2 Wilks,2 ‘Agencies,2 Networks,2Discourses2 and2 the2 Trajectory2 of2 the2 European2 Competition2 Enforcement’2 32 European2 Competition2 Journal,2448;2Venit,2 ‘Brave2New2World:2the2modernisation2and2decentralisation2of2enforcement2under2Articles2812and2822of2the2EC2Treaty’2402Common2Market2Law2Review,2559E64;2and2Hawk2and2Denaeijer,2‘The2Development2of2Articles2 812 and2 82:2 legal2 certainty2 and2 efficiency’2 in2 Ehlermann2 (ed),2 The' Modernisation' of' European'Competition'Law:'the'next'ten'years2(CELS2Occasional2Paper2No2421999),254.272Poiares2Maduro,2We,'the'Court:'the'European'Court'of'Justice'and'the'European'Economic'Constitution2(Hart21998)2 makes2 a2 similar2 point2 in2 relation2 to2 the2 internal2 market;2 see2 also2 the2 Opinion2 of2 Advocate2 General2Verloren2van2Themaat2in2Case2CE231/832Henri'Cullet'v'Centre'Leclerc'à'Toulouse'[1985]2ECR2IE305,2308.282de2Búrca2and2Scott,2‘Introduction’,222make2this2point2more2generally.292The2EU2Courts2are2the2Court2of2Justice2of2the2EU2(ECJ)2and2the2General2Court,2Articles2251E2812TFEU.2102 There2 is2 a2 continuum2 from2 hierarchical2 to2 more2 collaborative,2 Diedrichs,2 ‘New2 Modes2 of2 Governance:2perspectives2 from2 the2 legal2 and2 the2 living2 architecture2 of2 the2 European2 Union’2 in2 Diedrichs,2 Reiners2 and2Wessels2(eds),2The'Dynamics'of'Change'in'EU'Governance2(Edward2Elgar22011),2211E4.2112Diedrichs,2Reiners2and2Wessels,2The'Dynamics'of'Change'in'EU'Governance2(Edward2Elgar22011),29;2Prosser,2‘Conclusion:2ten2lessons’2in2Oliver,2Prosser2and2Rawlings2(eds),2The'Regulatory'State:'constitutional'implications2(OUP22010),2306;2Cengiz,2 ‘Management2of2Networks2between2the2Competition2Authorities2 in2the2EC2and2the2US:2different2polities,2different2designs’2European2Competition2Journal,2435;2Walker,2‘EU2Constitutionalism2and2New2Governance’2in2De2Búrca2and2Scott2(eds),2Law'and'New'Governance'in'the'EU'and'the'US2(Hart22006),233;2Sturm,2‘Networking2in2Unchartered2Territory:2the2relationship2between2the2members2of2the2network2and2their2

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from2political2science2and2economics2provide2a2framework2for2coEordinated2diversity.2The2aim2is2to2encourage2sufficient2commonality2and2expertise;2while2simultaneously2encouraging2experimentation2and2accepting2diversity,2in2EU2competition2law2and2other2areas2too.2

This2 paper2 is2 relevant2 for2 competition2 lawyers,2 EU2 lawyers,2 economists2 and2 political2 scientists.2Competition2lawyers2often2disregard2Article2101’s2place2within2the2EU2Treaties.2Similarly,2EU2lawyers2often2 ignore2 the2 implications2 of2 their2 debates2 for2 competition2 law.2 Insights2 from2 these2 two2communities2 help2 us2 to2 consider2 whether2 diversity2 within2 Article2 101’s2 substantive2 application2 is2legally2acceptable2in2the2existing2legal2framework2and2normatively2desirable.2The2answer2affects2case2outcomes.2 Furthermore,2 the2 ECN2 is2 held2 out2 as2 an2 example2 of2 network2 governance2 for2 others2 to2follow.122It2is2valuable.2But2we2must2better2understand2its2role2and2dynamic2before2transplanting2it.2

2. On&the&complexity&of&the&regulatory&task&

The2 EU2 and2 its2 Member2 States2 have2 five2 major2 challenges2 when2 considering2 diversity2 and2 coEordination2in2European2law,2and2competition2law2in2particular.2One2finds2many2of2these2challenges2in2other2regulatory2regimes2too.2First,2Member2States2have2different2views2on2harnessing2the2market’s2power.2 ‘Market2 structures,2 rules,2 and2 norms2 vary2 greatly2 across2 nations,2 for2 example,2 concerning2public2ownership2and2privitisation,2the2extent2of2‘deregulation’,2the2role2of2the2state,2and2the2power2of2firms2and2organised2labour.’132The2UK2has2a2liberal2economy;2Germany2encourages2more2interEfirm2coEoperation;2France2lies2somewhere2between2the2two.142Competition2law2is2an2important2organising2principle2in2the2capitalist2world.2Different2market2views2affect2the2types2of2competition2needed2and2competition2law’s2goals.2This2is2regulatory2Issue212(competition2v.2coEoperation).2

Regulatory2Issue222(public2policy’s2importance)2arises2because2the2Member2States2value2goals,2such2as2environmental2protection,2differently.2There2are2many2 legitimate2 reasons2 for2 this.2 For2example,2the2Member2States2have:2different2environmental2problems,2 rural2 countries2may2care2more2about2soil2quality2than2noise2reduction;152different2valuations2of2this2harm2over2time,2in2the2financial2crisis2the2UK2is2becoming2even2less2green;162and2rich2and2poor2countries2cannot2afford2equal2levels2of2social2or2environmental2protection.172The2competition2and2internal2market2rules2have2large2footprints;2they2affect2many2Member2States’2public2policy2goals.2Different2relative2valuations2of2public2policy,2mean2that2 some2Member2 States2 find2 this2 large2 footprint2more2problematic2 than2others.2 It2 also2makes2 it2hard2to2agree2uniform2levels2of2protection2in2harmonised2EU2rules.182

Thirdly,2 even2 if2 agreement2 could2be2 reached2on2 the2 level2 and2 relative2 importance2of2 public2 policy2values,2 Member2 States2 harness2 diverse2 mechanisms2 in2 response.2 Some2 legislate2 to2 resolve2 such2

222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222national2 governments’2 in2 Ehlermann2 and2 Atanasiu2 (eds),2 Constructing' the' EU' Network' of' Competition'Authorities2 (Hart22002),236;2Philippart2and2SieEDhianEHo,2 ‘Flexibility2and2Models2of2Governance2for2the2EU’2 in2De2Búrca2and2Scott2 (eds),2Constitutional'Change' in' the'EU:' from'uniformity' to' flexibility?2 (Hart22000),2307E8;2Poiares2Maduro,2We,'the'Court,211E23.2122Prosser,2‘Conclusion:2ten2lessons’,2314;2Commission,2A'Single'Market'for'21st'Century'Europe2(2007),213;2and2Monti,2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,210.2132Thatcher,2 ‘Varieties2of2Capitalism2in2an2Internationalised2World:2domestic2 institutional2change2in2European2telecommunications’2372Comparative2Political2Studies,2753.2142 Wigger2 and2 Nölke,2 ‘Enhanced2 Roles2 of2 Private2 Actors2 in2 EU2 Business2 Regulation2 Thatcher,2 ‘Varieties2 of2Capitalism’,2753.2152Ladeur,2‘Towards2a2Legal2Concept2of2the2Network2in2European2StandardESetting’2in2Joerges2and2Vos2(eds),2EU'Committees:'social'regulation,'law'and'politics2(Hart22000),2152.2162Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,2351;2and2Poiares2Maduro,2We,'the'Court,2103E4.2172 Scharpf,2 ‘European2 Governance:2 common2 concerns2 vs.2 the2 challenge2 of2 diversity’2 in2 Joerges,2 Mény2 and2Weiler2 (eds),2Mountain' or'Molehill?' A' critical' appraisal' of' the' Commission'White' Paper' on'Governance,2 vol2Jean2Monnet2Working2Paper2No.26/012(Robert2Schuman2Centre2for2Advanced2Studies,2EUI22001),23E4.2182de2Búrca2and2Scott,2‘Introduction’,22.2

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tensions.2Others2 favour2 coEregulation,2 or2 even2 selfEregulation192 by2 the2 relevant2 industry.2 So,2 some2Member2 States2 want2 public2 policy2 to2 be2 relevant2 in2 the2 internal2 market2 (legislation)2 others2 in2competition2law2(self2and2coEregulation).2This2is2regulatory2Issue232(appropriate2mechanisms).2

Regulatory2Issue242(multiElevel2power2distribution)2is2one2of2the2most2testing2issues2in2structures2like2the2 EU.202 The2 distribution2 of2 power2 between2 the2 EU2 and2 the2 Member2 States2 is2 constitutionally2guaranteed.2 However,2 these2 ‘…assignments2 of2 authority2 are2 often2 stated2 in2 vague2 terms,2 and2 in2practice2 federal2 and2 state2 governments2 frequently2 enjoy2 concurrent2 rather2 than2 exclusive2jurisdiction2in2most2issue2areas.’212Power2struggles2arise2between2the2EU2and2the2Member2States.222Some2say2that2power2runs2inexorably2to2the2EU;2in2fact,2it2ebbs2and2flows.232Pollack2talks2of2cycles2of2federalism,2 power2 and2 authority2 are2 centralised2 ‘…followed2 periodically2 by2 backlashes2 in2 which2states2seek2a2rebalancing2or2devolution2of2power2back2to2the2states.’2422

Fifthly,2opening2up2markets2to2foreign2competition2and2‘…advancements2in2technology2have2brought2about2a2fundamental2transformation2in2models2of2business2organisation.’252Vertical2 integration2was2the2paradigm,2it2was2considered2more2efficient2and2reduced2holdEup2problems.2Today’s2more2volatile2market2 conditions2 and2 advances2 in2 production2 mean2 that2 firms2 must2 continuously2 innovate2 and2need2access2to2new2knowledge.2They2 increasingly2focus2on2core2activities,2 forging2shifting2strategic2alliances2with2other2 independent2firms.2There2are2more2arrangements2between2firms.2Competition2law2assessments2demand2complex2analysis2of2the2arrangements’2positive2dynamic2effects,2including2on2innovation,2and2the2potential2for2collusive2harm.2This2 is2difficult,2there2 is2 little2evidence2and2the2economics2remains2unclear.2This2is2regulatory2Issue252(uncertainty).2

As2a2result,2the2early2EEC2prototype2of2one2‘…inexorable2path2of2integration2implying2harmonisation2and2 gradual2 unification…’2was2 too2 restrictive.2 It2was2 probably2 overEstated2 in2 any2 event.2 Section2 32shows2that,2in2many2areas2of2EU2law,2there2is2a2‘…commitment2to2a2broad2commonality2within2which2room2exists2for2varying2degrees2of2difference2and2diversity.’262This2takes2our2five2challenges2seriously.2

3. Diversity&

2222222222222222222222222222222222222222222222222222222222222192‘SelfEregulation2refers2to2the2creation2of2common2guidelines2by2economic2operators2and/2other2stakeholders;2coEregulation2refers2to2the2situation2whereby2EU2secondary2law2sets2the2objectives2and2entrusts2certain2parties2(economic2 operators,2 social2 partners…)2 with2 the2 attainment2 thereof.’,2 Commission,2 Instruments' for' a'Modernised'Single'Market'Policy2(2007),212.2202 Lindseth,2 ‘Delegation2 is2Dead,2Long2Live2Delegation:2managing2 the2democratic2disconnect2 in2 the2European2marketEpolity’2 in2 Joerges2 and2Dehousse2 (eds),2Good'Governance' in' Europe's' Integrated'Market2 (OUP2 2002),2158.2212Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,229.2Similarly,2Everson,2‘The2Crisis2of2Indeterminacy:2an2'equitable'2 law2 of2 'deliberative'2 European2 market2 administration?’2 in2 Joerges2 and2 Dehousse2 (eds),2 Good'Governance'in'Europe's'Integrated'Market2(OUP22002),2235E9.2222 Lindseth,2 ‘Delegation2 is2Dead,2Long2Live2Delegation:2managing2 the2democratic2disconnect2 in2 the2European2marketEpolity’2inibid2,2160;2and2Walker,2‘Flexibility2within2a2Metaconstitutional2Frame:2reflections2on2the2future2of2 legal2authority2 in2Europe’2 in2de2Búrca2and2Scott2(eds),2Constitutional'Change'in'the'EU:'from'uniformity'to'flexibility?2(Hart22000),210E4.2232Respectively,2Diedrichs,2Reiners2and2Wessels,2The'Dynamics'of'Change,214;2c.f.244;2and2Wallace,2Pollack2and2Young,2 PolicyGMaking' in' the' EU,2 483.2 For2 the2 EU2 and2 US:2 Donahue2 and2 Pollack,2 ‘Centralisation2 and2 Its2Discontents:2the2rhythms2of2federalism2in2the2United2States2and2the2European2Union’2in2Nicolaïdis2and2Howse2(eds),2The' Federal' Vision:' legitimacy' and' levels' of' governance' in' the'United' States' and' the' European'Union2(OUP22001);2and2Keohane2and2Nye,2 ‘Transgovernmental2Relations2and2 International2Organisations’2272World2Politics,258E62.2Hans2Vedder2rightly2notes2that2both2the2EU2and2Member2States,2qua2actors,2and2their2interests,2are2intertwined,2making2the2analysis2even2more2complex.2242Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,229.2252Svetiev,2‘Networked2Competition2Governance2in2the2EU’,293.2262de2Búrca2and2Scott,2‘Introduction’,22.2

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The2five2regulatory2challenges2seen2above,2affect2the2EU2and2the2Member2States’2ability2to2agree2the2right2 type2 and2 level2 of2 intervention.2 The2 response2 has2 been2 to2 allow2 the2 Member2 States2 some2freedom2when2applying2EU2law.2Part2(a)2shows2this2for2free2movement2of2goods.2Tolerance2of2public2policy2 is2 changing2 there2 (Issue2 2);2 as2 is2 the2Member2 States’2 freedom2 to2 pursue2 different2 goals,2 to2different2 degrees2 (Issue2 4).2 Contrary2 to2 the2 prevailing2 wisdom,2 diversity2 has2 advantages2 for2 EU2competition2law2too.2Part2(b)2catalogues2them,2along2with2some2disadvantages.2Finally,2direct2effect,2which2might2have2been2seen2as2an2obstacle,2allows2some2diversity,2Part2(c).2

a. Diversity&in&EU&free&movement&of&goods&

The2EU’s2openness2 to2 regulation2has2 changed2over2 time.2 Take2Article2 34,2 for2 example,2 it2 prohibits2‘…quantitative2restrictions2on2imports2and2all2measures2having2equivalent2effect…between2Member2States.’2 In2 the21960s,2 the2Commission2(and2the2EU2Courts)2began2to2use2 the2 free2movement2 rules,2especially2Article234,2to2target2national2rules,2often2social2regulation.2It2wanted2detailed,2harmonised,2EU2rules2for2all.2Agreement2was2elusive,2given2the2five2regulatory2challenges2noted2above272and2the2need2for2unanimity2for2EU2harmonisation2rules2at2that2time.2These2clashes2undermined2public2policy2protection2(Issue22);2and2affected2the2Member2State/2EU2balance2of2power2(Issue24).2822

In2the2absence2of2exhaustive2EUElevel2regulatory2harmonisation,2national2rules2can2only2be2saved2if2they2 fall2 within2 the2 mandatory2 requirements2 (MRs),2 or2 Article2 36.2 The2MRs2 are2 ‘…in2 the2 general2interest2and2such2as2 to2 take2precedence2over2 the2requirements2of2 the2 free2movement2of2goods.’292They2 include2 fair2 commercial2 transactions2 and2 environmental2 protection.302 Article2 362 provides2 for2some2exceptions2based2on2‘…public2morality,2public2policy2or2public2security;2the2protection2of2health2and2life2of2humans,2animals2or2plants…or2the2protection2of2industrial2and2commercial2property.’22

As2the2case2law2under2Article234,2the2MRs2and2Article2362develops,2 it2affects2the2equilibrium2under2Issues222and24.2 In219742the2ECJ2responded2to2the2EU2legislative2blockage2by2expanding2Article234.312The2 balance2 tilted2 towards2 the2market2 and2 the2 EU.2Member2 States2 responded2with2 new2national2rules2(reEseizing2power).322By2the21980s2Europe2faced2an2economic2crisis.2Companies2complained2of2burdensome2regulation.2An2EU2consensus2emerged,2favouring2reEregulation2at2the2EU2level.2In2Cassis'de'Dijon,332the2ECJ'gave2the2Commission2a2new2tool2for2pursing2this,2mutual2recognition.2The2Single2European2Act219852pushed2power2towards2the2EU.2 It2made2generating2(harmonised)2EU2level2rules2easier2as2qualified2majority2voting2(QMV)2began2to2replace2unanimity2in2Council2voting.2

The2Member2States’2power2to2disrupt2 trade2changes2 in2 the2shadow2of2unanimity2and2QMV.2Under2unanimity,2strict2Member2States2with2high2regulatory2standards,2can2ban2 ‘bad’2products2 from2their2territories;2 the2cost2 falls2on2producers2 in2other2Member2States.2Under2QMV,2 strict2Member2States2cannot2hold2out2alone.342This2impacts2upon2democratic2legitimacy2(Issues222and24).2Furthermore,2the2ECJ2(an2EU2body)2decides2upon2‘…the2right2balance2between2market2integration2on2the2one2hand2and22222222222222222222222222222222222222222222222222222222222222272Donahue2and2Pollack,2 ‘Centralisation2and2Its2Discontents’,2100E2;2and2Dehousse,2 ‘Integration2v2Regulation?2On2the2Dynamics2of2Regulation2in2the2European2Community’2302Journal2of2Common2Market2Studies,2391.2282 Dougan,2National' Remedies' Before' the' Court' of' Justice,2 113E9;2 Lindseth,2 ‘Democratic2 Legitimacy2 and2 the2Administrative2 Character2 of2 Supranationalism:2 the2 example2 of2 the2 European2 Community’2 992 Columbia2 Law2Review,2662E5;2and2Poiares2Maduro,2We,'the'Court,223E4.2292Case2120/782ReweGZentral'v'Bundesmonopolverwaltung'[1979]2ECR2649,2para214.2302Respectively,2Case2120/78,2Ibid.,2para213;2and2Case2302/862Commission'v'Denmark'[1998]2ECR24607,2para28.2Member2States2must2(often)2accept2in2their2own2markets2products2approved2for2sale2by2other2Member2States.2312Case28/742Procureur'du'Roi'v'Benoît'and'Gustave'Dassonville2[1974]2ECR2837.&322Dougan,2National'Remedies'Before'the'Court'of'Justice,2189;2and2Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,2110.2These2new2rules2were2also2susceptible2to2EU2challenge.2332Case2120/782ReweGZentral'v'Bundesmonopolverwaltung'für'Branntwein2[1979]2ECR2649.2342Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,2125;2Dehousse,2‘Misfits:2EU2law2and2the2transformation2of2European2governance’2in2Joerges2and2Dehousse2(eds),2Good'Governance'in'Europe's'Integrated'Market2(OUP22002),2209;2and2Lindseth,2‘Democratic2Legitimacy2and2the2Administrative2Character2of2Supranationalism’,2665E8.2

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social2policy...’2on2the2other;2and2so2controls2national2regulation2(Issues232and24).352The2ECJ2has2been2criticised2 for2 failing2 to2 adequately2 reflect2 a2 change2 in2 the2 EU2 Treaties;2 as2 they2move2 from2 a2 pure2economic2community,2to2one2increasingly2based2on2socioEeconomic2values2(Issue22).3622

The2Commission2also2persuaded2Member2States2to2pursue2public2policy2through2minimum2EUElevel2requirements,2 leaving2scope2for2national2variation,2subject2to2mutual2recognition.372Member2States2lose2some2control,2but2getting2agreement2is2easier382as2some2flexibility2 is2preserved.392Diversity2can2undermine2 the2 internal2 market,2 but2 it2 can2 be2 beneficial.2 Europe’s2 diverse2 language,2 cultural2 and2consumer2 preferences2 are2 ‘…an2 invaluable2 asset2 and2 source2 of2 innovation…’402 From2 a2 democratic2legitimacy2perspective,2anger2is2directed2at2the2EU2when2it2does2not2respect2national2tastes/2choices:222

“The2persistent2socioEpolitical/2socioEcultural2attachment2to2national2constitutional2bodies2as2the2privileged2expressions2of2democratic2legitimacy2is2an2empirical2reality2that2simply2cannot2be2 theorized2 away.2 This2 attachment2 is2 a2 background2 constraint2 so2 fundamental2 as2 to2 be2sometimes2overlooked2in2nonEhierarchical2theories2of2EU2governance.”412

DeEregulation2has2a2political2dimension.422The2Commission2now2says2that2the2 internal2market2must2be2more2 responsive2 to2 EU2 citizens’2 concerns;2 especially2 on2 socioEenvironmental2 issues2 (Issue2 2).432Democracy2cannot2always2be2(re)gained2at2the2EU2level2(Issue24).2So,2the2right2actor,2be2it2EU2or2the2Member2 States,2must2 act,2 when2 necessary,2 to2 protect2 relevant2 values.2 The2 Commission2 says2 that2regulation2must2be2‘…designed2as2closely2to2the2market2as2possible2and2account,2where2needed,2for2

2222222222222222222222222222222222222222222222222222222222222352Gerstenberg2 and2 Sabel,2 ‘DirectlyEDeliberative2 Polyarchy:2 an2 institutional2 ideal2 for2 Europe?’2 in2 Joerges2 and2Dehousse2(eds),2Good'Governance'in'Europe's'Integrated'Market2(OUP22002),2329.2Also,2Everson,2‘The2Crisis2of2Indeterminacy:2 an2 'equitable'2 law2 of2 'deliberative'2 European2 market2 administration?’2 inibid2 ,2 235;2 Poiares2Maduro,2We,'the'Court,2105E11.2362Demetriou2and2Higgins,2‘Free2Movement2and2the2Environment:2seeing2the2wood2for2the2trees’2in2Hoskins2and2Robinson2 (eds),2 A' True' European:' essays' for' Judge' David' Edwards2 (Hart2 2004),2 201.2 C.f.2 the2 Opinion2 of2AdvocateEGeneral2 Jacobs2 in2 Case2 CE379/982 PreussenElektra' v' Schleswag2 [2001]2 ECR2 IE2099,2 paras2 225E33;2Oliver2(ed)2Oliver'on'Free'Movement'of'Goods'in'the'European'Union2(Fifth2edn,2Hart22010),2219;2Gerstenberg2and2Sabel,2‘DirectlyEDeliberative2Polyarchy’,2329;2and2Weatherill,2‘Finding2Space2for2Closer2CoEoperation2in2the2Field2of2Culture’2 in2De2Búrca2and2Scott2 (eds),2Constitutional'Change' in' the'EU:' from'uniformity' to' flexibility?2(Hart22000),2244E5.2372Commission,2Instruments'for'a'Modernised'Single'Market'Policy,29;2Donahue2and2Pollack,2‘Centralisation2and2Its2 Discontents’,2 102E3.2 Schillig,2 Konkretisierungskompetenz' und' Konkretisierungsmethoden' im' Europäischen'Privatrecht2(DeGruyter22009),258E622criticises2this.2382Wallace,2Pollack2and2Young,2PolicyGMaking' in'the'EU,2110E3;2and2Lindseth,2 ‘Democratic2Legitimacy2and2the2Administrative2Character2of2Supranationalism’,2665E6.22392 Commission,2 Instruments' for' a' Modernised' Single' Market' Policy,2 10.2 An2 example2 is2 Council2 Directive289/48/EEC,2on'a'general' system' for' the' recognition'of'higherGeducation'diplomas'awarded'on'completion'of'professional'education'and'training'of'at'least'three'years''duration,2OJ219892L19/16.2402Commission,2A'Single'Market'for'21st'Century'Europe,25.2412Lindseth,2‘Delegation2is2Dead,2Long2Live2Delegation’,2142E3.2Also,2Wallace,2Pollack2and2Young,2PolicyGMaking'in' the' EU,2 127;2 Gerstenberg2 and2 Sabel,2 ‘DirectlyEDeliberative2 Polyarchy’,2 301E5;2 Donahue2 and2 Pollack,2‘Centralisation2and2Its2Discontents’,276;2Majone,2‘Regulatory2Legitimacy2in2the2United2States2and2the2European2Union’2inibid2,2267E8;2and2Poiares2Maduro,2We,'the'Court,2113.2Resentment2is2increasing,2Wallace,2Pollack2and2Young,2 PolicyGMaking' in' the' EU,2 484;2 and2 Scharpf,2 ‘Democratic2 Legitimacy2 under2 Conditions2 of2 Regulatory2Competition:2why2 Europe2 differs2 from2 the2United2 States’2 in2Nicolaïdis2 and2Howse2 (eds),2The' Federal' Vision:'legitimacy'and'levels'of'governance'in'the'United'States'and'the'European'Union2(OUP22001),2360E2.2422Chalmers,2Davies2and2Monti,2European'Union'Law:'cases'and'materials2(Second2edn,2Cambridge2University2Press22010),2916;2and2Chang,223'Things'They'Don't'Tell'You'About'Capitalism'(Penguin2Books22010),210,2247E8.2432Commission,2Commission' to'boost'protection' for'posted'workers2 (2012);2 Svetiev,2 ‘Networked2Competition2Governance2 in2 the2EU’,283;2Commission,2Commission'staff'working'document,' Instruments' for'a'Modernised'Single'Market'Policy,'accompanying'the'Communication'from'the'Commission'to'the'European'Parliament,'the'Council,'the'European'Economic'and'Social'Committee'and'the'Committee'of'the'Regions,'A'Single'Market'for'21st'Century'Europe2(2007);2Commission,2Instruments'for'a'Modernised'Single'Market'Policy,217,220.2

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national2 diversity…’442 Since2 the2 1990s2 the2 paradigm2 of2 ‘…uniformity,2 homogeneity2 and2 oneEdimensional2integration2is2gradually2being2replaced2by2one2of2flexibility,2mixity2and2differentiation.’452We2have2seen2that2this2is2true2for2free2movement;2similar2stories2can2be2told2in:2EMU,2social2policy,2labour2 law,2 culture2and2environmental2protection.462The2Lisbon2Treaty2paved2 the2way2 for2 stronger2supranational2features,2while2balancing2this2with2heterogeneity2in2new,2interesting2ways2(Issue23).4722

b. Diversity&in&EU&competition&law&

This2 part2 discusses2 the2 advantages2 and2 disadvantages2 of2 allowing2 difference2 or2 diversity2 in2 EU2competition2 law,2 specifically2 Article2 101,2 which2 deals2 with2 antiEcompetitive2 arrangements.2 The2diversity2of2NCAs2and2the2law2that2they2enforce2changes2over2time.482

In2 essence,2 Article2 101(1)2 prohibits2 arrangements2 between2 undertakings2 which2 may2 affect2 trade2between2Member2States2and2which2restrict2competition2within2 the2 internal2market.2Arrangements2that2breach2this2provision2can2be2saved2by2Article2101(3);2which2has2four2cumulative2conditions.2 In2brief2the2arrangement2must:2 improve2the2production2or2distribution2of2goods2or2promote2technical2or2economic2progress;2and2allow2consumers2a2 fair2share2of2 the2resulting2benefit.2The2arrangement2must2not:2impose2restrictions2which2are2not2indispensable2to2the2attainment2of2these2objectives;2and2eliminate2competition2in2respect2of2a2substantial2part2of2the2products2in2question.22

Under2Regulation217,2the2Commission,2the2NCAs2and2Member2States’2courts2(the2relevant2actors)2all2implemented2Article2101(1).2Only2the2Commission2applied2Article2101(3).2Council2Regulation21/20032now2allows2all2of2the2relevant2actors2to2apply2all2of2Article2101.492

Legal2provisions2cannot2be2applied2perfectly2uniformly.2The2real2question2is2how2much2difference2is2desirable2in2the2EU.502As2all2the2relevant2actors2applied2Articles2101(1)2and2102;2uniformity2was2not2present.2Yet,2many2feared2that,2with2the220042loss2of2the2Commission’s2Article2101(3)2monopoly,2the2‘…uniform2application2of2EC2competition2law2would2be2unwound2through2the2independent2actions2of2

2222222222222222222222222222222222222222222222222222222222222442 Commission,2 Instruments' for' a' Modernised' Single' Market' Policy,2 8.2 Also2 page2 3;2 Commission,2 A' Single'Market'for'21st'Century'Europe,212;2Commission,2European'Governance:'a'white'paper2(2001),212E3,232E4.2452 de2 Búrca2 and2 Scott,2 ‘Introduction’,2 2.2 Donahue2 and2 Pollack,2 ‘Centralisation2 and2 Its2 Discontents’,2 110E1;2Barnard,2 ‘Flexibility2 and2 Social2 Policy’2 in2 De2 Búrca2 and2 Scott2 (eds),2 Constitutional' Change' in' the' EU:' from'uniformity' to' flexibility?2 (Hart2 2000);2 de2 Búrca,2 ‘Differentiation2 within2 the2 'Core'?2 The2 Case2 of2 the2 Internal2Market’2inibid2,2133E4,2140;2Shaw,2‘Constitutionalism2and2Flexibility2in2the2EU:2developing2a2rational2approach’2inibid2,2340;2Weatherill,2‘Finding2Space2for2Closer2CoEoperation2in2the2Field2of2Culture’2inibid2,2237E82and2253E5.2462de2Búrca2and2Scott2 (2006);2Budzinski,2 ‘Towards2an2 International2Governance2of2Transborder2Mergers?’2362NYU2 Journal2 of2 INternational2 Law2 and2 Politics,2 27;2 Barnard2 and2 Deakin,2 ‘Market2 Access2 and2 Regulatory2Competition’2(The2Legal2Foundations2of2the2Single2Market:2unpacking2the2premises);2Maher2and2Hodson,2‘The2Open2Method2as2a2New2Mode2of2Governance:2 the2case2of2 soft2economic2policy2coEordination’2392 Journal2of2Common2 Market2 Studies,2 722;2 Peterson2 and2 O'Toole,2 ‘Federal2 Governance2 in2 the2 United2 States2 and2 the2European2Union:2a2policy2network2perspective’2 in2Nicolaïdis2and2Howse2 (eds),2The'Federal'Vision:' legitimacy'and' levels'of'governance' in'the'United'States'and'the'European'Union2 (OUP22001),2312;2de2Búrca2and2Scott,2‘Introduction’;2Lindseth,2‘Democratic2Legitimacy2and2the2Administrative2Character2of2Supranationalism’,2670E1.2472 Diedrichs,2 ‘New2 Modes2 of2 Governance’,2 216E72 and2 235E7;2 and2 Sabel2 and2 Zeitlin2 (eds),2 Experimentalist'Governance'in'the'European'Union:'towards'a'new'architecture2(OUP22010).2482Svetiev,2‘Networked2Competition2Governance2in2the2EU’,285.2In2fact,2Gerber2reports2three2stages2of2evolution2in2 the2 Commission/2 NCA2 relationship,2 Gerber,2 ‘The2 Evolution2 of2 a2 European2 Competition2 Law2 Network’2 in2Ehlermann2and2Atanasiu2(eds),2Constructing'the'EU'Network'of'Competition'Authorities2(Hart22002),246E59.2492Respectively,2Council2Regulation,'First'Regulation'Implementing'Articles'85'and'86'of'the'Treaty,2OJ21959E62,2p.287;2and2Council2Regulation,2on'the'implementation'of'the'rules'on'competition'laid'down'in'Articles'81'and'82'of'the'Treaty,2OJ220032L1/1.2502de2Visser,2NetworkGBased'Governance'in'EC'Law2(Hart22009),2183;2Waelbroeck2in2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,2304E5,2466E7.2

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the2various2actors.’512Obviously,2in2times2of2(legal)2doubt2the2national2courts2can2make2an2Article22672reference2to2the2ECJ.2This2avenue2is2not2open2to2the2NCAs.2So,2received2wisdom2states2that2the2NCAs2should2 mimic2 the2 Commission’s2 application2 of2 Article2 101.522 Some2 argue2 that2 Council2 Regulation21/20032 takes2 consistency2 in2 Article2 1012 ‘…very2 seriously…’532 Similarly,2 the2 Commission2 wants2 a2‘…consistent2application2of2the2rules,2and2the2preservation2of2the2unity2of2competition2policy…’542

A2uniform2application2of2Article21012has2many2benefits.2Kokott2argues2that2it2ensures2some2parity2of2purchasing2 and2 selling2 conditions.2 ‘Not2 only2 the2 fundamental2 objective2 of2 equal2 conditions2 of2competition2 for2undertakings2on2 the2 single2market2but2also2 the2 concern2 for2uniform2protection2of2consumer2interests2in2the2entire2Community…’552de2Visser2believes2that2undertakings2have2the2right2to2have2 similar2 situations2 treated2 in2 the2 same2way2 throughout2 the2EU.562 In2 any2event,2when2 firms2play2on2a2level2playing2field,2it2helps2to2encourage2competition2on2the2merits2between2them.5722

However,2 it2 is2unclear2whether2a2 right2 to2equality2goes2as2 far2as2de2Visser2 suggests.2Nor2must2one2overEstate2 the2 value2 of2 the2 level2 playing2 field2 in2 the2 EU2 legal2 order.2 The2 EU2 Treaties2 allow2 the2Member2States2 to2create2different2conditions2of2 competition2at2home.582Similarly,2while2 consumer2interests2may2have2a2minimal2 level2of2protection2throughout2the2EU,2there2are2often2differences2 in2the2actual2 level2of2protection,2some2Member2States2provide2significantly2more2protection2than2this2agreed2minimum.592If2consumers2purchase2EUEwide,2they2will2push2competition2between2systems.602

International2trade2is2affected2where2there2is2a2risk2of2conflicting2decisions,2even2if2both2answers2are2equally2legitimate.612This2is2particularly2so2if2behaviour2is2mandatory2in2one2territory2and2prohibited2elsewhere.2Where2behaviour2is2possible2in2one2territory,2but2not2in2another,2then2international2trade,2even2if2feasible,2becomes2more2expensive.2Firms2have2costs,2for2example,2in2understanding2what2the2

2222222222222222222222222222222222222222222222222222222222222512 de2 Visser,2NetworkGBased' Governance' in' EC' Law,2 xxExxi.2 See2 also,2 Faull2 and2 Nikpay2 (eds),2 The' EC' Law' of'Competition2 (Second2 edn,2 OUP2 2007),2 para2 2.05;2 and2 Commission,2 Commission' Explanatory'Memorandum,'Proposal'for'a'Council'Regulation'Implementing'Articles'81'and'82'of'the'Treaty,26.2522See2footnote26.2532Faull2and2Nikpay,2The'EC'Law'of'Competition,2paras22.203E4.2542Commission,2European'Commission'White'Paper,'on'modernization'of'the'rules'implementing'Articles'85'and'86'of'the'EC'Treaty2(1999),2para2104.2See2also2paras283,2842and2101E28.2Commission,2Communication'from'the'Commission' to' the' European' Parliament' and' the' Council,' Report' on' the' functioning' of' Regulation' 1/20032(2009),2 para2 47;2 and2 Commission,2 Commission' Notice,' on' informal' guidance' relating' to' novel' questions'concerning'Articles'81'and'82'of'the'EC'Treaty'that'arise'in'individual'cases'(guidance'letters)2(2004),2para22.2552Opinion2of2Advocate2General2Kokott,2Case2CE8/082TGMobile'Netherlands'[2009]2ECR2IE4529,2para285.2See2also,2Opinion2 of2 AdvocateEGeneral2 Mazák,2 Case2 CE375/092 Prezes' Urzędu' Ochrony' Konkurencji' i' Konsumentów' v'Tele2'Polska'sp.'zoo,'now'Netia'SA'w'Warszawie,232May22011,2not2yet2reported,2paras243E4;2Luis2Ortiz2Blanco2&2Alfonso2Lamadrid2de2Pablo,2EU'Competition'Law'Enforcement:'elements'for'a'discussion'on'effectiveness'and'uniformity,2 (2011)2 Fordham238th2Conference2on2 International2Antitrust2 Law2and2Policy2 [note& this& is&not& the&final& version],2 47;2 de2 Visser,2 NetworkGBased' Governance' in' EC' Law,2 154;2 and2 Sturm,2 ‘Networking2 in2Unchartered2Territory’,2282.2562de2Visser,2NetworkGBased'Governance'in'EC'Law,2153E4.2This2view2is2discussed2at2Dougan,2National'Remedies'Before'the'Court'of'Justice,286E91.2572Recital28,2Regulation21/2003,2see2also2article23(2),2 it2does2not2defend2perfect2uniformity.2See2also,2Dougan,2National'Remedies'Before'the'Court'of'Justice,286E91.2582For2example,2article23(3)2of2Regulation21/2003;2and2Articles2342and2362TFEU.2592Case2CE484/08,2Caja'de'Ahorros'de'Piedad'de'Madrid'v'Ausbanc,2[2010]2ECR2IE4785,2paras227E44,2interpreting2Directive293/13,2on'unfair'terms'in'consumer'contracts,2OJ219932L95/29.&602Barnard2and2Deakin,2‘Market2Access2and2Regulatory2Competition’,210E1;2Poiares2Maduro,2We,'the'Court,2132;2but2see2139.22612 Kozuka,2 ‘The2 Economic2 Implications2 of2 Uniformity2 in2 Law’2 42 Uniform2 Law2 Review,2 686;2 Budzinski,2‘Transborder2Mergers’,25,244;2and2Dehousse,2‘Integration2v2Regulation?’,2393.2

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different2rules2are.622Costs2arise2as2soon2as2difference2is2possible.2This2affects2our2desire2for2uniform2public2policy2valuations2in2EU2rules2(Issues222and24)2and2identical2appropriate2mechanisms2(Issue23).2

However,2 facilitating2 international2 trade,2 even2within2 the2 EU,2 is2 not2 the2 only2 value2 in2 our2 system.2Where2 different2 applications2 of2 Article2 1012 would2 arise2 due2 to2 different2 valuations2 of2 another2relevant2value,2then2increased2transaction2costs2probably2arise2out2of2this2difference,2whether2or2not2it2is2tolerated2within2Article21012(Issue23).2Imagine2that2one2Member2State2values2benefits2to2future2consumers2in2Article2101,2while2another2thinks2that2they2should2be2considered,2but2uses2other2laws2instead.2 Firms2must2 comply2with2other2 laws2protecting2 such2 values,2 as2well2 as2 competition2 law.2 If2these2different2valuations2of2e.g.2future2consumers’2benefits,2must2be2achieved2through2other2laws,2transaction2costs,2lawyer’s2fees,2and2complying2with2all2the2different2laws,2etc.2might2not2change.6322

Moreover,2 increased2 transaction2 costs2may2 be2 tolerated2 if2 the2 benefits2 derived2 from2diversity2 are2sufficiently2 important,2or2at2 least2 if2 the2 cost2of2uniformity2 is2more2 than2 the2benefits2of2preventing2diversity.2I2focus2on2two2kinds2of2disagreements2here:2disagreements2on2aims2and2disagreements2on2methods.642I2treat2them2separately,2although2they2overlap2to2some2degree.2

There2are2several2varieties2of2capitalism,2and2competition2law’s2goals2(for2example2consumer2welfare2or2 Ordoliberalism)2 are2 affected2 by2 the2 one2 that2 we2 select2 (Issue2 1).652 Many2 aims2 have2 been2suggested2 for2Article2 101.2 Even2within2 the2 consumer2welfare2 standard,2 disagreement2 exists2 about2whether2to2focus2on2short2or2 longEterm2gains.662 In2addition,2public2policy2goals2are2important2in2EU2law.2 Recent2 EU2 Court2 judgments2 confirm2 their2 relevance2 in2 Article2 101;2 think2 of2 values2 such2 as:2market2integration,2public2health,2environmental2protection,2administration2of2justice,2culture,2etc.6722

Many2 assume2 that2 there2 is2 only2 one2 ‘correct’2 result2 in2 Article2 101.2 Uniformity2 is2 important,2 but2diversity2has2benefits2too.2Assume2that,2the2NMa2(Dutch2NCA)2considers2the2administration2of2justice2

2222222222222222222222222222222222222222222222222222222222222622de2Visser,2NetworkGBased'Governance'in'EC'Law,2154;2Maher,2 ‘Regulation2and2Modes2of2Governance2in2EC2Competition2 Law:2 what's2 new2 in2 enforcement?’2 312 Fordham2 International2 Law2 Journal,2 1719E20,2 especially2footnote236;2Tesauro,2 ‘The2Relationship2Between2NCAs2and2Their2Governments’,2172;2Thatcher,2 ‘The2Causes2and2Consequences2of2Regulation2by2Networks:2 telecommunications2 in2Europe’2 inibid2 ,2132;2and2Ribstein2and2Kobayashi,2‘An2Economic2Analysis2of2Uniform2State2Laws’2252The2Journal2of2Legal2Studies,2138.2632 Townley,2 Article' 81' EC' and' Public' Policy2 (Hart2 2009),2 35.2 Although2 note,2 Commission,2Guidelines' on' the'assessment' of' horizontal' mergers' under' the' Council' Regulation' on' the' control' of' concentrations' between'undertakings2(2004),2para280.2642Similarly,2 in2 the2absence2of2EU2harmonisation,2and2within2 limits,2 the2Member2States2may2adopt2their2own2procedural2 rules2 for2 competition2 enforcement,2 Advocate2 General2 Kokott,2 Case2 CE8/082 TGMobile' Netherland'[2009]2ECR2IE4529,2paras283E4.2Sanctions2that2are2possible2(and2applied)2 in2the2Member2States2differ;2so,2the2‘cost’2of2breaching2Article21012may2differ2throughout2the2EU.2This2may2affect2the2kinds2of2breaches2that2take2place,2 in2 a2 similar2way2 to2 substantive2 differences2 in2 the2 application2 of2 Article2 101.2 See,2 Cengiz,2 ‘MultiElevel2Governance2 in2 Competition2Policy’,2 665;2Maher2 and2 Ştefan,2 ‘Competition2 Law2 in2 Europe:2 the2 challenge2of2 a2network2constitution’2 in2Oliver,2Prosser2and2Rawlings2 (eds),2The'Regulatory'State:' constitutional' implications2(OUP2 2010),2 189E90;2 Svetiev,2 ‘Networked2 Competition2 Governance2 in2 the2 EU’,2 99E105;2 Commission,2Commission' staff' working' paper' accompanying' the' Communication' from' the' Commission' to' the' European'Parliament' and' Council,' Report' on' the' functioning' of' Regulation' 1/20032 (2009),2 para2 203;2 Commission,2Commission,'Report'on'Competition'Policy'20072 (2007),2para2456;2and2,2107.2Different2administrative2priority2criteria2can2also2produce2similar2results.2652Thatcher,2‘Varieties2of2Capitalism’.2662Townley,2 ‘Remembering2Those2Not2Yet2Born:2 interEgenerational2 impacts2 in2competition2analysis’2European2Competition2Law2Review;2and2Wigger2and2Nölke,2‘Enhanced2Roles2of2Private2Actors2in2EU2Business2Regulation’.2672Case2CE519/042P2Meca'Medina'v'Commission'[2006]2ECR2IE6991,2para245;2and2Case2TE193/022Laurent'Piau'v'Commission'[2005]2ECR2IIE209,2para2102.2Townley,2‘Is2There2(Still)2Room2for2NonEEconomic2Arguments2in2Article21012 TFEU2Cases?’2 in2HeideEJørgensen2 (ed),2Aims'and'Values' in' EU'Competition' Law2 (DJØF2Publishing2 2013);2Townley,2Article' 81' EC' and' Public' Policy,2 Introduction,2 Chapter2 22 and2 Part2 B;2 and2Monti,2 ‘Article2 812 EC2 and2Public2 Policy’2 392Common2Market2 Law2Review21057.2 C.f.2Wils,2Principles' of' European'Antitrust' Enforcement2(Hart22005),29E10.2

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to2be2more2important2in2the2Article21012balance2than2the2OFT2(UK2NCA).2This2might2be2because2the2Dutch2value2administration2of2justice2more2highly2(Issue22);2or,2because2the2British2do2not2believe2in2public2 policy2 balancing2 in2 Article2 1012 (Issue2 3).2 Imagine2 two2 legally2 identical2 cases2 in2 those2 two2countries,2 with2 different2 parties,2 both2 agreements2 appreciably2 restrict2 competition2 under2 Article2101,2but2there2are2considerable2benefits2for2the2administration2of2justice.2The2NMa2might2‘allow’2the2agreement;682but2the2OFT2might2prohibit2 in2a2 legally2 identical2case.2The2relevant2actors2might2form2different2conclusions,2when'applying'Article'101,2because2of2different2value2 judgments.2This2 is2not2just2a2theoretical2problem.2In2line2with2EU2Court2judgments,2the2NMa’s2Annual'Report'20092explains2that2 it2 considers2 public2 policy2 goals2 in2 Article2 101.692 On2 the2 other2 hand,2 in2 20102 the2 OFT2 had2 a2roundtable2 to2discuss2Article2101’s2 goals2 implying2 that2 it2would2not.702 In220122 the2UK2government2proposed2 changes2 to2 the2 UK2 competition2 regime,2 including2 giving2 a2 new2 competition2 authority2 a2single2 primary2 duty,2 even2 when2 applying2 Article2 101,2 to2 ‘…promote2 effective2 competition2 in2markets…for2the2benefits2of2consumers.’712This2mirrors2recent2Commission2policy2statements.722

There2 is2a2further2 jurisdictional2reason2why2disagreements2on2aims2within2Article21012are2valuable.2Even2though2competition2is2an2exclusive2EU2competence2and2internal2market2is2a2shared2one,732given2differing2 fields2 of2 competence2 for2 public2 policy2 goals,2 neither2 the2 EU2 nor2 the2Member2 States,2 are2always2able2 to2address2 these2clashes2 (e.g.2 competition2 (EU)2v2culture2 (MS))2 in2 their2entirety2alone.2Good2solutions2must2accept2both2interests.742Where2diversity2is2unavailable,2the2relevant2actors2can:2accept2the2uniform2rule;2refuse2to2coEoperate;2or2‘cheat’2to2achieve2their2ends.752As2the2competition2rules’2wide2remit,2grudging2acceptance2 is2hard2to2tolerate.2So2far,2Member2States2still2apply2Article2101,2 but2 there2 are2 signs2 of2 ‘cheating’,2 sometimes2 encouraged2 by2 the2 EU2 Courts;2 for2 example,2narrowly2defining2 an2appreciable2 affect2on2 trade2between2Member2 States.762 If2 no2 space2 is2 left2 for2genuine2difference,2decisionEmakers2may2seek2to2achieve2unstated2aims,2secretly.2This2contributes2to2legal2uncertainty;772which,2in2turn,2frustrates2our2ability2to2learn2and2debate2which2rules2are2best.2

In2 regulatory2 theory,2 Majone2 suggests2 that2 one2 can2 have2 economic2 integration2 without2 political2integration.2Even2though2competition2law2has2distributive2consequences,2he2believes2that2delegation2

2222222222222222222222222222222222222222222222222222222222222682 Case2 CE375/092 Prezes' Urzędu' Ochrony' Konkurencji' i' Konsumentów' v' Tele2' Polska,2 32 May2 2011,2 not2 yet2reported,2paras219E30,2does2not2allow2NCAs2to2find2no2breach2of2Article21012and2102,2although2they2can2decide2not2to2enforce2it.2The2position2is2different2for2the2Member2States’2courts.2692NMa,2Annual'Report:'weighing' interests2 (2009),29.2 It2 is2hard2 to2point2 to2any2cases2 that2actually2 turned2on2public2policy,2 thanks2 to2Tjarda2van2der2Vijver2 for2 this2point,2although2see2Lavrijssen,2 ‘What2Role2 for2National2Competition2Authorities2in2Protecting2NonECompetition2Interests2After2Lisbon?’2European2Law2Review.2702OFT,2Article'101(3)'G'A'Discussion'of'Narrow'versus'Broad'Definition'of'Benefits:'discussion'note'for'an'OFT'breakfast'roundtable'on'12'May'2010;2discussed2in2Townley,2‘Which2Goals2Count2in2Article21012TFEU?:2public2policy2and2its2discontents’2European2Competition2Law2Review.271http://www.bis.gov.uk/assets/biscore/consumerEissues/docs/g/12E512EgrowthEandEcompetitionEregimeEgovernmentEresponse.pdf,2para210.7.2The2draft2Enterprise2and2Regulatory2Reform2Bill,2section218,2dilutes2this2somewhat.2722Commission,2Guidelines'on' the'application'of'Article'81(3)'of' the'Treaty2 (2004),2para213.2 The2Commission2cannot2contradict2the2EU2Courts,2Townley,2‘Is2There2(Still)2Room2for2NonEEconomic2Arguments?’.2732Articles232and242TFEU;2there2are2also2difficulties2defining2the2limits2of2the2internal2market,2Craig2and2de2Búrca,2EU'Law:'text,'cases'and'materials2(Fifth2edn,2OUP22011),278E9.2742 Joerges,2 ‘'Deliberative2 Political2 Processes'2 Revisited:2 what2 have2 we2 learnt2 about2 the2 legitimacy2 of2supranational2decisionEmaking’2442Journal2of2Common2Market2Studies,2794E5.2752Cengiz,2‘Management2of2Networks’,2418;2Philippart2and2SieEDhianEHo,2‘Flexibility2and2Models2of2Governance2for2 the2 EU’,2 303;2 Walker,2 ‘Flexibility2 within2 a2 Metaconstitutional2 Frame:2 reflections2 on2 the2 future2 of2 legal2authority2 in2 Europe’2 in2 de2 Búrca2 and2 Scott2 (eds),ibid2 ,2 28;2 and2 Weatherill,2 ‘Finding2 Space2 for2 Closer2 CoEoperation2in2the2Field2of2Culture’2in2De2Búrca2and2Scott2(eds),ibid2,2254E5.2762Case2229/832Association'des'Centres'distributeurs'Édouard'Leclerc'v'Sàrl''Au'blé'vert''[1985]2ECR21,2para220.2The2 Commission2 does2 this2 too,2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU' Network' of' Competition'Authorities,2xxx.2[also&Wouters’&paper&discussing&Poland.]&772Walker,2‘Flexibility2within2a2Metaconstitutional2Frame’,228.2

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to2 an2 independent2 institution2 is2 democratically2 justifiable2 in2 order2 to2 achieve2 credible2 policy2commitments.2In2the2US,2Majone2says2that2they2found2that2politics2and2technical2issues2could2not2be2separated.2One2solution2was2to2have2clear2statutory2goals,2set2fixed2deadlines2for2achieving2them2and2empower2 citizens2 to2 take2 slowEmoving2 agencies2 to2 court.782 Article2 1012 is2 such2 a2 general2 provision2that2 this2 does2 not2 seem2 possible.792 By2 contrast,2 Majone2 thought2 that2 accountability2 should2 be2‘political’2if2distributive2concerns2prevail.802This2allows2separation2of2the2political2and2the2economic.22

However,2 this2 suggestion2 generates2 three2problems.2Article2 1012 cuts2 across2many2policy2 domains.2Majone2 creates2 a2 democratic2 deficit2 once2 the2 local,2 often2Member2 State,2 population’s2 regulatory2wishes2 are2 ignored.812 Secondly,2 pure2 technical2work2 is2 a2 chimera.2 Value2 judgments2 are2 constantly2made.2For2example,2even2if2we2could2agree2a2sole2consumer2welfare2goal,2reEdistributive2and2political2(more2 than2merely2 reEdistributive82),2 issues2 still2 arise.832There2are2also2disagreements2on2methods.2Many2 see2 regulatory2 competition2 as2 an2 important2 spur2 for2 EU2 development.842 Thirdly,2 defining2 a2‘(predominantly)2 efficiencyEorientated2 decision’2 is2 critical,2 yet2 circular.2 Competition2 decisions2 are2only2(predominantly)2efficiencyEorientated2if2efficiency2is2selected2as2the2sole2goal.2Majone2concedes2that2 even2 in2 areas2 of2 exclusive2 competence,2 such2 as2 competition2 law,2 the2 tendency2 is2 to2 move2towards2a2coEoperative2partnership2with2the2national2regulatory2authorities.8522

Even2 if2 there2 were2 agreement2 on2 Article2 101’s2 aims,2 allowing2 difference2 may2 also2 be2 beneficial2where2 there2 are2 disagreements2 on2 methods.2 Assume2 that2 Article2 101’s2 sole2 goal862 is2 consumer2welfare,2however2defined.2There2 is2considerable2disagreement2about2how2to2achieve2this2 (Issues212and2 5).872 How2 much2 competition2 is2 optimal2 to2 encourage2 innovation2 and2 (ultimately)2 consumer2welfare?2To2some2extent,2 firms2with2market2power2have2 less2 incentive2to2 innovate2than2firms2that2face2more2competition.2 In2a2competitive2market,2 firms2have2an2 incentive2to2 invest2 in2 technological2

2222222222222222222222222222222222222222222222222222222222222782Majone,2‘Regulatory2Legitimacy2in2the2US2and2the2EU’,2259,2265.2792Townley,2‘Is2There2(Still)2Room2for2NonEEconomic2Arguments?’;2Townley,2‘Which2Goals2Count2in2Article21012TFEU?:2public2policy2and2its2discontents’;2and2Townley,2Article'81'EC'and'Public'Policy.22802Gerstenberg2 and2 Sabel,2 ‘DirectlyEDeliberative2Polyarchy’,2 297E8;2Majone,2 ‘Regulatory2 Legitimacy2 in2 the2US2and2 the2 EU’,2 256;2 Majone,2 La' Communauté' européenne:' un' Etat' régulateur2 (Montchrestien2 1996);2 and2Majone,2 ‘The2 Rise2 of2 the2 Regulatory2 State2 in2 Europe’2 172 West2 European2 Politics;2 so2 evaluate2 the2 EU2 on2efficiencyEorientated2criteria;2and2Philippart2and2SieEDhianEHo,2 ‘Flexibility2and2Models2of2Governance2 for2 the2EU’,2310.2812Gerstenberg2and2Sabel,2 ‘DirectlyEDeliberative2Polyarchy’,2302,2also2page2322;2Joerges,2 ‘The2Law's2Problems2with2the2Governance2of2the2European2Market’2inibid2,227;2Lenaerts2and2Verhoeven,2‘Institutional2Balance2as2a2Guarantee2 for2 Democracy2 in2 EU2 Governance’2 inibid2 ,2 56E7;2 and2 Lindseth,2 ‘Democratic2 Legitimacy2 and2 the2Administrative2Character2of2Supranationalism’,2699E700.2Similarly,2Rhodes2and2Visser,2 ‘Seeking2Commitment,2Effectiveness2 and2 Legitimacy:2 new2modes2 of2 socioEeconomic2 governance2 in2 Europe’2 in2 Héritier2 and2 Rhodes2(eds),2New'Modes'of'Governance'in'Europe:'governing'in'the'shadow'of'hierarchy2(Palgrave2Macmillan22011),2114.2822Joerges2and2Neyer,2‘"Deliberative2Supranationalism"2Revisited’2EUI2Working2Paper2Law2No22006/20,216.2832Townley,2 ‘Remembering2Those2Not2Yet2Born:2 interEgenerational2 impacts2 in2competition2analysis’;2Townley,2‘Which2Goals2Count2 in2Article21012TFEU?:2public2policy2and2 its2discontents’ibid;2Craig,2EU'Administrative'Law2(OUP2 2006),2 52;2 Joerges,2 ‘'Deliberative2 Political2 Processes'2 Revisited’,2 783;2 Lindseth,2 ‘Democratic2 Legitimacy2and2 the2 Administrative2 Character2 of2 Supranationalism’,2 687E9.2 Similarly2 on2 scientific2 expertise,2 Dehousse,2‘Misfits’,2210E1,2224E5;2and2Scott2and2Vos,2‘The2Juridification2of2Uncertainty:2observations2on2the2ambivalence2of2the2precautionary2principle2within2the2EU2and2the2WTO’2inibid2,2283E4.&842For2example,2Ferguson,2Civilisation2(Penguin22011),2particularly239E43.2852Majone,2‘Regulatory2Legitimacy2in2the2US2and2the2EU’,2255.22862 I2do2not2accept2 this2assumption,2 see2Townley,2Article'81'EC'and'Public'Policy.2However,2 I2 say2 this2here2 to2simplify2the2discussion2about2disagreement2on2methods.2872Budzinski,2 ‘Transborder2Mergers’,211E7;2Budzinski,2 ‘Pluralism2of2Competition2Policy2Paradigms2and2the2Call2for2 Regulatory2 Diversity’2 No.2 14/20032 Volkswirtschaftliche2 Beiträge,2 3E24.2 Regulators2 also2 need2 to2 react2 to2innovation2 in2 antiEcompetitive2 practices,2 Budzinski,2 ‘Transborder2 Mergers’,2 15;2 and2 Budzinski,2 ‘Pluralism2 of2Competition2Policy2Paradigms’,229.2

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development.2Successful2firms2can2reduce2their2prices/2improve2quality,2forcing2less2efficient2rivals2to2exit.2This2is2not2a2linear2relationship,2however.2Firms’2incentives2to2innovate2are2not2only2determined2by2 the2existence2of2 competition.2They2also2consider2 their2own2ability2 to2appropriate2 the2 results2of2their2investment.2Strong2competition2reduces2the2chances2of2this2and2thus2the2incentive2to2innovate.2

So,2an2intermediate2level2of2competition2is2often2optimal2for2encouraging2innovation2and,2ultimately,2consumer2welfare.2Yet,2Motta2says2that2it2is2hard2‘…to2use2this2result2for2practical2policy2purposes,2for2instance2 to2 choose2 the2 ‘right’2 level2 of2 competition.’882 Economists2 disagree2 about2 how2 much2competition2 is2 best2 for2 innovation.2 This2 is2 of2 great2 practical2 significance2 in2 Article2 101.892 An2 NMa2study2asked2NCAs,2and2others,2about2the2emphasis2that2they2place2on2innovation2in2their2consumer2welfare2 analysis.2 There2 was2 no2 consensus2 about2 where2 the2 appropriate2 balance2 lies2 either.902Uniformity2 advocates2 assume2 that2 one2 body2 can2 solve2 problems2 alone,2 or2 by2 talking2 to2 others.2However,2the2cost2of2exploring2all2solutions2can2be2too2great;2especially2if2there2is2a2lot2of2complexity.22

Externalities2may2be2problematic2here,2however.2Unlike2the2Member2States,2the2EU2institutions2act2for2Europe2as2a2whole.2There2may2be2efficiency2 (and2public2policy)2 losses2 if2Member2States2 favour2their2constituents2while2hurting2people2or2groups2based:2

“…outside2 the2 state,2 such2 as2 manufacturers2 or2 issuers...The2 costs2 of2 such2 laws2 are2externalised2 in2 the2 sense2 that2 they2 do2 not2 effect2 voters2 or,2 by2 extension,2 their2 elected2officials.2 Uniform2 lawmakers2 presumably2must2 take2 into2 account2 interstate2 social2 welfare2rather2than2only2the2narrow2constituent2interests2that2would2matter2to2state2regulators.”912

If2capital2relocates2to2jurisdictions2where2the2regulatory2costs2are2lower,2it2drags2the2other2Member2States2 down,2 in2 a2 race2 to2 the2 bottom2 to2 scrap2 environmental,2 and2 other2 rules.922 This2 ‘…approach2would,2in2this2vision,2be2rather2ineffective2in2protecting2values2other2than2trade2liberalization.’932One2may2get2a2race2to2the2bottom2if2Article21012only2pursues2consumer2welfare2and2public2policy2goals2

2222222222222222222222222222222222222222222222222222222222222882Motta,2Competition'Policy:'theory'and'practice2(Cambridge2University2Press22004),257.2892 Italianer,2 ‘Défis2de2 la2politique2de2 la2concurrence’2 (Cercle2des2Européens)2discusses2some2cases2where2 the2impact2upon2innovation2was2important.2902 NMa,2 Competition' Enforcement' and' Consumer' Welfare:' setting' the' agenda,2 (2011),2 11E42 and2 25E31,2available2at2http://www.icnEthehague.org/page.php?id=7822912Ribstein2and2Kobayashi,2‘An2Economic2Analysis2of2Uniform2State2Laws’,2139.2Faull2and2Nikpay,2The'EC'Law'of'Competition,2para22.203;2Budzinski,2‘Transborder2Mergers’,25,245;2and2Geradin2and2Petit,2‘The2Development2of2Agencies2 at2 EU2 and2 National2 Levels:2 Conceptual2 Analysis2 and2 Proposals2 for2 Reform’2 Jean2Monnet2Working2Paper2<http://centers.law.nyu.edu/jeanmonnet/archive/papers/04/040101.pdf>2,212E3.2ECJ2often2protects2the2EU,2next2 section,2Poiares2Maduro,2We,' the'Court,2 25,2148.2Think2of2Case2CE360/922P,2Publishers'Association,2[1995]2ECR2IE23.2922de2Visser,2NetworkGBased'Governance' in'EC'Law,2 17;2Fingleton,2 ‘The2Distribution2and2Attribution2of2Cases2Among2the2Members2of2the2Network:2the2perspective2of2the2Commission/2NCAs’2 in2Ehlermann2and2Atanasiu2(eds),2Constructing' the' EU'Network' of' Competition' Authorities2 (Hart2 2002),2 333;2 Thatcher,2 ‘The2 Causes2 and2Consequences2 of2 Regulation2 by2 Networks:2 telecommunications2 in2 Europe’2 inibid2 ,2 132;2 and2 Donahue2 and2Pollack,2‘Centralisation2and2Its2Discontents’,278E9;.2It2happens2in2the2US,2for2example,2Hawk2and2Bayer,2‘Lessons2to2be2Drawn2from2the2InfraENational2Network2of2Competition2Authorities2in2the2US:2the2National2Association2of2Attorneys2General2(NAAG)2as2a2case2study’2 in2Ehlermann2and2Atanasiu2(eds),2Constructing'the'EU'Network'of'Competition'Authorities2 (Hart22002),2109;2and2 in2 relation2 to2 free2movement2of2goods,2 see2Commission,2First'Biennial'Report'on'the'Application'of'the'Principle'of'Mutual'Recognition2(1999).2Having2said2that,2Fox2believes2that2such2externalities2can2normally2be2detected,2Fox,2‘The2Elusive2Promise2of2Modernisation:2Europe2and2the2world’2282Legal2Issues2of2Economic2Integration,2144E5.2C.f.2de2Visser,2NetworkGBased'Governance'in'EC'Law,220,2see2also234E5.2932Philippart2and2SieEDhianEHo,2 ‘Flexibility2and2Models2of2Governance2for2the2EU’,2320;2 in2a2different2context,2but2 applies2 here2 too.2 Thatcher2 in2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU' Network' of' Competition'Authorities,224,2gives2the2example2of2telecoms2regulation.2

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are2 not2 achieved2 in2 legislation.2 However,2 regulatory2 races2 to2 the2 top2 are2 also2 possible;942 and2evidence2of2actual2races2to2the2bottom2is2 limited.952 It2may2be2possible2to2stop2races2to2the2bottom2through2minimum2standards.962One2has2to2consider2the2impact2of2diversity2in2the2round2in2any2event.22

Ribstein2 and2 Kobayashi2 note2 that2 uniformity2 can2 facilitate2 the2 development2 of2 a2 detailed2 body2 of2case2 law2 applying2 the2 rules.2 It2 eliminates2 the2 deadweight2 litigation2 costs2 involved2 in2 forum2shopping.972This2may2be2particularly2important2for2the2EU2competition2provisions,2which2tend2to2be2principles,2 rather2 than2 clear2 rules.2 However,2 diversity2will2 cause2 less2 damage2 in2 this2 regard2 if2 the2areas2of2divergence2are2clear2and2small;2and2the2reasons2for2divergence2are2explicitly2explained.22

In2 fact,2 in2 addition2 to2 those2 already2mentioned,2 difference2 has2many2 potential2 benefits.2 It2 allows2rules2to2be2made2more2easily.2Everyone’s2agreement2is2not2needed.2Within2limits,2the2relevant2actors2can2strike2the2balance2that2they2think2is2appropriate.2This2helps2to2avoid2deadlock2and2facilitates2joint2work2towards2a2common2solution2in2the2end,2by2demonstrating2the2efficacy2of2an2NCA’s2solutions2to2the2others.982In2turn,2this2facilitates2more2transparent2decisions.2The2cost2of2mistakes2is2also2reduced.2Bad2choices2mainly2affect2 the2Member2State2 concerned,2not2 the2whole2EU.2Furthermore,2diversity2allows2 greater2 options2 going2 forward,2 which2 facilitates2 modification2 and2 reEnegotiation2 as2circumstances2 change.2 Diversity2 also2 accommodates2 diverse2 legal2 systems2 and2 helps2 us2 to2 better2cope2with2uncertainty.2For2example,2if2we2do2not2understand2the2underlying2problems2and2so2cannot2easily2predict2all2of2the2consequences2of2an2action.9922

When2solutions2are2applied2at2a2local2level,2some2say2that2the2relevant2actors2better2understand2the2conditions2 affecting2 implementation,2 and2 can2 better2 tailor2 solutions2 to2 the2 specific2 context.2 The2national2 administrations2 of2 France,2 Britain2 and2 Germany2 are2 all2 increasingly2 able2 to2 decentralise2administrative2control2for2this2reason,2and2because2they2favour2more2regulatory2and2administrative2experimentation.1002 The2 development2 makes2 sense2 from2 an2 experimentation2 perspective,2 but,2 in2principle,2better2information2transfers2should2allow2this2to2occur,2even2at2the2supranational2level.2In2any2event,2this2point2has2been2made2for2local2authorities,2the2idea2is2that2they2are2more2accountable2to2their2local2populations.2This2might2not2be2true2of2independent2courts2and2NCAs.10122

c. Tolerating&diversity&in&competition&law&today:&Germany&and&the&USA&

Disagreements2 on2 methods2 and2 aims2 can2 arise2 in2 Article2 101.2 It2 is2 unclear2 whether2 we2 should2tolerate,2or2even2encourage,2these2disagreements;2or,2whether2we2should2stamp2them2out.2Here2two2reputable2competition2jurisdictions2encourage,2within2limits,2disagreements2on2aims2and2methods.2

2222222222222222222222222222222222222222222222222222222222222942 Eberlein,2 ‘Policy2CoEordination2without2Centralisation?2 Informal2Network2Governance2 in2 EU2 Single2Market2Regulation’2 in2 Ehlermann2 and2Atanasiu2 (eds),2Constructing' the' EU'Network' of' Competition'Authorities2 (Hart22002),2142;2Gerstenberg2and2Sabel,2‘DirectlyEDeliberative2Polyarchy’,2318;2Thatcher,2‘Causes2and2Consequences2of2Regulation2by2Networks’,2132;2Barnard2and2Deakin,2‘Market2Access2and2Regulatory2Competition’,26E8.2952Dehousse,2‘Integration2v2Regulation?’,2396.2962Barnard2and2Deakin,2 ‘Market2Access2and2Regulatory2Competition’,237.2The2Commission2does2 this2 too,2 see2text2around2footnote237.2972 Ribstein2 and2 Kobayashi,2 ‘An2 Economic2 Analysis2 of2 Uniform2 State2 Laws’,2 138.2 Commission,2 Commission'Explanatory'Memorandum,'Proposal'for'a'Council'Regulation'Implementing'Articles'81'and'82'of'the'Treaty,28,2for2the2modernisation2of2Article2101.2982Similarly,2for2the2OMC,2see2Trubek,2Cottrell2and2Nance,2‘'Soft2Law',2 'Hard2Law'2and2EU2Integration’2in2Búrca2and2Scott2(eds),2Law'and'New'Governance'in'the'EU'and'the'US2(Hart22006),278.2992Ibid,274.2They2discuss2OMC,2it2also2seems2true2for2the2ECN.21002Lindseth,2‘Delegation2is2Dead,2Long2Live2Delegation’,2154;2for2similar2EU2trends,2p.155.2Also,2Poiares2Maduro,2We,'the'Court,2113E26.21012de2Visser,2NetworkGBased'Governance'in'EC'Law,2349E50.2

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In2Germany,2Federal2competition2law2is2enforced2by2a2network2comprising2the2Bundeskartellamt2and2162 State2 competition2 authorities2 (in2 their2 own2 states).1022 Consistency2 in2 the2 law’s2 application2 is2important;2yet,2the2various2authorities’2independence2is2valued2too.1032Authorities2decide2cases2alone2and2 do2 not2 bind2 others.2 The2 Bundeskartellamt2 cannot2 relieve2 State2 authorities2 of2 cases,2 or2 give2instructions2to2them.2Network2members2must2exchange2case2information.2Inconsistency2remains2on2the2first2appeal,2to2State2courts;2after2that2the2Federal2Supreme2Court2applies2the2law2uniformly.10422

In2the2USA,2the2Federal2Trade2Commission2(FTC)2and2the2Department2of2Justice2(DoJ)2apply2Federal2antitrust2statutes:2including,2in2effect,2section21,2Sherman2Act21890,1052their2equivalent2of2Article2101;2and2 the2 Clayton2 Act2 1914.2 The2 states2 enforce2 these2 provisions2 too,1062 as2 do2 the2 courts.2 Multiple2actors2apply2the2same2laws.2Judge2Brandeis2called2the2US2States2‘…laboratories2of2democracy.’2

In2 part,2 to2 promote2 uniformity,2 the2 FTC2 and2 the2 DoJ2 issue2 joint2 written2 substantive2 guidance.2Similarly,2 in2 1983,2 the2 Multistate2 Antitrust2 Task2 Force2 of2 the2 National2 Association2 of2 Attorneys2General2(NAAG)2was2created2to2increase2coEordination2of2enforcement2by2the2states.2They2produce2guidance2too.2However,2disagreements2arise.1072One2example,2from2the2merger2arena,2concerns2the2issue2 of2what2 constitutes2 a2 vertical2 restraint.2 There2were2 joint2 FTC2 and2DoJ2 Federal2 guidelines2 on2point,2now2withdrawn.2NAAG2issued2more2aggressive2guidelines.10822

Disagreements2 on2 both2 aims2 and2 methods& are2 embraced2 in2 Germany2 and2 the2 USA.1092 These2 are2networks2of2equals,2 all2 take2 substantive2policy2decisions,2within2 the2 limits2of2 the2Federal2 Supreme2Court’s2 judgments2 and2 the2 law.2 Both2 countries2 allow2 difference2 for2 similar2 reasons.2 First,2 the2constitutional2 relationship2 between2 the2 States2 and2 the2 Federal2 authorities2 (Issue2 4).1102 Secondly,2central2 enforcement2 may2 lack2 state2 enforcement’s2 sensitivity2 to2 local2 concerns2 (Issues2 1E3).1112

22222222222222222222222222222222222222222222222222222222222221022Similarly,2in2Spain,2Regional2Governments2can2apply2national2competition2law,2but2there2are2strict2rules2on2case2 allocation,2 Martínez2 Lage2 in2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU' Network' of' Competition'Authorities,227.21032Ibid,2xxii.21042 Böge,2 ‘The2 Bundeskartellamt2 and2 the2 Competition2 Authorities2 of2 the2 German2 Länder’2 in2 Ehlermann2 and2Atanasiu2 (eds),2 Constructing' the' EU' Network' of' Competition' Authorities2 (Hart2 2002),2 20,2 112E5.2 Only2 the2Bundeskartellamt2does2mergers2and2EU2competition2law.21052 At2 least2 insofar2 as2 is2 important2 for2 our2 discussion,2 see2 Hovenkamp,2 Federal' Antitrust' Policy:' the' law' of'competition'and'its'practice2(Third2edn,2West2Publishing2Co.22005),2592.21062Budzinski,2 ‘Pluralism2of2Competition2Policy2Paradigms’,230E1;2Cengiz,2 ‘Management2of2Networks’,2424E31;2and2Hovenkamp,2Federal'Antitrust'Policy,2598.21072 The2USA2may2 have2 less2 divergence2 than2 the2 EU,2 as2 there2 is2 a2 stronger,2 jointly2 held,2 commitment2 to2 the2market2and2the2states2are2more2closely2integrated.2Hawk2believes2that2in2the2USA2network2there2is2‘…far2more2commonality2…in2terms2of2the2soEcalled2‘common2competition2culture’2than2among2the2members2of2the2future2EU2network.’2A2common2EU2competition2culture2may2be2developing2though,2Hawk2in2Ehlermann2and2Atanasiu,2Constructing' the' EU' Network' of' Competition' Authorities,2 40.2 Also2 Cengiz,2 ‘Management2 of2 Networks’,2 427;2Scharpf,2‘Democratic2Legitimacy2under2Regulatory2Competition’,2365.21082Hovenkamp,2Federal'Antitrust'Policy,2599;2and2Cengiz,2‘Management2of2Networks’,2426.21092For2US2law,2Hawk2and2Bayer,2‘Lessons2from2the2US'2InfraENational2Network2of2Competition2Authorities’,217,299,2 102E102 and2 Kovacic,2 ‘Competition2 Policy2 in2 the2 European2Union2 and2 the2 United2 States:2 convergence2 or2divergence2 in2 the2 future2 treatment2 of2 dominant2 firms?’2 Competition2 Law2 International2 (although2 note2 the2Surpreme2 Court2 judgment2 in2 Credit' Suisse' Securities' v' Billing' 5512 U.S.2 2642 (2007),2 Justice2 Breyer,2 16);2 for2German2 competition2 law,2 Böge,2 ‘The2 Bundeskartellamt2 and2 the2 Competition2 Authorities2 of2 the2 German2Länder’,2115.2Diversity2occurs2in2many2areas2of2German2Federal2law.&1102 Cengiz,2 ‘Management2 of2 Networks’,2 431E3.2 In2 fact,2 the2 states2 have2more2 power2 in2 the2 US2 as2 their2 own2antitrust2 rules2 have2 more2 effect2 than2 those2 of2 the2 Member2 States2 here,2 Rodger2 (ed)2 Landmark' Cases' in'Competition'Law:'around'the'world'in'fourteen'stories2(Kluwer2Law2International2BV22013),2346.21112For2the2US,2Hawk2and2Bayer,2‘Lessons2from2the2US'2InfraENational2Network2of2Competition2Authorities’,2109.2As2 regards2 Germany,2 Böge,2 ‘The2 Bundeskartellamt2 and2 the2 Competition2 Authorities2 of2 the2 German2 Länder’2inibid2(Hart),2202and2111.2

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Finally,2the2great2benefit2of2‘…surfacing2hard2issues2for2debate2and2creating2dialogue2as2to2what2the2law2is2and2should2be…ultimately2to2be2resolved2by2the2US2Supreme2Court…’2(Issue25).1122

d. Direct&effect&allows&diversity&

Direct2 effect2 is2 the2 capacity2 of2 an2 EU2 norm2 to2 be2 applied2 in2 a2 domestic2 court2 or2 administrative2proceedings.1132 Directly2 effective2 Treaty2 provisions2 must2 be2 justiciable.2 If2 Article2 1012 is2 directly2effective,1142 does2 this2 prevent2 diversity2 there?2 Can2 one2 balance2 public2 policy2 interests2 in2 directly2effective2provisions;2and2can2Member2States2arrive2at2the2same2results2 in2this2balance2even2 if2 they2value2things2differently?2Temple2Lang2has2said,2for2example,2that2national2courts2must2do2‘…what2is2reasonably2 necessary2 to2 ensure2 that2 Community2 law2 is2 uniformly2 applied2 throughout2 the2Community.’1152This2may2make2diversity2inappropriate2in2Article2101.2

Originally,2 the2 preEcondition2 for2 direct2 effect2 was2 that2 the2 provision2 had2 to2 contain2 a2 clear2 and2unconditional2prohibition;1162for2which2no2further2legislative2intervention2was2required.1172However,2the2 ECJ2 has2 relaxed2 these2 criteria,2 to2 include2 many2 ‘…Treaty2 articles2 dealing2 with2 the2 common2market,2 even2 those2 that2 did2 seem2 to2 require2 national2 or2 Community2 implementing2 acts2 and2 even2those2granting2to2 the2Member2States2a2power2to2derogate.’1182Today,2a2Treaty2provision2 is2directly2effective2 if2 it2 is2 ‘…sufficiently2 operational2 in2 itself2 to2 be2 applied2 by2 a2 court…’1192 This2 is2 widely2interpreted.1202 We2 have2 already2 discussed2 the2 interaction2 between2 Articles2 342 and2 36.1212 Both2articles2are2directly2effective,2yet2both2require2a2balancing2of2public2policy2 interests2within2them.1222This2must2 be2 done2 by2 the2Member2 State2 courts2 and2 administrative2 authorities.2 They2 are2 likely2 to2arrive2at2different2results2(within2Member2States2and2across2the2EU)2when2balancing2here.2

The2 application2 of2 Article2 1012 requires2 the2 relevant2 actors2 to2 balance2 short2 and2 longEterm2competition2 (today2most2 speak2 of2 consumer2welfare),2 environmental2 protection2 and2 other2 public2policy2goals.2For2example,2in2Wouters,2the2Dutch2court2reviewed2the2legality2of2an2agreement2under,2directly2 effective,2 Article2 101(1).1232 At2 issue2was2 the2Dutch2Bar2 Council’s2 19932Regulation2basically2prohibiting2lawyers2in2the2Netherlands2from2forming2partnerships2with2nonElawyers.2Mr2Wouters,2a2lawyer,2wanted2 to2 enter2 an2 accounting2 partnership.2On2 an2Article2 2672 reference,2 the2 ECJ2 found2 a2

22222222222222222222222222222222222222222222222222222222222221122For2the2US,2Fox,2‘The2Elusive2Promise2of2Modernisation’,21442and2Forrester,2‘Diversity2and2Consistency’,2341.2As2many2 competition2 issues2must2 be2 litigated,2 rather2 than2being2made2 through2administrative2decision,2 the2analogy2with2the2Commission2and2the2NCAs2is2not2perfect.2As2regards2Germany,2Böge,2‘The2Bundeskartellamt2and2the2Competition2Authorities2of2the2German2Länder’2inibid2(Hart),2202and2111.21132 de2Witte,2 ‘Direct2 Effect,2 Primacy,2 and2 the2 Nature2 of2 the2 Legal2 Order’2 in2 Craig2 and2 De2 Búrca2 (eds),2 The'Evolution'of'EU'Law2(OUP22011),2323.2On2the2issue2of2administrative2proceedings,2Case2103/882Costanzo'[1989]2ECR21839,2paras230E2;2such2as2an2NCA,2recital262and2article23,2Regulation21/2003.21142This2is2much2debated,2Townley,2Article'81'EC'and'Public'Policy,297E8,2and2the2references2made2there;2but2I2make2this2widely2accepted2assumption2in2order2to2simplify2the2arguments2in2this2paper.21152Temple2Lang,2‘The2Duties2of2National2Courts2under2Community2Constitutional2Law’2European2Law2Review,215.2 21162 Case2 26/62,2NV' Algemene' TransportGen' Expeditie' Onderneming' van' Gend' &' Loos' v' Netherlands' Inland'Revenue'Administration2[1963]2ECR21,2section2II(B).21172Case28/812Ursula'Becker'v'Finanzamt'MünsterGInnenstadt2[1982]2ECR253,2paras227E40.21182de2Witte,2‘Direct2Effect,2Primacy,2and2the2Nature2of2the2Legal2Order’,2330;2also2327E9.21192Opinion2of2AdvocateEGeneral2van2Gerven2in2the2Banks'Case'[1994]2ECR2IE1209,2para227.221202Case2CE413/992Baumbast'[2002]2ECR2IE7091;2de2Witte,2‘Direct2Effect,2Primacy,2and2the2Nature2of2the2Legal2Order’,2334;2and2Eijsbouts,2‘Direct2Effect,2the2Test2and2the2Terms:2in2praise2of2a2capital2doctrine2of2EU2law’2in2Prinssen2and2Schrauwen2 (eds),2Direct'Effect:' rethinking'a' classic'of'EC' legal'doctrine2 (Europa2Law2Publishing22004),2240.21212See2text2around2footnote229.21222 http://ec.europa.eu/enterprise/policies/singleEmarketEgoods/files/goods/docs/art34E36/new_guide_en.pdf,237.2See,2Case234/792R'v'Henn'and'Darby'[1979]2ECR237952(morality);2and2Case2CE180/962United'Kingdom'v'Commission'[1998]2ECR2IE22652(public2health).'21232Case2CE234/892Delimitis'[1991]2ECR2IE935,2para245,2finds2Article2101(1)2directly2effective.2

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restriction2of2competition.1242However,2the2ECJ2conducted2a2public2policy2balancing2exercise;2holding2that,2 for2 the2 purposes2 of2 applying2 Article2 101(1),2 account2must2 first2 of2 all2 be2 taken2 of2 the2 overall2context2in2which2the2Bar2Council’s2action2produces2its2effects.2More2particularly,2account2must:2

“…be2taken2of2its2objectives,2which2are2here2connected2with2the2need2to2make2rules2relating2to2 organisation,2 qualifications,2 professional2 ethics,2 supervision2 and2 liability,2 in2 order2 to2ensure2that2the2ultimate2consumers2of2legal2services2and2the2sound2administration2of2justice2are2 provided2with2 the2necessary2 guarantees2 in2 relation2 to2 integrity2 and2 experience…It2 has2then2 to2 be2 considered2 whether2 the2 consequential2 effects2 restrictive2 of2 competition2 are2inherent2in2the2pursuit2of2those2objectives.”1252

The2ECJ2 seems2 to2balance2here,2 contrary2 to2Article2 267;1262 the2 relevant2 actors2 should2normally2do2it.1272Note2too2that2a2private2party2asks2for2the2balance2to2be2done2within2Article2101;2and2it2is2a2nonEstate2 actor2 –2 albeit2 one2 with2 special2 legal2 privileges,2 the2 Bar2 Council,2 that2 balances2 in2 its2 19932Regulation.2Private2actors2assess2public2policy2balancing2in2the2shadow2of2many2Treaty2articles.1282

Even2 if2 public2 policy2 balancing2 is2 compatible2 with2 direct2 effect,2 in2 this2 balance,2 must2 all2 of2 the2relevant2actors2arrive2at2the2same2outcome?2Prechal2says,2critically:2

“The2 establishment2 and2 proper2 functioning2 of2 the2 Common2Market2 as2 one' single' market'requires2a2system2of2common2rules2and2principles2which2safeguards2its2unity.2Any2unilateral2interference2with2these2rules2by2the2Member2States2or2other2actors2has2to2be2excluded.”12922

Yet,2 when2 public2 policy2 balancing2 in2 the2 free2 movement2 rules,2 Member2 States2 have2 a2 margin2 of2appreciation2 according2 to2 their2 ‘…social2 circumstances2 and2 to2 the2 importance2 attached2 by2 those2States2 to2 a2 legitimate2 objective2 under2 Community2 law…the2measures2 which2 are2 likely2 to2 achieve2concrete2 results.’1302 A2 similar2 position2 has2 arisen2 in2 Article2 101.2 In2 Wouters,2 the2 restriction2 of2competition2prohibited2lawyers2and2nonElawyers2entering2into2partnerships.2The2ECJ2held2that:2

“…the2fact2that2different2rules2may2be2applicable2 in2another2Member2State2does2not2mean2that2the2rules2in2force2in2the2former2State2are2incompatible2with2Community2law2(see,2to2that2effect,2Case2CE108/962Mac'Quen'[2001]2ECR2IE837,2paragraph233).2Even2 if2multiEdisciplinary2partnerships2of2lawyers2and2accountants2are2allowed2in2some2Member2States,2the2Bar2of2the2Netherlands2 is2 entitled2 to2 consider2 that2 the2 objectives2 pursued2 by2 the2 19932 Regulation2cannot,2having2 regard2 in2particular2 to2 the2 legal2 regimes2by2which2members2of2 the2Bar2and2accountants2 are2 respectively2 governed2 in2 the2 Netherlands,2 be2 attained2 by2 less2 restrictive2

22222222222222222222222222222222222222222222222222222222222221242Case2CE309/992Wouters'v'Algemene'Raad'van'de'Nederlandse'Orde'van'Advocaten2[2002]2ECR2IE1577,2paras286E96.21252Ibid.,2para297.21262Case2CE226/112Expedia,2132December22012,2nyr,2para234.21272The2ECJ2justifies2this2with2Article21012cases2E2Case2CE250/922DLG2[1994]2ECR2IE5641,2para235;2and2freedom2of2establishment/services2 cases2 (also2directly2effective)2 E2Case2107/832Klopp' [1984]2ECR22971,2para217,2Case2CE3/952Reisebüro'Broede'v'Sandker'[1996]2ECR2IE6511,2para237.21282Case2CE415/932URB'v'Bosman' [1995]2ECR2 IE4921,2para286;2Case2CE281/982Angonese'v'Cassa'di'Risparmio'[2000]2ECR2IE4139;2Case2CE350/962Clean'Car2v'Landeshauptmann'[1998]2ECR2IE2521.21292Prechal,2 ‘Direct2Effect,2Indirect2Effect,2Supremacy2and2the2Evolving2Constitution2of2the2European2Union’2in2Barnard2(ed),2The'Fundamentals'of'EU'Law'Revisited:'assessing'the' impact'of'the'constitutional'debate2 (OUP22007),2 39.2 Also,2 Jans2 and2 Prinssen,2 ‘Jans,2 J2 and2 Prinssen,2 J.,2 Direct2 Effect:2 convergence2 or2 divergence?2 in2Prinssen2 and2 Schwauren2DE2 book’2 in2 Prinssen2 and2 Schrauwen2 (eds),2Direct' Effect:' rethinking' a' classic' of' EC'legal'doctrine2(Europa2Law2Publishing22004),2107;2and2the2text2around2footnote251.21302Case2CE394/972Heinonen' [1999]2ECR2 IE3599,2para243;2and2Case2CE208/092 Ilonka'SaynGWittgenstein' [2010]2ECR2IE13693,2para287.2C.f.2Case2CE473/932Commission'v'Luxembourg'[1996]2ECR2IE3207,2paras225E50.2This2may2vary2in2different2areas,2see2Barnard2and2Deakin,2‘Market2Access2and2Regulatory2Competition’,228E342

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means2 (see,2 to2 that2effect,2with2 regard2 to2a2 law2reserving2 judicial2debtErecovery2activity2 to2lawyers,2Case2CE3/952Reisebüro'Broede'v'Sandker'[1996]2ECR2IE6511,2paragraph241).”1312

Interestingly,2when2noting2that2Member2States2could2come2to2different2views2on2the2importance2of2public2policy2 criteria,2 visEàEvis2Article2101’s2 restriction2on2 competition,2 the2ECJ2makes2 reference2 to2the2free2movement2case2law2to2support2this2idea.1322There2it2is2clear2that2if2a2Member2State2protects,2for2example,2the2environment2more2than2others,2it2does2not2necessarily2breach2EU2law.13322

However,2justifications2must2serve2a2legitimate2purpose.2In2both2Article21012and2the2free2movement2rules,2 the2ECJ2 is2 the2ultimate2arbiter;1342and2 the2 restraint2must2be2proportionate.1352Member2State2rules2can2be2 inappropriate2 if2EU2 legislation2exhaustively2harmonises2an2area.2The2ECJ2made2similar2points2 in2Wouters'when2 balancing2 public2 policy2 in2 Article2 101.1362 It2 is2 also2 wary2 of2 opportunistic2protectionism.2The2ECJ2often2demands2that2Member2States2protecting2specific2goals2show2that2they2coherently2and2consistently2protect2them2in2their2legal2systems.13722

As2we2saw2for2the2free2movement2rules,2a2unitary2focus2in2Article21012has2incidental2impacts2on2other2goals2too.2This2would2leave2a2gap2in2the2socioEeconomic2protection2in2the2Member2State(s).1382Article2101’s2footprint2means2a2big2impact;2testing2acceptance2of2market2liberalisation,1392Issues212and23.22

Many2argue2that,2where2public2policy2goals2are2important,2the2Member2States2should2individually,2or2collectively2 through2 the2EU,2 legislate2 to2protect2 them,2 rather2 than2distorting2 competition.2This2has2advantages:2many2think2it2more2efficient2and2clearer2for2firms.2As2we2have2seen,2it2creates2problems2too:2 Member2 States2 cannot2 always2 agree;2 legislation2 may2 not2 happen2 if2 legislators2 are2 busy;2 it2undermines2joined2up2government;1402and2largely2abandons2self2regulation,2an2efficient2policy2tool:2

“SelfEand2 coEregulation…mean2 that2 relevant2 industry2 players,2 not2 the2 Commission,2 edict2norms.2 They2 may2 be2 quicker2 to2 adopt2 and2 may2 lead2 to2 more2 acceptable2 results2 for2stakeholders,2who2 produce2 the2 rules2 themselves2 and2may2 even2 use2 them2 as2 a2 'marketing2tool'.2CoEregulation2may2also2be2a2means2of2accommodating2national2diversity2–2by2allowing2national2coEregulation2practices2on2the2basis2of2general2EU2regulatory2framework.2But2there2are2also2potential2drawbacks2that2must2be2managed,2in2particular2the2risk2of2antiEcompetitive2

22222222222222222222222222222222222222222222222222222222222221312Case2CE309/992Wouters'v'Algemene'Raad'van'de'Nederlandse'Orde'van'Advocaten2[2002]2ECR2IE1577,2para2108.21322The2objectives2of2the2competition2and2free2movement2rules2are2regularly2linked,2Joined2Cases2CE468/062etc.2Sot.'Lelos'kai'Sia'EE'v'GlaxoSmithKline'[2008]2ECR2IE7139,2para265.21332Oliver,2EU'Free'Movement'of'Goods,2para28.25.21342Case2CE254/052Commission'v'Belgium'[2007]2ECR2IE4269,2paras236E7.21352Case213/782Eggers'v'Freie'Hansestadt'Bremem'[1978]2ECR21935,2para230;2Case2174/822Sandoz'[1983]2ECR22445,2para218;2and2Craig2and2de2Búrca,2EU'Law,2673.21362Case2CE309/992Wouters'v'Algemene'Raad'van'de'Nederlandse'Orde'van'Advocaten2[2002]2ECR2IE1577,2paras299E110.21372Case2121/852Conegate'v'CCE'[1986]2ECR21007,2paras215E6;2and2Case2CE169/072Hartlauer'[2009]2ECR2IE1721,2para2 55;2 but2 see2 Mathisen,2 ‘Consistency2 and2 Coherence2 as2 Conditions2 for2 Justification2 of2 Member2 State2Measures2Restricting2Free2Movement’2472Common2Market2Law2Review.2Similarly,2in2the2US2see2Dorf2and2Sabel,2‘A2Constitution2of2Democratic2Experimentalism’2Cornell2Law2Faculty2Publications2Paper2120,2134.21382Wigger2and2Nölke,2 ‘Enhanced2Roles2of2Private2Actors2 in2EU2Business2Regulation’,2505;2and2Wilks,2 ‘Agency2Escape:2 decentralisation2 or2 dominance2 of2 the2 European2 Commission2 in2 the2 modernisation2 of2 competition2policy?’2182Governance,2437.21392Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,2137.21402 Barnard,2 ‘Solidarity2 and2 New2 Governance2 in2 Social2 Policy’2 in2 De2 Búrca2 and2 Scott2 (eds),2 Law' and' New'Governance' in'the'EU'and'the'US2 (Hart22006),2175;2de2Búrca,2 ‘EU2Race2Discrimination2Law:2a2hybrid2model?’2inibid2,2117E8;2and2Commission,2Second'Report'on'Economic'and'Social'Cohesion2(2001)2

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collusion2amongst2 industry2members2 to2 the2detriment2of2consumers,2as2well2as2 the2 risk2of2non2respect.[141]”1422

The2EU2 should2be2more2 cautious2about2 imposing2 its2own2 ideas2of2how2 the2Member2States2 should2‘regulate’2 specific2 issues,1432 Issues2 32 and2 5.2 To2 do2 otherwise2 does2 not2 respect2 local2 regulatory2solutions;2abandons2the2principle2of2regulatory2neutrality;1442and2negates2a2growing2EU2belief2that2we2need2a2smarter2mix2of2policy2instruments.2Many2other2substantive2areas2of2EU2law2already2do2this.14522

That2 is2 the2 theory,2 however2 there2 are2 arguments2 by2 Everson2 and2 Whish2 and2 Bailey2 that2 may2undermine2 it.2Relying2on2Verband'der' Sachversicherer,2 Everson2 says2 that2 the2ECJ2does2not2permit,2under2Article2101,2 ‘…coEoperative2public/2private2economic2regulation2at2the2national2 level.’1462This2could2rule2out2diversity2in2Article2101.2In2that2case,2the2parties2said2the2Commission2could2not2apply2Article21012to2the2German2 insurance2sector2because,2 in2 the2absence2of2EU2harmonisation,2German2legislation2excluded2the2German2equivalent2of2Article2101,2and2also,2so2the2argument2went,2Article2101.2The2judgment2is2unclear,2but2the2ECJ2seems2to2resent2the2complete2exclusion2of2insurance2from2Article2101’s2scope,2rather2than2public2policy2balancing2of2private2restrictions2within2Article2101.2

Alternatively,2 Whish2 and2 Bailey2 argue2 that,2 in2Wouters,2 like2 the2 free2 movement2 cases,2 the2 rules2basically2had2a2public2law2character.1472If2a2public2law2character2is2necessary,2this2could2significantly2restrict2diversity’s2 scope.2However,2 the2ECJ2did2not2highlight2 this2 issue2 in2Wouters;'nor2 in2 the2 later2Meca'Medina'case2balancing2public2health2 in2Article2101(1),2where,2no2state2actors2were2 involved.2The2ECJ2recently2hinted2that2this2was2irrelevant.1482In2fact,2public2policy2has2been2considered2in2many2cases2without2a2public2law2character,2think2of2the2single2market2cases,2for2example.1492This2issue2may2not2 have2 arisen2 so2 clearly2 before2 because2 public2 balancing2was2 normally2 conducted2within2Article2101(3),2 where2 the2 Commission2 had2 the2 monopoly2 until2 2004;2 making2 divergent2 judgments2 rarer.2However,2Wouters'was2 debated2 under2 Article2 101(1),2 the2 agreement2 did2 not2 fall2 within2 a2 block2exemption,2nor2had2 it2been2notified2 to2 the2Commission2at2 the2 relevant2 time.1502 Some2believe2 that2demanding2 state2 involvement2 in2 public2 policy2 balancing2 is2 sensible.2 Otherwise,2 so2 the2 argument2goes,2 we2 abandon2 the2 balance2 to2 selfEcentred2 companies,2 rather2 than2 democratically2 elected2

22222222222222222222222222222222222222222222222222222222222221412The2relevant2actors2must2ensure2that2collusive2outcomes2do2not2result.2However,2only2insofar2as2this2means2that2there2is2a2proper2balancing2of2competition2and2other,2relevant,2public2policy2goals.21422Commission,2Instruments'for'a'Modernised'Single'Market'Policy,212;2also2pages23E11;2Wallace,2Pollack2and2Young,2PolicyGMaking' in' the'EU,2 127,2 485;2 Townley,2Article' 81'EC'and'Public' Policy,2 Chapter21;2 Commission,2Commission' staff'working' document,' Instruments' for' a'Modernised' Single'Market' Policy,' accompanying' the'Communication' from' the' Commission' to' the' European' Parliament,' the' Council,' the' European' Economic' and'Social'Committee'and'the'Committee'of'the'Regions,'A'Single'Market'for'21st'Century'Europe,211;2Commission,2A' Single' Market' for' 21st' Century' Europe,2 4,2 12;2 Senden,2 ‘Soft2 Law,2 SelfERegulation2 and2 CoERegulation2 in2European2 Law:2where2 do2 they2meet?’2 92 Electronic2 Journal2 of2 Comparative2 Law;2 and2 Commission,2European'Governance:'a'white'paper,2221.21432Sabel2and2Zeitlin,2‘Learning2from2Difference:2the2new2architecture2of2experimentalist2governance2in2the2EU’2in2Sabel2and2Zeitlin2(eds),2Experimentalist'Governance'in'the'European'Union:'towards'a'new'architecture2(OUP22010),21E2.21442 Commission,2 Instruments' for' a'Modernised' Single'Market' Policy,2 13;2 and2OECD,2Recommendation' of' the'Council'on'Regulatory'Policy'and'Governance2(2012),217.2See2also2footnote2132.21452Wallace,2Pollack2and2Young,2PolicyGMaking'in'the'EU,2310.21462Everson,2‘The2Crisis2of2Indeterminacy’,2233E4;2Case245/852Verband'der'Sachversicherer'v'Commission'[1987]2ECR2405,2para223.2My2focus2is2para2182and2AdvocateEGeneral2Darmon’s2Opinion,2pp.2427E34.21472Whish2and2Bailey,2Competition' Law,2 132E3.2 Similarly,2Odudu,2The'Boundaries'of' EC'Competition' Law:' the'scope'of'Article'812(OUP22006),2chapter23,2part2IV.21482Case2CE1/122Ordem'dos'Técnicos'Oficiais'de'Contas'v'Autoridade'da'Concorrência,2nyr,2282February22013,2para293.21492Townley,2Article'81'EC'and'Public'Policy,2111E99.221502Whish,2Competition'Law2(Fifth2edn,2Butterworths22003),2123.2

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Member2States2 (unlike2 legislation).1512 Just2 to2engage2with2 this2argument,2 let’s2 ignore2 the2 influence2that2undertakings2have2over2 legislative2activity2 too.2The2ECJ2 focuses2on2 the2outcome2of2 the2Article21012 balance,2 not2 undertakings’2 motivations.1522 The2 Commission,2 NCAs2 and2 Member2 State2 courts2‘judge’2the2cases.2As2a2result,2these2public2actors2can2protect2us2in2the2balance.1532

Direct2effect2cannot2be2discussed2in2isolation;2it2is2influenced2by2metaEdoctrines2on2the2nature2of2EU2law.1542We2have2 seen2 several2 regulatory2 challenges2which2 impact2upon2decisionEmaking2 in2 the2EU.2Even2before2the2Maastricht2Treaty’s2social2chapter2expressly2 tolerated2 it,2 there2was2an2established2practice2of2allowing2some2‘…differentiation2between2Member2States2even2within2the2most2hallowed2parts2 of2 the2 EC’s2 supposedly2 uniform2and2 shared2 internal2market2 acquis…’1552Given2 the2 increasing2emphasis2 on2 social2 and2 environmental2 goals2 in2 the2 EU2 Treaties2 and2 the2 greater2 willingness2 to2consider2local2preferences,2direct2effect2should2not2prevent2diversity2in2Article2101.2

e. Conclusion&

The2 presence2 of2 disagreements2 on2 aims2 (whether2 they2 arise2 through2 Issues2 1E4)2 and2 methods2(whether2 they2 arise2 through2 Issues2 32 or2 5)2 suggest2 that2 diversity2 within2 Article2 1012 furthers2constitutional2tolerance,2helps2to2resolve2complex2jurisdictional2problems,2democratic2legitimacy2and2diverse2national2views2of2the2good2life2(both2substantively2and2through2appropriate2mechanisms).2As2Eberlein2 notes,2 ‘Decentralisation2 encourages2 flexible2 rule2 adjustment2 tailored2 to2 specific2 local2conditions2that2may2vary2substantially2with2a2heterogeneous2polity...’1562Homogeneity2can2be2a2curse.2Paradoxically,2 diversity2 can2 be2 ‘…a2 preEcondition2 for2 preservation2 of2 identity…’1572 and2 liberate2 the2network2 to2openly2experiment2with2different2aims2and2methods,2which2 is2 especially2 important2 for2resolving2uncertainty.2Network2members2become2public2laboratories.1582Sharing2outcomes2generates2a2rich2pool2of2learning2experiences.1592Comparing2results2against2the2best2performers,2and2redefining2aims2 or2 methods2 when2 others’2 are2 better,2 should2 more2 rapidly2 lead2 to2 best2 practice2 and2harmonisation;1602 or,2 at2 least,2 informed2 divergence.1612 On2 the2 other2 hand,2 at2 a2 certain2 point,2 this222222222222222222222222222222222222222222222222222222222222221512 Odudu,2 The' Boundaries' of' EC' Competition' Law,2 51E2.2 C.f.2 Forrester,2 ‘Where2 Law2Meets2 Competition:2 is2Wouters2 like2 a2 Cassis2 de2Dijon2or2 a2 Platypus?’2 in2 Ehlermann2 and2Atanasiu2 (eds),2European'Competition' Law'Annual'2004:'The'Relationship'between'Competition'Law'and'the'(Liberal)'Professions2(Hart22004),2293.&1522Joined2Cases229/832etc.2CRAM'v'Commission'[1984]2ECR21679,2para229.21532 For2more2 discussion2 on2 problems2with2 public/2 private2 divide2 arguments2 see2 Townley,2Article' 81' EC' and'Public'Policy,287E93.21542de2Witte,2‘Direct2Effect,2Primacy,2and2the2Nature2of2the2Legal2Order’,2324;2and2Eijsbouts,2‘Direct2Effect,2the2Test2and2the2Terms’,2240E1,2248E9.21552de2Búrca,2‘Differentiation2within2the2'Core'?’,2134;2in2agreement2also2Shaw,2‘Constitutionalism2and2Flexibility2in2the2EU:2developing2a2rational2approach’2inibid2,2340.21562 Eberlein,2 ‘Policy2 CoEordination2 without2 Centralisation?’,2 146.2 Also,2 Budzinski,2 ‘Transborder2Mergers’,2 44;2Donahue2and2Pollack,2‘Centralisation2and2Its2Discontents’,274;2Scharpf,2‘European2Governance’,24E5;2de2Búrca,2‘Differentiation2 within2 the2 'Core'?’,2 141;2 and2 Philippart2 and2 SieEDhianEHo,2 ‘Flexibility2 and2 Models2 of2Governance2for2the2EU’2inibid2,2301.21572Gerstenberg2and2Sabel,2‘DirectlyEDeliberative2Polyarchy’,2291E2.21582 Fingleton2 in2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU' Network' of' Competition' Authorities,2 180,2although2he2assumes2that2these2will2only2be2competition2considerations;2similarly,2Böge2in2ibid,2167;2Wils,2The'Optimal' Enforcement' of' EC' Antitrust' Law2 (Kluwer2 Law2 International2 2002),2 146;2 and2 Wils,2 Principles' of'European'Antitrust'Enforcement,217,2but2c.f.244E6.221592Similarly,2Kilpatrick,2‘New2EU2Employment2Governance2and2Constitutionalism’2in2De2Búrca2and2Scott2(eds),2Law'and'New'Governance'in'the'EU'and'the'US2(Hart22006),21252(employment);2Barnard2and2Deakin,2‘Market2Access2and2Regulatory2Competition’,242(free2movement).2In2different2institutional2settings,2de2Visser,2NetworkGBased'Governance'in'EC'Law,2349E50.21602Eberlein,2‘Policy2CoEordination2without2Centralisation?’,2146E7;2de2Visser,2NetworkGBased'Governance'in'EC'Law,2239;2and&Maher2and2Ştefan,2‘Competition2Law2in2Europe’,2185.2Similarly,2for2the2OMC,2see2Trubek,2Cottrell2and2Nance,2‘'Soft2Law',2'Hard2Law'2and2EU2Integration’,289.21612Budzinski,2‘Pluralism2of2Competition2Policy2Paradigms’,225E30;2Donahue2and2Pollack,2‘Centralisation2and2Its2Discontents’,275;2and2Sabel2and2Zeitlin,2‘Learning2from2Difference’,24.2

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might2undermine2the2 internal2market,2 increase2the2cost2of2 international2 trade,2raise2the2spectre2of2externalities2and2races2to2the2bottom,2and2retard2the2development2of2a2unified2body2of2case2law.2

Uniformity2and2diversity2are2both2valuable.2Despite2 the2 risks2 to2 the2 clarity2of2 the2EU’s2message,1622and2 the2 threat2of2 externalities,2 I2 see2more2advantages2 in2 accepting2diversity2 in2Article21012 to2deal2with2 disagreements2 on2 aims2 and2methods.2 It2 allows2 heterogeneous2 states2 to2 join2 together2 in2 the2pursuit2of2consumer2welfare,2but2with2tolerance2and2respect2for2their2differences.2In2the2space2they2build,2they2can2openly2experiment,2sharing2best2practice2in2the2pursuit2of2their2best2solution(s).2Here,2we2are2more2likely2to2find,2and2to2find2more2quickly,2better2answers.2There2is2unity2in2diversity.2

It2 is2 difficult2 to2 allocate2 competences2 in2 a2 multiElevel2 governance2 structure;2 we2 need2meaningful2interaction2between2the2various2levels.2In2essence,2this2also2demands2a2balance2between2coherence,2as2a2basic2condition2 for2 the2 internal2market;2and2respect2 for2 local2preferences.1632Some2diversity2 is2important,2even2in2Article2101.1642This2is2not2a2crude2grab2for2power2by2the2Member2States,1652but2a2rational2way2to2deal2with2disagreements2on2aims2and2methods.2However,2there2must2be:22

“…certain2 limits2to2flexibility2and2to2differentiation,2some2minimum2degree2of2commitment2to2 a2 basic2 and2 shared2 set2 of2 policies.2 This2 notion2 of2 commitment2 combines2 the2 idea2 of2acceptance2of2both2the2content2of2particular2policies2and2the2specific2legal2and2constitutional2characteristics2of2such2measures.”16622

Growing2Member2 State2 influence2 and2 competence2 in2 Article2 1012 and2 increasing2 distrust2 in2 ‘pure’2market2solutions2demand2a2revitalization2of2the2Member2States’2role.2I2believe2that2Article2101’s2core2should2be2consumer2welfare.2As2 I2have2explained2elsewhere,2this2goal2seems2to2be2reflected2 in2the2EU2Treaties,2 it2often2also2helps2us2 to2achieve2many2other2 relevant2public2policy2goals,2 indirectly.1672Sometimes2this2is2not2the2case;2then,2relevant2public2policy2goals2may2have2to2be2directly2considered2within2Article2101.2There2should,2however,2be2limits2to2diversity.2The2next2section2explores2them.2

4. Co)ordination&

This2section2discusses2the2limits2to2diversity.2Policy2and2information2sharing2networks2are2useful2for2providing2 the2 experimentation,2 information2 and2 learning2 that2 is2 needed2 for2 dealing2 with2 the2problems2that2we2have2outlined2above.2Part2(a)2asks2whether2there2is2a2competition2network2at2all.2This2may2be2a2 surprising2question,2but2 I2 argue2 that2 the2Commission2 is2 trying2 to2 create2a2hierarchy2rather2 than2 a2 network2 of2 equals.2 Having2 said2 that,2 Regultion2 1/20032 leaves2 room2 for2 a2 policy2network.2So,2Part2 (b)2uses2 insights2 from2political2science2to2explain2what2we2need2to2create2such2a2policy2network.2Then,2 it2 investigates2how2this2 could2be2achieved2within2 the2European2Competition2Network2(ECN)2as2currently2structured2and2asks2whether2better2coEordination2requires2any2changes.2These2findings2are2particularly2important2if2the2ECN2is2to2be2exported2to2other2areas2of2EU2law.&

22222222222222222222222222222222222222222222222222222222222221622Weatherill,2‘Finding2Space2for2Closer2CoEoperation’,2237;2and2de2Búrca2and2Scott,2‘Introduction’2in2de2Búrca2and2Scott2(eds),ibid2,23E4.221632de2Visser,2NetworkGBased'Governance'in'EC'Law,2xxiii.21642Böge,2‘The2Bundeskartellamt2and2the2Competition2Authorities2of2the2German2Länder’,2167;2Fingleton,2‘The2Distribution2and2Attribution2of2Cases2Among2the2Members2of2the2Network:2the2perspective2of2the2Commission/2NCAs’2inibid2(Hart2),2180;2Sturm,2‘Networking2in2Unchartered2Territory:2the2relationship2between2the2members2of2 the2 network2 and2 their2 national2 governments’2 inibid2 ,2 174;2 although2 they2 do2 not2 seem2 to2 discuss2 this2 in2relation2to2disagreements2on2aims,2just2methods.2C.f.2Siragusa,2‘The2Commission's2Position2within2the2Network:2the2perspective2of2the2legal2practitioners’2inibid2,2267.21652Some2might2think2this2in2relation2to2flexibility2elsewhere2in2EU2law,2Shaw,2‘Constitutionalism2and2Flexibility2in2the2EU’,2339.21662 de2 Búrca,2 ‘Differentiation2 within2 the2 'Core'?2 The2 Case2 of2 the2 Internal2 Market’2 inibid2 ,2 135;2 c.f.2 Shaw,2‘Constitutionalism2and2Flexibility2 in2 the2EU:2developing2a2 rational2approach’2 inibid2 .2 Increased2differentiation2may2start2to2undermine2the2EU2as2a2whole,2ibid,2353;2and2Weatherill,2‘Finding2Space2for2Closer2CoEoperation2in2the2Field2of2Culture’2inibid2,2241.21672Townley,2Article'81'EC'and'Public'Policy,2Chapters212and26.2

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a. Is&it&a&hierarchy,&or&is&it&a&network?&

The2 Commission’s2 policy2 role2 may2 leave2 no2 room2 for2 networking.2 Article2 172 TEU2 instructs2 it2 to2promote2 the2 EU’s2 general2 interest2 and2 to2 apply2 the2 EU2 Treaties.2 Article2 1032 demands2 Council2regulations2and2directives2which,2amongst2other2things,2Article2103(2)(b)2 ‘…lay2down2detailed2rules2for2the2application2of2Article2101(3)…’2and2Article2103(2)(d)2‘…define2the2respective2positions2of2the2Commission2and2the…’2EU2Courts.2Article2105(1)2adds2‘…the2Commission2shall2ensure2the2application2of2the2principles2laid2down2in2Articles21012and2102…’2In22000,2the2ECJ2held2that,2for2Articles21012and2102,2 the2Commission2 is' ‘…responsible' for'defining'and' implementing'the'orientation'of'Community'competition'policy.’1682The2Commission2explicitly2tried2to2retain2this2role2in2the220042modernisation2process;2saying2that2decentralisation2must2not2result2in2inconsistent2application:2

“…of2Community2competition2law.2Competition2policy2will2thus2continue2to2be2determined2at2Community2level,2both2by2means2of2the2adoption2of2legislative2texts2and2individual2decisions.2The2 Commission,2 as2 guardian2 of2 the2 Treaties2 and2 guarantor2 of2 the2 Community2 interest2subject2to2the2supervision2of2the2Court2of2Justice,2has2a2special2role2to2play2in2the2application2of2Community2law2and2in2ensuring2the2consistent2application2of2the2competition2rules.”16922

At2 first2 sight,2 the2 Commission2 appears2 to2 have2 allied2 the2 Council2 to2 its2 cause.2 Council2 Regulation21/2003,2 recital2 34,2 retains2 this2 central2 role2 for2 EU2 bodies.1702 The2 Commission2 issues2 substantive2guidelines2 and2 block2 exemptions.1712 Its2 selection2 of2 a2 sole2 consumer2 welfare2 goal2 for2 Article2 1012leaves2 little2room2for2disagreements2on2aims;1722 its2guidance2might2do2the2same2for2disagreements2on2methods.1732The2Commission2assumes2that2its2decisions2explain2the2relevant2law2to2all2(as2well2as2making2policy,2see2above),2not2only2to2the2decisions’2addressees2(like2EU2Court2judgments).1742

Under2 Regulation2 1/2003,2 all2 the2 relevant2 actors2 can2 take2 Article2 1012 decisions/2 judgments.175& So2many2 decisionEmakers2 could2 undermine2 the2 consistency2 of2 EU2 competition2 law.1762 However,2 in2Masterfoods,2 the2ECJ2held2that2the2Commission2cannot2be2bound2by2a2decision2given2by2a2national2court.2The2Commission2may2adopt2Article21012decisions2even2where2an2agreement2‘…or2practice2has2already2 been2 the2 subject2 of2 a2 decision2 by2 a2 national2 court2 and2 the2 decision2 contemplated2 by2 the2Commission2conflicts2with2that2national2court's2decision.’1772Furthermore,2Member2State2courts2(and,2probably,2NCAs)2cannot2decide2contrary2to2Commission2decisions,2or2those2in2contemplation.17822

22222222222222222222222222222222222222222222222222222222222221682Case2CE344/982Masterfoods'v'HB'Ice'Cream'[2000]2ECR21E11369,2para246.21692 Commission,2European'Commission'White'Paper,' on'modernization'of' the' rules' implementing'Articles' 85'and' 86' of' the' EC' Treaty,2 para2 83.2 Also,2 Cengiz,2 ‘Management2 of2 Networks’,2 421E4;2 and2 Wißmann,2‘Decentralised2Enforcement2of2EC2Competition2Law2and2the2New2Policy2on2Cartels’,2141E2.21702 Whish2 and2 Bailey,2 Competition' Law,2 p.2 53;2 c.f.2 Townley,2 ‘Is2 There2 (Still)2 Room2 for2 NonEEconomic2Arguments?’,2section23.2.21712See2http://ec.europa.eu/competition/antitrust/legislation/legislation.html221722See2the2text2around2footnote272.21732For2example,2the2proof2of2future2benefits2that2the2Commission2demands2may2prejudice2the2Member2States’2freedom2 to2 emphasise2 future2 innovation,2 Commission,2Guidelines' on' the' application' of' Article' 81(3)' of' the'Treaty,2paras250E8.21742Commission,2Commission'staff'working'paper'accompanying' the'Communication' from'the'Commission' to'the' European' Parliament' and' Council,' Report' on' the' functioning' of' Regulation' 1/2003,2 para2 86.2 See2 also,2Commission,2Commission'Explanatory'Memorandum,'Proposal'for'a'Council'Regulation'Implementing'Articles'81'and'82'of'the'Treaty,213.21752Respectively,2Regulation21/2003,2articles25,272and210,2see2also2recitals26,2112and214.221762 Commission,2European'Commission'White'Paper,' on'modernization'of' the' rules' implementing'Articles' 85'and'86'of'the'EC'Treaty,215.21772 Case2 CE344/982 Masterfoods' v' HB' Ice' Cream' [2000]2 ECR2 1E11369,2 para2 48.2 See2 also,2 Case2 CE478/932Netherlands'v'Commission2[1995]2ECR2IE3081,2paras236E42.21782Case2CE344/982Masterfoods'v'HB'Ice'Cream'[2000]2ECR21E11369,2paras251E2.2See2also2recital2142and2article210,2Regulation21/2003.2

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Yet,2 the2 content2 of2 the2 Commission’s2 policy2 function2 is2 contestable.2 Articles2 172 and2 1052 tell2 it2 to2apply,2rather2than2make,2Article21012principles.2Regulation21/20032could2tell2the2Commission2to2lay2down2detailed2rules2for2applying2Article2101(3),2not2Article2101(1);2instead2it2undermines2this2policy2role,2at2least2compared2to2Regulation217.2In2addition,2when2the2EU2Courts2speak2of2the2Commission’s2competition2policy2 function,2 they:2allow2the2Commission2to2prioritise2some2complaints2before2 it;1792and2ensure2that2the2Member2States’2courts’2decisions2do2not2conflict2with2contemplated2Commission2decisions.1802 The2 Commission2 can2 also2 declare2 that2 conduct2 that2 has2 already2 been2 terminated2infringes2Article2101;1812and2it2has2a2lot2of2freedom2over2its2fining2policy.1822Policy,2then,2has2more2to2do2with2prioritising2resources2and2discouraging2antiEcompetitive2behaviour,2rather2than2Article2101’s2substance.1832In2Masterfoods,2the2ECJ2held2that2while2orientating2and2applying2EU2competition2policy2in2its2decisions2and2regulations,2the2Commission2is2subject2to2review2by2the2EU2Courts.1842Even2when2the2Commission2enjoys2discretion,2the2EU2Courts2demand2reasons2so2that2they2can2review2it.18522

In'law,2the2ECN2is2not2necessarily2a2hierarchical2arrangement,2with2the2Commission2at2the2apex.2The2Council2 has2 left2 room2 for2 diversity2 in2 Regulation2 1/20032 as2 have2 the2 Member2 States2 in2 the2 EU2Treaties.2The2Commission2is2not2the2only2one2with2a2substantive2policy2role.2The2EU2Courts’2judicial2review2function2ensures2that2all2 (and2only)2relevant2 issues2affect2Commission2analysis.2Commission2power2to2constrain2the2other2relevant2actors2is2limited,2legally.2The2Council2gave2it2a2power2to2make2block2exemption2regulations,2subject2to2the2EU2Courts’2 interpretation2of2Article2101.1862Commission2guidelines2cannot2create2legally2binding2obligations2or2authorise2arrangements2that2are2incompatible2with2the2EU2Treaties,2as2interpreted2by2the2EU2Courts.1872Nor2can2they2bind2Member2State2courts2and2the2 NCAs.1882 Furthermore,2 Commission2 decisions2 do2 not2 have2 the2 precedential2 value2 of2 EU2 Court2judgments.2Article22882TFEU2says2that2only2the2addressees2of2Commission2Article21012decisions2are2bound2 by2 them.2 Masterfoods' should2 be2 interpreted2 narrowly:2 the2 relevant2 actors2 only2 cannot2deviate2from2Commission2decisions2for2the2same2parties,2subjectEmatter,2relevant2market,2etc.1892

However,2the2ECN2may,2in'fact,2be2a2hierarchy.1902Several2mechanisms2seek2a2consistent2application2of2Article2101:2the2duty2to2apply2EU2law2if2there2is2an2effect2on2trade;2the2NCAs’2obligation2to2inform2the2Commission2before2adopting2decisions;2and2the2possibility2for2the2Commission2to2relieve2the2NCA2

22222222222222222222222222222222222222222222222222222222222221792Case2TE24/902Automec'v'Commission2[1992]2ECR2IIE2223,2para273.21802Case2CE344/982HB'Ice'Cream'v'Masterfoods'Ltd'[2000]2ECR2IE11369,2para246.21812Case2TE23/022Sumika'Fine'Chemicals'v'Commission,262October22005,2nyr,2paras234E8.21822Whish2and2Bailey,2Competition'Law,2pp.2276E80.2 21832Wils,2‘Discretion2and2Prioritisation2in2Public2Antitrust2Enforcement,2in2Particular2EU2Antitrust2Enforcement’2342World2Competition,2366E8;2and2Case2CE226/112Expedia,2132December22012,2nyr,2paras229E31.21842Case2CE344/982HB'Ice'Cream'Ltd'v'Masterfoods'Ltd'[2000]2ECR2IE11369,2para246.21852Case2CE119/972P2Ufex'v2Commission'[1999]2ECR2IE1341,2para291.21862Regulation21/2003,2article229(2)2sometimes2allows2a2NCA2to2withdraw2a2block2exemption.21872Case2TE9/922Automobiles'Peugeot'and'Peugeot'v'Commission2[1993]2ECR2IIE493,2para244;2and2Case2CE266/902Franc'Soba'v'Hauptzollamt'Augsburg2[1992]2ECR21E287,2para219.21882Case2CE226/112Expedia,2132December22012,2nyr,2paras229E31;2Schütze,2 ‘From2Europe2to2Lisbon:2 'executive2federalism'2 in2 the2 (new)2European2Union’2472Common2Market2Law2Review,21404E5;2Stefan,2 ‘European2Union2Soft2Law:2new2developments2concerning2the2divide2between2legally2binding2force2and2legal2effects’2752Modern2Law2Review,2892.21892de2Visser,2NetworkGBased'Governance'in'EC'Law,2187.2C.f.2Case2TE65/982Van'den'Bergh'[2003]2ECR2IIE4653,2para2198.21902 Cengiz,2 ‘Management2 of2 Networks’,2 420;2 Cengiz,2 ‘MultiElevel2 Governance2 in2 Competition2 Policy’,2 664E6;2Wigger2and2Nölke,2‘Enhanced2Roles2of2Private2Actors2in2EU2Business2Regulation’502;2and2Sevón,2‘The2National2Courts2and2the2Uniform2Application2of2EC2Competition2Rules:2preliminary2observations2on2Council2Regulation21/2003’2in2Hoskins2and2Robinson2(eds),2A'True'European:'essays'for'Judge'David'Edwards2(Hart22004),2147.2See2also2 the2 hints2 from2 Commission,2 Commission' Notice,' on' coGoperation' within' the' Network' of' Competition'Authorities2(2004),2paras231,243E57.2

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of2its2competence2to2act2if2there2is2a2serious2risk2of2incoherence.1912So,2NCA2decisions2are2made2in2the2Commission’s2 shadow.1922 The2Commission2 sees2 itself2 as2 the2 arbiter2 of2 disputes2between2 the2NCAs2and2as2hierarchically2superior2to2them.1932The2Commission2and2the2Council2made2an2explicit2attempt2to2reserve2cases2for2the2Commission2involving2links2with2other2EU2policies.1942

Many2believe2 that2 the2 ECN2 is2 primarily2 concerned2with2 enforcement2 rather2 than2policyEmaking.1952Yet,2even2in'fact,2a2policy2network2is2possible.2Networks2are2not2like2hierarchies,2they2do2not2‘…have2central2 direction2 or2 an2 established2 set2 of2 authority2 relations…’1962 Decentralising2 Article2 101’s2application2 decentralised2 power;1972 even2 Article2 101(3)’s2wording2 invokes2 discretion.1982 Regulation21/20032 instructs2 the2 Commission2 and2 the2 NCAs2 to2 form2 a2 network2 of2 public2 authorities2 applying2Article2 1012 ‘…in2 close2 cooperation…’1992 It2 adds:2 ‘Further2modalities2 for2 the2 cooperation2within2 the2network2will2be2 laid2down2and2 revised2by2 the2Commission,2 in2 close2cooperation2with2 the2Member2States.’2002The2Commission’s2explanatory2memorandum2includes2the2NCAs2in2other2ways2too:2

“The2Commission,2being2the2only2authority2that2can2act2throughout2the2European2Union,2will2necessarily2 continue2 to2 play2 a2 central2 role2 in2 the2development2 of2 Community2 competition2law2and2policy2and2 in2ensuring2that2 it2 is2applied2consistently2throughout2the2single2market,2thereby2preventing2any2renationalisation2of2Community2competition2law.2The2development2and2 application2 of2 the2 law2 and2 policy2 will,2 however,2 be2 a2 concern2 of2 all2 the2 competition2authorities2 involved2 in2 the2 enforcement2 of2 Articles2 812 and2 822 [now2 Articles2 1012 and2 1022TFEU].2Policy2issues2will2be2the2subject2of2discussion2within2the2network.”2012

The2 Council2 and2 Commission2 joint2 statement2 on2 the2 functioning2 of2 the2 ECN2 gave2 the2 NCAs2 full2competence2to2apply2Article2101,2‘…actively2contributing2to2the2development2of2competition2policy,2

22222222222222222222222222222222222222222222222222222222222221912 Regulation2 1/2003,2 respectively:2 recital2 8,2 article2 32 and2 Sevón,2 ‘The2 National2 Courts2 and2 the2 Uniform2Application2of2EC2Competition2Rules’,2147;2article211(4);2and2article211(6).2Also2see,2Commission,2Commission'staff'working'paper'accompanying'the'Communication'from'the'Commission'to'the'European'Parliament'and'Council,'Report'on'the'functioning'of'Regulation'1/2003,2para2250.21922 Cengiz,2 ‘The2 European2 Competition2 Network:2 structure,2 management2 and2 initial2 experiences2 of2 policy2enforcement’2EUI2Working2Papers,211E2.2Héritier2and2Lehmkuhl,2 ‘Governing2in2the2Shadow2of2Hierarchy:2new2modes2 of2 governance2 in2 regulation’2 in2 Héritier2 and2 Rhodes2 (eds),2 New' Modes' of' Governance' in' Europe:'governing' in' the' shadow' of' hierarchy2 (Palgrave2 Macmillan2 2011),2 59E61,2 say2 one2 needs2 the2 shadow2 of2hierarchy2as2a2credible2threat.221932 It2 promises2 to2 use2 its2 formal2 powers2 sparingly,2 Monti2 in2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU'Network'of'Competition'Authorities,28.221942Commission,2Commission'Notice,'on'coGoperation'within'the'Network'of'Competition'Authorities,2para215;2and2Council2and2Commission,2Council'and'Commission'Joint'Statement,'on'the'Functioning'of'the'Network'of'Competition'Authorities2(2002),2para219.21952Wilks,2‘Agencies,2Networks,2Discourses’,2440.21962Wilks,2‘Understanding2Competition2Policy2Networks2in2Europe:2a2political2science2perspective’2in2Ehlermann2and2Atanasiu2(eds),2Constructing'the'EU'Network'of'Competition'Authorities2(Hart22002),267.2See2also,2Eberlein,2‘Policy2CoEordination2without2Centralisation?2 Informal2Network2Governance2 in2 EU2Single2Market2Regulation’2inibid2,2143.21972Council2 and2Commission,2Council' and'Commission' Joint' Statement,' on' the' Functioning'of' the'Network'of'Competition'Authorities,2para26;2and2Regulation21/2003,2article21,2recital24.21982Townley,2Article'81'EC'and'Public'Policy,2253,2261,2but2note2252;2and2Wils,2Principles'of'European'Antitrust'Enforcement,27.21992Regulation21/2003,2 recital215.2See2also2article211(1),2Regulation21/2003;2Council2and2Commission,2Council'and'Commission'Joint'Statement,'on'the'Functioning'of'the'Network'of'Competition'Authorities,2para22;2and,2Commission,2Commission'Explanatory'Memorandum,'Proposal'for'a'Council'Regulation'Implementing'Articles'81'and'82'of'the'Treaty,2112and212.22002Regulation21/2003,2recital215.22012 Commission,2 Commission' Explanatory' Memorandum,' Proposal' for' a' Council' Regulation' Implementing'Articles'81'and'82'of'the'Treaty,2112and212.2

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law2 and2 practice.’2022 All2 competition2 authorities2 ‘…within2 the2 Network2 are2 independent2 from2 one2another.2Cooperation2between2NCAs2and2with2the2Commission2takes2place2on2the2basis2of2equality,2respect2 and2 solidarity.’2032 Equality2 is2 not2 typical2 in2 a2 hierarchy.2 Furthermore,2 the2 ECN2 discusses2policy.2DG2COMP’s2website,2explains2that2there2are2working2groups:2

“…where2 the2 Network2 members2 can2 discuss2 general2 issues2 or2 issues2 relating2 to2 certain2sectors.2 There2 are2 no2 voting2 rules,2 because2 this2 type2 of2 cooperation2 relies2 on2 consensus2building.2 The2Commission2 as2 the2 guardian2of2 the2 Treaty2 has2 the2ultimate2but2 not2 the2 sole2responsibility2for2developing2policy2and2safeguarding2efficiency2and2consistency.”2042

So,2 here2 we2 have2 a2 network,2 based2 on2 equality,2 where2 the2members,2 both2 the2 Commission2 and2NCAs,2 discuss2 EU2 competition2 policy.2 There2 are2 no2 voting2 rules;2 the2 network2 relies2 on2 consensus2building.2The2NCAs2have2been2tasked2with2discussing2general2policy2issues2as2well2as2merely2deciding2cases.2Policy2is2not2the2sole2prerogative,2or2responsibility,2of2the2Commission.2There2has2been2a2lot2of2consistency2 so2 far;2052 however,2 in2 practice2 we2 also2 see2 substantial2 divergence2 between2 the2enforcement2 actions2of2 the2NCAs.2 For2 example,2 the2OFT2do2not2 generally2 proceed2against2 vertical2restrictions2 under2 Article2 101,2 whereas2 the2 French2 authorities2 do.2 In2 part,2 this2 may2 reflect2administrative2priority2decisions,2but2it2is2also2likely2to2reflect2substantive2difference.2062

Commission2decisions,2which2can2contradict2Member2State2decisions/2 judgments,2can2be2appealed2to2the2EU2Courts,2so2the2Member2States2can2challenge2them.2Similarly,2questions2of2EU2 law2before2the2Member2States’2courts2can2be2resolved2by2the2ECJ2through2Article22672references.2The2EU2Courts2are2often2reluctant2to2interfere2with2the2Commission’s2substantive2appraisals;2072similarly,2they2often2allow2the2Member2State2courts2a2margin2of2appreciation.2The2Commission2could2do2the2same2for2the2NCAs.2Perhaps2its2role2is2to2coGordinate2diversity;2ensuring2that2difference2does2not2rip2the2ECN2apart.2Alternatively,2as2the2Commission2itself2takes2decisions,2it2may2have2more2‘right’2to2intervene.20822

The2 debate2 is2 better2 cast2 in2 the2 light2 of2 the2 division2 of2 competences2 in2 the2 EU.2092 Acceptance2 of2diversity2largely2depends2on2one’s2metaEconstitutional2view2of2where2power2should2lie2between2the2Commission2and2the2Member2States.2On2the2one2hand,2we2get2significant2benefits2from2our2pursuit2of2 an2ever2 closer2union2amongst2 the2peoples2of2 Europe.2 To2achieve2 this,2 the2EU2 shall2 establish2an2internal2market,2based2on2free2movement2and2competition.2However,2the2 internal2market2must2be2balanced2with2other2policy2goals,2such2as2environmental2protection2and2social2progress.22

Prior2to2the2Lisbon2Treaty,2the2EU2Treaties2did2not2explicitly2state2which2areas2were2ones2of2exclusive2competence.2Article232TFEU2now2lists2six2such2areas.2The2ECJ2had2already2categorised2most2of2them2in2this2way.2102However,2 ‘…the2establishing2of2 the2 competition2 rules2 necessary2 for2 the2 functioning2of2the2 internal2market…’2 is2new.2This2was2surprising.2Prior2to2the2Lisbon2Treaty,2the2ECJ2had2held2that2

22222222222222222222222222222222222222222222222222222222222222022Council2 and2Commission,2Council' and'Commission' Joint' Statement,' on' the' Functioning'of' the'Network'of'Competition'Authorities,2para26.22032Ibid,2para27;2c.f.2para29.22042 http://ec.europa.eu/competition/ecn/faq.html2 See2 also2 Regulation2 1/2003,2 article2 14(7);2 Commission,2Commission' Notice,' on' coGoperation' within' the' Network' of' Competition' Authorities,2 para2 43;2 Commission,2Commission' staff' working' paper' accompanying' the' Communication' from' the' Commission' to' the' European'Parliament' and' Council,' Report' on' the' functioning' of' Regulation' 1/2003,2 para2 114;2 Commission,2Communication'from'the'Commission'to'the'European'Parliament'and'the'Council,'Report'on'the'functioning'of'Regulation'1/2003,2para234.22052Wilks,2‘Agencies,2Networks,2Discourses’,2449E55.22062Thanks2to2Wouter2Wils2for2this2comment.22072For2a2more2detailed2discussion2see2Townley,2‘Is2There2(Still)2Room2for2NonEEconomic2Arguments?’22082Similarly,2see2de2Visser,2NetworkGBased'Governance'in'EC'Law,21392and2147.22092 Sturm2 in2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU' Network' of' Competition' Authorities,2 36.2 See2discussion2in2footnote285.22102For2example,2on2the2common2commercial2policy,2Opinion'1/75'Local'Cost'Standard'[1975]2ECR21255.2

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the2Member2States2share2competence2with2the2EU2in2the2field2of2competition.2112In2Akzo,2122the2ECJ2accepted2that2competition2is2now2an2area2of2exclusive2Union2competence.2This2undermines2Section23’s2comparison2with2free2movement2of2goods,2which2remains2an2area2of2shared2competence.2

Article222TFEU2says2that2‘When2the2Treaties2confer2on2the2Union2exclusive2competence2in2a2specific2area,2only2the2Union2may2legislate2and2adopt2legally2binding2acts,2the2Member2States2being2able2to2do2so2themselves2only2if2so2empowered2by2the2Union2or2for2the2implementation2of2Union2acts.’2Since2the2Lisbon2Treaty,2have2the2Member2States2lost2their2ability2to2pursue2diversity2within2Article2101?22

The2EU’s2website2says2 the2Lisbon2Treaty’s2 ‘…attempt2at2clarification2[of2EU2competences]2does2not2result2in2any2notable2transfer2of2competence.’2132These2areas2were2defined2as2exclusive2competence2to2contain2the2EU’s2power,2not2expand2it.2142Under2Article22(6)2TFEU,2the2‘…scope2and2arrangements2for2exercising2the2Union’s2competences2shall2be2determined2by2the2provisions2of2the2Treaties2relating2to2each2area.’2The2EU2authorised2the2NCAs2and2the2Member2States’2courts2to2apply2Article2101.21522

The2 EU2 Courts’2 case2 law2 is2 binding.2 Within2 this2 limit,2 are2 disagreements2 on2 aims2 and2 methods2allowed2between2 the2 relevant2 actors?2 Is2 diversity2 caused2by2 disagreements2 on2 aims2 and2methods2merely2 the2 application2 of2 Article2 101,2 or2 are2 they2 ‘legislative’?2 Articles2 1032 and2 1052 TFEU2 are2inconclusive.2 If2one2interprets2 ‘application’2widely,2then2one2reduces2exclusive2competence’s2scope2and2 thus2 EU2 power.2 The2 Commission2 may2 be2 exclusively2 responsible2 for2 substantive2 Article2 1012policy2 development,2 subject2 to2 the2 EU2 Courts.2 Alternatively,2 substantive2 policy2might2 be2 a2 shared2enterprise2with2 the2Member2 States;2or2 something2between2 the2 two,2 see2above.2 Schütze2 says2 that2exclusive2 competence2 has2 changed.2 At2 first,2 the2 ECJ2 favoured2 a2 wide2 interpretation.2 Later,2 it2interpreted2‘…these2competences2restrictively.’2Both2in2terms2of2the2scope2of2exclusive2competence2powers,2as2well2as2what2happens2when2they2conflict2with2other2nonEexclusive2powers.2162

Article2 1012 allows2 diversity.2 Given2 its2 importance2 (allowing2 difference2 and2 generating2experimentation2 in2uncertainty)2 I2 embrace2 it.2 If2 the2ECN2 is2a2 substantive2policy2network2of2equals,2then2the2Commission2should2only2step2in2as2a2 last2resort,217e.g.,2 if2diversity’s2problems2become2too2great,2relative2to2its2benefits,2or2if2learning2in2a2certain2area2is2complete2(rare).2182If2the2Commission2were2 legally' at2 the2 head2 of2 a2 hierarchical2 ‘network’2 it2 should2 encourage2 the2 relevant2 actors2 to2experiment,2only2stepping2in2if2diversity’s2costs,2such2as2externalities,2become2too2great.2Diversity2is2

22222222222222222222222222222222222222222222222222222222222222112Case214/682Walt'Wilhelm'[1969]2ECR21.2C.f.2http://www.developmentportal.eu/wcm/information/guideEonEeuEdevelopmentEcoEoperation/generalEinformationEonEtheEeuropeanEunion/competencies.html222122 Case2 CE550/072 P2 Akzo' Nobel' Chemicals' v' Commission' [2010]2 ECR2 IE8301,2 paras2 116E120.2 See2 also2 the2Opinion2of2AdvocateEGeneral2Kokott,2paras2174E183.22132http://europa.eu/legislation_summaries/institutional_affairs/treaties/lisbon_treaty/ai0020_en.htm222142Council,2Laeken'Declaration2(2001),221E22;2the2Convention2on2the2Future2of2Europe,2CONV2357/02,2Brussels2212August22002;2and2Craig,2The'Lisbon'Treaty,'Law,'Politics,'and'Treaty'Reform2(OUP22010),2159.22152Articles252and26,2Regulation21/2003.2See2also2Craig,2The'Lisbon'Treaty,'Law,'Politics,'and'Treaty'Reform,2160.22162Schütze,2From'Dual' to'Cooperative'Federalism:' the'changing'structure'of'European' law2 (OUP22009),2167E188.2 C.f.2 AdvocateEGeneral2 Kokott2 on2 exclusive2 competence2 in2 Article2 101,2 Case2 CE550/072 P2 Akzo' Nobel'Chemicals' v' Commission' [2010]2 ECR2 IE8301,2 paras2 174E183.2 This2 judgment2 seems2more2 about2 the2Member2States’2 limited2 power2 to2 force2 the2 Commission2 to2 consider2 certain2 policy2 goals2within2 its2 Article2 1012 cases,2rather2than2limiting2their2ability2to2generate2substantive2Article21012policy.2Subsidiarity2 may2 support2 coEordinated2 diversity,2 Sturm,2 ‘Networking2 in2 Unchartered2 Territory’,2 282;2 but2Articles2 5(3)2 TEU2 and2 3(1)(b)2 TFEU2 imply2 that2 it2 is2 irrelevant2 in2 Article2 101,2 by2 implication2 Nicolaïdis,2‘Conclusion:2 the2Federal2Vision2Beyond2 the2Federal2 State’2 in2Nicolaïdis2 and2Howse2 (eds),2The'Federal'Vision:'legitimacy'and'levels'of'governance' in'the'United'States'and'the'European'Union2 (OUP22001),2446;2and2Idot,2L'application'du'principe'de' la'subsidiarité'dans' le'droit'de' la'concurrence2 (1993),25.2Mariana2Tavares,2one2of2my2PhD2researchers,2questions2this2implication2in2her2work;2see2also2recital234,2Regulation21/2003.22172Through2article211(6),2Regulation21/2003.22182Kovacic,2‘Competition2Policy2in2the2EU2and2the2US’.2

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often2in2the2EU2interest.2192So,2how2can2we2harness2the2power2of2this2network2while2keeping2the2dark2side2of2diversity2in2check?2

b. Limits&to&diversity?&

We2 have2 seen2 substantive2 disagreements2 about2 what2 competition2 means2 (Issue2 1);2 and2 the2relevance2 (and2weight)2 of2 public2 policy2 considerations2within2 Article2 1012 (Issue2 2).2 There2 are2 also2methodological2 disagreements2 about2 how2 best2 to2 achieve2 these2 ends2 (Issue2 3)2 and2 who2 should2decide2 such2matters2 (Issue24).2All2 of2 this2 takes2place2within2a2 climate2of2business2uncertainty,2 and2uncertainty2from2economists2as2to2which2path2will2best2achieve2what2we2want2(Issue25).2

Having2said2that,2there2is2much2common2ground.2However,2where2this2runs2out2(and2sometimes2even2before2 this),2 we2 need2 experimentation2 and2 learning.2 There2 is2 also2 a2 need2 to2 deal2 with2 possible2failures2 to2 consider2 ‘outside2 interests’2 by2 the2 EU2 and2 the2 Member2 States.2202 Here,2 the2 power2 of2networks2comes2to2the2fore.2There2are2an2infinite2variety2of2them,2and2situations2in2which2they2may2be2used.2212Wilks2describes2some2key2elements,2including:2interdependencies2between2the2actors;2no2dominant2 actor;2 network2 stability;2 and2 transparency.2 Furthermore,2 actors2 need2 not2 have2 shared2goals2in2policy2networks,2Wilks2calls2them2values;2but2they2must2agree2on2norms.2Norms2are:2

“…expressed2as2shared2understandings2about2substance2and2process2(norms,2which2are2tacit2and2specific,2should2be2distinguished2from2values,2which2are2explicit2and2generalised,2e.g.2‘do2not2reveal2confidential2information’2is2a2norm;2‘competition2is2beneficial’2is2a2value).”2222

Does2this2mean2that2limits2to2substantive,2or2even2procedural,2diversity2are2unnecessary?2Sabel2and2Zeitlin2 say2 that,2when2network2members2experiment2with2different2methods,2 framework2goals2are2needed;2 and2 so2 are2measures2 for2 gauging2 their2 achievement.2 Then,2 members2 can2 advance2 these2ends2as2they2see2fit.2In2return2for2this2autonomy,2they2must2regularly2report2on2performance:2

“…especially2 as2measured2 by2 agreed2 indicators,2 and2 participate2 in2 a2 peer2 review2 in2which2their2own2results2are2compared2with2those2pursuing2other2means2to2the2same2general2ends.2Fourth2and2finally,2the2framework2goals,2metrics2and2procedures2themselves2are2periodically2revised2by2 the2 actors2who2 initially2 established2 them,2 augmented2by2 such2new2participants2whose2views2come2to2be2seen2as2indispensible2to2full2and2fair2deliberation.”2232

It2 is2hard2to2agree2specific,2detailed2ends.2Wilks2seems2relaxed2about2this,2and2even2where2there2is2experimentation2on2appropriate2methods,2Sabel2and2Zeitlin2speak2of2agreeing2‘general2ends’,2rather2than2demanding2total2precision.2This2 leaves2space2for2disagreements2on2aims.2On2the2other2hand,2 I2believe2that2there2must2be2a2minimum2commonality2of2aims,2or2at2least2this2aids2experimentation.2242Otherwise2 there2 is2 limited2overlap2 for2mutual2 learning2 (interEdependency)2 and2 the2 relevant2 actors2may2simply2stop2listening2to2each2other;2252and2thus2being2a2network2in2any2meaningful2sense.22622

22222222222222222222222222222222222222222222222222222222222222192Recital218,2Regulation21/2003.222202 Joerges2 and2 Everson,2 ‘ReEconceptualising2 Europeanisation2 as2 a2 Public2 Law2 of2 Collisions:2 comitology,2agencies2 and2 an2 interactive2 public2 adjudication’2 in2 Hofmann2 and2 Turk2 (eds),2 EU' Administrative' Governance2(Edward2Elgar22006),2521,2525.22212Joerges2and2Neyer,2‘"Deliberative2Supranationalism"2Revisited’,223.22222Wilks,2 ‘Understanding2Competition2Policy2Networks2 in2Europe’,268;2 c.f.2Wilks2 in2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,215.22232Sabel2and2Zeitlin,2‘Learning2from2Difference’,23.22242Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,2xxiv.2Many2believe2that2too2 much2 diversity2 in2 the2 EU2 network2 for2 regulators2 caused2 many2 problems,2 Thatcher,2 ‘Causes2 and2Consequences2of2Regulation2by2Networks’;2and2de2Visser,2NetworkGBased'Governance'in'EC'Law,235.222252Gerber,2‘The2Evolution2of2the2ECN’,261E2.2On2interdependency2see2Cengiz,2‘Management2of2Networks’,24,217.2Note2also,2de2Búrca,2‘Differentiation2within2the2'Core'?’,2140E141.222262By2implication,2Böge,2‘The2Bundeskartellamt2and2the2Competition2Authorities2of2the2German2Länder’,2167;2Fingleton,2‘The2Distribution2and2Attribution2of2Cases2Among2the2Members2of2the2Network:2the2perspective2of2

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The2Commission2has2said2that2the2sole2goal2of2Article21012is2consumer2welfare.2272Some2NCAs,2such2as2the2OFT,2appear2to2agree.2282However,2this2is2not2inline2with2the2EU2Treaties,2or2the2EU2Court2case2law.2292We2have2seen2that2the2Commission2is2subject2to2both2the2EU2Treaties2and2the2EU2Courts,2Part2(a).2I2have2argued2elsewhere2that2a2consumer2welfare2test2should2be2at2the2heart2of2Article2101.2This2should2provide2a2sizeable2substantive2core2to2allow2the2network2to2work;2although2more2research2is2needed2 on2 this2 point.2302 I2would2 not2 advocate2 using2 goals2 such2 as2 economic2 freedom2and2market2integration2as2part2 of2 this2 core.2312However,2 these2 and2other2 relevant2public2 policy2 goals2 could2be2considered2where2the2 impact2upon2them2outweighs2any2appreciable2consumer2welfare2 loss.2 In2the2Wouters'case,2discussed2 in2 Section23,2 above,2we2 saw2 that2 the2ECJ2 is2 the2ultimate2arbiter2of2which2public2 policy2 goals2 are2 relevant2 and2 how2 much2 weight2 they2 should2 have.2 However,2 both2 within2Article2 1012 and2 elsewhere2 in2 the2 EU2 Treaties,2 the2 ECJ2 gives2 the2 Member2 States2 a2 margin2 of2appreciation2 in2 relation2 to2 which2 goals2 are2 relevant2 and2 what2 weight2 they2 should2 have.2 This2substantive2limit2then2gives2us2scope2for2agreeing2a2procedural2framework2to2drive2coEordination.2322

Before2considering2the2other2relevant2aspects2of2the2network,2I2define2the2network2members.2Thus2far,2 I2 define2 the2 relevant2 actors2 as2 the2 Commission,2 the2 Member2 States’2 courts2 and2 the2 NCAs.2Repeated2interactions2between2network2members2aid2policy2development.2Network2members2try2to2influence2 each2 other.2 Part2 (a)2 discusses2 the2 ECN,2 containing2 all2 the2 relevant2 actors2 except2 the2Member2States’2courts.2This2definition2is2more2appropriate2here.2Networks2generate2 links2between2their2members.2332This2has2implications2for2the2independence2of2the2judiciary.2Member2State2courts2can2also2make2a2reference2to2the2ECJ2when2the2EU2law2that2they2are2applying2is2unclear.2So,2I2exclude2them2 from2my2network.2342 I2 also2 exclude2 the2 EU2Courts2 from2 the2 network.2 They2 essentially2 act2 as2independent2 referees,2 dictating2 what2 space2 is2 available2 for2 disagreements,2 see2 above.2 A2 similar2position2arose2in2Germany2and2the2USA,2both2encourage2limited2diversity2in2their2competition2laws.2

The2 network2members’2 identity2 is2 important2 because2 there2 is2 a2 tension2 between2 the2 similarity2 of2them,2 which2 helps2 generate2 trust2 and2 transparency;2 and,2 on2 the2 other2 hand,2 the2 creative2 spark2caused2by2tension2and2difference.2Trust2is2important2if2network2members,2and2the2individuals2within2them,2352are2to2share2failure2and2success.2362Both2contribute2to2learning.2372Maher2and2Ştefan2say2that2information2networks2often2demand2small,2 closed2and2 stable2populations,2 repeatedly2dealing2with2each2other.2382The2same2applies2to2policy2networks.2However,2too2much2similarity2makes2 it2hard2to2destabilise2current2practice.2A2‘…powerful2robust2network,2could2also2be2dangerous:2it2could2become2

222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222the2Commission/2NCAs’2inibid2(Hart2),2180;2and2Sturm,2‘Networking2in2Unchartered2Territory:2the2relationship2between2the2members2of2the2network2and2their2national2governments’2inibid2,2174.222272See2footnote272.22282See2footnote270.22292See2footnote267.22302For2debate2on2the2substantive2core2of2the2free2movement2provisions,2see2Poiares2Maduro,2We,'the'Court.22312Townley,2Article'81'EC'and'Public'Policy,2chapter26.2C.f.2Monti,2‘Article2812EC2and2Public2Policy’.22322Ladeur,2‘Towards2a2Legal2Concept2of2the2Network2in2European2StandardESetting’,2165E168,2emphasises2the2need2for2methodological2and2procedural2aspects2of2decisionEmaking.22332There2is2also2a2network2of2Member2States’2courts2for2competition2matters.22342Article2 2672TFEU.2 This2 is2 not2 the2 same2 for2 the2NCAs2which2are2not2 courts2or2 tribunals,2 see2Case2CE53/032Synetairismos'Farmakopoion'Aitolias'&'Akarnanias'(Syfait)'v.'GlaxoSmithKline'[2005]2ECR2IE4605,2paras229E38.22352 Eberlein,2 ‘Policy2 CoEordination2without2 Centralisation?’,2 143;2 and2 van2Waarden2 and2 Drahos,2 ‘Courts2 and2(Epistemic)2Communities2in2the2Convergence2of2Competition2Policies’292Journal2of2European2Public2Policy,2928E32.22362PostE2004,2more2information2is2circulated,2so2monitoring2is2easier,2de2Visser,2NetworkGBased'Governance'in'EC'Law,2240.22372 Wilks,2 ‘Understanding2 Competition2 Policy2 Networks2 in2 Europe’,2 152 and2 70.2 Similarly,2 Böge,2 ‘The2Bundeskartellamt2and2the2Competition2Authorities2of2the2German2Länder’2inibid2(Hart),2117.22382Maher2and2Ştefan,2‘Competition2Law2in2Europe’.;2and2Joerges,2‘'Deliberative2Political2Processes'2Revisited’,25.2

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elitist,2exclusionary,2even2closed2to2new2ideas2and2critical2perspectives.’2392Remember2that2there2are2disagreements2 on2 both2 aims2 and2 methods.2 The2 challenge2 is2 to2 set2 a2 framework2 for2 deliberating2disagreements,2 among2heterogeneous2 social2 actors.2402Network2members2must2 ‘…see2 conflict2 as2a2process2to2be2managed2rather2than2as2an2evil2to2be2avoided2or2suppressed…’2412

Is2there2enough2similarity2and2difference2in2the2ECN?2I2have2assumed,2so2far,2that2the2NCAs2represent2their2Member2States.2422Is2this2correct?2Writing2about2technical2comitology2committees,2Vos2says:2

“Here2 the2 dual2 character2 of2 these2 committees2 must2 be2 emphasised:2 committees2 are2composed2of2national2representatives2who2generally,2but2not2necessarily,2are2civil2servants.2On2the2one2hand,2these2committees,2 in2their2composition2of2national2bureaucrats,2function2as2 a2 forum2 of2 interaction2 and2 coEoperation2 between2 the2 Member2 States2 and2 the2Commission.2 In2 this2way,2 the2 significance2 of2 purely2 national2 interest2 has2 been2 diminished,2contributing2to2the2overall2trend2of2greater2transnational2decisionEmaking,2in2which2national2interests2 are2 replaced2by2 technical2 expertise,2 socioEeconomic2 interests2 and2administration.2On2 the2 other2 hand,2 however,2 these2 committees,2 in2 their2 composition2 of2 national2representatives,2have2acted2as2 ‘mini'Councils’.2 They2potentially2enhance2 the2 importance2of2national2interests2and2contribute2to2the2decline2of2supranational2decisionEmaking.”2432

A2 similar2 point2 applies2 to2 NCAs2 within2 the2 ECN.2442 They2 are2 JanusEfaced.2 However,2 the2 NCAs2increasingly2 see2 themselves2 purely2 as2 bureaucrats.2 They2 argue2 for,2 and2 have2 often2 obtained,2independence2 from2their2Member2States.2Under2Regulation21/2003,2NCA2representatives2populate2the2Advisory2Committee,2rather2than2those2from2the2Member2States.24522This2is2an2important2change2because2independence2has2been2bought2by2arguing2that2the2competition2rules2are2valueEneutral;2and2that2those2enforcing2them2are2merely2technocrats2applying2formulaic2(apolitical)2rules.22

Regulation21/20032seems2to2make2a2mere2technical2change.2However,2it2is2important2where2an2NCA’s2views2conflict2with2those2of2its2Member2State.2462Science2has2a2political2dimension,2472economics2does2too.2 Competition2 is2 not2 purely2 technocratic2 (apolitical),2 nor2 is2 the2 consumer2 welfare2 test.2482Furthermore,2 consumer2welfare2often2 clashes2with2other2 important2 values2 that2may2be2better,2 or2more2 readily,2 protected2 within2 Article2 1012 itself.2492 The2 NCAs2 often2 share2 the2 same2 competition2model,2with2a2sole2consumer2welfare2goal.2Outside2of2the2ECN,2this2model2is2more2controversial.22

22222222222222222222222222222222222222222222222222222222222222392Wilks,2‘Understanding2Competition2Policy2Networks2in2Europe’,215;2also2662and270E8.22402Eberlein,2 ‘Policy2CoEordination2without2Centralisation?2 Informal2Network2Governance2 in2EU2Single2Market2Regulation’2inibid2,2149.22412Gerstenberg2and2Sabel,2‘DirectlyEDeliberative2Polyarchy’,2337.22422Svetiev,2‘Networked2Competition2Governance2in2the2EU’,2902and2Ehlermann,2Fingleton,2Gerber,2Monti2and2Schaub,2in2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,213,237E82and262E3.2van2Miert2in2ibid,2184,2do2not2consider2the2NCAs2and2Member2States2seperately.22432Vos,2‘Regional2Integration2Through2Dispute2Settlement:2the2European2Union2experience’2Maastricht2Faculty2of2Law2Working2Paper2No22005E7,253E54.22442Ehlermann,2Fingleton,2Gerber,2Monti,2Schaub2and2van2Miert,2 in2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,213,237E8,262E3,2184.22452 Article2 14(2),2 Regulation2 1/2003.2 Similarly,2 in2 telecoms2 regulation,2 Boeger2 and2 Corkin,2 ‘The2 Resilience2 of2SectorESpecific2 Competition2 Law2 in2 the2 Liberalised2 Sectors’2 in2 HeideEJørgensen2 (ed),2Aims' and' Values' in' EU'Competition'Law2(DJØF2Publishing22013),292DRAFT.22462Courts2get2‘political’2questions2in2many2areas,2Hirschl,2Towards'Juristocracy2(Harvard2University2Press22007);2Majone,2‘Regulatory2Legitimacy2in2the2US2and2the2EU’,2256,2271.22472Joerges2and2Everson,2‘ReEconceptualising2Europeanisation’,2530.22482See2text2around2footnote282.22492Townley,2‘Is2There2(Still)2Room2for2NonEEconomic2Arguments?’;2Townley,2‘Which2Goals2Count2in2Article21012TFEU?:2public2policy2and2its2discontents’;2and2Townley,2Article'81'EC'and'Public'Policy,2chapter21.2

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The2Netherlands2illustrates2these2tensions.2In22007,2the2Dutch2Court2of2Audit2pushed2the2NMa2to2be2more2transparent2about2public2policy’s2relevance2in2competition2law.2502Politically,2a2sole2consumer2welfare2goal2was2unacceptable2 in2the2Netherlands.2 In2 its2 initial2 response2to2the2Court2of2Audit,2 the2NMa’s2 Board2 argued2 that2 there2was2 no2 point2 developing2 a2 framework2 for2 balancing2 public2 policy2concerns2as2this2was2so2unusual.2512The2Court2of2Audit2criticised2this2response.2522As2a2result2of2this2disagreement,2 several2 Parliamentary2 questions2were2 directed2 at2 the2Minister2 of2 Economic2 Affairs,2the2NMa2is2an2 independent2administrative2body,2although2 its2personnel2are2part2of2the2Ministry2of2Economic2 Affairs.2532One2 of2 the2 questions2 asked2whether2 public2 policy2 balancing2was2 principally2 a2political2process,2and2thus2inappropriate2for2an2independent2administrative2body,2i.e.2more2suited2to2the2political2 arena.2542 The2Minister2 agreed2 that2 such2balancing2 is2political.2 She2 said2 that2politicians2should2 frame2 the2 issues2 to2 be2 weighed2 in2 the2 balance.2 The2 NMa2 should2 merely2 implement2 this2framework.2She2was2discussing2Dutch2competition2law,2but2her2comments2can2be2read2more2widely.2Certainly2 the2 NMA’s2 response,2 in2 its2 Annual2 Report2 2009,2 covered2 Article2 1012 as2 well.2 The2 NMa2sought2to2explain2how2public2policy2goals2are2relevant2in,2amongst2others,2Article2101.22

The2division2between2politics2and2application2 is2hard2to2maintain.2Wilks2says,2 ‘…a2hundred2years2of2administrative2 theory2 have2 attested2 to2 the2 difficulty2 of2 divorcing2 ‘policyEmaking’2 from2 ‘policy2implementation’…’2552 This2 story2 illustrates2 the2 tensions2 between2 the2 NMa2 and2 other2 Dutch2institutions2when2applying2Article2101.2There2is2(at2 least2sometimes)2a2difference2between2the2NCA2and2 its2 Member2 State).2 This2 is2 important2 because2 one2 of2 our2 regulatory2 challenges2 was2 to2 reEintroduce2Member2 State2 values2 into2 Article2 1012 decisions2 (Issue2 4).2 Note2 too2 that2 the2 NMa2 also2risked2conflict2with2the2Commission2and2other2NCAs.2Perhaps2because2of2this,2it2did2not2publicise2or2clear2 its2 Annual2 Report2 with2 the2 ECN.2 In2 fact,2 there2may2 be2 a2more2 general2 problem2with2 policy2communications2 there.2 The2OFT2had2a2 roundtable2on2Article2101’s2 goals2 in22010.2 The2Commission2was2the2only2ECN2member2invited.2562If2difference2is2not2embraced,2such2problems2will2continue.22

Inclusiveness2of2relevant2views2is2important.2572There2is2a2risk2that2the2ECN2is2now2too2homogenous.2Too2much2trust,2not2enough2spark.2Not2only2are2Member2States’2views2often2 ignored,2but2the2sole2consumer2welfare2model2is2too2dominant.2The2problem2is2exacerbated2as2only2independent2NCAs2are2network2members.2One2solution2is2to2move2away2from2political2independence2for2NCAs,2or2we2could2reEintroduce2the2Member2States2into2the2process2in2some2other2way.2This2suggestion2is2controversial.2I2make2 it2 because2 competition2 decisions2 are2 value2 laden.2NCAs2 risk2 losing2 their2 independence.2 So2they2may2not2 favour2 the2suggestions2 in2 this2paper,2even2though2they2would2ostensibly2gain2power2visEàEvis2the2Commission.2

We2also2have2 to2 consider:2dominance2within2 the2network;2 interdependencies2between2 the2actors;2network2 stability2 and2 transparency.2 When2 dominance2 is2 present,2 network2 members2 may2 be2 less2willing2to2openly2share2their2experience2(and2mistakes).2This2is2particularly2important2to2us2and2Part2

22222222222222222222222222222222222222222222222222222222222222502Report2of2the2Court2of2Audit,2Supervision'of'Competition'by'the'NMa,2302May220072(Kamerstukken2II22006E7,2312055,2nr.212and2nr.22),217.22512Letter2by2 the2NMa2 to2 the2Court2of2Audit2containing2 the2 formal2 reaction2of2 the2NMa2 to2 the2Report2of2 the2Court2 of2 Audit,2 p.2 5;2 available2 at:2http://www.nmanet.nl/nederlands/home/actueel/nieuws_persberichten/nma_persberichten/Persberichten_2007/07E14_NMa_Rapport_Algemene_Rekenkamer_is_stimulans_voor_verdere_versterking_van_markttoezicht.asp.22522Report2of2the2Court2of2Audit,2‘Supervision2of2competition2by2the2NMa’,2302May220072(Kamerstukken'II22006E2007,2312055,2nr.212and2nr.22),2p.224E25.22532Parliamentary2questions2on2the2report2of2the2Court2of2Audit2‘Supervision2of2competition2by2the2NMa’2for2the2Minister2of2Economic2Affairs2(Kamerstukken2II22006E2007,2312055,2nr.24).22542Ibid.,2question224.22552Wilks,2‘Agencies,2Networks,2Discourses’,2442.2Siimilarly,2Schillig,2Konkretisierungskompetenz',2156E7.22562See2text2around2footnote270.222572Joerges2and2Neyer,2‘"Deliberative2Supranationalism"2Revisited’,24.2

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(a)2 showed2 that2dominance2need2not2be2present2 in2 the2ECN.2By2allowing2network2members2 some2freedom2in2applying2Article21012we2can2experiment2with2and2learn2from2different2goals2and2methods.2However,2if2comparison2and2learning2is2to2occur2then2network2members2must2regularly,2clearly2and2openly,2 report2 on2 their2 performance,2 measured2 by2 agreed2 indicators.2 We2 need2 to2 know2 what2worked,2as2well2as,2what2did2not,2for2disagreements2on2aims2and2methods.2Periodic2pooling2of2results2reveals2the2defects2of2parochial2solutions:2

“…and2allows2the2elaboration2of2standards2for2comparing2local2achievements,2exposing2poor2performers2 to2 criticism2 from2 within2 and2 without,2 and2 making2 of2 good2 ones2 (temporary)2models2 of2 emulation.2 [This]…depends2 crucially2 on2 the2 exploration2 of2 possibilities,2 and2 the2discovery2of2unsuspected2ones,2that2occur2when2actors2come2to2grips2with2their2differences2in2the2course2of2solving2common2problems2that2none2can2resolve2alone.”2582

Accountability2of2network2members2 is2 strengthened2by2 forcing2 them2to2explain2each2decision.2 It2 is2helpful2 to2 expose2 these2 decisions2 to2 the2 risk2 of2 appeal2 or2 peer2 review.2592 In2 particular,2 they2must2show2how2they2consider2 the2 impact2of2 their2decisions2on2others.2We2saw2that2sharing2 information2with2the2competition2network2 is2compulsory2 in2Germany.2 Information2sharing2between2NCAs2takes2place2 in2 the2ECN.2602More2 is2needed,2 think2of2 the2NMa2Annual2Report220092and2the2OFT2breakfast2meeting,2 discussed2 above.2 In2 addition,2 ECN2 discussions2 need2 to2 be2 thoughtful2 and2 deeper.2Many2NCAs2 do2 not2 prioritise2 these2 with2 resources2 and2 some2 do2 not2 even2 read2 the2 papers2 before2 ECN2meetings.2Guidelines2needs2to2be2more2transparent2and2better2explain2their2rationale.2

It2is2also2important2to2openly2listen2to,2and2be2prepared2to2learn2from,2other2network2members.2Scott2notes2 that2participation2 ‘…in2 such2networks2 is2 likely2 to2 change2one’s2world2view…’2612CoEoperation2and2 coEordination2 duties2 make2 ECN2 members2 ‘…dependent2 on2 each2 other2 for2 resources2 such2 as2information,2advice,2legitimacy2and2authority2(formal2and2informal)…’2622This2effect2is2more2likely2to2arise2 in2 small2 communities,2 with2 repeated2 interactions2 between2 actors.2632 This2 describes2 the2 ECN2well,2it2is2a2closed2group2of2actors,2that2meet2regularly2to2discuss2problems,2including2on2policy.22

However,2if2information2is2to2be2of2interest2to2other2ECN2members,2it2must2be2seen2as2relevant.2This2depends2on2how2much2agreement2there2is2on2aims2and2methods.2There2needs2to2be2a2vision2that2is2largely2shared.2642If2the2OFT2thinks2that2consumer2welfare2is2Article2101’s2sole2goal2it2may2not2want2to2discuss2how2to2balance2other2goals.2Too2much2diversity2might2undermine2the2ECN2as2a2whole.2We2see2this2in2other2areas2of2EU2law.2652Still,2we2must2respect2diversity2for2the2reasons2stated2above.266222222222222222222222222222222222222222222222222222222222222222582Cengiz,2 ‘The2European2Competition2Network’,27;2Gerstenberg2and2Sabel,2 ‘DirectlyEDeliberative2Polyarchy’,2291E2;2and2Svetiev,2‘Networked2Competition2Governance2in2the2EU’,2102E4,2110E4.22592Sabel2and2Zeitlin,2‘Learning2from2Difference:2the2new2architecture2of2experimentalist2governance2in2the2EU’2inibid2 ,2 12.2 Accountability2 is2 limited2 in2 independent2 bodies,2 Verdun,2 ‘Experimentalist2 Governance2 in2 the2European2Union:2a2commentary’262Regulation2and2Governance,2390.22602de2Visser,2NetworkGBased'Governance'in'EC'Law,22382says2many2ECN2relationships2are2discretionary.2Also,2Cengiz,2‘The2European2Competition2Network’,2192says2that2there2is2more2informal2coEoperation2though.22612Scott,2‘Regulatory2Governance2and2the2Challenge2of2Constitutionalism’2in2Oliver,2Prosser2and2Rawlings2(eds),2The'Regulatory'State:'constitutional'implications2(OUP22010),232.22622de2Visser,2NetworkGBased'Governance' in'EC'Law,2238.2See2also2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,2xx,2142and268.222632Wilks,2‘Understanding2Competition2Policy2Networks2in2Europe’,268.2Similarly,2Eberlein,2‘Policy2CoEordination2without2 Centralisation?2 Informal2 Network2 Governance2 in2 EU2 Single2 Market2 Regulation’2 inibid2 ,2 148;2 and2Bartolini,2‘New2Modes2of2European2Governance:2an2introduction’2in2Héritier2and2Rhodes2(eds),2New'Modes'of'Governance'in'Europe:'governing'in'the'shadow'of'hierarchy2(Palgrave2Macmillan22011),210.22642Maher,2 ‘Networking2Competition2Authorities2 in2 the2 European2Union:2 diversity2 and2 change’2 in2 Ehlermann2and2 Atanasiu2 (eds),2 Constructing' the' EU' Network' of' Competition' Authorities2 (Hart2 2002),2 224.2 Also,2 van2Waarden,2 ‘Dimensions2 and2 Types2 of2 Policy2Networks’2 212 European2 Journal2 of2 Political2 Research2 ,2 35E6;2 and2Maher2and2Ştefan,2‘Competition2Law2in2Europe’,2185.22652For2example,2de2Búrca,2‘Differentiation2within2the2'Core'?’,2131E3;2and2Weatherill,2‘Finding2Space2for2Closer2CoEoperation2in2the2Field2of2Culture’2inibid2,2135.2

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Reasonable2dissent2must2have2a2realistic2chance2of2being2taken2seriously.2672 I2hope2that2agreeing2a2common2core2will2bind2the2network.2An2intermediate2position2is2to2allow2NCAs2that2agree2on2certain2goals2or2methods2to2 form2miniEnetworks2 to2support2each2other.2682However,2 they2 (and2the2others)2should2be2challenged2from2time2to2time2by2those2that2do2not2agree2with2their2approach,2see2below.22

There2 is2 also2 the2 risk2of2externalities2and2 retaliation2because2of2 them.2 It2 is2possible2 that2NCAs2will2give2more2weight2to2effects2in2their2own2territory2than2to2those2outside2it.2Some2difference2between2NCAs2 in2the2way2they2deal2with2similar2 is2possible,2but2the2 justification2for2the2difference2probably2matters.2Difference2based2on2partisanship2may2be2less2tolerable2than2that2based2on2socioEeconomic2grounds.2692Peer2review2and2transparency2are2important2tools2for2discouraging2beggarEthyEneighbour2strategies.2702 Section232discussed2 this2 for2externalities.2Germany2deals2with2 the2 issue2 through2case2allocation,2if2more2than2one2State2is2affected,2the2Bundeskartellamt2takes2the2case.2712Case2allocation2is2 insufficient2 for2 our2 kaleidoscope2 of2 interests2 and2 perspectives.2722 Fox2 suggests2 that2 Regulation21/2003’s2 rules2on2 the2 relevant2actors’2 autonomy,2 such2as2article211(6),2 are2 there2 to2push2Member2States2 to2 consider2 externalities.2732 Four2other2mechanisms2help2 too:2 the2 relevant2 actors’2 decisions2only2 apply2 in2 their2 own2 Member2 State;2742 the2 Commission2 is2 particularly2 wellEplaced2 to2 act2 if2competition2 is2 affected2 in2 more2 than2 three2 Member2 States2 (heterarchy2 and2 hierarchy2 often2 coEexist275);2762 public2 policy2 goals2 must2 be2 consistently2 and2 coherently2 pursued2 in2 other2 areas2 of2Member2 State2 legislation;2772 and,2 in2 the2 light2 of2 Article2 4(2)2 TEU,2 the2 national2 identities2 of2 the2Member2States2must2be2respected.2Member2States2must2not2impose2their2values2on2others2through2trade2restrictions.2782A2similar2point2may2apply2in2Article2101.2Publically2justifying2one’s2motives2also2forces2 the2NCAs2 to2consider2others’2 interests.2Base2motives2may2merely2be2hidden2 in2 this2process.2Even2this2might2subject2states2to2constraints2that2considerably2modify2their2action.2792

Another2issue2is2the2transparency2of2the2policy2discussions2within2the2ECN.2Some2ECN2information,2in2relation2 to2 specific2ongoing2 investigations,2 for2example,2 is2 commercially2 sensitive2and2must2not2be2disclosed.2However,2in2order2to2reflect2societal2concerns,2general2policy2‘…deliberation2must2not2take2place2behind2closed2doors.’2802It2may2be2that2we2need2to2have2small,2closed2groups2to2build2the2trust2needed2for2proper2debate.2By2opening2them2up2there2is2some2risk2of2jeopardising2this.2But,2hopefully,2transparency2will2‘reEpoliticise’2these2issues,2translating2them2from2a2‘technocratic’2domain.2

Network2 members2 must2 periodically2 meet2 to2 revise2 goals,2 metrics2 and2 procedures.2 This2 could2happen2within2 the2annual2ECN2meetings2and2 in2 response2to2specific2EU2Court2 judgments.2A2major,2

2222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222662Sabel2and2Zeitlin,2‘Learning2from2Difference’,29E10.22672Joerges2and2Neyer,2‘"Deliberative2Supranationalism"2Revisited’,25,27.22682Gerber,2 ‘The2Evolution2of2the2ECN’,255;2he2said2common2languages2may2unite2NCAs,2but2 it2may2be2values2too.2More2generally,2Scharpf,2‘Democratic2Legitimacy2under2Regulatory2Competition’,2367E70.22692 de2 Búrca,2 ‘Differentiation2 within2 the2 'Core'?’,2 1382 makes2 this2 point2 in2 other2 Treaty2 areas;2 and2Majone,2‘Regulatory2Legitimacy2in2the2US2and2the2EU’,2256.22702Scharpf,2‘European2Governance’,210.22712Böge,2‘The2Bundeskartellamt2and2the2Competition2Authorities2of2the2German2Länder’,2113E5.22722 Cengiz,2 ‘Management2of2Networks’,2 415E6;2 and2 Svetiev,2 ‘Networked2Competition2Governance2 in2 the2EU’,2114E5.22732Fox,2‘The2Elusive2Promise2of2Modernisation’,2144E5.222742Maher,2‘Networking2Competition2Authorities2in2the2EU’,2223;2Nehl,2‘Changes2in2Legislation’,222;2Ehlermann2and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,2239;2Schütze,2‘From2Europe2to2Lisbon:2'executive2federalism'2 in2the2(new)2European2Union’,21408E10;2and2article229(2),2Regulation21/2003.2C.f.2Wils,2Principles'of'European'Antitrust'Enforcement,236E8.22752Rhodes2and2Visser,2‘Seeking2Commitment,2Effectiveness2and2Legitimacy’,2127.22762Commission,2Commission'Notice,'on'coGoperation'within'the'Network'of'Competition'Authorities,2para214.22772See2discussion2around2footnote2137.22782Oliver,2EU'Free'Movement'of'Goods,2236E7.22792Joerges2and2Neyer,2‘"Deliberative2Supranationalism"2Revisited’,27.22802Ibid,24.2

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first2principles,2review2should2be2conducted2every2five2years2or2so.2We2need2mechanisms2to2promote2the2 adoption2 of2 superior2 norms2 (races2 to2 the2 top).2 The2 ECN2 is2 set2 up2 to2 do2 this2 through2 peer2pressure.2 This2may2 be2 sufficient,2 although2 it2 should2 be2 checked,2 article2 11(6)2 cannot2 be2 used2 too2much.2812Currently,2unless2the2EU2Courts2disagree,2mechanisms2for2optingEin2should2be2voluntary.2822

In2summary,2the2following2aspects2seem2important2in2policy2networks.2Most2of2them2are2important2in2order2 to2 generate2proper2discussion,2understanding2and2 learning.2Most2 are2present2 in2 the2ECN,2those2that2are2not2should2be2added2to2that2network:2

Characteristic& Present&in&the&ECN?&

Common2core2 Yes2Freedom2to2experiment2on2aims2and2methods2(margin2of2appreciation)2 Yes2EU2Court2is2ultimate2arbiter2on2freedom2to2diverge2from2common2core2 Yes2Discussion2taken2in2shadow2of2Commission2power/2QMV2 Yes2Small,2closed2and2stable2network2 Yes2Need2political,2and2possibly,2civil2society,2‘destabilising’2input2too2 No2(maybe2Netherlands)2Information2sharing2of2policy2papers2and2cases,2before2and2after2decided2 Yes2Highlight2important2issues2in2these2papers2to2avoid2information2overload2 No2Articulated2reasons2for2the2outcomes2in2policy2and2decisions2 No2Also2explain2how2taken2others’2interests2into2account22 No2Translate2documents2circulated2into2languages2so2all2understand2 No2Take2dissent2seriously.2Consider2fundamental2dissent2often2and2openly2 Maybe2Openly2share2peer2(and2self)2review2of2network2members2 No2LikeEminded2network2members2can2form2subEnetworks2together22 Maybe2Publication2of2network2policy2discussions2in2clear2format2 No2Protection2for2commercially2sensitive/2privacy2information2 Yes2

Article21012can2benefit2from2other2areas2of2EU2law,2e.g.2free2movement,2when2it2comes2to2exploiting2diversity2 and2 its2 benefits.2 It2 has2 been2 suggested2 that2 the2 ECN,2which2 is2 a2 developed2 informationEsharing2 and2 policy2 network,2 has2 things2 to2 teach2 other2 areas2 when2 it2 comes2 to2 coEordination.2 I2investigate2 this2 with2 reference2 to2 the2 Commission2 and2 Member2 State2 network2 dealing2 with2 the2provision2 of2 information2 on2 national2 technical2 regulations2 for2 the2 Internal2Market.2 I2 use2 this2 area2because2the2network2here2is2relatively2well2developed.2Nevertheless,2the2ECN2has2something2extra2to2offer.2Many2other2networks2are2significantly2less2developed,2there2the2gains2may2be2even2greater.28322

The2Internal2Market2is2an2area2without2internal2frontiers,2free2movement2of2goods2is2assured.2Some2technical2 regulations2 (e.g.2 the2duty2to2affix2a2sign2where2environmental2 taxes2are2due284)2are2trade2barriers.2Under2Directive298/34,2Member2 States2must2often2852notify2draft2 technical2 regulations2 to2the2Commission2stating2why2they2are2necessary.2If2the2regulations2treat2environmental,2consumer2or2public2health2concerns,2data2on2the2anticipated2risks2must2also2be2included.2862The2Commission2sends2

22222222222222222222222222222222222222222222222222222222222222812Similarly,2for2the2US,2Kovacic,2‘Competition2Policy2in2the2EU2and2the2US’,210.22822Ibid,210.222832See,2 for2example,2Sabel2and2Zeitlin,2Experimentalist'Governance' in' the'EU;2de2Búrca2and2Scott2 (eds),2Law'and'New'Governance'in'the'EU'and'the'US2(2006);2Joerges2and2Dehousse2(eds),2Good'Governance'in'Europe’s'Integrated'Market2(OUP22002);2and2de2Búrca2and2Scott2(eds),2Constitutional'Change'in'the'EU:'from'uniformity'to'flexibility?2(Hart22000).22842Case2CE13/962Bic'Benelux'v'Belgium'[1997]2ECR2IE1753.22852Articles21(5),282and210,2European2Parliament2and2Council,2Directive298/34,2laying2down2a2procedure2for2the2provision2of2information2in2the2field2of2technical2standards2and2regulations2and2of2rules2on2Information2Society2services,2OJ219982L204/237,2as2amended2(Directive298/34).2Unless2there2are2certain2kinds2of2urgency,2see2article29(7)2 and2 Commission,2 A' Guide' to' the' Procedure' for' the' Provision' of' Information' in' the' Field' of' Technical'Standards'and'Regulations'and'of'Rules'on'Information'Society'Services2(2005),251.222862Articles272and28,2Directive298/34.2Also,2ibid,245.2

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this2to2the2Member2States,2relevant2Commission2units2and2publicises2it2for2economic2operators.2872It2may2882also2consult2a2Standing2Committee2 for2 its2opinion.2892The2Member2State2must2not2normally2enact2this2regulation2for2three2months2from2when2the2Commission2received2it.29022

Member2States2nominate2a2central2hub2to2send2information2to2the2Commission2and2its2own2relevant2national2ministries.2 The2 Commission,2 a2 central2 hub2 itself,2 then2 deals2with2 the2 central2 hubs2 in2 the2other2Member2States2(translating2where2necessary291),2as2well2as2the2relevant2Commission2units.2922The2 whole2 procedure2 is2 based2 on2 a2 system2 of2 electronic2 data2 exchange.2932 Nevertheless,2 the2Commission2reports2that2it2has2generated2close2coEoperation2between2it2and2the2Member2States2in2this2 area.2942 In2part,2 this2 is2 also2because2 there2 is2 a2 Standing2Committee,2which2must2meet2 twice2a2year,2952and2is2composed2of2Member2State2representatives,2and2chaired2by2the2Commission.2It2is2the:2

“…focal2point2 for2discussion2of2all2 the2problems2connected2with2the2 implementation2of2the2Directive.2 It2 therefore2 plays2 a2 very2 important2 role2 in2 supervising2 the2 operation2 of2 the2procedure2 and2 in2 the2 examination2 of2 policy2 issues2 raised2 by2 the2 notifications2 and2 also2 in2developing2an2administrative2network2between2national2authorities.”2962

The2 Commission2 or2 a2 Member2 State2 can2 bring2 any2 question2 relating2 to2 the2 implementation2 of2Directive298/342before2the2Standing2Committee.2The2Standing2Committee2can2also2express2opinions2on2Commission2proposals2in2order2to2limit2existing2or2potential2trade2barriers.2For2example,2it2could2ask2the2Commission2to2encourage2Member2States2to2discuss2such2solutions2between2themselves.2972The2Commission2automatically2puts2all2 notifications2which2are2 subject2 to2 several2detailed2opinions2onto2 the2 Stranding2Committee’s2 agenda.2982 There2are2also2meetings2directly2between2 the2national2representatives2embedded2within2their2ministries2and2the2Commission2experts2in2the2units.29922

Once2a2Member2State2submits2draft2 technical2 regulations,2 the2Commission2and2the2other2Member2States2can:2(a)2ignore2the2draft,2in2which2case2it2can2be2adopted2after2three2months;3002(b)2comment2on2the2draft,2 if2 it2complies2with2EU2law2but2raises2 issues2of2 interpretation.2The2Member2State2need2not2reply2(they2often2do3012and2this2is2desirable302),2but2must2take2account2of2these2comments2‘as2far2as2 possible’2 when2 formulating2 the2 definitive2 text2 of2 the2 regulation;3032 (c)2 if2 they2 have2 serious2

22222222222222222222222222222222222222222222222222222222222222872Ibid,246.2It2only2publishes2the2draft2regulation2for2them,2not2the2Commission2or2Member2State2discussions,2Commission,2 Vademecum' to' Directive' 98/48/EC' Which' Introduces' a' Mechanism' for' the' Transparency' of'Regulations'on'Information'Society'Services2(1998),236E37.22882 This2 is2 optional,2 Commission,2 Vademecum' on' the' Operation' of' the' Procedure' for' the' Provision' of'Information'in'the'Field'of'Technical'Regulations2(1995),260.22892Article28(1),2Directive298/34.2Also,2Commission,2A'Guide'to'Technical'Regulations'2005,246.22902 Article2 9(1),2 Directive2 98/34,2 this2 period2 can2 be2 extended2 for2 various2 reasons.2 Also,2 Commission,2Vademecum'1995,258.22912Commission,2A'Guide'to'Technical'Regulations'2005,246E472and273;2and2Commission,2Vademecum'1995,238.22922Commission,2A'Guide'to'Technical'Regulations'2005,243.22932Ibid,246.22942Commission,2Preventing'Obstacles'to'Trade'in'the'Internal'Market2(2008),23.22952Article26(1),2Directive298/34.22962 Commission,2 A' Guide' to' Technical' Regulations' 2005,2 59.2 Also,2 Commission,2 Commission' Staff' Working'Paper,' Accompanying' the' Report' from' the' Commission' to' the' European' Parliament,' the' Council' and' the'European'Economic'and'Social'Committee'G'the'operation'of'Directive'98/34/EC'in'2009'and'20102(SEC(2011)215092final,22011),211.22972Commission,2A'Guide'to'Technical'Regulations'2005,259.22982Commission,2Vademecum'1995,268.22992Commission,2A'Guide'to'Technical'Regulations'2005,260.23002Ibid,247.23012Ibid,247.23022Commission,2Vademecum'1995,264.23032Article28(2),2Directive298/34.2Also,2Commission,2A'Guide'to'Technical'Regulations'2005,247.2

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difficulties2 in2 the2 event2 of2 adoption2 of2 the2 draft,2 because2 it2 creates2 obstacles2 to2 EU2 trade,3042comment2 in2 a2 detailed2 opinion2 explaining2 the2 issues.2 The2Member2 State2 proposing2 the2 regulation2must2 then2 tell2 the2 Commission2 how2 its2 draft2 has2 been2 amended2 to2 take2 account2 of2 the2 detailed2opinion;3052and2(d)2 the2Commission2can2announce2that2 there2 is2already2a2proposal2 (or2 it2 intends2to2propose)2 a2 regulation,2 directive2 or2 decision2 on2 the2 issue,2 in2 which2 case2 a2 further2 delay2 for2 the2Member2 State2 ensues.3062 Unless2 there2 is2 a2 relevant2 EU2 harmonisation2measure2 in2 place,2Member2States2must2then2publically2announce2that2a2national2measure2has2been2adopted2in2accordance2with2certain2formalities2and2communicate2the2text2of2this2regulation2to2the2Commission2without2delay.30722

Failure2of2 the2Member2States2 to2observe2these2obligations2violates2EU2 law2and2the2Commission2or2another2 Member2 State2 could2 bring2 infringement2 proceedings.3082 Furthermore,2 national2 courts2generally2cannot2enforce2regulations2that2should2have2been2notified,2but2were2not.3092

The2EU2Treaties2only2provide2for2retroactive2monitoring2through2infringement2procedures,2and2these2are2 rarely2used.3102Directive298/342 is2 an2early2warning2 system2 ‘…designed2 to2protect,2 by2means2of2preventative2 control,2 freedom2 of2 movement2 of2 goods,2 which2 is2 one2 of2 the2 foundations2 of2 the…’2EU.3112 In2nearly2302years2the2Directive298/342process2has2screened2over212,0002drafts.3122 In212%2of2these2 cases2 the2Commission2 found2 that2 the2 technical2 regulation2 could2hamper2 trade.2However,2 in295%2 of2 these2 cases,2 solutions2were2 found2 before2 the2Member2 State2 adopted2 the2 regulation.3132 A2dialogue2 is2 proposed.2 Notifying2 draft2 regulations2 could2 spur2 EU2 harmonisation2 measures2 and2generate2best2practice2discussions.2DG2Enterprise2says2that2the2decisionEmaking2process:2

“…can2take2place2at2the2most2appropriate2 level2enabling2decentralisation2which2safeguards2the2 diversity2 of2 political,2 cultural2 and2 regional2 traditions.2 The2 Directive2 has2 provided2 an2insight2 into2 national2 regulatory2 initiatives,2 has2 led2 to2 the2 creation2 of2 a2 genuine2 discussion2forum,2 clearing2 the2way2 for2 joint2 action2 to2 strengthen2 the2 internal2market…The2 exchange2and2gathering2of2information2is2also2an2effective2way2of2ensuring2that2national2best2practices2become2known2and2are2used2as2a2model2for2other2regulatory2initiatives.”3142

It2is2hard2to2see2inside2the2Standing2Committee.3152Its2discussions2are2secret.2Many2claims2are2made2about2 what2 it2 can2 achieve2 and2 how2 it2 helps2 in2 relation2 to2 policy2 in2 this2 area.2 However2 the2Commission2has2said2that2the2Member2States2are2encouraged2to2focus2on2certain2things2in2particular:2the2wording2of2drafts,2for2clarity,2etc.;2the2possibility2of2assessing2all2regulations2online2and2in2other2

22222222222222222222222222222222222222222222222222222222222223042Commission,2Vademecum'1995,265.23052Article29(2),'Directive298/34;2and2ibid,254.2Commission,2A'Guide'to'Technical'Regulations'2005,244.23062 Article2 9(3)2 and2 (4),2 Directive2 98/34.2 Also,2 Commission,2A' Guide' to' Technical' Regulations' 2005,2 48;2 and2Commission,2Vademecum'1998,28.23072Article28(3),2Directive298/34.223082Commission,2A'Guide'to'Technical'Regulations'2005,248;2and2Commission,2Vademecum'1995,2672and268.23092Case2CE194/942CIA'Security'International'v'Signalson'and'Securitel'[1996]2ECR2IE2201,2para240;2and2Case2CE443/982Unilever'Italia'v'Central'Food'[2000]2ECR2IE7535.2C.f.,2Case2CE226/972Lemmens'[1998]2ECR2IE3711.23102Commission,2A'Guide'to'the'Procedure'for'the'Provision'of' Information'in'the'Field'of'Technical'Standards'and'Regulations2(1998),210.23112Case2CE194/942CIA'Security'International'v'Signalson'and'Securitel'[1996]2ECR2IE2201,2para240.23122Commission,2Preventing'Obstacles'to'Trade'in'the'Internal'Market,26.223132Ibid,26.23142Commission,2A'Guide'to'Technical'Regulations'2005,27;2see2also2page211;2Commission,2A'Guide'to'Technical'Regulations' 1998,2 11;2 Commission,2 Vademecum' 1998,2 7;2 and2 Vos,2 ‘Regional2 Integration2 Through2 Dispute2Settlement’,265E66.23152Thanks2to2the2UK2Central2Unit2at2the2Department2for2Business,2Innovation2and2Skills,2past2and2present,2that2gave2me2impressionistic2insights2into2its2working.2

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consolidated2texts;2and2identification2of2particularly2onerous2regulations.3162The2emphasis2seems2to2be2more2on2specific2issues2in2specific2technical2regulations,2rather2than2developing2policy.2

Successful2 policy2 networks2 have2 several2 dimensions.2 I2 suggested2 consumer2 welfare2 as2 the2 ECN’s2substantive2core.2Similarly,2Article2342TFEU’s2prohibition2of2quantitative2restrictions2on2imports2and2all2measures2having2equivalent2effect,2is2a2relatively2clear2core2for2the2Commission2and2the2Member2States2to2coalesce2around.3172The2mandatory2requirements2and2Article2362leave2room2for2diversity.2

Secondly,2 although2 the2 relevant2 actors2 here2 are2 really2 the2 Commission,2Member2 State2 courts2 and2regulatory2 authorities,2 I2 will2 ignore2 the2 Member2 State2 courts2 in2 this2 discussion.2 Our2 focus2 is2 the2repeated2 interactions2 between2 network2 members.2 Similarly,2 the2 EU2 Courts2 are2 not2 part2 of2 our2network,2although2they2are,2once2again,2the2referees2in2these2disputes.2

Next2 is2 the2 similarity2 of2 the2 members2 and2 the2 impact2 on2 network2 performance.2 Remember2 the2tension2 between2 a2 need2 for2 trust2 and2 the2 benefits2 of2 creative2 spark,2 caused2 by2 tension2 and2difference.2The2ECN’s2members2are2becoming2too2similar.2In2the2Directive298/342network,2similarity2is2high2 too.2DG2Enterprise2 is2 the2network’s2hub,2and2there2are2central2hubs2 in2 the2Member2States.2These2are2often2low2level2bureaucrats,2focusing2on2process2rather2than2wider2policy2issues.22

Fourthly,2 technical2 regulations2 are2 again2 treated2 as2 if2 they2 had2 no2 political2 consequences.2 It2 is2unclear2what2input2the2Member2States2have2in2network2discussions,2as2opposed2to2the2technocrats.2As2with2the2ECN,2more2Member2State2influence2may2be2needed.2One2important2issue2to2note2is2that2most2communication2is2done2electronically.2The2only2physical2meetings2that2occur2are2the2Standing2Committee2 meetings.2 Yet,2 real2 meetings2 are2 fundamental2 for2 building2 trust2 between2 members.2Furthermore,2Standing2Committee2meetings2are2often2done2in2specialist2subEgroupings,2rather2than2with2 the2 same2 officials,2 for2 example2 the2 Standing2 Committee2 on2 Construction.2 This2 is2 positive2because2 there2 is2more2 technical2 expertise.2 However,2 the2 price2 is2 high,2 limited2 creative2 spark.2 It2 is2important2 to2 ensure2 that2 there2 are2 general2 Standing2 Committee2 meetings2 every2 year2 which2 all2Standing2Committee2members2can2attend2and2share2 their2policy2 insights.2This2might2 include2wider2issues2like2best2practice2in2technical2regulations;2streamlining,2replicating2and2coEordinating2technical2regulation2 across2 different2 sectors;2 and2 focusing2 on2 how2 best2 to2 deal2 with2 public2 policy2 interests2systemically.2Such2meetings2should2include2civil2servants2from2the2ministries,2but2political2input2from2the2Member2States2 is2needed2too.3182 I2 suggested2that2 the2ECN2start2annual2policyEreviews2and2 five2yearly2inEdepth2ones.2The2Standing2Committee2might2benefit2from2this2too2including2through2the2use2of2higher2level2civil2servants2with2greater2technical2and2policy2competence.2

There2is2a2risk2that2the2Commission2is2too2dominant2in2the2network,2making2it2more2hierarchical2than2coEoperative.2Yet,2this2does2not2seem2to2be2happening,2in2fact.2The2Member2States2generate2similar2numbers2of2detailed2opinions2as2 the2Commission2 itself.2As2with2 the2ECN,2 the2Commission2 controls2information2 flow2 as2 it2 is2 at2 the2 centre2 of2 the2 network.2 However,2 the2 relatively2 low2 number2 of2Standing2Committee2meetings,2and2the2fact2that2they2often2use2different2technical2specialists,2there2is2 a2 risk2 that2 strong2 network2 identity2 is2 not2 generated2 and2 that2 some2 network2 knowledge2 is2 lost.2Article2 11(6),2 Regulation2 1/20032 allows2 the2 Commission2 to2 withdraw2 a2 competition2 case2 from2 an2NCA.3192Similarly,2it2can2suggest2harmonising2certain2issues2or2take2the2Member2State2to2the2ECJ2if2it2breaches2Directive298/34.2These2powers2cannot2be2used2too2often,2otherwise2trust2breaks2down.2

22222222222222222222222222222222222222222222222222222222222223162 Commission,2 Report' from' the' Commission' to' the' Council,' the' European' Parliament' and' the' European'Economic'and'Social'Committee:' the'operation'of'Directive'98/34/EC' from'2006G20082 (COM(2009)26902 final,22009),2 9,2 although2 see2 pages2 11E12.2 Also,2 Commission,2 Report' from' the' Commission' to' the' Council,' the'European'Parliament'and'the'European'Economic'and'Social'Committee:'the'operation'of'Directive'98/34/EC'from'2002'to'20052(COM(2007)21252final,22007),210,2similarly,2page213.23172Although2see2the2discussion2in2Poiares2Maduro,2We,'the'Court.23182 Joerges,2 ‘"Good2 Governance"2 Through2 Comitology?’2 in2 Joerges2 and2 Vos2 (eds),2 EU' Committees:' social'regulation,'law'and'politics2(Hart22000),2313.23192See2the2text2around2footnote2273.2

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Directive298/342network2members2may2experiment2with2different2 technical2 regulations,2 unless2 EU2harmonisation2is2in2place,2or2proposed.2But,2for2comparison2and2learning2to2occur,2network2members2must2regularly,2clearly2and2openly2report2on2their2performance.2Although2they2have2to2say2how2they2amended2their2draft2technical2regulation2to2take2account2of2detailed2opinions,2no2mechanism2pushes2the2Member2States2to2say2what2regulatory2solutions2worked2and2what2did2not.2This2 is2unfortunate.2The2Member2States2should2review2themselves,2and2each2other,2and2report2on2failures2and2successes2so2that2wider2policy2learning2can2occur2particularly2with2the2defects2of2parochial2solutions.2

Member2 States2 and2 the2 Commission2 are2 pushed2 to2 consider2 externalities2 in2 the2 draft2 regulations.2They2can2comment2where2they2think2that2their2effect2is2disproportionate.2Technical2language2pushes2Member2States2to2justify2their2action2with2evidence.3202This2alters2their2reasons2for2action2over2time.2Some2 reasons2 are2 acceptable,2 others2 not.2 Forcing2 Member2 States2 to2 reply2 to2 detailed2 opinions,2invokes2justification.2This2affects2the2rules2that2Member2States2seek2to2promulgate2in2the2first2place.2

As2with2the2ECN,2policy2discussion2takes2place2behind2closed2doors.2Draft2regulations2are2put2on2the2Commission’s2website,2but2the2discussion2that2takes2place2after2this2is2secret.2It2might2be2sensible2to2shine2 more2 light2 on2 the2 specific2 discussions2 within2 the2 Standing2 Committee.2 There2 is2 some2information2 on2 the2 specialist2 ones,2 but2 the2 policy2 discussions2 are2 largely2 hidden.2 This2will2 further2push2actors2to2do2a2better2job2in2balancing2national2interests2with2EU2ones2in2acceptable2ways.2

I2suggested2some2simple2changes2to2the2Directive298/342network2responding2to2insights2gained2when2reconceptualising2the2ECN2as2a2policy2network,2through2coEordinated2diversity.2This2should2improve2understanding2between2the2actors,2generate2policy2experimentation2in2time2of2doubt,2and2increase2mutual2learning.2

5. Conclusion2&

The2Member2States2delegated2competence2 in2 limited2 fields2 to2 the2EU.2Responses2 to2 legal2diversity2affecting2 areas2 outside2 of2 these2 fields2 often2 requires2 coEordination2 of2 different2 semiEautonomous2modes2of2governance.3212

“In2 an2 uncertain2 postEnational2 political2 setting…the2 ability2 of2 the2 European2 market2administration2 and2 its2 law2 to2 respond2 to2 the2 social2 will2 largely2 determine2 its2 longEterm2success2or2otherwise:2in2the2absence2of2onEgoing2political2direction,2the2‘technocratic’2needs2must2 be2 administratively2 balanced2 against2 the2 ‘ethical’,2 whilst2 the2 ‘economically2 rational’2must2be2weighed2against2social2demands2within2the2administrative2process.”3222

The2Commission2is2trying2to2consolidate2substantive2policyEmaking2power2in2relation2to2Article2101.2It2wants2one2uniform2application2of2Article2101.2 It2wants2to2be2the2one2providing2that2 interpretation.2There2 is2 a2 competition2 network2 that2 includes2 the2 NCAs;2 but2 the2 Commission2 jealously2 guards2 its2power2 from2 them.2 The2 debate2 about2 where2 power2 should2 lie2 within2 the2 network2 is2 political,2 the2process2of2network2creation2and2delimitation:2

“…is2in2itself2an2acutely2political2process2in2which2arguments2about2efficiency,2effectiveness,2value2 for2 money,2 equity2 and2 legal2 certainty2 are2 almost2 certainly2 masking2 deeper2 seated2concerns2about2protecting2and2extending2the2interests2of2the2protagonists.”3232

The2paper2argues2that2both2disagreement2on2methods2and2aims2should2be2celebrated2in2Article2101.2This2 provides2 scope2 for2 respecting2 diverse2 substantive2 views;2 it2 also2 generates2multiple2 strings2 of2

22222222222222222222222222222222222222222222222222222222222223202 Neyer,2 ‘The2 Comitology2 Challenge2 to2 Analytical2 Integration2 Theory’2 in2 Joerges2 and2 Vos2 (eds),2 EU'Committees:'social'regulation,'law'and'politics2(Hart22000),2222.23212Joerges,2‘'Deliberative2Political2Processes'2Revisited’,2792.23222Everson,2‘The2Crisis2of2Indeterminacy’,2231.23232 Wilks,2 ‘Understanding2 Competition2 Policy2 Networks2 in2 Europe’,2 79.2 See2 also2 Sturm2 in2 Ehlermann2 and2Atanasiu,2Constructing'the'EU'Network'of'Competition'Authorities,2173.2

DRAFT& & [email protected]

3822

policy2 experimentation,2 particularly2 important2 in2 areas2 of2 business2 and2 economic2 uncertainty.2Germany2and2the2USA2both2embrace2some2diversity2in2their2competition2laws2for2these2reasons.2

Yet,2this2is2not2a2plea2for2unbridled2diversity.2Competition2and2market2integration2are2important2EU2values.2Article21012needs2a2strong2common2core:2given2the2importance2of2trust;2the2fear2of2beggarEthyEneighbour2 attitudes;2 and2 the2 efficiency2 of2 the2 whole2 system.2 So,2 I2 argue2 for2 coEordinated2diversity.2The2idea2is2that2the2EU2Courts2lay2down2the2law.2However,2the2Commission2and2the2NCAs2can2experiment2in2the2gaps.2This2has2repercussions2for2the2EU2Courts,2as2well2as2review2of2the2NCAs2by2 the2 Member2 States’2 courts.2 In2 an2 experimentalist2 model,2 their2 role2 may2 principally2 involve2checking2 that2 boundaries2 have2 not2 been2 crossed,2 rather2 than2 defining2 the2 actual2 content2 of2 the2balance;2at2least2until2the2experimental2music2has2stopped.2

By2ensuring2that2no2one2dominates2substantive2discussions2in2the2ECN,2and2by2respecting2difference,2we2 encourage2 experimentation2 and2 better2 protect2 local2 preferences.2 By2 ensuring2 that2 these2experiments2 are2 regularly2 reported2 to2 the2 ECN2 itself;2 and2 by2 pushing2 members2 to2 adopt2 better2solutions2on2their2competition2journey,2diversity2will2be2better2coEordinated2too.2

Greater2freedom2impacts2upon2network2members’2power.2They2often2deny2this.3242The2Commission2will2not2relish2losing2power2and2may2resist2my2proposals.2The2NCAs2and2Member2State2courts2relish2more2 independence2 on2 substantive2 policy2 issues2 from2 the2 Commission3252 and2 their2 Member2States.3262They2are2not2only2motivated2by2power,2but2it2is2important.3272They2gain2independence2here2from2 the2Commission;2 yet,2 the2NCAs2may2not2 favour2 coEordinated2diversity,2 they2 generally2 accept2the2system2as2it2is.3282Diversity2highlights2the2many2value2judgments2involved,2even2within2consumer2welfare2assessments.2This2undermines2their2claims2for2 independence2from2their2Member2States.3292Many2NCAs2give2consumer2welfare2disproportionate2weight,2compared2to2other2institutions2in2their2Member2States.2Competition2experts2must2pay2more2respect2to2the2will2of2their2peoples.22

A2similar2point2applies2to2many2other2areas2of2EU/2EUErelated2law.2I2specifically2discuss2the2Directive298/342network2where2Member2States2must2notify2their2draft2technical2regulations.2I2made2several2suggestions2as2to2how2this2network2can2be2improved2to2allow2more2diversity2and2to2encourage2learning2and2understanding2in2technical2regulation2policy.2Many2less2developed2networks2will2benefit2even2more2from2this2approach.2Only2when2we2coEordinate2in2this2way2can2we2be2united2in2diversity.2

&

22222222222222222222222222222222222222222222222222222222222223242 See2 Schaub2 and2 Tesauro2 in2 Ehlermann2 and2 Atanasiu,2 Constructing' the' EU' Network' of' Competition'Authorities,234E52and2172,2respectively.23252Böge2in2ibid,221;2and2Gerber,2‘The2Evolution2of2the2ECN’,262.23262Eberlein,2 ‘Policy2CoEordination2without2Centralisation?2 Informal2Network2Governance2 in2EU2Single2Market2Regulation’2 inibid2 ,2 148;2 de2 Visser,2 NetworkGBased' Governance' in' EC' Law,2 242E3;2 and2 Wilks,2 ‘Agencies,2Networks,2Discourses’,2442.23272Boeger2and2Corkin,2‘The2Resilience2of2SectorESpecific2Competition2Law’,242DRAFT.23282Generally2on2national2elites2in2EU2policy2cycles,2Maurer,2Mittag2and2Wessels,2‘National2Systems'2Adaptation2to2 the2 EU2 System:2 trends,2 offers,2 and2 constraints’2 in2 KohlerEKoch2 (ed),2 Linking' EU' and'National'Governance2(OUP22003),255.23292Wilks,2‘Agencies,2Networks,2Discourses’,2464.2


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