Competition law sanctions and the relations between administrative and criminal law. The Book and the Sword: the Antitrust Authority and the Lion of Saint Mark
Summary: 1. The Antitrust Authority and the Lion of Saint Mark: an introduction – 2. Public Enforcement and need to pre-establish the rules – 3. (Ctd.): the not always unambiguous nature of market rules – 4. The need to publish the Guidelinesas a prerequisite for effective Public Enforcement – 5. Conclusions on the use of the sword in the enforcement function.
1. The Antitrust Authority and the Lion of Saint Mark: an introduction
The task of addressing the question of antitrust sanctions has been greatly simplified by the analysis conducted by Paola Severino. As we have seen, including from the point of view of scholars of criminal law, it is agreed that the power to impose sanctions assigned to the Competition Authority is typically an administrative function, and it is clear that it is an administrative function even from the point of view of European law.
But the real question that this conference seeks to address is not so much the nature of the antitrust sanction function but rather the punitive character, indeed the strongly punitive nature, of this power to impose sanctions. The various contributions, which have been gathered in this volume, make plain the irrelevance of the question of the nature of the power whilst conversely it is absolutely essential to enquire into the dual content of this power.
I reflected a great deal as I listened to the various contributions concerning the duality of the content of this power in a vain attempt to achieve unity between them, then I looked up and saw that the problem under consideration was resolved sculpturally by the image on the back wall of the hall hosting the conference which gave rise to this volume.
The reference is to a very beautiful marble bas-relief which depicts the Lion of Saint Mark yet the image of that lion gives an awe-inspiring synthesis of the dual function of the antitrust plenitude of power. The Lion of Saint Mark, as is known, stands with a book in one front paw and a drawn sword in the other.
That book is not the Gospel. Scholars, some time ago, established that it is the book of wisdom, the rules of social co-existence and law. But which law we ask ourselves? There can only be one answer: the law of Venice, the law of commerce and the market, the Lex mercatoria.And in the other paw it holds firmly and drawn the sword which is the symbol of public power guaranteeing the effectiveness and the full application of the law and justice.
It is this dual function which every competition authority discharges. On one hand it makes visible the rules of the market and on the other it guarantees their effectiveness through the use of force, through public enforcement, just like the Lion of Saint Mark.
2. A book which in part still needs to be written: the need to pre-establish the rules.
It is a widespread opinion that the Competition Authority is not an institution which operates “in” the market but it is a public body which acts “for” the market, outside of it, as a guarantee of that natural order which on the market should operate virtuously, in accordance with Adam Smith’s theory of the “invisible hand“.
Alongside this undeniable function as a guarantee and safeguard of competition, however, the Competition Authority performs no less significant functions which are no mere guarantee or neutral arbitration but go in the direction of fully fledged “regulation” of the market. The protection of competition – from a domestic point of view as well as at community level – stands alongside the traditional neutral function as a guarantee for the natural order of the market, including “political” objectives in respect of the market; this is in addition to the frequent use of neutral powers, assigned as a guarantee of the natural order of the market, for the purpose of pursuing “political” objectives in respect of the market.
Furthermore, as recognised in the most authoritative economic doctrine, the function of the antitrust rules is to conciliate two basic objectives which do not coincide, and this has as a prerequisite the taking of “discretionary” decisions to balance out strongly opposed needs.
On one hand, the operation of competition provides for the strengthening of the better organised economic operators able to exploit economies of scale by widening their dimensions and the market naturally favours the disappearance of undertakings which are unable to achieve economic results because they are inefficient. This, in substance, entails a further strengthening of those productive structures already endowed with a highly competitive capacity. In practice, the decisions and the market opportunities could be centralised in a single body, thereby giving rise to a natural monopoly or an oligopoly which sees the market for a product in the hands of a reduced number of economic operators.
On the other hand, such an instrument, in addition to supporting those companies which have demonstrated particular robustness, technological innovation and inventiveness at an organisational level and which are able to acquire a significant position in respect of other rivals, must ensure the efficiency of the entire competitive system. Conciliating the safeguarding of such economic situations through the maintenance of the competitive structure is no small matter. A compromise must be achieved such as to ensure a stable dose of sufficient competition without penalising the undertakings which, operating correctly, have achieved pre-eminence over the others.
4. There is copious literature on the Lion of St Mark. See Giorgio Aldrighetti, L’araldica e il leone di San Marco. Le insegne della provincia di Venezia. Marsilio, Venezia 2002. And also G. Aldrighetti and M. De Biasi, Il gonfalone di San Marco. Analisi storico-araldica dello stemma, gonfalone, sigillo e bandiera della Città di Venezia, Venezia, Filippi Editore, 1998. ↑
5. A distinction which recalls, although it has a different meaning, that proposed by A. Pace, Libertà “del” mercato e “nel” mercato (1991), in La Costituzione economica, Cedam, Padova, 1997, p. 175 ss. ↑
7. As emphasized “contrary to what is frequently stated in the US books which are full of expressions such as regulation of competitive practices to identify the actions taken by the Antitrust Division of the Department of Justice, the rules governing competition (in other words compliance with the competition practices imposed by the rules and applied by a public authority) do not form part of the regulations, indeed the regulation in the opposite manner of the functions safeguarding competition takes the form of interference which are not external to the market but which are part of the market in the sense that they contribute to making it consistent, S. Cassese, Regolazione e concorrenza, in the volume with the same title by G. Tesauro e M. D’Alberti, Il Mulino, Bologna, 2000, p. 12 s. By way of these actions “the state becomes a player on the market. It lays down prerequisites for the market and carries out transactions which replace the transactions of the private individuals and requires private individuals to perform the transactions which are not carried out on the basis of private autonomy”, thus F. Merusi, Il potere normativo delle autorità indipendenti, in the volume by G. Gitti, L’autonioma privata e le autorità indipendenti, Il Mulino, Bologna, 2006, p. 47. This is an open question which is not always clear to anyone who has dealt with regulations. In addition to the major studies mentioned above G. Tesauro and M. D’Alberti, Regolazione e concorrenza, see from a sociological point of view, A. La Spina e G. Majone, Lo stato regolatore, Il Mulino, Bologna, 2000 and, from a legal point of view, L. Giani, Attività amministrativa e regolazione di sistema, Giappichelli, Torino, 2002. See also for the sake of completeness, S. Frego Luppi, L’amministrazione regolatrice, Giappichelli, Torino, 1999 e M. Antonioli, Mercato e regolazione, Giuffré, Milano, 2001. ↑
8. As regards the significance assumed by the so-called “policies for competition” see the comments by A. Pera, Concorrenza e antitrust, Il Mulino, Bologna, 3^ ed., 2005, p. 112 ss. Even our own Constitutional Court recognises that the protection of competition “can no longer be understood solely in a static sense, as a guarantee of actions to regulate and restore a lost equilibrium, but also in a dynamic usage well-known to community law, which justifies public measures aimed at reducing imbalances, favouring the conditions for a sufficient development of the market or create competitive conditions”. Thus, the Constitutional Court., 13 January 2004, no. 14, in Giur. cost., 2004, p. 237 ss., with comments by A. Pace, Gli aiuti di Stato sono forme di “tutela” della concorrenza, p. 259 ss.; G.P. Dolso, Tutela dell’interesse nazionale sub specie di tutela della concorrenza?, p. 265 ss.; C. Bozzacchi, Principio della concorrenza e aiuti di Stato tra diritto interno e diritto comunitario, p. 277 ss. Also the Constitutional Court of 27 July 2004, no. 272, ivi, 2004, p. 2748, with comments by S. Bellomia, A proposito di servizi privi di rilevanza economica e di gestione dei beni culturali, p. 2760 ss.; as well as in Servizi pubblici e appalti, 2004, p. 831 ss., with comments by A. Police e W. Giulietti, Servizi pubblici, servizi sociali e mercato: un difficile equilibrio. ↑