Antitrust rules prohibit agreements between market operators that would restrict competition, and the abuse of dominance. European Antitrust policy is developed from two central rules set out in the Treaty on the Functioning of the European Union:
- Article 101 of the Treaty prohibits agreements between two or more independent market operators, which restrict competition
The most flagrant example of illegal conduct infringing Article 101 is the creation of a cartel between competitors, which may involve price-fixing and/or market sharing.
- Article 102 of the Treaty prohibits firms that hold a dominant position on a given market to abuse that position, for example by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers.
The Commission is empowered by the Treaty to apply these rules and has a number of investigative powers to that end (e.g. inspections at business and non-business premises, written requests for information, etc.). The Commission may also impose fines on undertakings which violate the European Antitrust rules. The main rules on proceduresare set out in Council Regulation (EC) 1/2003.
Cartels are generally highly secretive and hard to detect. The Commission’s leniency programme encourages companies to hand over inside evidence of cartels in exchange for immunity for fines or a substantial reduction of fines. The first company in any cartel to apply for leniency, may receive full immunity, if the information it provides is sufficient for the Commission to start an investigation. The Commission also carries out its own investigations to detect cartels.
Individuals may report any inside knowledge or suspicion of a cartel to the Commission through the "whistleblower" tool.
Cartel participants can settle their case by acknowledging their involvement in the cartel and thereby receiving a 10% reduction in any eventual fine. The settlement procedure brings efficiencies for the Commission and the parties by reducing the time of the investigations, a limited access to file procedure and shorter final decisions.