In this seminar I want to juxtapose informal methods by which competition authorities solve cases (using the example of commitment decisions) and consider how far the analysis of this enforcement style may be assisted by reference to the literature on ‘responsive regulation’. The judgment and the paper by Wagner von Papp will get you started on the legal issues, which we will map out first. The chapter by Ayres & Braithwaite is taken from their seminal book, which has been influential in academic and policy circles. The last paper raises some questions.
Case C-441/07 P Alrosa [2010] ECR I-5949
F. Wagner von Papp ‘Best and Even better Practices in Commitment Procedures after Alrosa: the Danges of Abandoning the “Struggle for Competition Law”‘ (2012) 49 Common Market Law Review 966
Ayres and Braithwaite Responsive Regulation (OUP, 1992) chapter 2 (will be distributed)
Parker ‘The ‘‘Compliance’’ Trap: The Moral Message in Responsive Regulatory Enforcement’ (2006) 40(3) Law and Society Review 591
Points for Discussion
Is Alrosa wrongly decided? shoudl there be tighter controls on commitment decisions? If so how would you design such controls?
what are the methods by which Ayres and Braithwaite argue in favour of responsive regulation? (and conversely how do their methods disprove the validity of other regulatory tools)
Can commitment decisions be subsumed within the framework of Ayres and Braithwaite’s responsive regulation theory?
Is it possible to design an enforcement pyramid and a pyramid of enforcement strategies in the framework of competition law? How would it look?
what are the risks of adopting responsive regulation?
competitioncourses 
My comments on the first question:
The Alrosa case is from my point of view wrongly decided by the Court for several reasons. First, by overruling the judgment of the General Court and its interpretation of the proportionality principle as well as of Alrosa’s right to be heard, the Court omits the opportunity to guarantee an adequate level of judicial protection for the parties within the Art. 9 Commitment procedure. This is directly linked with the issue of the defendant’s procedural rights that we discussed last week. In the light of the ECHR’s Menarini judgment, the Court’s judgment is rather disappointing, since it fails to clarify the extent of procedural rights of the defendants and interested parties in the framework of the Art.9 Commitment procedure.
Second, the judgment is also problematic with regard to the issue of the level of judicial review of Commitment decisions by the European Courts. By squashing the General Court’s extensive review of the Commission assessment which goes beyond the “manifest error” standard, the Court adopts unfortunately a hands-off approach and fails to reconsider its problematic traditional stance limiting the European Court’s judicial review of the Commission’s competition decisions. Wagner von Papp accurately points out that this is particularly problematic in the case of the Art.9 Commitment decisions, since it leaves the Commission an almost unlimited margin of discretion. Thus, the Alrosa judgment fails to establish a sufficient level of judicial review which guarantees the interests of the concerned and third parties as well the general interest.
Third, Wagner von Papp’s article also underlines the general problems of the Commitment procedure with regard to legal certainty and to the development of a clear competition case law. Thus, the Standard Essential Patents cases (Rambus, Samsung) as well as the interminable negotiation of the Google commitments demonstrate that the Commission often prefers in economic complex and innovative cases to rely on the commitment procedure which relieves the Commission from the task of establishing a concrete infringement of EU competition law. Despite the obvious advantages in terms of procedural economy, this practice decreases the level of legal certainty and the authoritative impact of EU competition law. Moreover, it impedes the development of legal precedents and of new theories of harm through infringement decisions and ECJ case law. This jeopardizes the adaptation of the EU competition law to economic and technological progress in particular in innovative sectors. The Google case exemplifies this fact. In addition, this horse trading between the Commission, political actors and the concerned undertakings could also have detrimental effects on the protection of competition in the general interest. The Court failed to establish in the Alrosa case adequate safeguards and principles which tackle these problems and limit the Commission’s discretion in the application of Art.9 Commitment decisions.
For these reasons, I am in favour of a stricter framework for Art. 9 Commitment decisions. Thus, the applicability of Art. 9 Commitment decisions should be limited to cases and factual circumstances for which already precedents and a clear theory of harm exist. This “precedent-criterion” should guarantee the development of new theories of harm and legal certainty in economically and technically complex cases, in particular in innovative sectors. Moreover, Art. 9 Commitment decisions should be reviewed and authorized by a third party (e.g. General Court or European Ombudsman) before entering in to force. This would protect at the same time the interest of the concerned parties as well as the general interest. In addition, the Commitment decisions should be subject to an extensive judicial review which ensures the procedural rights of the concerned undertakings and interested parties as well as the proportionality of the remedies.
Re Alrosa: I think even cosidering Menarini, the judgement of the course is in line with most of its other case law, wherein it has often held that the Commission enjoys a wide area of discretion, and as a consequence if there was no manifest error of assessment (which the GC didn’t find there to be, or at least didn’t say so) then it is not for the GC to make a new assessment. Granted, another system is possible but then the whole system of administrative competition law should be changed. It might also be possible to make it clear in the guidelins and/or regulation, that commitment decisions, once given, can’t be taken back.
Regarding responsive regulation, first, examples are given where other regulatory models have failed and the authors then build a model that show the effectiveness of different systems of regulation, culminating in their regulation pyramid. Within that system, commitment decisions could be seen as a middle tier somewhere between a warning letter / notification and final decisions prohibiting / imposing a fine.
To have true responsive regulation, the competition law framework might need additional steps in between, but to some extent there is. The law in itself and above that the guidelines by the commission regarding agreements, mergers etc are the lowest level. Above that could be compliance programs held by the firms internally or by their legal counsel. After that, there would be a notification of an investigation/notification or maybe even some ‘rumours’ before that. Then there is the informal and formal procedure, which can also be seen as an opportunity to return to compliance and the process of investigation. If the investigation finds illegal behaviour and no commitment decisions can be reached, in the end, there is a fine for the behaviour, and after that a fine for non-compliance and potentially (only in the US) the possibility of splitting a company into two parts.
I think responsive regulation is a very promising theory and of course enforcement shouldn’t only be black or white(dualistic theory) but with responsive regulation the line between compliant and non-compliant or legal/illegal also becomes increasingly blurry and it can become hard to know one from the other. Furthermore, really responsive regulation would boil down to case-by-case evaluations, at which point (at the latest) there is the danger that there is a lot of legal uncertainty and what would be otherwise illgegal is not penalized because of some particular circumstances. This not only creates legal uncertainty but can also decrease compliance if individuals/companies feel they have no idea what the precise rules are.
In “The Compliance Trap”, Parker prophesises that a regulator attempting to impose sufficient sanctions to engender deterrence may find its powers or its existence under threat as a result of waning political support arising from effective lobbying by market participants. In my reaction piece I will briefly attempt to make loose analogies with the reforms made to the Hungarian Constitutional Court since 2012.
Between 1989 and 2012, the Hungarian constitutional court played a significant role in upholding the rights enshrined in the constitution. This included opposing the position of the government on numerous occasions. Constitutional reforms in 2012 altered both the structure and jurisdiction of the court. The court is now effectively unable to intervene in the field of economic policy (interpreted broadly). Further, “the number of constitutional court judges will be increased and their terms of office extended, potentially allowing the government to increase its influence over the judiciary” (Financial Times 18 April 2011).
I believe that the Hungarian reforms are illustrative of the issues highlighted by Parker. The case demonstrates that if independent, supervisory bodies are to be effective and remain effective, politicians must always be reminded of the objective desirability of such institutions.
The commitment decisions framework certainly has got some facets that allow a comparison with the responsive regulatory strategies as developed by Ayres and Braithwaite. The fact that it is set up as a way for the undertakings concerned to submit proposals to remedy competition concerns can be seen as a means of persuasion. Insufficient effort can be reprimanded with warning letters and eventual failure to comply can lead to an infringement procedure with a high fine. As such the commitments procedure shares some structural features with the Ayres and Braithwaite model. The Commission model however lacks some of the necessary safeguards to remedy serious problems with this type of regulatory framework, which were foreseen by Ayres and Braithwaite. Firstly, the model can be criticised on the grounds of fairness, proportionality and consistency. As highlighted also in the reading of Wagner von Papp, a system of informal responsive regulation has to deal with a lack of formalism that may undermine the rule of law and broader constitutional values. For example, Ayres and Braithwaite’s model prioritises the functional concerns of ensuring effective regulation over constitutional values of proportionality and consistency. This is effectively also the case in the commitment decision context after Alrosa where the Court’s emphasis on the functional concerns of the procedure trump judicial review. Furthermore, responses of the Commission are influenced by the cooperation or non-cooperation of the companies involved and not the seriousness of the infringement. As such, infringements that cause a lot of consumer harm will not be treated severely so long as the company involved cooperates with the Commission, whereas lesser more or more complex infringements will be treated severely if the company involved does not cooperate. In these hypothetical situations, the enforcement response is not proportional to the actual societal harm and can lead to consistency issues. These issues could then partly be addressed through the generation of specific rules and guidelines that will self-restrict and check the regulatory behaviour of the Commission. However, as identified in the readings, detailed rules on the regulatory behaviour of the commission in this field are lacking. Secondly, the commitment decisions framework, characterised by a close relationships through repeated negotiations and potential monitoring between the Commission and the regulated could be prone to what is called ‘regulatory capture’. Ayres and Braithwaite’s answer here is to advocate a system of tripartism – in which so called Public Interest Groups (PIGs) are legally empowered parties within the regulatory process that can act as informed representatives of regulatory beneficiaries and operate as counterbalances to industrial and agency pressures. It would seem desirable if not necessary to incorporate a similar kind of mechanism within the Commission’s framework of decision making as it is currently lacking it.
Gaps in the law and committments
Wagner-Von Papps briefly discusses two devices supporting the “struggle of law” more than the current committment practice (pp. 968-969). First, a reduction in the scope of committments: committments cannot be made unless the regulation of the competition concern at issue is novel. Second, requiring the Commission to state what the law is among the premises of the “committment agreement”.
He considers them cumulative, but it seems to me that the first bears disadvantages he does not consider. On the one hand, the novel standard requires further elaboration. On the other hand, a truly uncertain case is exaclty the type of case where the undertakers can be blamed the least. Still, even if the Commission does not directly sanction the conduct, social sanctions and private enforcement can nevetheless hit undertakers in such cases.
Given these shortcomings of a non-novel case rule, I prefer the idea of forcing the Commission to state what the law is, according to her. In this way, the “struggle for law” should be guaranteed. Besides, the counterargument “in this way, the statement of the content of law is not subject to judicial review” does not convince me. First, if the Commission explains what the reasons are for her choices, it is easier to make better evaluations of the proportionality of the committment under scrutiny. Second, in the system there are already cases when a statement by the Commission of what the law is not reviewed in court, namely, when no judicial review is requested.
While perhaps this is not exactly a core issue that arises from this week’s reading, I cannot help but to wonder to what extent Parker’s empirical findings can be illustrative for the purposes of analysing the European approach to regulation (general methodological issues aside). Do the specific circumstances in which Australian competition enforcement developed make this case unique or do they just exacerbate effects that are of a general nature? all in all, Australian business resistance to competition enforcement is not surprising, given that mentality changes do not take overnight. In Europe (and in the US as well) the tradition of competition enforcement is much stronger and long lasting, so one would expect a better embedded understanding of moral wrongness inherent in non-compliance with competition law (unless this is undermined by other factors, for example a perception of abuse of discretion by the Commission in its approach to commitment decisions). Query how this should affect an enforcement strategy.
Another thing that attracted my attention, is the role of the media in all of this. We have already discussed the reputation cost when considering the deterrence model, but it is still interesting to see how media involvement can transform what is meant to be a more consensual model of enforcement that is leaning more towards compliance model into a deterrence based strategy. The regulator might be tempted to use media involvement to their advantage in an attempt to strengthen their moral grounding in securing a settlement/commitment decision, but that move can estrange businesses which were trying to avoid the stigma attached to blameworthiness. While the compliance model or soft responses forming part of a responsive model rely on the moral perceptions of regulated behaviour for their effectiveness, attaching a stigma to a particular conduct through media involvement may have an opposite effect. Businesses that agree to a settlement or a commitment decision find themselves in a particularly difficult situation, without a forum to defend themselves against post-agreement public statements by the regulator.
I thought that one of the noteworthy things about the Alrosa decision is the status given to third-parties in commitment procedures, that Wagner-von Papp also picks up on. In para. 41 of the decision the Court acknowledges that “the Commission must … take into consideration the interests of third parties”. However, it is doubtable that the Commission did so sufficiently in this case. The ECJ refuses to give Alrosa further say in this matter as in para 90 it then denies it of being a ‘party concerned’. Moreover, the Court maintains that “the Commission was [not] obliged to provide Alrosa with a reasoned explanation of why the observations of the third parties had changed its position on the appropriateness of the joint commitments”. I am slightly taken aback by this because Alrosa to me is very much a ‘party concerned’. First, Alrosa and De Beers are active on the same market and thus competitors and second (and most importantly), De Beers’ commitment has an immediate binding effect on Alrosa. I agree with Wagner-von Papp that the rise of commitment procedures could mean that the third-party interests become under-represented or simply ignored. The Alrosa-decision hints at this. However, in this specific case, Alrosa’s treatment by the Court seems unjust and lacking of due process.
Commitment procedures are desirable in the extent that they are cheaper than infringement procedures and that they offer more flexibility to the Commission. Commitment decisions make possible to tailor remedies according to the features and to the incentives at play in each market. This is crucial since economic models tend to differ largely from one sector to another. Moreover, it could be said from the Ayres and Braithwaite’s responsive regulation theory that it is efficient for the Commission to have a set of various remedies.
However, the flexibility of commitment procedures is gained at the expense of a decrease of legal certainty. As emphasized by F. Wagner-Von Papp, the risk behind an increased use of commitment decisions is to abandon the struggle for law in favor of discretionary case to case negotiations. Legal principles would not anymore be clearly defined. A second concern is that the increased discretion the Commission enjoys in commitment procedures can help an “instrumentalization” of competition law by the Commission. Indeed, some commitment decisions may have been taken in consideration of other policies than competition policy. The commitment decision adopted in the Rambus case provide an example in which the Commission allegedly used its power to shape the market and influence its evolution. It could be claim that the Commission try to regulate the market through the application of EU competition law. However, competition law lacks some attributes that are typical of economic regulation. It may be good to be able to make a broad use of competition law, but it can lead to a misuse of competition law.
I agree with F. Wagner-Von Papp, when he argues that the ECJ wrongly decided the Alrosa case. An evolution towards more discretion in the remedies used by the Commission seems to be desirable, however safeguards for assuring accountability of discretion are needed. The Court missed an opportunity to recognize the possibility for the Commission to use more creative remedies, best tailored to each market, under judicial review ensuring that commitments are proportionate to the infringement and that the Commission is not abusing its power.
The problem with the enforcement pyramid and the rules-versus-discretion debate is that to a great extent it assumes that the regulatory authorities are pursuing a single goal at all times, regardless of whether they are construed as adversaries of the undertakings in a hierarchical public-private model or “players in the game”. While clearly legal certainty is important, the strategy of the regulator, especially in the case of the European Commission, would be more multi-pronged. The primary aim of the EC (securing the integrity of the internal market) is clear, but the secondary aims – for longer-term legitimate reasons – might very well differ to include: creating a sense of ownership of the rules, building a certain image and position of it as an enforcer (also for other policy areas) or managing expectations of the regulated market, thereby contributing to a more complete framework of regulation in the EU, even if it might result in some inconsistencies in the shorter term.
The legitimacy question, raised by Parker, is not negligible in the context of the European Commission, not even in the sphere of competition policy, where the tools at the disposal of the EC are formally strong. Perceived legitimacy of the European Commission would therefore affect its enforcement techniques. In a sense the bargaining aspect of the commitments process, with the Commission enjoying relative discretion, contributes to building a sense of a ownership of the competition law framework by market actors, potentially strengthening the perceived legitimacy of EC itself, including in “hard” enforcement and in other policy areas.
The issue of ownership relates not only to the enforcement process itself, but also the formulation of guidelines which – contrary to the claim of Walter-Von Papp – are not just about “self-restraint”, but are an important means of “negotiating” the Commission’s approach and policy priorities, being a result of consultation processes (with industries, consumer group reps, other DGs within the Commission, Member States, other EU institutions, etc), providing legal certainty and constructing a framework for understanding of the application of competition law by various actors. Of course the transparency and inclusiveness of this process can be debated.
Following review of the reading material I would like to focus on the weaknesses of the Commission’s commitment procedure which I consider crucial:
– In my opinion it is doubtful whether the “voluntary nature” of commitments should substitute the proportionality test applicable to infringement decisions mainly for the following reasons: First of all because the people representing the undertakings in the negotiation process might have the incentive to offer disproportionate commitments in order to protect themselves or their colleagues from criminal liabilities. Second because when the undertakings offer the commitments, the Commission has not fully investigated the facts of the case. As a result they negotiate without being able to predict the possible outcome of an infringement decision and its associated costs. The undertakings’ inability to predict the potential costs of an infringement decision along with the fact that the Commission has the reputation of imposing huge fines may motivate them to offer disproportionate commitments.
– In contractual relationships when there is inequality of bargaining power between the parties the law protects the party whose bargaining position is weaker. This is exactly the case for example in the field of labour law. In the same line, the application of a proportionality test in the commitment procedures might serve a similar purpose, might protect the undertakings from the Commission’s unequal bargaining power in the negotiation process. The fact that under the commitment procedure a proportionality test does not fully apply weakens considerably the bargaining position of the undertakings.
– The commitments may prohibit conduct that would otherwise be permissible under competition law. Taking into account that the Commission’s role is to protect public interest by prohibiting anti -competition behaviour, a crucial question might be to which extent the Commission should have the power to prohibit legal business conducts in the framework of commitment procedures. In addition, the restriction of otherwise legitimate business conduct in the framework of the commitment procedures may create considerable legal uncertainly especially in relation with cases involving novel legal issues and may lead to over deterrence.
Antitrust enforcement and legitimacy
To my understanding the above title summarizes an underlying leitmotif, which permeates all readings of the seminar.
To begin with, I would like to make a general comment regarding the notion of legal obligation: to obey the law is not merely conforming to the law; it is to comply with the law, to be guided by it. A purely coercive order can oblige, but never obligate, a person to comply. To be obligated by the law means to accept legal rules as standards of conduct and adopt “the internal point of view” (Hart, the Concept of Law). In this respect, the law is conceptualized as a normative social practice: it purports to guide human behavior, giving rise to practical reasons for action and is dialectically related to legitimacy questions.
In light of the above, the simple deterrence model reflects a conception of the law as “commands backed by threats”. According to that model the cost of an anti-competitive behavior is tantamount to the possibility of the relevant fine supplemented with the costs of litigation and discounted by the probability of detection. However, this model not only faces a practical problem (i.e. low fines could be inadequate to deter an anti-competitive conduct triggered by a cost-benefit analysis, whereas excessive fines may incur over-deterrence and false positives), but it is also unable to ensure compliance with the law.
On the contrary, responsive regulation is aligned to the above-mentioned “compliance enterprise” and calls for the subjects to comply with the law not merely because they are obliged to do so, but because they are duty-bound or obligated to do so. In other words, responsive regulation communicates a moral message and aims at advancing a consensus with regards to the substantive content of the competition rules. Arranged as a regulatory pyramid with more cooperative strategies at the bottom and progressively more punitive measures at the top, such a regulatory approach is presumed to be more efficient and fair than the simple deterrence model, whereas it ensures a stable and workable legal system. Furthermore, such an enforcement approach presupposes and demands from competition rules to shape just institutions.
In this respect, it becomes apparent that Parker’s “compliance trap” (pp. 609-613) should not be considered as a trap. In particular, Parker argues that although responsive regulation is an improvement in comparison to simple deterrence, since it avoids the “deterrence trap”, yet it leads to a “compliance trap”. The latter includes a deadlock situation for the regulator and occurs when there is a lack of political and moral consensus regarding regulator’s application of the law. Nonetheless, questioning the moral and political legitimacy of an authority’s decision should not be deemed as a trap. Likewise, an authority’s endeavor to persuade the subjects that certain legal rules should be obeyed due to their moral and political content should not be seen as a hurdle. Hence, responsive regulation, merely, sets higher standards for substantive competition rules and enforcement practices; it permits evaluations of competition law application and aims at developing an overlapping consensus in relation to its rules. Thus, responsive regulation may offer a plausible response to the legitimacy question, especially because of its “compliance trap”.
In this context, commitments procedure of article 9 could be considered as a means of responsive regulation and be associated with the above-mentioned leitmotif. Commitment decisions may smoothly discipline the undertakings concerned and enable the Commission better organize its enforcement priorities. In addition, such decisions are speedier, less costly and allow more flexible remedies.
Nevertheless, commitment decisions may bear significant disadvantages. The required level of investigation and detail of a commitment decision is lower in comparison to Article 7 decisions. The Commission has not advanced a principled approach, since it has not issued guidelines, except the general Antitrust Manual. Moreover, the “commitment path” may incur delays in full-fledged antitrust investigations (in case of unsuccessful commitments), reduce Commission’s opportunities to have contentious legal issues clarified by the Court (Von Papp pp. 962-966) and have a limited deterrent effect on third-parties. In this setting, ECJ’s judgment in Alrosa, which significantly impaired the judicial review of commitment decisions (especially, paras 41-50) should be deemed as creating an unsatisfactory area of law.
In addition, attention should be paid to the fact that a commitment decision does not contain a finding of an infringement (as decisions under article 7 of the Regulation), but merely concludes that “there are no longer grounds for action” by the Commission. This feature of the commitment decisions deters the Commission from engaging in a restorative dialogue with the undertaking concerned seeking to “overcome offenders’ rationalizations and neutralizations of their wrongdoing”. Furthermore, many competition breaches may end up to “private settlements”. Therefore, there is a risk for the Commission to impair the legitimacy of competition law via such a procedure. To put it differently, if commitment decisions lead to “abandoning the struggle for law”, the above-mentioned compliance enterprise of responsive regulation may fade away.
Therefore, commitment procedure should be applied in a strict manner: the Commission should set forth authoritative guidelines in relation to its approach, adopt specific principles of application, avoid issuing a commitment decision on novel issues, where there is no precedents or a clear theory of harm, refrain from accepting commitments in case of a hardcore restriction, offer reasonable justification of its decisions and preserve an appropriate balance between commitment and infringement decisions.
I share many of the concerns expressed by Wagner-Von Papp on the consequences of the ECJ’s decision as regards the necessary extent of judicial review, the principle of proportionality in Article 9 procedures and the danger of forgetting about the rule of law. In my view, the ECJ stresses the contractual nature of commitment decisions so that the possibility of looking into the proportionality of the commitments presented by the concerned undertakings is reduced, insofar as the agreement is thought to be a safeguard effective enough against disproportionate commitments.However, when the effects of these agreements go beyond the sphere of interest of the contracting parties to reach third parties’ interests or public interests, their contractual nature somewhat fades, while the normative dimension reappers. This public law dimension cannot be so easily erased, and calls for stricter controls on the proportionality and content of the commintments.
In addition to this, the general rule in contract law is that of res inter alios acta and the principle of relativity of contracts, but sometimes contracts can have effects on third parties’ interests. In this case, the consentment of the concerned third party is generally required, even when they have a favorable effect (article 1257 of the Spanish Civil Code).
This is why I think the ECJ should have better taken into account Alrosa’s interests and the normative effects of commitment decisions in order to guarantee the proportionality of their content.
I have two quick points to make:
My first point reformulates what Wagner-von Papp already points out in his article: There is an inherent tension between commitment decisions and private enforcement. On the one hand the ECJ gave with the Commission with the Alrosa judgment and incentive to rely more heavily on commitment decisions than on formal infringement proceedings. This might lead to an increase of commitment decisions vis-à-vis formal proceedings (is this proven by stats?). On the other hand the Commission is heavily promoting private enforcement of competition rules by proposing a Directive on private damages actions “to remove the main obstacles standing in the way of effective compensation, and guarantee a minimum protection for citizens and businesses, everywhere in the EU” (wording from DG comp webpage). How ironic if the Commission itself might make it at the same time harder for third parties to enforce their rights to compensation for antitrust violations if it chooses to enforce EU competition rules through commitment decisions and not through formal decisions, which might be the necessary basis for a private enforcement action.
My second point relates to whether commitment decisions could be considered a form of responsive regulation. Looking at Ayres and Braithwaite’s pyramid, commitment decisions could be considered a form of cooperation (or persuation as put by Jotte). What happens however if the top of the pyramid is missing in competition law? There does not seem to be a severe enough sanction under EU competition law equal to “corporate capital punishment” as put by Ayres and Braithwaite’s chapter 2 conclusion… Furthermore I wondered whether cooperation can function in the same way as envisaged by Ayres and Braithwaite, if the underlying regulatory framework, is extremely vague, as is the case with competition law. I would imagine that the US regulation for nursing homes is much more wordy, explicit and comprehensive than what is offered by Arts 101 and 102 TFEU. Cooperation might then be made very difficult because of diametrically opposed understandings of the same law by regulator and regulatee (Parker makes that argument). Well, and who has the authority to specify what the law is? Either the legislator or courts. If courts take then a hands-off approach, we arrive at the problematic situation posed by Alrosa. Would the responsive regulation model then collapse for EU competition law enforcement?