The answer to the question posed in the title seems evident, if one looks at the function of the effect on trade between Member States within the framework of EU competition law. Simply put, and this is the essence of the notion, it aims to regulate the relationship between EU and national competition law, in particular it aims to provide direction for national competition authorities whether EU competition should be applied in a given case. If the effect on trade between Member States exists, national competition authorities shall apply EU competition law; if it does not, they do not have to.
The affectation of inter-state trade clause, is, therefore, a preliminary issue to be decided by national competition authorities before they decide on the merits of the case.
This is the original reading of the notion, however, the Supreme Court of Hungary (ʽCuria’) has interpreted the question in another way in an Article 101 TFEU case. Without presenting and analysing the details (facts or legal arguments) of the case, one sentence of the decision gives rise to some concerns. The key question during the procedure was whether the market share of the undertaking exceeded 5%. According to the Curia and the undertakings concerned, the Hungarian Competition Authority did not prove it to the necessary extent that it did. But what was the necessary extent in the Curia’s opinion?
In the present case, the Authority has obtained information on the market from more than 30 market players, and it concluded that on the relevant market, the undertaking’s market share exceeded 5%, therefore the effect on trade between Member States existed to an appreciable extent. That is to say, the non appreciably affecting trade-rule (the NAAT-rule) does not apply. Based on this, the Authority applied EU competition law.
In this recent judgment of the Curia (judgment Kfv.IV.37.739/2021/12), within the framework of its analysis on the effect on trade between Member States, the Curia whipped out one of its earlier holdings that the competition authority is required to establish a higher standard of proof than the general burden of proof imposed on public authorities in order to draw a reasonable conclusion as to the existence of an infringement. With this, the Curia connected the proving of the effect on trade between Member States with the general standard of proof applicable in competition cases. The general evidentiary standard in Hungarian competition law to establish a substantial infringement of law is close to the standard ʽbeyond any reasonable doubt’. In principle, and it has been held several times in competition cases by the reviewing courts, the competition authority is not required to prove the violation of competition law to the same extent as it is necessary in criminal proceedings, but the standard expected from the authority is quite close to it. This derives from the quasi-criminal nature of competition proceedings. In practice, the difference between these standards of proof is hard, if not impossible, to tell exactly.
In sum, the consequence of the Curia’s judgment is as follows: in order that it could apply EU competition law in its proceedings, the Hungarian Competition Authority is required to prove the effect on trade between Member States beyond any reasonable doubt. Quite a difficult task in connection with an issue that is not about any substantial infringement of law.
The Curia’s decision „lifted up” the question on applicable law to the same level as the infringement itself, which may be an excessive requirement for a choice of law criterion (i.e. it does not show a direct link to the infringement). The application of EU law in competition law does not imply a stricter assessment than that of the Hungarian law. In fact, in the context of Article 101, it is the other way around: there is harmonisation and Hungarian law cannot be stricter than EU law. That is, the requirement to prove the applicable law beyond any reasonable doubt can be read in a way that the application of EU law in Hungarian competition enforcement has been made more difficult by this judgment (despite that the Hungarian rules on anti-competitive agreements shall not be stricter than Article 101 TFEU). Because of the harmonisation of Article 101, if the Authority applies Hungarian law, it shall also apply EU law, as the European Court of Justice has ruled in the Hungarian Allianz case.
The judgment’s further blemish is that the Curia declared this holding as a principle, that is to say, it shall be applied by courts in future cases. It is not clear now what the result of requiring the standard of proof ʽbeyond any reasonable doubt’ in relation to the inter-state trade affectation clause will be in cases proceeding on an EU legal basis (of course, beyond an increase in the administrative burden imposed on the national competition agency).
