The European Commission is about to gain a new investigative power through the Single Market Information Tool (SMIT). The SMIT will allow the Commission to request information (including factual market data or fact-based analysis) from private firms or trade associations when the Commission initiates or substantiates infringement proceedings against one or more Member State(s) that may have failed to fulfil an obligation under the applicable Single Market legislation. This post will discuss the background of the SMIT, its purported rationale, and critically reflect on the powers granted to the Commission under the SMIT.
The Commission is at pains to clarify that the SMIT initiative does not aim to create new enforcement powers allowing it to pursue infringements of Union law in the Single Market area against individual market participants. That said, the Single Market rules can be infringed by either Member States or private companies. Therefore, companies responding to such information requests will not only incur administrative and financial burdens, but they will also have to be careful not to incriminate themselves in doing so, as we will see below.