The Implications of Menarini
Marco Bronckers
GCLC / 8 December 2011
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Background
Do fundamental rights make a difference for EU
competition law?
• Old question
• New answers after Lisbon?
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Background (2)
• Growing recognition that ECHR was relevant
▫ but was ECtHR case law strictly followed?
▫ now Charter instruction
• Growing recognition that comp fines are “criminal”
under Art. 6 ECHR
▫ but how “criminal” are they (Jussila 2006)
▫ what are the implications?
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Jussila para. 43
• While…the requirements of a fair hearing are the most strict in the sphere
of criminal law, the Court would not exclude that in the criminal sphere the
nature of the issues to be dealt with before the tribunal or court may not
require an oral hearing…there are criminal cases which do not carry any
significant degree of stigma. There are clearly “criminal charges” of
differing weight. What is more, the autonomous interpretation adopted by
the Convention institutions of the notion of a “criminal charge” by
applying the Engel criteria have underpinned a gradual broadening of the
criminal head to cases not strictly belonging to the traditional categories
of the criminal law, for example administrative penalties…customs
law…competition law…Tax surcharges differ from the hard core of
criminal law; consequently, the criminal-head guarantees will not
necessarily apply with their full stringency.
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Menarini judgment
• Italian case, relevant to EU law
• ECtHR confirms criminal character of comp law
fines
• ECtHR accepts administrative enforcement,
provided “full jurisdiction” of courts to review
• ECtHR satisfied with review in this case
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Criticisms
• The dissent: the context suggested too much
deference to administration
▫ but see ‘bridging’ concurring opinion
• Questions left open:
▫ how stringent will Art. 6 disciplines be (Jussila 2006)?
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Implications: standard of review
• ECtHR: “full jurisdiction”
▫ must cover all points of fact and law
▫ must be able to reformulate (or simply quash?) admin
findings
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Implications: standard of review
• Art. 263 TFEU: “legality review”
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lack of competence
infringement of an essential procedural requirement
infringement of…any rule of law
misuse of powers
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Implications: standard of review
• Art. 261 TFEU: courts can be given “unlimited
jurisdiction” with regard to penalties
• Art. 31 Reg. 1/2003: CJEU shall have “unlimited
jurisdiction” to review decisions imposing fines; it
may “cancel, reduce or increase” fines
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Implications: standard of review
Is there obstacle in the TFEU against “full jurisdiction”
required by ECtHR?
• certainly not in “unlimited jurisdiction”
▫ but does this cover actual finding of infringement?
• probably not in “legality review”
▫ Art. 263 not as restrictive as ECSC-predecessor
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Implications: standard of review
Is there obstacle in the CJEU case law against “full
jurisdiction” required by ECtHR?
• the problem is “complex economic assessments”
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procedural errors
inadequate reasoning
inaccurate statement of fact
manifest error of assessment
misuse of powers
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Implications: standard of review
How to overcome the case law obstacle?
• “marginalize marginal review”
▫ reduce number of complex assessments
▫ adapt formula to reflect actual intensity
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Implications: standard of review
New formula?
• In a legality review “the Courts cannot use the Commission’s
margin of discretion…as a basis for dispensing with the
conduct of an in-depth review of the law and of the facts.”
• “The review of legality is supplemented by the unlimited
jurisdiction…”
KME 8 December 2011, paras. 102 & 103.
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Implications: standard of review
Echo of Menarini’s concurring opinion?
• “…although the General Court repeatedly referred to the
‘discretion’, the ‘substantial margin of discretion’ or the ‘wide
discretion’ of the Commission, including in paragraphs 35 to
37, 92, 103, 115, 118, 129 and 141 of the judgment under
appeal, such references did not prevent the General Court
from carrying out the full and unrestricted review, in law and
in fact, required of it.”
KME 8 December 2011, para. 109.
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Implications: standard of review
A more fundamental approach to “full jurisdiction”:
• eliminate “complex economic assessments”
▫ is there room for any admin discretion in defining criminal
infringements (Art. 6 and 7 ECHR)?
• confirm that courts can reformulate infringement
findings
• make appeals against fines suspensive
▫ also consider presumption of innocence (Art. 6.2 ECHR)
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Other implications
• Menarini underscores direct relevance of ECHR to
competition law proceedings
• Consider also other pending cases before ECtHR
▫ Finnish case- questioning absence of cross-examination of
witnesses
▫ Dutch case– questioning parental liability presumption
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Example: parental liability
• Parent presumed to be liable for conduct 100%
subsidiary (Akzo 2009)
• Rebuttal must show no parental influence generally in
subsidiary’s conduct
▫ not just in anti-competitive behavior
• No rebuttal to date has ever been accepted
• Recently, COM’s reasons for rejecting rebuttals have
been criticized (Air Liquide, Grolsch, Elf Aquitaine 2011)
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Example: parental liability (2)
• ECtHR case law (Salabiaku 1988) on presumptions:
▫ reasonably serve public policy goal
▫ may not be automatic
▫ effective rebuttals must be available
• Compare other instances where corporate veil is
pierced (tax; tort; human rights)
▫ unusual
▫ with rebuttals
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Example: parental liability (3)
• Does “economic unit” concept justify exceptional
approach in competition law?
• Is fine increase proportionate?
• Is parental liability as a rule necessary?
• In any event: COM to identify acceptable rebuttals
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Draft, 25 Nov 2011
Conclusion
After Menarini,
no more business as usual
for EU competition law