DUE PROCESS IN EU ANTITRUST PROCEEDINGS
Comments on and Analysis of the European Commission’s and EU Courts’ Antitrust Proceedings
DISCUSSION PAPER
Prepared by the ICC Commission on Competition
Summary:

Analysis of current EU antitrust proceedings

Commission's Explanatory Note on inspections

Information sharing among competition authorities
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Introduction
1.1.
In March 2010, ICC had commented on due process in response to, inter alia, DG
COMP’s consultation in relation to Best Practices in antitrust proceedings. ICC
believes that its paper on due process needs to be updated in light of the many
developments in the practice of DG COMP and of the Courts in Luxembourg in the
intervening four years.
1.2.
We continue to believe that it is essential that a fundamental review of due process
and procedural fairness in EU antitrust cases is formally carried out (in spite of or
particularly because of the widely debated Menarini case of the European Court of
Human Rights). This is not to impugn the professionalism, dedication and commitment
of the talented staff at DG COMP, the Commission’s Legal Service or the European
Courts. Yet, ICC believes that the European Commission’s procedures for enforcing
antitrust law and the General Court’s practices in reviewing antitrust decisions are
currently inadequate to guarantee procedural fairness; they may even reduce the
prestige of the institutions as antitrust enforcers and the acceptability of the important
competition policy objectives they are pursuing. To maintain the exceptional success of
the European Commission in enforcing antitrust law, its own practices need to be the
best in the world and subject to minute judicial review, such that all stakeholders are
convinced that those procedures are robust, fully in line with all safeguards of the
rights of the defence and incapable of being politically influenced. This is why due
process and scrupulous attention to procedural fairness are imperative if justice is not
only to be done, but also seen to be done.1
1.3.
The key features of a competition regime that the business community requires are
certainty, predictability, consistency, and confidence in the process. Companies doing
business in Europe want competition rules which are strong but fair. The business
community desires the Commission to have the best possible procedures – and for the
Commission to adopt procedures which are the benchmark and which compare
favourably to global best practices. The growing perception of unfairness of the
Commission’s and EU courts' competition procedures is something that the business
community therefore regrets.
1.4.
The European Commission is made up of 28 experienced political figures, one from
each Member State. In most areas of EU law, it acts as the EU executive and as the
draftsman of new EU legislation. Yet in the antitrust field, it also acts as investigator,
prosecutor and adjudicator, and imposes enormous criminal sanctions for antitrust
infringements. We have no doubt that if the EU were to put in place antitrust rules
today, starting with a clean slate, it would design the decision making process
differently.
1.5.
We therefore believe DG COMP should not merely look at continually improving Best
Practices in existing procedures, but that they (and indeed the EU institutions as a
whole) should address a wider question: is more fundamental reform of EU institutions
and particularly of EU antitrust procedures desirable? We believe it is not only
desirable, but inevitable (see section 2).
“[J]ustice should not only be done, but should manifestly and undoubtedly be seen to be done”: R v. Sussex Justices, ex
p McCarthy [1924] 1 KB 256, 259 per Hewart LCJ.
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2.
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In this context, ICC also would like to briefly comment on the Commission's
Explanatory Note on Inspections (section 3) and on the information sharing among
competition authorities (section 4).
Analysis of due process in current EU antitrust proceedings
2.1. Current EU antitrust proceedings are not in line with the European Convention on
Human Rights (ECHR)
2
3
4
5
6
7
8
9
10
11
2.1.1.
The ECHR guarantees fundamental rights of natural and legal persons involved in
proceedings before an authority of a signatory state. These rules apply throughout the
EU as all 28 Member States are signatories to the ECHR, as the Charter of
Fundamental Rights of the EU (the Charter) requires that the rights recognised in it be
given the same meaning and scope as under the ECHR,2 and even more so as the
European Union itself will soon accede to the ECHR as Article 6(2) Treaty on
European Union stipulates.
2.1.2.
Article 6(1) ECHR sets specific minimum due process requirements that must be met
before criminal punishments can lawfully be imposed. These requirements in criminal
proceedings include the right to a public hearing3 before an independent and impartial
tribunal4 at first instance5 with the opportunity inter alia to give evidence in one’s own
defence,6 hear the evidence of the prosecution7 and examine and cross-examine the
witnesses.8 Proceedings must not exceed a reasonable time.9 This principle of
effective judicial protection also is a general principle of European Union law to which
expression is given by Article 47 of the Charter and which corresponds, in European
Union law, to Article 6(1) of the ECHR,10
2.1.3.
After a long debate, it is generally accepted by now11 that when penalties are imposed
for violations of the EU antitrust rules, these penalties constitute a "criminal charge"
Article 52(3) of the Charter of Fundamental Rights provides: “In so far as this Charter contains rights which correspond
to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning
and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent
st
Union law providing more extensive protection.” Further, since the entry into force of the Lisbon Treaty on 1 December
2009, the Charter of Fundamental Rights has the same legal value as the Treaties themselves; see Article 6(1) of the
TEU provides that: “The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental
Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have
the same legal value as the Treaties.” (Emphasis added.) See also recently Court of Justice of the EU, judgment of
18July 2013, Case C-501/11 P, Schindler, at para 32.
Fredin v Sweden, [1991] EHRR 784, para. 21.
Campbell and Fell v United Kingdom, [1984] EHHR 165, para. 78.
Findlay v. the United Kingdom,[1997] EHRR 221, para. 79.
Hulki Gunes v Turkey, App. 28490/95, Judgment of 19 June 2003.
Ekbatani v Sweden, [1988] EHRR 504, para. 25.
Isgro v Italy, judgment of 19 February 1991, Series A, No 104.
Eckle v Germany, [1982] EHRR 1, para. 76.
Court of Justice of the EU, judgment of 18July 2013, Case C-501/11 P, Schindler, at para 36.
See, e.g., C. Bellamy, "ECHR and competition law post Menarini: An overview of EU and national case law, eCompetitions, N°47946, 5 July 2012; E. Morgan de Rivery/E. Lagathu/E.Chassaing, "EU Competition Fines and
Fundamental Rights: Correcting the Imbalance", European Law Reporter 2012, 190; Opinion of Advocate General
Sharpston of 11 February 2011 in Case C-272/09 KME Germany and Others v Commission, para 64; W. Wils, “The
Increased Level of EU Antitrust Fines, Judicial Review, and the European Convention on Human Rights”, [2010] World
Competition 5; F. Castillo de la Torre, “Evidence, Proof and Judicial Review in Cartel Cases”, [2009] World Competition
505; I. Forrester, “Due Process in EC competition cases: a distinguished institution with flawed procedures", [2009]
European Law Review 817; Jürgen Schwarze, Rainer Bechtold and Wolfgang Bosch, Deficiencies in European
Community Competition Law, Stuttgart 2008; Opinion of Mr Vesterdorf, acting as Advocate General, of 10 July 1991 in
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within the meaning of the ECHR. This has recently been confirmed by the European
Court of Human Rights (ECtHR) in the case Menarini, referring to a number of
precedents in that respect12, and by the EFTA Court in the case Posten Norge.13 An
obvious and indispensable consequence to be drawn from these precedents is that the
guarantees of due process set out in Article 6(1) ECHR, in particular the right to be
heard before an independent and impartial tribunal at first instance, fully apply. If that
consequence were not drawn, the categorization of antitrust fines as criminal sanctions
would be meaningless because due process guarantees would then be open to
arbitrary treatment.
12
13
14
15
2.1.4.
However, some authors, notably from inside the European Commission14, disagree.
According to them, cartel investigations comply with the guarantees of Article 6(1)
ECHR if the sanction decisions can be appealed before a Court that has full
jurisdiction. At first sight, it seems that these authors have received some support from
the Menarini decision of late 2011. Menarini Diagnostics S.R.L. had complained that
the Italian proceedings leading to a fine violated the fair trial principles of Article 6
ECHR, given that the decision of the Autorità Garante della Concorrenza e del Marcato
had not been reviewed closely enough by the Italian Courts on appeal. On the merits,
when assessing whether the administrative decision was subject to review by a Court
having “full jurisdiction”, the ECtHR looked at the review of the fining decision actually
undertaken in two instances by Italian administrative Courts, including the Italian
Council of State. The majority in Menarini found that these domestic Courts, notably
the Council, had gone beyond a “simple legality control”, and had therefore exercised
“full jurisdiction”.15 On closer scrutiny though, this decision is far from being convincing
and can hardly be construed in such a broad manner as to have resolved one of the
key issues of due process once and for all.
2.1.5.
It is true that violations of some guarantees of Article 6(1) ECHR can frequently be
cured by an appellate instance with full jurisdiction. Yet according to the long standing
(pre-Menarini) case law of the ECtHR, this cure is to be applied only most exceptionally to the most fundamental right, namely the right to an independent and impartial
tribunal at first instance. In its leading decision in De Cubber, the ECtHR had to decide
whether it would infringe the right to an independent and impartial tribunal if, in the
same case, the same person were to successively exercise the function first of
investigating judge and then of trial judge of the first instance Oudenaarde Court. This
was common practice under Belgian law at the time. The ECtHR first recalled that "a
Joined Cases T-1/89 to T-4/89 and T-6/89 to T-15/89, Rhône-Poulenc and Others v Commission, [1991] ECR II-869 at
885; Opinion of Advocate General Léger of 3 February 1998 in Case C-185/95 P, Baustahlgewerbe v Commission,
[1998] ECR I-8422, para. 31; Judgment of 8 July 1999 in Case C-199/92 P, Hüls v Commission, [1999] ECR 4287, para.
150.
ECtHR, Judgment of 27 September 2011, A Menarini Diagnostics SRL v Italy, paras 38-44.
EFTA Court, Judgment of 18 April 2012, Case E-15/10, para 88: "Having regard to the nature of the infringements in
question and to the potential gravity of the ensuing penalties, it must be held that the proceedings at hand fall, as a
matter of principle, within the criminal sphere for the purposes of Article 6 ECHR."
Wils, op. cit.; pp. 12-19; Castillo de la Torre, op. cit., pp.570-572; W. Wils, The compatibility with fundamental rights of
the EU antitrust enforcement system in which the European Commission acts both as investigator and as first-instance
decision maker, World Competition, Volume 37, March 2014, 1-19. It should be noted though that this view is not
uniform. Cf., for instance, Georg-Klaus de Bronett, former member of DG Competition, The Legality of the recent fining
practice of the Commission for infringements of Article 23 (1) of Regulation No. 1/2003, WuW 2012, 1140 et seq.;
Plädoyer für eine Reform der Aufgabenverteilung zwischen der Kommission und dem Gerichtshof der EU bei der
Anwendung der Art. 101 und 102 AEUV in Einzelfällen, ZWeR 2012, 157 et seq.
ECtHR, Judgment of 27 September 2011, A Menarini Diagnostics SRL v Italy, paras 58 et seq.
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restrictive interpretation of Article 6(1) – notably in regard to observance of the
fundamental principle of the impartiality of the Courts – would not be consonant with
the object and purpose of the provision, bearing in mind the prominent place which the
right to a fair trial holds in a democratic society within the meaning of the Convention",
and then held with remarkable clarity:16
"At the hearings, the Commission's Delegate and the applicant's lawyer raised a
further question […]: had not "the subsequent intervention" of the Ghent Court of
Appeal "made good the wrong" or "purged" the first-instance proceedings of the
"defect" that vitiated them? […] The possibility certainly exists that a higher or the
highest Court might, in some circumstances, make reparation for an initial violation of
one of the Convention's provisions […]. The circumstances of the present case,
however, were different. The particular defect in question did not bear solely upon the
conduct of the first-instance proceedings: its source being the very composition of the
Oudenaarde criminal Court [i.e. the first instance], the defect involved matters of
internal organization and the Court of Appeal did not cure that defect since it did not
quash on that ground the judgment [of the first instance] in its entirety." [emphasis
added]
The judgment confirmed that in criminal proceedings each instance, including the first,
has to be constituted of an independent and impartial tribunal. This has explicitly been
confirmed in the Findlay judgment.17 The reason is obvious: the right to an independent
and impartial tribunal is so fundamental for the safeguarding of human rights that it has
to be complied with at each instance, and most importantly at the first instance. If this
were not the case, the inevitable "prosecutorial bias" of the partial authority in the first
instance18 will have such a strong impact that the deficiencies and flaws cannot be
remedied at the second instance (see in more detail at section 2.1.14 below). The De
Cubber decision had a far-reaching impact on various signatory states of the ECHR in
that they had to reform their criminal procedure laws. As a result, it would seem
obvious today that for all signatory states it would constitute an infringement of
Article 6(1) ECHR if a prosecutor were to hear later as a judge a case that he himself
had investigated earlier.
2.1.6.
The strict rule and general application of De Cubber requiring an independent and
impartial tribunal at each instance including the first is subject to only one limited
exception: The ECtHR's Öztürk decision – which involved a fine of DEM 60 for causing
a traffic accident - established the so-called "minor offences" exception. The Court held
the following:19
"Having regard to the large number of minor offences, notably in the sphere of road
traffic, a Contracting State may have good cause for relieving its Courts of the task of
their prosecution and punishment. Conferring the prosecution and punishment of minor
offences on administrative authorities is not inconsistent with the Convention provided
16
17
18
19
ECtHR, Judgment of 26 October 1984, De Cubber v Belgium, para 30 in fine and para 33.
ECtHR, Judgment of 25 February 1997, para 79.
This is a neutral and objective statement related to human nature and not meant to blame any individual at an authority.
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 56. The complaint of Mr. Öztürk was in fact directed
against paying the interpreter's fees of some DEM 63.90 in the proceedings which was, in his view, not compatible with
Article 6(3)(e) ECHR according to which everyone charged with a criminal offence has the right to have the free
assistance of an interpreter if he cannot understand or speak the language used in Court.
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that the person concerned is enabled to take any decision thus made against him
before a tribunal that does offer the guarantees of Article 6 [...]." [emphasis added]
2.1.7
The genesis of this exception should be assessed in the context of the historic
development of the ECtHR's case law. The ECtHR had continuously expanded the
notion of "criminal charge" to cover every punitive or deterrent sanction irrespective of
the amount of the fine imposed.20 If the ECtHR had applied its De Cubber judgment
with all severity, it would no longer have been possible for administrative bodies to
impose any kind of minimal fines, including minor fines for traffic, tax, or customs
offences. It is obvious that it would have placed a very high burden on signatory states
if they had been obliged to install independent and impartial first instance Courts for
these minor offences. The ECtHR has summarized the legitimate considerations of the
Contracting States in Öztürk as follows:21
"By removing certain forms of conduct from the category of criminal offences under
domestic law, the law-maker may be able to serve the interests of the individual (...) as
well as the needs of the proper administration of justice, in particular in so far as the
judicial authorities are thereby relieved of the task of prosecuting and punishing
contraventions – which are numerous but of minor importance – of road traffic rules.
The Convention is not opposed to the moves towards 'decriminalisation' which are
taking place – in extremely varied forms – in the member States of the Council in
Europe. (...) Nevertheless, if the Contracting States were able at their discretion, by
classifying an offence as 'regulatory' instead of criminal, to exclude the operation of the
fundamental clauses of Articles 6 and 7, the application of these provisions would be
subordinated to their sovereign will."
20
21
22
23
24
2.1.8
Therefore, the ECtHR found it wise to devise a limited exception to the De Cubber rule.
However, this exception only applies to minor offences occurring in large numbers. In
Öztürk, the ECtHR reported that, according to the German Government, each year in
the Federal Republic of Germany there were 4.7 to 5.2 million decisions imposing a
fine (Geldbusse) and 15.5 to 16 million warnings accompanied by a fine
(Verwarnungsgelder)22. It is common to the case law regarding minor offences that the
discretion of the competent administrative bodies is very limited both regarding the
elements of the offence and its legal consequences. Fines are regularly imposed
based on a pre-defined general tariff. Hence, as the ECtHR put it in Jussila, these
cases "do not carry any significant degree of stigma."23
2.1.9
Antitrust cases with fines of millions or even billions of Euros cannot be regarded as
minor offences in this sense. 24 The punishments of the European Commission have by
now become so severe and receive such wide publicity that they inevitably constitute a
Whether a sanction constitutes a criminal charge is assessed based on the so-called Engel criteria; see ECtHR,
Judgment of 8 June 1976, Engel et al v The Netherlands, para 82.
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 49
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 40
ECtHR, Judgment of 23 November 2006, Jussila v Finland, para 43.
The EFTA Court in Posten Norge explicitly held in that respect (at para 90):"Having regard to the nature and the severity
of the charge at hand, the present case cannot be considered to concern a criminal charge of minor weight. The amount
of the charge in this case is substantial [EUR 12.89m] and, moreover, the stigma attached to being held accountable for
an abuse of a dominant position is not negligible."
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considerable stigma for the company concerned.25 There is a strong stigma on
infringing companies and their managers.26To antitrust officials, there is no difference
between a manager accused of fraud and a manager "cheating" in a cartel to the
disadvantage of numerous buyers or consumers.27 Contrary to offences that led to the
Öztürk exception, the number of cartel cases of the European Commission per year is
fairly limited (six decisions in cartel cases on average in the years 2008-2012) and
fines cannot be said to be based on a general tariff. Further, antitrust cases often
involve a complex set of economic and technical facts that are often highly disputed.
Therefore, antitrust cases are much more comparable to white collar criminal offences
such as fraud or embezzlement for which it is undisputed that the De Cubber rule
applies. Nobody would seriously suggest today that in fraud cases the roles of
investigator, prosecutor, judge and jury should all be ascribed to the same body. Yet in
antitrust cases the European Commission does act as investigator, prosecutor, judge
and jury.28
2.1.10
A simple comparison may help illustrate the situation: let us assume that in a lengthy
and complex criminal trial, e.g. for fraud, the prosecutor also had the right to render the
judgment. After years of investigation, the prosecution may know the intricate set of
facts very well but inevitably there will be a prosecutorial bias in the prosecutor's
judgment. (If it were otherwise, far fewer cases in the actual criminal law practice
would be set aside or reversed in Court.) In our hypothetical case, the prosecution's
charge would effectively constitute the judgment at first instance, admittedly with a
right to appeal. Nobody would accept such a blatant violation of the Convention rights
in a criminal trial.
2.1.11
Allegedly, the ECtHR's Menarini29 judgment in September 2011 allowed exactly this
set-up for competition law infringements. The case concerned a fine of € 6 million
imposed by the Italian Competition Authority in 2003 on Menarini for alleged price
fixing. Menarini asserted that this fine had to be considered a criminal sanction within
the meaning of Article 6 ECHR. Furthermore, Menarini complained that the fine
violated the fair trial principles of Article 6 ECHR given that the Authority’s decision had
25
For instance, see specific web page on DG COMP website regarding the Intel case with quote from the Commissioner
and video excerpt of her press conference, available at http://ec.europa.eu/competition/sectors/ICT/intel.html or the
press release in the Power Transformers case, where the Commissioner stated “The Commission has now put an end to
this rip-off by the self-appointed "Gentlemen"”, available at
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1432&format=HTML&aged=0&language=EN&guiLangu
age=en.
26
In Jussila v Finland, Judgment of 23 November 2006,a case about a tax surcharge of approx. EUR 300.--, the ECtHR
held in para 43 that there are "criminal cases which do not carry any significant degree of stigma". This is true for minor
offences in the sense of Öztürk and other cases, including tax surcharges, but this is not true for cartel cases. To the
extent that the ECtHR in Jussila mentions competition law as an example for "cases not strictly belonging to the
traditional categories of the criminal law" (also in para 43), this is (i) an obiter dictum only, (ii) refers to the case Société
Stenuit v. France of 27 February 1992 which has been withdrawn and concerned a fine of approx. EUR 7,620.—and (iii)
does not take into account that competition law infringements today carry a highly significant degree of stigma.
27
See, for instance, then Commissioner for competition Neelie Kroes in her press release of November 12, 2008 in which
she stated as follows with regard to the car glass cartel and the record fine at the time: "The overall fines are high
because of the large market (worth two billion euros in the last year of the cartel), the seriousness of the case, and
Saint-Gobain's earlier offences. The Commission has imposed such high fines because it cannot and will not tolerate
such illegal behaviour. Management of companies that damage consumers and European industry by running cartels
must learn their lessons the hard way – if you cheat, you will get a heavy fine. (...) For this unethical and wholly illegal
behaviour, Saint Gobain has been fined €896 000 000 for 5 years participation in the cartel. This includes an increase of
60% as Saint Gobain is a repeat offender."
28
Cf. N. Hauger & C. Palzer, Investigator, Prosecutor, Judge … and Now Plaintiff? The Leviathanian Role of the European
Commission in the Light of Fundamental Rights, World Competition 2013, 565-583
29
ECtHR, A. Menarini Diagnostics S.R.L. c. Italie, judgment of 27 September 2011.
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not been reviewed closely enough by the Italian Courts on appeal. Overruling Italy’s
objections, the Court agreed with Menarini that the Italian competition law fine, notably
because of its severity, amounted to a criminal sanction within the meaning of Article 6
ECHR. However, on the merits a majority of the Court sided with Italy. It found that the
Italian Competition Authority could lawfully impose a criminal sanction within the
meaning of Article 6 ECHR, as long as this decision was subject to review by a Court
having “full jurisdiction” to examine that decision.
2.1.12
What were the reasons for the ECtHR to come to that conclusion? Following its confirmation that the guarantees of the Convention have to be assessed under the notion of
a criminal charge, the Court briefly noted that the sanction in question was not
imposed by a judge but by the Italian Competition Authority. It then immediately
referred to specific case law (quoting Kadubec v. Slovakia of 1998 and Canady v.
Slovakia of 2004) according to which it is (allegedly) not incompatible with the
Convention for an administrative authority to impose sanctions, as long as the
defendant can appeal the decision to an independent tribunal.30 However, the majority
opinion in the ECtHR's Menarini judgment completely misapplied both of these
precedents by omitting the decisive element of minor offences. In fact, the ECtHR had
stated the following in Canady:
"The Court has previously found that the general character of the legal provisions
governing minor offences under the Minor Offences Act of 1990 together with the
deterrent and punitive purpose of the penalty imposed for their infringement suffices to
show that such offences are, in terms of Article 6 of the Convention, criminal in nature
(...). It recalls that, while entrusting the prosecution and punishment of similar minor
offences [emphasis added] to administrative authorities is not inconsistent with the
Convention, the person concerned must have an opportunity to challenge any decision
made against him or her before a tribunal that offers the guarantees of Article 6 (see
Kadubec v. Slovakia)"31
2.1.13
30
31
32
Taken literally by its wording, the Menarini judgment would entirely reverse the
fundamental De Cubber rule (and its narrowly construed exceptions in, e.g., Öztürk,
Kadubec and Canady32) since it suggests that every criminal sanction (and not only
minor offences) can be imposed at first instance by a (partial and dependent) administrative body as long as it can be appealed before a Court with full jurisdiction. We
doubt that the judges of the Menarini case consciously decided to reverse the long
standing De Cubber rule without even mentioning let alone discussing and distinguishing it. The ECtHR in Menarini completely fails to address the crucial question
whether antitrust proceedings in fact constitute minor offences. The stigma attached to
ECtHR, Judgment of 27 December 2011, A Menarini Diagnostics SRL v Italy, para 58 ."Si confier à des autorités
administratives la tâche de poursuivre et de réprimer les contraventions n’est pas incompatible avec la Convention, il
faut souligner cependant que l’intéressé doit pouvoir saisir de toute décision ainsi prise à son encontre un tribunal offrant
les garanties de l’article 6 […]."
ECtHR, Judgment of 16 November 2004, Canady v. Slovakia, para 31; similarly the judgment of 2 September 1998,
Kadubec v Slovakia,at para. 57.
It should be noted that Kadubec was about an applicant that had been fined 1,000 Slovakian korunas (SKK) under the
Slovakian Minor Offences Act for having disturbed boarders in a spa establishment by his noisy behavior and refusal to
obey police officers. In Canady, the applicant also had been fined 1,000 SKK under the same Minor Offences Act for
having prevented his neighbor from fixing a broken connection of his house pipes to the gas supply in the street. The
Kadubec and Canady examples thus show that the case law cited by the majority opinion in Menarini addresses
exceptions for de minimis sanctions that are by no means comparable to the magnitude of sanctions for serious
infringements of antitrust law.
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the alleged infringement as set out in Jussila (see 2.1.8 and 2.1.9 above), and which
could be used as a good test, is not mentioned either. Moreover, Menarini is not a
judgment by the Grand Chamber, and there is a powerful dissenting opinion.
2.1.14
Judge Pinto de Albuquerque held in his dissenting opinion that the texts governing the
different tribunals, and their judgments, made it clear that the Italian courts could not,
and had not, exercised the full jurisdiction required by Article 6(1) ECHR. Under the
Italian system, fundamental concepts such as the relevant market, abuse of dominance or the notion of agreements restricting competition were effectively outside the
control of the Courts. In the instant case, moreover, the Italian Courts had merely gone
through the motions of reviewing the decisions, often simply repeating the findings of
the competition authority.33 According to Judge Pinto de Albuquerque, that approach
was not compatible with Article 6 (1) ECHR. He rightly summarized this crucial problem
as follows:34
"L'acceptation d'un 'pseudo-droit pénal' ou d'un 'droit pénal à deux vitesses', où
l'administration exerce sur les administrés un pouvoir de punition, imposant parfois des
sanctions pécuniaires extrêmement sévères, sans que s'appliquent les garanties
classiques du droit et de la procédure pénale, aurait deux conséquences inévitables:
l'usurpation par les autorités administrative de la prérogative juridictionnelle du pouvoir
de punir et la capitulation des libertés individuelles devant une administration publique
toute-puissante."35
2.1.15
33
34
35
36
ICC respectfully submits that antitrust violations are far from being of minor importance
in the sense of Öztürk. Some commentators argue that competition law infringements
are not "hardcore" criminal law because in the European Union fines can only be
imposed on the undertakings concerned but not on individuals. This argument is
unconvincing. First, the competition law regimes of some member states do allow for
fines to be imposed on individuals (e.g., Germany) and even for jail sentences (e.g.,
United Kingdom). This strongly corroborates the fact that in the EU infringements of
antitrust law are considered a serious violation warranting severe personal
consequences and not of minor importance, even though the European Commission
itself does not (yet) have the competence to impose sanctions on individuals.36
Second, and more importantly, in many of the cases in which the European
Commission imposes high fines on companies, the managers responsible for the
infringements are liable under their employment contracts and may lose their jobs.
ECtHR, judgment of 27 September 2011, Menarini Diagnostics SRL v Italy, dissention opinion, para 5 and para 7.
ECtHR, judgment of 27 September 2011, Menarini Diagnostics SRL v Italy, dissention opinion, para 9. It should be noted
that judge Albuquerque came to the conclusion that independent and impartial judges with unlimited jurisdiction
therefore must have the last word. However, as set out in this section 2.1, the theoretical possibility of (allegedly) "full
judicial review" cannot and in fact does not solve this fundamental problem.
“Accepting a ‘pseudo-criminal law’ or a ‘two-tiered criminal law’ in which the administration exerts penal power over the
administrated, sometimes imposing pecuniary sanctions that are extremely severe, without the application of the
classical guarantees of law and of the criminal procedure, would have two inevitable consequences: the usurpation of
the jurisdictional prerogative by the administrative authorities to have the power to punish and the capitulation of the
individual liberties in front of an omnipotent public administration.” (English convenience translation)
The EU lacks the competence for criminal law. This is why Article 23(5) Regulation No 1/2003 asserts that fining
decisions taken pursuant to paragraphs 1 and 2 shall not be of a criminal law nature. Yet W. Wils, op. cit. World
Competition 2014, 5-6 continues to quote this article in order to support his classification of antitrust fines as not falling
under the “hard core of criminal law” for which the criminal-head guarantees of Article 6 ECHR do not necessarily apply
with their full stringency. N. Hauger & C. Palzer, op. cit., 573-574 rightly comment that the wording of Article 6 ECHR
does not provide a point of reference for such a differentiation and that procedural efficiency reasons may well justify an
exception for cases of mass administration or minor offences but not for cartel fines because anticompetitive behaviour
is a serious offence.
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Further repercussions could be difficulties in finding another suitable position. The
personal consequences can thus be considerable, even without direct sanctions
imposed on individuals. Third, fines against undertakings are imposing substantial
financial burdens on the affected shareholders, and are therefore ultimately always
targeted (at least indirectly) at individuals. In other words, the fines must be paid by
natural persons even if they are imposed on legal persons. Finally, as the "inability to
pay" cases demonstrate, the fines imposed by the European Commission can lead – in
theory and practice – to the need for restructuring or to bankruptcy, entailing job losses
for employees that quite likely were never involved in the infringement. That also
indicates the need for strict procedural safeguards when imposing fines on
undertakings.
2.1.16
Allowing administrative authorities to impose high fines in first instance antitrust proceedings (contrary to the De Cubber rule) deprives the companies concerned of the
most fundamental defence rights conferred by the ECHR. The theoretical possibility of
an independent review of all relevant facts and circumstances by an appeal tribunal
with unlimited jurisdiction (even assuming it would be in fact fully exercised; c.f. the
discussion under 2.2 below) cannot cure this fundamental defect. In cases involving a
criminal charge it is impossible to fulfil the fundamental guarantee of an independent
and impartial tribunal only on appellate level,37 because there is a fundamental
difference in the mindset of the deciding tribunals. Acting as first instance, a tribunal
must carefully assess all facts and evidence put forward by the prosecution before it
can impose a sanction. It must weigh the evidence and hear witnesses of the
prosecution and the defence. If there remain any reasonable doubts, it cannot impose
a sanction. On appeal, the starting point is completely different. The appellate tribunal
reviews the decision of the first instance, and the review process is limited. The
appellate tribunal may only address the pleas in fact and in law brought forward by the
defendant. The weighing of the evidence is not be undertaken anew but merely
assessed for major flaws or inconsistencies as set forth in the administrative decision.
In any complex case, the difference between the procedural guarantees applying to
each instance therefore matter greatly to the defendant. This is exactly the reason the
exceptions for minor offences must be narrowly construed in order not to jeopardize
the Convention guarantees of Article 6(1) ECHR.
2.1.17. Consequently, antitrust proceedings must comply with the De Cubber rule because
they are not about minor offences. It is clear that this significantly impacts how EU
bodies take decisions in antitrust proceedings. Considerations of efficiency and costs
cannot be given priority if an authority assumes the competence to issue criminal
sanctions, contrary to the guarantees in Article 6(1) ECHR and Article 47 of the
Charter. The ECtHR held this in no unclear terms in De Cubber in response to
Belgium’s argument that requiring an independent and impartial tribunal at first
instance would entail serious consequences for Belgian Courts with limited staff:
"The Court recalls that the Contracting States are under the obligation to organise their
legal systems "so as to ensure compliance with the requirements of Article 6 para. 1
37
Similarly E. Morgan de Rivery/E. Lagathu/E.Chassaing, "EU Competition Fines and Fundamental Rights: Correcting the
Imbalance", European Law Reporter 2012, 193: "Furthermore, once the first instance phase is tainted by impartiality,
one can hardly see how a Court, on appeal, could cure such original sin. In addition, it would also place an unattainable
burden of proof to require the applicant to establish that the substance of the decision itself was tainted by that
impartiality."
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(Article 6-1)" [...]; impartiality is unquestionably one of the foremost of those
requirements. The Court's task is to determine whether the Contracting States have
achieved the result called for by the Convention, not to indicate the particular means to
be utilised."
2.1.18
Allowing the Convention States and the EU to shift antitrust proceedings (by
structuring them as administrative proceedings) to the area of (allegedly) non-hardcore
criminal law, would result in the unacceptable situation characterized in Öztürk as
follows (cf. 2.1.6 above)38:
Nevertheless, if the Contracting States were able at their discretion, by classifying an
offence as 'regulatory' instead of criminal, to exclude the operation of the fundamental
clauses of Articles 6 and 7, the application of these provisions would be subordinated
to their sovereign will."
2.1.19. In conclusion, the normal due process standards established by the ECHR and upheld
by the ECtHR for criminal matters must apply to Commission competition procedures.
The Commission undisputedly is not an independent tribunal and does not provide for
the ECHR guarantees. Since there is no "minor offences" exception available in the
competition law context from the rule that an independent and impartial tribunal must
decide in the first instance, the current Commission procedures do not meet the
required standard. The Menarini decision of the ECtHR is far from being the "panacea"
to the shortcomings of the EU proceedings, as some commentators would like to
argue. It was limited to the specific case under the Italian system (including the full
judicial review actually undertaken), and did not give its blessing to European antitrust
proceedings. Therefore, Menarini must be carefully distinguished from a system in
which, unlike in Italian antitrust proceedings, a college of Commissioners as a political
executive body makes the decision, the level of fines is exponentially higher, and the
courts cannot and in fact do not exercise full jurisdiction with regard to the alleged
infringement (see 2.2 below). It is therefore submitted that it is necessary to change
the current system. ICC thus urges the EU to reorganise its antitrust proceedings in a
manner that is fully compliant with Article 6(1) ECHR and Article 47 of the Charter. This
would foster the rule of law which the EU claims to uphold. The inevitable restructuring
should aim for a system in which the Commission would act as investigating and
prosecuting authority only, and an independent and impartial tribunal would make the
fining decision. That tribunal could be the GC or a new competition court acting as first
instance, at which the Commission would have to present its indictment and to prove
the alleged violations of EU competition law calling for a sanction.39
2.2. EU Courts’ Legality Review does not meet the ECHR Standards
2.2.1
38
39
If one were (hypothetically) to assume that a system of administrative competition law
enforcement is compatible with the strictures of Article 6 ECHR and Article 47 of the
Charter, the review by the Courts of such an administrative fining decision necessarily
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 49.
Such a system would not be entirely novel since the system in Germany is actually such that the fining decision of the
Federal Cartel Office is turned into an indictment if the fined undertaking objects to it. The enforcement competence
shifts from the Federal Cartel Office to the Public Prosecution. N. Hauger & C. Palzer, op. cit., 582-583 come to a similar
conclusion calling the GC to taking its jurisdiction seriously: “Thus the GC would de facto evolve to a Court of Appeal,
really deserving its name, proceeding to its own assessment of the facts gathered by the Commission in the course of its
investigation. Then, however, the power to impose fines might as well be conferred upon the GC.”
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must meticulously observe all guarantees Article 6 ECHR and Article 47 of the Charter
provide for proceedings with criminal charges. This is all the more important in view of
the Commission’s current triple role in competition investigations, as an investigator, a
prosecutor and a judge.40 The (fining) decisions of the Commission therefore must be
“subject to subsequent control by a judicial body that has full jurisdiction and does
provide the guarantees of Article 6 para. 1”.41 In order for a Court to have “full
jurisdiction” within the meaning of the ECHR, the ECtHR held that the judicial body
must have “the power to quash in all respects, on questions of fact and law, the
decision of the body below” – and actually exercise such jurisdiction.42
2.2.2
On the basis of this standard, the GC will have to undertake the first independent
review of the case and act accordingly. This is the very reason why such a two-tiered
system, in the assumed hypothetical scenario, can be in line with the ECHR. ICC
emphasizes once again that such a system would be the exception (Öztürk) to the rule
(de Cubber, cf. sections 2.1.6 and 2.1.7) according to which there must be an independent tribunal in the first instance. Exceptions in cases involving criminal charges
must be construed narrowly. In order to fully provide the guarantees of the ECHR in
the second instance, the EU Courts inevitably must change their mindset (cf. section
2.1.15) when reviewing fining decisions. They must act as if the Commission decision
were only an indictment. To hold otherwise would render the Convention guarantees
meaningless insofar as the EU Courts were to delegate assessment and judgment to
the Commission.
EU Courts lack the legal basis for a full judicial review
40
41
42
2.2.3
Since the EU Courts are not reviewing an administrative decision but a criminal
sanction imposed by the Commission, their review must be undertaken painstakingly,
always bearing in mind the guarantees of Article 6 ECHR and Article 47 of the Charter.
As a matter of fact though, the EU Courts lack the legal basis for such a full judicial
review. In addition, up to now, they do not exercise their jurisdiction to its full extent.
The existing level and depth of review fails to provide the guarantees of Article 6
ECHR and Article 47 of the Charter.
2.2.4
The Court of Justice of the European Union (CJEU) does not share this view and takes
the following position (cf. 2.2.8 below in more detail): "As the review provided for by the
Treaties involves review by the European Union judicature of both the law and the
facts, and means that it has the power to assess the evidence, to annul the contested
decision and to alter the amount of a fine, the Court has concluded that the review of
legality provided for under Article 263 TFEU, supplemented by the unlimited
jurisdiction in respect of the amount of the fine, provided for under Article 31 of
It is worth mentioning in addition that the Commission also acts as legislator and even as plaintiff in actions for damages
based on its own fining decisions.
ECtHR, Judgment of 10 February 1983, Albert and Le Compte v Belgium, para. 29 (emphasis added).
ECtHR, Judgment of 23 October 1995, Schmautzer v Austria, para. 36. See also the later Kyprianou case where the
ECtHR ruled on whether the review by the Cypriot Supreme Court of a condemnation for criminal contempt could cure
the flaws that affected the trial before the lower Court. Noting the absence of retrial of the case because the Supreme
Court was lacking the competence to deal de novo with the case, the ECtHR concluded that the defects were not cured
on appeal. (ECtHR, Judgment of 27 January 2004, Kyprianou v Cyprus, paras 43-46. Subsequently, the Grand
Chamber upheld the judgment of the Chamber and did not overrule the conclusions or the reasoning reproduced above
- ECtHR, Judgment of 15 December 2005 (Grand Chamber), Kyprianou v Cyprus, para. 134.). Similarly ECtHR,
Silvester’s Horeca Service c. Belgique, judgment of 4 March 2004, paras 26-27.
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Regulation No 1/2003 is not contrary to the requirements of the principle of effective
judicial protection which is currently set out in Article 47 of the Charter".43
2.2.5
These arguments are unconvincing because the CJEU attempts to blur the fact that
the predominant review standard of the EU Courts in an action of nullity is a legality
review of the Commission decision. It should be recalled that Article 261 TFEU as legal
basis in the Treaties explicitly restricts the "unlimited jurisdiction" to fines: "Regulations
adopted jointly by the European Parliament and the Council, and by the Council,
pursuant to the provisions of the Treaties, may give the Court of Justice of the
European Union unlimited jurisdiction with regard to the penalties provided for in such
regulations." Article 31 Regulation 1/2003 accordingly states: "The Court of Justice
shall have unlimited jurisdiction to review decisions whereby the Commission has fixed
a fine or periodic penalty payment. It may cancel, reduce or increase the fine or
periodic penalty payment imposed." Yet this seemingly broad mandate does not cover
the Commission’s underlying finding of an infringement44, in particular since the "full
jurisdiction" is explicitly limited to a mere legality review supplemented by the unlimited
jurisdiction concerning the amount of the fine (cf. article 263(1) and (2) TFEU45). In
criminal proceedings, how would a convicted defendant react if he were told that the
independent appellate tribunal could only undertake a legality review of the verdict in
terms of underlying facts, but could review the sentence without any limitation? Even if
the findings of an infringement may be implicitly and partly be reviewed by the EU
Courts, this is not a full judicial review as required by Article 6(1) ECHR and Article 47
of the Charter, particularly if seen in light of the fact that, in the words of the CJEU (see
2.2.5 above), the legality review is carried out "on the basis of the evidence adduced
by the applicant in support of the pleas in law put forward."
2.2.6
C. Bellamy shares this critique and rightly commented as follows: 46
"Article 261 TFEU and its EFTA equivalent simply do not envisage a full jurisdictional
control. Secondly, the argument that the control exercised in practice, irrespective of
the texts, is sufficient to comply with article 6(1) ECHR, is unpersuasive: a situation in
which the decisional practice of the Courts diverges from the texts governing their
jurisdiction is legally unsound. A right as fundamental as the right to a Court of full
jurisdiction cannot be founded on ambiguity, but should be anchored, fairly and
squarely, in the founding texts of the Treaties. Thirdly, whatever gloss may be found in
the jurisprudence seeking to emphasize the intensity of the Court's review over the
facts and law, and the obligation to give reasons, it is simply inherent in the concept of
the control of legality that it is a lesser form than full jurisdiction. Under a control of
legality approach, it is inevitable that the Commission will always retain a substantial
margin of discretion.
43
44
45
46
CJEU, Case C-386/10 P, Chalkor, at para 67; Case C-501/11 P, Schindler, at para 38.
See, e.g., the distinction drawn by AG Sharpston in her Opinion of 10 February 2011 in Case C-272/09 P, KME [2011] at
para. 70.
Under Article 263 TFEU, the Community Courts’ competence is limited to voiding decisions that are illegal, without the
possibility to substitute their own decision to that of the Commission. If a decision is annulled, it is then for the
Commission to take the necessary measure to implement the judgment. The illegality can be found on grounds of lack of
competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law
relating to their application, or misuse of powers (cf. article 263(2). Concurring insofar W. Wils, op. cit., World
Competition Review March 2014, 7-8, 13-14 but wrongly alleging that this legality review meets the “full jurisdiction”
standard of the ECtHR.
See C. Bellamy, "ECHR and competition law post Menarini: An overview of EU and national case law, e-Competitions,
N°47946, 5 July 2012
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2.2.7
The review by the Community Courts and by the GC in particular therefore does not
meet the standard set out in Schmautzer, Kyprianou and other cases of the ECtHR.
The recent Menarini judgment also calls for an unlimited judicial review, including
allowing the European Courts to substitute their own evaluation of the facts for that of
the Commission.47 A mere legality control does not correspond to the required in-depth
review by which the GC should itself assess all evidence, including hearing witnesses
and assessing the credibility of corporate statements against preexisting documentary
evidence. Indeed, the weak legal review restricts the ability of the addressees of the
Commission decision to bring effective challenges to the substance of the infringement
decisions. At the same time, this weakness (or even helplessness) reinforces the
compulsion to make a leniency application or to reach a settlement, sometimes
contrary to better knowledge.
2.2.8
Hence, based on the rules of the TFEU, it seems impossible for the EU Courts to
undertake a full judicial review. In this situation, the EU Courts are left with two options:
Either they accept that the existing rules do not comply with the guarantees provided in
the ECHR and the Charter and therefore quash all fining decisions of the Commission
from the outset. Or, they could live up to the high expectation as truly independent
Courts, adapt their internal rules if necessary, change their mindset and undertake a
full judicial review whilst at the same time meticulously observing the Convention
guarantees. If the CJEU argues that, irrespective of the (at least shaky) legal basis in
the TFEU, the EU Courts in fact would exercise full jurisdictional control in practice
(see section 2.2.4 above), it cannot, unfortunately, be demonstrated on the basis of the
existing case law to date. This shall be illustrated in the following sections.
The Commission's Margin of Discretion is Unacceptable under the ECHR
47
48
49
50
51
2.2.9
The EU Courts have traditionally granted the European Commission a margin of
discretion in respect of “complex economic or technical assessments”. In these
instances, the EU Courts, taking into account “[the] nature [of these evaluations]”48
have confined themselves “to an examination of the relevance of the facts and of the
legal consequences which the Commission deduces therefrom”49 and therefore limited
their review to “checking whether the relevant rules on procedure and on stating
reasons have been complied with, whether the facts have been accurately stated and
whether there has been any manifest error of assessment or a misuse of powers.”50
While the EU Courts are nowadays claiming that they actually exercise full jurisdiction
(see sections 2.2.8 et seq. below) and have abandoned the previous practice, this is
effectively not the case. Instead, in substance, they continue to adhere to the
traditional deferential standards of review.
2.2.10
While in the early days of competition law, the EU Courts seem to have restrained their
marginal review to allow the Commission to design its competition policy51, it now
It is debated whether full jurisdiction within the meaning of Article 6 ECHR requires a power of substitution. Contra E.
Morgan de Rivery, E. Lagathu, E. Chassaing, op. cit., 194, see also T. Bombois, L’arrêt Menarini c. Ialie de la Cour
européenne des droits de l’homme, [2012] Cah. Dr. eur., 541589, 559.
See, e.g., Case 56/64 and 58/64, Consten and Grundig [1966] ECR 299, at p. 347.
See, e.g., Case 56/64 and 58/64, op. cit., p. 347.
See, e.g., Case T-201/04, Microsoft [2007] ECR II-3601, at para. 87.
E.g. case 56/64 and 58/64, op. cit and case C-42/84, Remia [1985] ECR 2545, at paras. 26-27, 34-36, 40-48. See by
contrast, case C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85, A. Ahlström Osakeyhtiö
[1993] ECR I-1307at paras. 43-45, 51-52, 69, 101, 118, 126-127, 135-138, 183-185.. See also E. Morgan de Rivery, E.
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applies to all complicated economic or complex technical issues. In competition law,
the EU Courts have found quite a number of Commission assessments that are key to
an infringement decision to be “complex”. Examples include the definition of product
markets and geographic markets,52 the assessment of exchanges of price
information53 and the tests determining the existence of predatory prices.54 In some
instances, it was even expanded to all “economic assessments, regardless of their
complexity”, like in merger review.55 With such marginal review (referred to above
under 2.2.6), the European Courts seem to have abandoned their review power (or at
least part of it) to the benefit of the Commission,56 although it is not a tribunal within the
meaning of Article 6 ECHR and it combines the triple role of investigator, prosecutor
and judge. Such a marginal review by the EU Courts is far from the “full”, effective
review required by Article 6(1) ECHR to remedy the deficiencies of the Commission
proceedings in the first instance. It is unacceptable that an administrative and also
political body such as the Commission is granted any discretion with regard to
(criminal) liability and sanctions. This amounts to a rather obvious violation of Article
6(1) ECHR. Or, as judge Albuquerque stated more colorfully in Menarini, the system
amounts to "the usurpation of the jurisdictional prerogative by the administrative
authorities to have the power to punish and the capitulation of the individual liberties in
front of an omnipotent public administration."57
The Court of Justice superficially tailored the Legality Review to meet the ECHR
Standards
52
53
54
55
56
57
58
2.2.11
The CJEU seems to have taken note of the implications of the ECtHR’s judgment in
Menarini. Only a few months later, the Court took pains to make the limitations
inherent in a legality review (under Article 263 TFEU) more palatable from a
fundamental rights perspective. According to the Court of Justice, “the Courts must
carry out the review of legality incumbent upon them on the basis of the evidence
adduced by the applicant in support of the pleas in law put forward. In carrying out
such a review, the Courts cannot use the Commission’s margin of discretion – either
as regards the choice of factors taken into account in the application of the criteria
mentioned in the Guidelines or as regards the assessment of those factors – as a
basis for dispensing with the conduct of an in-depth review of the law and of the
facts.”58
2.2.12
Having said this, and having pointed as well to its “unlimited jurisdiction” to review the
Commission’s fines, the Court concluded that the EU Courts provide effective judicial
Lagathu, E. Chassaing, op. cit., 195.
Case T-446/05, Amann & Söhne [2010] ECR II-1255, at para. 136.
Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, Aalborg Cement [2004]
ECR I-123, at para. 279.
Case C-280/08 P, Deutsche Telekom [2010] ECR 0000, at paras. 143-148; Case C-202/07 P, France Télécom [2009]
ECR I-2369, at para. 7.
See E. Morgan de Rivery, E. Lagathu, E. Chassaing, op. cit., citing Case T-48/04, Qualcomm, [2009], ECR II-2029 at
paras. 89, 91, 92.
I. Forrester, A bush in need of pruning: the luxuriant growth of light judicial review, in: Claus-Dieter Ehlermann and Mel
Marquis, eds., European Competition Law Annual 2009: Evaluation of Evidenceand its Judicial Review in Competition
Cases, 2011, Oxford/Portland, Hart Publishing, p. 407.
ECtHR, judgment of 27 September 2011, Menarini Diagnostics SRL v Italy, dissention opinion, para 9.
Case C-272/09 P, KME [2011], at para. 102-103; Case C-386/10 P, Chalkor [2011], notably para. 50-51; Case C501/11 P, Schindler [2013], at paras 33-35.
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protection within the meaning of Article 47 of the Charter. Although the General Court,
in the case under appeal, had referred a number of times to the Commission’s
discretion as being “wide” or “substantial”, according to the Court of Justice this had
not prevented the General Court from engaging in “the full and unrestricted review, in
law and in fact, required of it.”59 Similarly, in a recent appeal the Court of Justice
criticized the deferential language chosen by the General Court in reviewing the
Commission’s calculation of the fine (i.e., leniency discounts), but nevertheless
concluded that the actual review conducted by the General Court was sufficiently indepth.60
2.2.13
This exercise is artificial and has been criticized as purely formalistic. In none of these
cases, “did the Court find that the General Court’s review had not met the standard,
despite the very limited review of certain aspects of the Commission’s decision.”61
Indeed, such an approach is highly unsatisfactory. ICC strongly believes that the EU
Courts are neither sufficiently well-equipped nor really willing yet to exercise the actual
full judicial review required by Article 6 ECHR. Without fundamental changes of the
mindset and the Court's proceedings, the alleged "full" judicial review pays mere lip
service to the guarantees of Article 6 ECHR and Article 47 of the Charter.
Shortcomings of the Current Proceedings at the EU Courts
2.2.14
There are various shortcomings of the current proceedings at the EU Courts, which
illustrate the failure to comply with the requirements of Article 6 ECHR. For instance,
just to mention a few particularly notable facts, the EU Courts only have a limited case
file at their disposal and they lack fact-finding powers.62 It seems rather obvious that
this set-up is flawed from the outset. It is impossible for a Court to undertake a full
review without complete, unabridged case file. Moreover, even an independent Court
cannot establish or assess the facts (or measure them against the required standard of
proof) if it lacks fact-finding tools; instead, it is left with the facts as established by the
Commission. In criminal proceedings, such a set-up would be perceived as an
egregious violation of the ECHR.
2.2.15. Another striking example is the reluctance of the Courts to hear witnesses or to be
assisted by technical experts. According to Article 6(3)(d) ECHR, everyone charged
with a criminal offence has the minimum right "to examine or have examined witnesses
against him and to obtain the attendance and examination of witnesses on his behalf
under the same conditions as witnesses against him". Therefore, if motions to hear
witnesses are categorically dismissed, it is a blatant violation of the ECHR. An
illustrative example in that respect is the recent decision of the GC in Duravit.63 The
plaintiffs had questioned the facts as established by the Commission in its fining
decision regarding the bathroom fittings cartel64 and asked the GC to hear specifically
named witnesses, based on Article 68 Rules of Procedure of the GC and referring to
Article 6(3)(d) ECHR. The GC, however, was reluctant to do so and dismissed all (!)
59
60
61
62
63
64
Chalkor, id., at para. 109.
CJEU, Case C-501/11P, Schindler, judgment of 18 July 2013, at paras. 156-158.
See E. Morgan de Rivery, E. Lagathu, E. Chassaing, op. cit., 195. See also T. Bombois, op. cit., 579, 581 and 582.
See also K. Nordhandler, P. Harrison, “Are Rights Finally Becoming Fundamental?”, [2012] CPI Antitrust Chronicle, 213, 8.
Case T-364/10, Duravit v. Commission, judgment of 16 September 2013
Decision of 23 June 2010, case COMP/39092 – Bathroom fittings
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these various motions with the same stereotyped arguments. It referred to its
discretion in hearing witnesses and repeatedly stated that, based on the subject matter
of the complaint and the Court's files, it is neither required nor appropriate to comply
with the request to hear witnesses.65
65
66
67
68
69
70
71
72
2.2.16
The CJEU as well as the GC assume that the hearing of witnesses is discretionary,
such that the GC is "the sole judge of whether the information available concerning the
cases before it needs to be supplemented".66 Allegedly, this discretion comports with
Article 6(3)(d) ECHR because the defendants do not have an absolute right to present
witnesses.67 Whilst this may be true in the abstract, in practice the Courts’ logic
demonstrates the ineffectuality of the current system: the Courts have established the
rare exception to the rule and then adamantly refused to apply it. It should be recalled
that the GC as independent tribunal is called upon to undertake a "full judicial review".
According to the CJEU, this standard requires that "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".68 Consequently, the GC must not freely
exercise its discretion only in observing the principles of a fair hearing.69 Categorical
dismissals of requests to hear witnesses cannot be reconciled with the guarantee in
Article 6(3)(d) ECHR. In criminal proceedings in which a tribunal acts as first instance,
the denial of a request to hear witnesses or present other evidence is usually an
absolute ground for appeal.
2.2.17
Equally dissatisfying is the situation to date with regard to the right of Article 6(3)(d)
ECHR to examine or have examined witnesses against the applicants. In a few cases,
the CJEU and the GC have heard "witnesses for the applicants" whose hearing had
been applied for by the applicants.70 To the best of ICC's knowledge and as far as is
evident, a hearing of "witnesses for the prosecution" by the CJEU or the GC has hardly
ever taken place in any proceedings under EU competition law.71 At the time of
proliferating leniency applications, these witnesses are hardly ever heard by the
Commission either. In practice, this means that numerous corporate leniency
statements are prepared and read out by external lawyers and that the Commission
never meets the actual witnesses (i.e. the individuals) face to face. Nils Wahl, judge at
the GC, has drawn attention to the apparent difference between (authentic) recitals by
the persons involved in a cartel and the leniency applications written by lawyers: "Often
it is not very clear to the court who said what, and under what circumstances…
Leniency applications are, I would say, inherently unreliable and you have to be careful
with them."72 Moreover, the Commission may invite or even encourage companies to
make questionable statements with regard to factual circumstances (in order to have
See Case T-364/10 – Duravit, at paras 135, 200, 214, 236, 240, 245, 253, 270, 283, 290 and 305
Cf. CJEU, Joined cases C-189/02 and others – Dansk Rørindustri A/S v Commission, para 67 with reference to
consistent case law
See Case T-364/10 – Duravit, at paras 49-54
Case C-272/09 P, KME [2011], at para. 102-103; Case C-386/10 P, Chalkor [2011], notably para. 50-51; Case C501/11 P, Schindler [2013], at paras 33-35.
Cf. U. Soltesz, Due Process and Judicial Review – Mixed Signals from Luxembourg in Cartel Cases, ECLR 2012, 245
Cf. Court of Justice, Joined cases C-100-103/80 – SA Musique Diffusion française and others v. Commission, at paras
50 and 57; GC, T-141/94 – Thyssen Stahl AG v. Commission, at paras 67 et seq., 530 et seq.; GC, T-145/98 – ADT
Projekt Gesellschaft der Arbeitsgemeinschaft Deutscher Tierzüchter mbH v. Commission, at paras 39 and 99 et seq.
U. Soltesz, op. cit., ECLR 2012, 245. To the best of ICC's knowledge, no witness has been heard during the last ten
years.
Nils Wahl, cited from Global Competition Review, Notice of September 8, 2011.
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"better" facts for proving an infringement) since the reporting witnesses do not have to
fear ever being tested. The lawyers who deliver the confessions of the guilty managers
are encouraged to incriminate others. With no confrontation of witnesses, the setting
for making leniency confessions makes it easy to exaggerate against competitors.
There is thus a structural tendency in the leniency procedure to encourage
embellishment and, consequently, the defending company incriminated by the
corporate statement has no opportunity to cross-examine the witnesses against it,
either in the stage of the Commission proceedings or in Court. This is yet another
violation of Article 6(3)(d) ECHR, in particular since the interest of a leniency applicant
is to downplay its own role and to exaggerate the role of other participants.73
2.2.18
73
74
75
76
77
According to the Commission and the GC, there is allegedly no incentive for a leniency
applicant to submit such distorted evidence because such behavior could entail losing
the leniency status. For instance, the GC stated in the Siemens case as follows: "That
does not however mean that ABB’s statements are to be regarded as devoid of all
credibility. In that regard, it has been held that the fact of seeking to benefit from the
application of the Leniency Notice in order to obtain a reduction in the fine does not
necessarily create an incentive to submit distorted evidence. Indeed, any attempt to
mislead the Commission could call into question the sincerity and the completeness of
cooperation of the person seeking to benefit, and thereby jeopardise his chances of
benefiting fully under the Leniency Notice (Case T-120/04 Peróxidos Orgánicos v
Commission [2006] ECR II-4441, paragraph 70)."74 However, this argument lacks any
empirical basis. To the best of ICC's knowledge, there has not been one single case in
which the leniency applicant lost its status for having exaggerated the role of other
participants and downplayed its own role.75 Up to date, these corporate statements
have not been tested in court, e.g. by hearing witnesses and have them questioned by
the incriminated company, but have only been dealt with as part of the case file in
written proceedings. The GC assessed the "credibility" of various (leniency applicant)
statements in lengthy detail and compared them with the statements of other
witnesses without seeing, hearing and examining a single named witness in person
and instead relying exclusively on written records.76 Such a practice based on
theoretical and abstract considerations is not sufficient in terms of providing the
guarantees of Article 6 ECHR in the judicial review process. ICC believes that it is
difficult to assess the credibility of any witness without actually seeing and hearing him
or her in person, and that defendants in competition proceedings should be afforded
the same opportunity to confront live witnesses as defendants receive as of right in
other types of criminal proceedings.77
U. Soltesz, op. cit., ECLR 2012, 245 et seq., with highly illustrative examples. He emphasizes that the informants are not
always idealists who feel a sense of duty to help implement antitrust law, but instead are very frequently motivated by
pure self-interest. For example, one of the main inculpatory witnesses in the Copper Plumbing case (COMP/E-1/38.069)
was a former managerial employee of one of the undertakings concerned, who had left his former employer following
disagreements and who was entangled in numerous legal and patent disputes with the latter at the time he made his
witness statement.
GC, T-110/07 – Siemens AG v Commission, at paras 65.
Cf. U. Soltesz, op. cit., ECLR 2012, 246 with further references.
Cf. GC, T-110/07 – Siemens AG v Commission, at paras 62 et seq., 78 et seq., 90 et seq. 180 et seq., as reported by U.
Soltesz, op. cit., ECLR 2012, 247
According to U. Soltesz, op. cit., ECLR 2012, 246, a "particularly good illustration is provided by the case of the state's
witness Mike Sadler (a former manager of the leniency applicant Micron), whose statement the US Department of
Justice heavily relied on in the DRAM case. In separate criminal proceedings under antitrust law against one of the
managers accused, this government 'star witness' was apparently unable to convince the court of his credibility. The jury
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2.2.19
Furthermore, the Commission and the applicants (i.e. the plaintiffs against the
Commission's fining decision) are not on an equal footing before the judge meant to
provide for a fair trial. The applicants are limited in their pleadings in a drastic way. The
applicant only has 50 pages to apply for a nullification of a Commission’s fining
decision (or for a reductions of the fine), which is often hundreds of pages.78 The Court
may also limit the parties’ right to submit replies and rejoinders,79 further increasing the
imbalance between the applicants and the Commission. Thus, the Court may actually
be depriving the applicant of the right to reply to the Commission in writing, whereas
the Commission has already established its case in a decision of several hundred
pages (sometimes even 500-600 pages).
2.2.20
Under today's system, the starting point for applicants (or plaintiffs) is the Commission's fining decision which they can appeal to the GC enumerating and substantiating
all elements of facts and law they disagree with (cf. 2.1.15 above). Every fact that is
not disputed by substantiated arguments is held to be true by the EU Courts because
the GC does not undertake a general review ex officio.80 Under these circumstances,
how can the Convention rights be exercised in a meaningful way? In the first instance,
there is no independent tribunal. In the second instance, on appeal before the GC, the
factual and legal situation is such that the rights of the ECHR cannot be exercised
properly, if at all. ICC takes the view that such a system is inconsistent with the
presumption of innocence guaranteed by Article 6(2) ECHR according to which
"everyone charged with a criminal offence shall be presumed innocent until proved
guilty according to law" (similarly Article 48 of the Charter). Quite to the contrary, the
current system can be characterized by the presumption of guilt. In criminal
proceedings, the prosecution must start by an indictment of the accused (who is
deemed innocent). In antitrust proceedings, the fined companies (deemed guilty) must
appeal the fining decision of the Commission.
2.1.21
Finally, the most galling example for the existing unfairness is the fact that the Commission is granted the right of the last word. This would be unheard of in any criminal
case. In EU antitrust sanctions proceedings, it is the consequence of the reversed
roles because the companies must appeal the Commission decision and thus are the
applicants or plaintiffs even though in fact they are the defendants. This reversal of the
roles violates the presumption of innocence guaranteed by Article 6(2) ECHR and
Article 48(1) of the Charter.
Absence of Suspensory Effect of an Appeal
2.2.22
78
79
80
81
Last but not least, it is of concern that appeals before the GC have no suspensory
effect.81 In cases like competition law fines that are covered by Article 6 ECHR this is
failed to reach a guilty verdict, such that the case was dismissed."
As set out in the ‘Practice Directions to Parties before the General Court’, OJ 2012 L68/23 under ‘A.4 Length of
pleadings’.
The maximum is 25 pages; see Practice Directions to Parties before the General Court’, cit. above, A.4
Cf., e.g.,the judgment of the Court of Justice of the EU of 8 December 2011 in Case C-386/10, Chalkor AE Exergasias
Metallon, at para 66: "The failure to review the whole of the contested decision of the Court's own motion does not
contravene the principle of effective judicial protection. Compliance with that principle does not require the General Court
– which is indeed obliged to respond to the pleas in law raised and to carry out a review of both the law and the facts –
should be obliged to undertake of its own motion a new and comprehensive investigation of the file."
Article 278 TFEU.
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problematic.82 Absent the very rare granting of interim measures, the fine must be paid
or (if the Commission is willing to accept it – which is increasingly rare) a bank
guarantee must be produced. And even if the Commission were to accept a bank
guarantee, this does not cure the problem because the cost of a bank guarantee for
large fines can in itself be very high (in particular if the case remains pending for many
years), and thus be penal in nature, and cannot be recovered if the appeal is
successful.83 Such a system can hardly be reconciled with the presumption of
innocence (Article 6(2) ECHR) because the penalty is executed prior to the
establishment of liability and guilt by an independent tribunal. It is therefore submitted
that an appeal to the EU Courts should suspend the obligation to pay a competition
law fine.
The Menarini Decision as Justification of the EU Courts' Legality Review?
82
83
84
85
2.2.23
The decision of the ECtHR in Menarini has been welcomed by some authors and
representatives of antitrust authorities and interpreted as justification of the current
system of EU antitrust proceedings.84 Alexander Italianer, Director General at DG
COMP, characterized it as a "landmark ruling" coming as a welcome indication that the
EU institutional framework is sound because the institutional set-up of the Italian
competition authority is so similar to the Commission's. He concluded that the recent
developments (referring also to the CJEU cases Chalkor and KME) "should allow us to
put to rest institutional debates and concentrate on our core business – on enforcing
the law."85 ICC respectfully disagrees and emphasizes that the institutional debate
cannot be closed as long as fundamental rights of companies are not respected by the
current system of administrative competition law enforcement. Menarini has been
already discussed in detail in this paper (c.f. section 2.1.10 et seq.). This decision is
poorly reasoned, not consistent with the case law of the ECtHR and far from being
convincing, as indicated by a powerful dissenting opinion. Given that EU competition
law sanctions are not "minor offences", an independent and impartial tribunal must
decide in the first instance about fines for infringements.
2.2.21
Even under the hypothetical assumption that Menarini had indeed "put to rest" the
institutional debate, i.e., that it is, in principle, sufficient that an independent and
ECtHR, judgment of 27 January 2004, Kyprianou v Cyprus, para. 45; ECtHR, Janosevic v Sweden, judgment of 23 July
2002, para. 120: “A system that allows enforcement of considerable amounts of tax surcharges before there has been a
Court determination of the liability to pay the surcharges is therefore open to criticism and should be subjected to strict
scrutiny”.
Case T-113/04, Atlantic Container Line a.o. v Commission, [2007] ECR II-171, at paras 38-46.
E.g. A. ITALIANER: “The [Menarini] judgment confirms that an administrative system where an agency imposes sanctions
which are subject to full review by an independent court should comply with fundamental rights law. This is a welcome
development which confirms the legitimacy of administrative systems, a model followed by many competition agencies.
It also corroborates the case law of the European Court of Justice which has repeatedly found the EU system of
competition enforcement to fulfil the requirements of Article 6 ECHR on the right to a fair trial.” A. ITALIANER, “Best
Practices for antitrust proceedings and the submission of economic evidence and the enhanced role of Hearing Officer”,
http://ec.europa.eu/competition/speeches/text/sp2011_12_en.pdf, 18 October 2011, 3; Referring to i.a. Menarini, Wouter
P.J. Wils writes that “the addressees of Commission decisions can subsequently appeal against the Commission
decision before the EU Courts, thus ensuring the compatibility of the enforcement system with the fundamental right of
access to an independent court.” W.P.J. Wils, “The Oral Hearing in Competition Proceedings before the European
Commission”, World Competition, Vol. 35, No. 3, September 2012 and
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2050453&download=yes, 7.
Alexander Italianer, Recent developments regarding the Commission's cartel enforcement, Speech at the
Studienvereinigung Kartellrecht Conference in Brussels of 14 March 2012, p. 2 et seq.
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impartial tribunal acts as second instance only, the current EU antitrust proceedings
would still violate fundamental rights of the companies. ICC takes the view86 that the
legality review traditionally exercised by the EU Courts in respect of Commission
decisions does not meet at all the requirement of “full jurisdiction”. The CJEU’s more
recent, superficially tailored attempts to adapt the traditional legality review to the
standard required for a full judicial review as called for by Menarini fail to convince and
do not address the core of the problem (cf. section 2.2.8 et seq.). Like others, ICC
therefore believes that the Menarini judgment constitutes at least “an implicit warning,
which the EU Courts would be well-advised not to ignore, that [EU] judicial review does
not comply with the ECHR”.87 In any event, the value of Menarini as precedent for EU
antitrust proceedings is fairly limited (cf. 2.1.19 above). The ECtHR looks at the totality
of the procedural circumstances, and what was approved in Menarini is not an
endorsement of what the European Commission in Brussels and the EU Courts in
Luxemburg do.
2.2.22
In other words, Menarini is not the acclaimed "landmark ruling" giving its blessing to
the current deficiencies in EU antitrust proceedings. Some authors have noted that the
finding that the Italian system as applied in Menarini complied with Article 6 ECHR,
does not mean that all administrative enforcement systems do so as well.88 In that
regard, particular attention should be paid to the fact that in the EU the ultimate
decision regarding fines for competition law infringements is taken by the College of
Commissioners, who are political appointees by the Member States, who ‘have little
day-to-day involvement with these questions' and with whom it is not possible for the
parties to have a hearing.89 The fact that there is not a hearing before an impartial
person empowered to decide who is right is one of the most inequitable and offensive
aspects of EU proceedings. This is comparable to a situation in which the Italian or
French government were ultimately to decide on the fines in antitrust cases. Finally, as
C. Bellamy rightly concluded, Menarini is not a judgment of the Grand Chamber, and
the dissenting judgment in that case gives much food for thought.90 The EU Courts
must provide for the guarantees of Article 6 ECHR and Article 47 of the Charter in
unabated form. Otherwise, the companies concerned are in fact deprived of these
guarantees because the Commission in the first instance is not an independent
tribunal and the EU Courts do not (fully) secure them.
2.3. Proposals for Reform
2.3.1.
86
87
88
89
90
ICC urges both the Commission and the judges at the EU Courts actively to formally
explore the possibilities for real reform because the current system of antitrust proceedings is deeply flawed under both the ECHR and the Charter.
As it did on previous occasions, see the ICC Commission on Competition, Due process in EU antitrust proceedings,
Document No. 225/667 – 8 March 2010.
E. Morgan de Rivery, E. Lagathu, E. Chassaing, EU Competition Fines and Fundamental Rights: Correcting the
imbalance, (2012) 7-8 European Law Reporter 190, 198.
Cf. R. Wesseling & M. van der Woude, "The Lawfulness and Acceptability of Enforcement of European Cartel Law,
World Competition 35, no. 4 (2012), 573, at 577 et seq. Similarly, it has been said that the full implication of a
fundamental rights approach to European competition law will only appear over time, cf. M. Bronckers and A. Valléry,
Fair and Effective Competition Policy in the EU: Which Role for Authorities and Which Role for the Courts after Menarini,
European Competition Journal 2012, 283, at 298.
Cf. M. Barroso Gomes, Administrative Adjudication in Antitrust: Still a Controversy?, AAI Working Paper No 13.03 of
June3, 2013, at 21
C. Bellamy, "ECHR and competition law post Menarini: An overview of EU and national case law, e-Competitions,
N°47946, 5 July 2012
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In ICC's view, the time is ripe to resolve the fundamental due process problems set out
above. The Treaty of Lisbon provides for an accession of the EU to the ECHR, and in
2014 a new Commission will have to be established. In order to effectively comply with
the guarantees provided by Article 6 ECHR and Article 47 of the Charter, ICC
respectfully recommends that the Commission power to take decisions involving
penalties should be explicitly transferred to an independent court (whether the GC or
another community court such as, e.g., a newly formed competition court). Penalties
would then be imposed by the EU Courts and not by the Commission, resolving once
and for all the ECHR issue.
Intermediate Solutions prior to the Required Fundamental Reform
91
92
2.3.3
However, ICC acknowledges that such reform will take time to put into place.91 So we
would also suggest that intermediate solutions should be considered and implemented
in the more immediate term, while awaiting fundamental reform. These intermediate
solutions within the current institutional set-up could be undertaken on two levels: the
Commission's and the EU Courts'.
2.3.4.
First, the Commission’s procedures should be reformed so that factual findings are
made by an independent decision-maker which has heard the case of all parties and
thoroughly assessed the evidence. There are various ways in which this could be
achieved, removing the multiplicity of inconsistent roles that characterises the current
system, without removing the formal decision-making role of the College of
Commissioners. The administrative procedure should facilitate a genuine debate on
the veracity of corporate statements, including the obligation to produce and the
possibility to cross-examine witnesses whose statements serve as basis for the
corporate statements. In addition, the Commission should accept to hear witnesses à
décharge upon application of the defendant unless there are compelling reasons to
reject it. Due to human nature, unfortunately, a prosecutorial bias cannot be fully
excluded within the investigating case team. Therefore, more than using peer review
panels, the Commission should organize its hearing before a new team which would
hear with an open-mind the case team’s arguments as well as the arguments in
defense from the investigated companies.
2.3.5
Second, the EU Courts must expand the scope of their judicial review and conduct a
full review of all factual and legal matters. To begin with, the EU Courts should
explicitly and completely abandon the “complex appraisals” formula in EU antitrust
proceedings and engage more openly with economic facts or technical appraisals,
even though they may be technically difficult.92 This requires more than a semantic
adaptation of the reasons given in the judgment. A fundamental change of the mindset
is essential. The judges have enormous responsibility as the first independent and
impartial instance and must meticulously assess the Commission's fining decision as
to the facts underlying the alleged infringement and the application of the law. The
While many authors have argued that no Treaty change would be required and that such reforms could be implemented
via Article 103TFEU (see GCLC, Report of Group III, op cit), it is clear that a more fundamental reform will require time
to implement.. The question of whether Treaty change is needed is ultimately only a question of timing, as the need for a
Treaty change can evidently not justify non-compliance with the ECHR.
See, e.g., Judge Jaeger, “The Standard of Review in Competition Cases Involving Complex Economic Assessments:
Towards the Marginalisation of the Marginal Review” (2011) 2 Journal of European Competition Law & Practice 295;
Judge Forwood, as reported in AR Rego, “Economics pleas should be presented early in antitrust appeals, EU judge
says”, MLex, 1 November 2011.
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starting point must be the presumption of innocence, i.e. that the fining decision could
be wrong in all respects. The judges should be encouraged to undertake, upon the
pleadings of the appellants, a review as thorough as is possible under the current
system which is not ex officio or de novo.
2.3.6
3.
93
94
95
96
Very recently, in the Telefonica case93, Advocate General Wathelet called on the GC to
exercise to the full extent its unlimited jurisdiction when reviewing the proportionality of
fines, both in fact and in law, and stated that the Court should not have deferred to the
discretion of the Commission in that regard. In addition, the EU Courts should adopt a
more interventionist approach in the organization of competition litigation and allow for
an actual and genuine debate before the judges. To that end, the GC should avail itself
of its power to prescribe measures of organization of procedure and measures of
inquiry and make it rather the rule than the exception to hear witnesses for and against
the applicants. Alternatively, the EU Courts should quash all decisions involving
sanctions until the reform has been made.
Specific Comments on the Commission's Explanatory Note on Inspections
3.1
On 18 March 2013, the Commission updated its Explanatory Note on inspections,94
which sets out its current practices, notably as regards the use of electronic search
tools. However, there are several ways in which this Note could and should better
reflect the defendant companies’ rights of defence.
3.2
First, the Note refers to the decision ordering an inspection under Article 20(4) of
Regulation 1/2003 and states that Commission inspectors cannot be required to
expand upon the subject matter as set out in the decision or to justify the decision in
any way. However, it is wrong to suggest that the Commission has a free rein. In the
recent Nexans/Prysmian cases,95 the GC annulled a Commission dawn raid decision
on the basis that the Commission lacked reasonable grounds for ordering an
inspection covering "all electrical cables". The Court upheld the applicants’ contention
that the Commission had over-extended the subject-matter of its decision and
undertook a ‘fishing expedition’. The Commission was required to demonstrate that it
had reasonable grounds for suspecting an infringement related to the identified
products. This is significant because, contrary to proceedings in the majority of EU
Member States where judicial approval of a search warrant is required before its
execution, there is currently no judicial review of Commission inspection decisions
before they are implemented. The Commission must show ‘probable cause’,96 not only
with regard to the product scope but also the geographic and temporal scope of the
infringement.
3.3
Second, the Note should balance out the exposition of the company’s duty to
cooperate fully and actively, with a clear statement of the company’s rights. For
example, when screening electronic data during an inspection, it is usual practice for
Commission inspectors to use key word searches. These could throw up numerous
Case C-295/12, Telefónica de España SAU v Commission
European Commission Explanatory note to an authorisation to conduct an inspection in execution of a Commission
decision under Article 20(4) of Council Regulation No 1/2003, Revised on 18/03/2013, available at:
http://ec.europa.eu/competition/antitrust/legislation/explanatory_note.pdf
Judgment of the General Court of 14 November 2012 in Cases T-135/09, Nexans France and Nexans v Commission
and Case T-140/09, Prysmian and v Commission (not yet reported in the ECR).
The language of US criminal procedure is not out of place, given the criminal nature of EC cartel sanctions.
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documents that are outside the scope of the investigation (e.g., relate to a different
product). It is the role of the Commission inspectors to check all documents for
relevance and whether they might be covered by legal professional privilege, and the
company and its lawyers should not feel hindered by the threat of a penalty for noncooperation from supervising this process closely: this is simply the exercise of the
company’s procedural rights.
97
3.4
Third, the Note refers to the controversial practice of removing entire copies of hard
drives from company premises (the so-called ‘sealed envelope procedure’ or
‘continued inspection’). This occurs when the selection of relevant documents is not
completed during the inspection at the company premises. The Commission inspectors
place a copy of the data still to be searched in a sealed envelope and bring it back to
their premises in Brussels. At a later date, the officials open the envelope and continue
the review process at their premises. The company and its lawyers are typically invited
to attend and supervise.
3.5
It is questionable whether the wholesale removal of electronic data, which has not
been previously reviewed, is within the powers conferred on the Commission under
Regulation 1/2003. Article 20(2) of Regulation 1/2003 empowers the Commission: “to
examine the books and other records related to the business, irrespective of the
medium on which they are stored” and “to take or obtain in any form copies of or
extracts from such books or records”. This presupposes that the Commission has first
examined the records which it wishes to copy or remove, to ensure that they are
relevant to the investigation. It is doubtful whether the Commission has the power to
take copies of material which have not been examined. If that were the case, the
Commission would be entitled to take a copy of a company’s entire computer system –
containing material that is wholly irrelevant to the investigation and that can be highly
confidential (e.g., patent applications, which can be crucial assets for companies
making large investments in R&D, or sensitive information of energy companies, such
as nuclear power plants) – to review at its leisure at its premises in Brussels.
Therefore, the possible efficiency gains of conducting the search at the Commission's
premises do not outweigh the risk of companies' commercial sensitive information
being divulged to third parties. Nor can the power to remove unexamined material be
implied into Regulation 1/2003 since it is not indispensable for the effective exercise of
the Commission’s functions.97 Electronic data was already a normal feature of
business life when Regulation 1/2003 was adopted, but that regulation did not provide
for such a possibility.
3.6
The practice of removing unexamined electronic data also raises questions under
national and European data protection laws. Effectively, these only permit the
processing of personal data in certain circumstances, including where pursuant to a
legal obligation or in some circumstances where in the public interest. It is
questionable whether the copying and removal of unexamined data, which may even
be irrelevant to the investigation, would satisfy such criteria. Further, it is questionable
whether the removal of unexamined data accords with the principle of proportionality:
an intrusive and expansive ‘fishing expedition’ for documents on a wide range of topics
is evidently disproportionate.
On implied powers in the context of competition investigations, see order of 17 January 1980 in Case 792/79 R Camera
Care v Commission [1980] ECR 119, paragraph 18.
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4.
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In sum, while the Commission’s Explanatory Note on inspections is a welcome
initiative to increase the transparency of an important step in the competition
investigations, this Note should be revised to reflect a more balanced approach to the
rights of the defendant companies. The objective of administrative expediency must be
secondary to the respect of due process and procedural fairness.
Information Sharing among Competition Authorities
“First Generation” Information Sharing Agreements
4.1
Following a recommendation of the OECD (Organisation for Economic Cooperation
and Development) first adopted in 1967,98 a common framework of international
cooperation among competition authorities emerged in the form of “soft” bilateral
cooperation agreements between the European Union (EU) and the United States,99
Canada,100 Japan101 and South Korea.102
4.2
These first generation agreements are characterized as “soft” because they do not
override applicable domestic laws, in contrast to Mutual Legal Assistance Treaties and
other treaties, which do have the force of domestic law. As such, domestic laws
relating to confidentiality and prohibitions against disclosure of information without
consent of the affected company take precedence over the commitments to foreign
antitrust authorities contained in first generation agreements. This restriction is critically
important to ensure due process. It means that the exchange of information depends
upon a company’s willingness to waive confidentiality.
Some competition authorities have criticized the need for waivers which has led them
to explore farther-reaching forms of cooperation, referred to as “second generation”
agreements.
The first “Second Generation” Agreement: EU-Switzerland
4.3
On May 17, 2013, the European Union and Switzerland signed the first “second
generation” bilateral cooperation agreement (“CA”).103 Representatives of competition
authorities have expressed the hope that the CA will serve as a model for second
generation agreements between other countries.104 If the CA is ratified,105 the EU
98
The 1967 OECD recommendation was amended in 1973, 1986 and 1995. OECD, Revised Recommendation of the
Council concerning Co-operation between Member countries on Anticompetitive Practices affecting International Trade,
(July 27-28, 1995), http://www.oecd.org/daf/competition/21570317.pdf
99
Agreement Between The Government of the United States of America and the Commission of the European
Communities Regarding the Application of their Competition Laws, Sept. 23, 1991,
http://www.ftc.gov/sites/default/files/attachments/international-antitrust-and-consumer-protection-cooperationagreements/agree_eurocomm.pdf; Agreement Between The Government of the United States of America and the
European Communities on the Application of Positive Comity Principles in the Enforcement of their Competition Laws,
June 3/4, 1998, http://www.state.gov/documents/organization/112457.pdf.
100
Agreement Between The Government of Canada and the European Communities Regarding The Application of Their
Competition Laws, June 17 1999, 2101 U.N.T.S. 36502, http://www.competitionbureau.gc.ca/eic/site/cbbc.nsf/vwapj/euro_e.pdf/$FILE/euro_e.pdf.
101
Agreement between the European Community and the Government of Japan Concerning Cooperation on Anticompetitive Activities, July 10, 2003. http://ec.europa.eu/competition/international/legislation/japan.pdf http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:183:0012:0017:EN:PDF
102
Agreement between the European Community and the Government of the Republic of Korea Concerning Cooperation
on Anti-competitive Activities, May 23, 2009, http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:202:0036:0041:EN:PDF
103
Agreement Between The European Union And The Swiss Confederation Concerning Cooperation On The Application Of
Their Competition Laws, May 17, 2013, http://ec.europa.eu/competition/international/bilateral/agreement_eu_ch_en.pdf.
104
See also European Parliament resolution of 5 February 2014, Eur. Parl. Doc. P7_TA-PROV(2014)0079, at para. 8.
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Commission and the Swiss Competition Commission will be able to exchange
information, including confidential information, subject only to relatively low safeguards.
The ICC submits that the CA raises significant due process concerns that should be
addressed before the CA is ratified.106
No consent for or notice of information exchanges
4.4
The key difference to first generation agreements is that the European Commission
and the Swiss Competition Commission do not need to obtain a waiver or consent
from a company that provided information before sharing or discussing that
information. Moreover, the CA does not even require the competition authorities to
notify a company whether or when its information has been exchanged or discussed.
To the contrary, the CA provides that information requests will be kept confidential,
indicating that the authorities are generally not permitted (unless disclosure is required
by law) to inform a company about exchanges of or discussions about its own
confidential and proprietary information.107 This is troubling, particularly if potential
multi-jurisdictional immunity or leniency applicants are seeking knowledge about
whether certain information transmitted to or gathered by one authority has already
been transmitted to another authority. Coupled with the lack of any right of review for
companies whose information is being shared,108 the confidentiality of information
requests essentially prevents affected companies from obtaining judicial protection in
such situations.
4.5
The risk that confidential information will be transferred without companies’ consent or
knowledge (and possibly in an incomplete, and potentially damaging light, as
discussed below), may also discourage their cooperation with investigations.
Risk of selective information transfer
4.6
105
106
107
108
109
The CA does not require that the authorities transfer a complete or balanced set of
information. This raises serious concerns because the EU competition enforcement
system already lacks adequate separation of the prosecutorial and adjudicative role
(see ● above). Further, the GC does not perform a full judicial review of all relevant
facts and, in practice, never hears witnesses (see ● above).109 If only incriminating
information, but no exculpatory or otherwise balanced evidence, is shared between
authorities, and if companies have no knowledge and control of which contents are
At the time of writing, the European Parliament has consented to the agreement as per its resolution of 5 February 2014,
Eur. Parl. Doc. P7_TA-PROV(2014)0079, and instructed its President to forward the resolution to the Council, the
European Commission and other relevant bodies. The Swiss Parliament has not yet ratified the CA, and in Switzerland
there is also the possibility of a public referendum.
See supra note ●.
Id. at Article 9(1).
See Section ● below.
The European Parliament has repeatedly criticized the lack of due process in EU cartel proceedings. See e.g. European
Parliament resolution of 12 June 2013 on the Annual Report on EU Competition Policy, Eur. Parl. Doc. P7
TA(2013)0268 at para. 38, www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2013268; European Parliament resolution of 2 February 2012 on the Annual Report on EU Competition Policy, Eur. Parl. Doc.
P7 TA(2012)0031 at para. 31/32, www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-20120031+0+DOC+XML+V0//EN; European Parliament resolution of 20 January 2011 on the Report on Competition Policy
2009, Eur. Parl. Doc. P7 TA(2011)0023 at para. 60/61, www.europarl.europa.eu/sides/getDoc.do?pubRef=//EP//TEXT+TA+P7-TA-2011-0023+0+DOC+XML+V0//EN; European Parliament resolution of 9 March 2010 on the
Report on Competition Policy 2008, Eur. Parl. Doc. P7 TA(2010)0050 at para. 45, available at:
www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2010-0050+0+DOC+XML+V0//EN.
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shared and in which light they are presented, there is a grave risk that today’s
inadequate checks and balances will prevent incomplete and possibly biased
information from being tested and/or corrected. This concern is all the greater as the
companies in practice will hardly have an opportunity to provide countervailing
evidence. ICC would welcome clear safeguards against selective or unbalanced
transfers of information.
Information exchange is allowed even before initiation of a formal investigation
4.7
Information “obtained by investigative process” includes materials gathered by both
authorities even before the beginning of a formal investigation, such as a simple
information request pursuant to Article 18 of EU Regulation 1/2003 or Article 40 of the
Swiss Cartel Act.110 This raises due process issues for which the CA provides no
solutions. For example, if a preliminary investigation has been opened in
Switzerland,111 the Swiss and EU authorities may exchange and discuss information
even though the target company does not have access to the file at this stage. The
Swiss Government’s message regarding the CA speaks about “formal investigations”
by both authorities as a requirement to exchanging information.112 This would prohibit
sharing information on the basis of preliminary investigations in Switzerland. ICC
welcomes the attempt to clarify the types of relevant investigations, but the Swiss
message is not binding on the EU and an ambiguity remains. The text of the CA
should therefore be clarified before ratification.113
Lack of clarity regarding the ECN and EFTA
4.8
4.9
110
111
112
113
114
115
116
The CA provides that information discussed or transmitted to the other authority –
including information transmitted without knowledge or consent of the company
providing the information – shall only be used for the purpose of enforcing that party’s
competition laws by its competition authority.114 However, the Commission may also
transmit information received from the Swiss Competition Commission to the 28 EU
Member States’ competition authorities, as well as to the EFTA Surveillance Authority,
in order to fulfill its information obligations.115 Through this mechanism, the CA
effectively integrates Switzerland into the ECN without conferring any of the benefits of
the ECN.116
The CA does not provide any remedies if Member State authorities or the EFTA
Surveillance Authority (which are not party to the CA and are therefore not bound by it)
do not honor the limited safeguards under Article 10 of the CA according to which the
Member State authorities must not initiate proceedings based on the transmitted
EU-Swiss Cooperation Agreement, supra note ● at Article 2(6).
Federal Act on Cartels and other Restraints of Competition, Oct. 6, 1995, Article. 26, available at
http://www.admin.ch/ch/e/rs/2/251.en.pdf.
See Swiss Official Message to the CA, May 17, 2013, 13,
www.news.admin.ch/NSBSubscriber/message/attachments/30695.pdf.
See supra note ●.
EU-Swiss Cooperation Agreement, supra note ● at Article 8(1).
Id. at Article 10.
The official Swiss message concerning the CA explicitly acknowledges that an agreement with EU Member States,
rather than only with the EU, would have entailed a longer and more complicated negotiation and ratification process.
For this reason the parties did not pursue that path. See Official Message to the CA, supra note ● at 6.
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information. At the same time, the CA recognizes the realistic possibility of improper
use or disclosure of information since it provides that the “Parties” the EU and Swiss
competition authorities “shall promptly consult on steps to minimize any harm ….”
resulting from such improper use or disclosure 117 When information is shared with
even more authorities, the possibility of misuse increases, but affected companies are
still left without a possibility for recourse (see also ● below). The CA does not even
provide for a “prompt consultation” mechanism in analogy to Article 9(2) that would
cover EU Member State authorities or the EFTA Surveillance Authority.
4.10
A misuse of information will become even more critical if the information was contained
in a Swiss leniency application, as the CA does not provide for any protection of preexisting documents. If the CA is ratified,118 leniency applicants in Switzerland will
therefore always have to factor in the likelihood that their information is shared with the
Commission, the EFTA Surveillance Authority and 28 EU Member States. As leniency
applicants will have no guarantee of learning if (and which of) their information has
been transferred, it is not difficult to see that this will have a chilling effect on the Swiss
leniency program, particularly where it is not possible or practical to apply for leniency
simultaneously in other relevant countries.
4.11
This is exacerbated by the risk that national courts may order authorities to hand over
leniency information to potential private antitrust damages claimants. While the
Commission makes attempts to limit this risk in its proposal for a private damages
litigation directive,119 it is uncertain whether its approach can be upheld after the 2013
Donau Chemie decision.120
4.12
Moreover, the comprehensive flow of information between ECN authorities in itself
creates risk that information will be misused as the present safeguards within the ECN
are insufficient and should be revised.121
Lack of clarity regarding leniency and settlement procedures
4.13
The CA’s limits on transferring information obtained through leniency and settlement
procedures do not adequately specify the scope or relevant time period of the
limitation.122 Companies can initiate settlement discussions in both the EU and
Switzerland at various stages.123 However, the CA fails to clarify how authorities can
117
EU-Swiss Cooperation Agreement, supra note ● at Article. 9(2).
See supra note ●.
119
Proposal for a Directive of the European Parliament and of the Council on Certain Rules Governing Actions for Damages
Under National Law for Infringements of the Competition Law Provisions of the Member States and of the European
Union, Article 6, 7, COM(2013) 404 final (June 11, 2013), available at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0404:FIN:EN:PDF.
118
120
Case C-536/11, Donau Chemie, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0536:EN
:HTML. In the judgment, the European Court of Justice held that EU Member States must not adopt legislation which fully
shields plaintiffs from access to leniency-based evidence in a cartel file of an antitrust authority. Instead the Court of
Justice requires weighing the public interest against the private damages interests in a single case in accordance with its
Pfleiderer judgment of 2011. Case C-360/09, Pfleiderer, ECR I-5161 (2011).
121
Article 12(2) and (3) of Regulation 1/2003 are insufficient. There should be a duty to inform affected companies when
their information is transmitted within the ECN, and to create processes for review or appeal of information exchanges.
In addition, special rules should be implemented that prevent subsequent private antitrust litigants from obtaining or
using information shared for public enforcement purposes.
122
See EU-Swiss Cooperation Agreement, supra note ●, Article 7(6) in conjunction with Article 2(8), and David Mamane &
Samuel Jost, Let’s Work Together – An EU / Swiss co-operation agreement has far-reaching implications, Competition
Law Insight, Nov. 13, 2012, at 8, 9-10.
123
Council Regulation 773/2004, 2004 O.J. L 123, 18, Article 10a, 2(1), http://eur-
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use information that was transferred before the initiation of settlement discussions. In
particular, the CA lacks a mechanism that withdraws or limits the use of already
transmitted or discussed information if a settlement is reached later. ICC would also
welcome a clarification that the limitations of Article 7(6) apply as soon as settlement
discussions or leniency procedures commence.
No right of review
4.14
In contrast to other international agreements, particularly on mutual legal assistance,
the CA does not allow appeals to an independent body to review the sharing of
information, leaving companies unprotected. The Swiss message on CA is surprisingly
open about this deficiency and explains that the CA deliberately lacks an appellate
procedure for companies as this would hinder a “swift and efficient exchange”.
Companies have to wait instead for the opportunity to appeal an intermediate or final
decision.124 Regrettably, the European Parliament seems to share this view.125
ICC believes that even to the extent ex post appeals are available, they are not timely
or effective. The lack of specific remedies in the CA that allow for judicial review, with
suspensory effect, of agency cooperation, curtails companies’ ability to assess the
legality of an information exchange before authorities use that information to render a
decision. Such decisions will be inherently difficult to annul or correct years after an
information exchange and other fact-finding. It is therefore crucial that specific and
timely remedies be introduced into the CA before ratification.126
Moreover, as the CA also allows information transfers to the 28 EU Member States
and the EFTA Surveillance Authority, non-signatories to the CA, there is a significant
risk that these institutions use the information without observing the restrictions of the
CA. In such case, it is also unlikely that effective judicial review at Member State level
will be possible.
Lack of consultation on the CA
4.15
Neither the EU nor Switzerland sought public consultation concerning the CA. This is
regrettable given the aforementioned deficiencies. It is also surprising in light of the
significantly enlarged “second generation” scope of the CA.
ICC would welcome the opportunity to consult with the EU and Switzerland, along with
any other interested parties, about the CA. The CA’s legitimacy will be undermined if
the impression persists that the CA was negotiated “behind closed doors” without
hearing external expert views. In particular, future “second generation” agreements127
should not suffer from similar deficits. As an alternative to formal consultation, ICC
124
125
126
127
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004R0773:20080701:EN:PDF; Swiss Cartel Act supra note ●,
Article 29.
Official Message to the CA, supra note ● at 15.
See resolution of 5 February 2014, Eur. Parl. Doc. P7_TA-PROV(2014)0079, at para. 5: “allowing the parties to appeal
against intermediate decisions, such as those on the exchange of information, would block investigations and could
compromise the effectiveness of this agreement”.
See supra note ●.
See text at supra note ● and Mamane / Jost, supra note ● at 8, 10.
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urges the Swiss Parliament and the EU Parliament to set clear conditions for improved
due process under the CA before ratification128 (see also ● above).
Conclusion
4.16
128
129
130
ICC would strongly welcome if ratification of the CA129 was made dependent upon
improving the severe due process shortcomings in EU antitrust proceedings in
general130 and upon renegotiations of the CA to remedy at least its most severe
deficiencies.
See supra note ●.
See supra note ●.
See sections 1 and 2 above, and EU Parliament resolutions, supra note ●.
International Chamber of Commerce | 29
The International Chamber of Commerce (ICC)
ICC is the world business organization, a representative body that speaks with authority on behalf of
enterprises from all sectors in every part of the world.
The fundamental mission of ICC is to promote open international trade and investment and help
business meet the challenges and opportunities of globalization. Its conviction that trade is a powerful
force for peace and prosperity dates from the organization’s origins early in the 20th century. The
small group of far-sighted business leaders who founded ICC called themselves “the merchants of
peace”.
ICC has three main activities: rule setting, dispute resolution, and policy advocacy. Because its
member companies and associations are themselves engaged in international business, ICC has
unrivalled authority in making rules that govern the conduct of business across borders. Although
these rules are voluntary, they are observed in countless thousands of transactions every day and
have become part of the fabric of international trade.
ICC also provides essential services, foremost among them the ICC International Court of Arbitration,
the world’s leading arbitral institution. Another service is the World Chambers Federation, ICC’s
worldwide network of chambers of commerce, fostering interaction and exchange of chamber best
practice. ICC also offers specialized training and seminars and is an industry-leading publisher of
practical and educational reference tools for international business, banking and arbitration.
Business leaders and experts drawn from the ICC membership establish the business stance on
broad issues of trade and investment policy as well as on relevant technical subjects. These include
anti-corruption, banking, the digital economy, marketing ethics, environment and energy, competition
policy and intellectual property, among others.
ICC works closely with the United Nations, the World Trade Organization and intergovernmental
forums including the G20.
ICC was founded in 1919. Today its global network comprises over 6 million companies, chambers of
commerce and business associations in more than 130 countries. National committees work with ICC
members in their countries to address their concerns and convey to their governments the business
views formulated by ICC.