ECHR IMPLICATIONS IN THE EU COMPETITION ENFORCEMENT
LYUBOMIR TALEV*
I INTRODUCTION
In almost 50 years, EU competition law has acquired a prominent position in the
daily life of European law and has been the source of many important developments of
general EU law. This achievement is even more remarkable when one considers that in
the period immediately after the Second World War competition law was virtually nonexistent in Europe.1 It is rightly considered that the EU competition law has been a
success.2
Despite of the recent modernization of the EU competition law3 and the
proclaimed decentralization of the EU competition enforcement4 the European
Commission still plays a central role in EU competition enforcement.5 It has the right,
along with the competition authorities of the Member States (hereafter the NCAs) to
apply Arts 101 and 102 of the TFEU.6 The leading role of the Commission in this process
is underlined inter alia by the fact that the initiation by the Commission of proceedings
for the adoption of a decision shall relieve the competition authorities of the Member
States of their competence to apply Articles 101 and 1027 and that it is allowed where the
*
Attorney-at-law, Varadinov&Co attorneys-at-law, Sofia, LLM City University London The author is
grateful to Professor Alan Riley for his valuable guidance and advises. All mistakes and omissions remain
solely the ones of the author. The author can be contacted at ltalev@varadinovlaw.com.
1
Jan Slot P, “A View From the Mountain: 40 Years of Developments in EC Competition Law”, [2004]
C.M.L.R., p 443
2
Ibid, p 473. However, recent developments of the Community legal order and in particular the decision to
remove the competition phrase contained in Art. 3(1)(g) of the EC Treaty from the new Reform Treaty and
to replace it with a “competition protocol” (see Protocol on the Internal Market and Competition, OJ [2007]
C 305/156) are threatening to undermine the success of the EU competition law and consequently – the
competitiveness of the European economy and the wellbeing of the European citizens – see Riley A, “The
EU Reform Treaty and the Competition Protocol: undermining EC competition law”, [2007] E.C.L.R. p
703.
3
See Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on
competition laid down in Articles 81 and 82 of the Treaty, OJ L1, 04.01.2003, p 1 (hereafter Regulation
1/2003 or the “Modernization Regulation”)
4
Ibid, Recitals 3 and 4
5
See Riley A, “EC antitrust modernization: the Commission does very nicely – thank you! Part 1:
Regulation 1 and the notification burden”, [2003] E.C.L.R. p 604.
6 Regulation 1/2003, Arts 4 and 5. Art 101(1) of the TFEU (previously Art 81(1) EC Treaty) prohibits all
agreements between undertakings, decisions by associations of undertakings and concerted practices which
may affect trade between Member States and which have as their object or effect the prevention, restriction
or distortion of competition within the common market unless if they contribute to improving the
production or distribution of goods or to promoting technical or economic progress, while allowing
consumers a fair share of the resulting benefit, and do not impose on the undertakings concerned
restrictions which are not indispensable to the attainment of these objectives and afford such undertakings
the possibility of eliminating competition in respect of a substantial part of the products in question (Art
101(3) TFEU). Art 102 (previously Art 82 EC Treaty) prohibits any abuse by one or more undertakings of
a dominant position within the common market or in a substantial part of it.
7
Regulation 1/2003, Art 11(6)
1
Community public interest relating to the application of Articles 101 and 102 of the
TFEU so requires, to find by decision that Article 101 is not applicable to an agreement, a
decision by an association of undertakings or a concerted practice, either because the
conditions of Article 101(1) are not fulfilled, or because the conditions of Article 101(3)
are satisfied.8 In the area of Merger control the Commission enjoys an “exclusive
competence” to apply the EU Merger Regulation.9
In order to fulfill its task the Commission is granted with broad investigative and
decision-making powers10 and can impose substantial fines amounting at up to 10 % of
the undertaking’s total turnover in the preceding business year.11 This inevitably invokes
an extensive public scrutiny over the EU competition enforcement regime. Amongst the
most frequent criticisms is the (lack of) compatibility of this regime with the rights
enshrined in the European Convention on Human Rights and Fundamental Freedoms
(hereafter ECHR or the Convention) and particularly with the right of fair trial under
Article 6 ECHR12. The dispute as to whether (and to what extent) the rights under the
ECHR are guaranteed in the EU competition procedures has been responsible for the
accumulation of considerable literature13 as well as jurisprudence of the EU Courts.14 The
8
Ibid, Art 10(1). This provision is not intended to provide a back door notification provision, nor does it
authorize the Commission to clear anticompetitive agreements for public interest considerations as some
authors have recently suggested (see Bar-Bouyssiere B and Kamrad H, “Crisis Cartels: An option under
article 81 EC?”, Competition Law Insight, [2009] 8(3), p 15). In Recital 14 it is indicated that such
decisions shall be of declaratory nature. The aim is that such decisions should be adopted in order to clarify
the law and ensure its consistent application throughout the EU, in particular with regard to new types of
agreements or practices that have not been settled in the existing case-law and administrative practice. See
Riley, “EC antitrust modernization: the Commission does very nicely – thank you! Part 1: Regulation 1 and
the notification burden”, p 608.
9
Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between
undertakings, [2004] O.J. L 24/1 (hereafter the EUMR), Recital 17
10
These are discussed in Section III of this paper
11
Regulation 1/2003, Art 23(4)
12
Article 6 ECHR - Right to a fair trial
1 In the determination of his civil rights and obligations or of any criminal charge against him, everyone is
entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal
established by law. Judgment shall be pronounced publicly but the press and public may be excluded from
all or part of the trial in the interests of morals, public order or national security in a democratic society,
where the interests of juveniles or the protection of the private life of the parties so require, or to the extent
strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the
interests of justice.
2 Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to
law.
3 Everyone charged with a criminal offence has the following minimum rights:
a to be informed promptly, in a language which he understands and in detail, of the nature and cause of the
accusation against him;
b to have adequate time and facilities for the preparation of his defence;
c to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient
means to pay for legal assistance, to be given it free when the interests of justice so require;
d 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;
e to have the free assistance of an interpreter if he cannot understand or speak the language used in court.
13
See in general the bibliography to this paper.
2
relevance of the topic has been highlighted by the ever increasing fines imposed by the
Commission for breaches of the competition rules as well as by the fact that according to
the Lisbon Treaty the EU shall accede to the ECHR.15 These developments justify a
further research in the area.
When one considers the topic of this paper the first question to be answered is
whether the right of fair trial is applicable at all to the administrative procedures under
the EU competition law directed mainly against undertakings – legal persons16. If the
answer is in the affirmative, the alleged problems are to be examined. Having regard to
the European Court of Human Rights (hereafter the ECtHR)’ composite approach 17 both
the procedures before the Commission and before the EU Courts need examination.
Section II of this paper therefore contains a discussion regarding the applicability
of the concept of fair trial to the EU competition procedures. Section III examines the
existing ECHR implications at the procedures before the Commission.18 Section IV then
takes a look at the judicial proceedings before the EU Courts from the perspective of the
right of fair trial. Section V considers the possibilities for the undertakings concerned to
obtain a judicial redress in case of violation of their ECHR rights. In its final part the
paper provides the author’s conclusions on the questions raised above.
II EU COMPETITION ENFORCEMENT AND THE RIGHT TO A FAIR
TRIAL
14
This will be discussed at the respective sections of this paper. For the purposes of this paper the term
“EU Courts” includes the General Court (previously the Court of First Instance or the CFI) and the Court of
Justice of the European Union (previously the European Court of Justice or the ECJ).
15
The new Art 6(2) of the Treaty on European Union introduced by the Treaty of Lisbon, OJ [2007] C
305/1 at 13. This constitutional amendment was necessary after the ECJ held in its Opinion 2/94 ([1996]
ECR I-1759) that under the then current provisions of the EC Treaty the Community lacked the
competence to accede to the ECHR. For comments on that Opinion see Allott P, “Fundamental Rights in
the EU” [1996] C.L.J., p 409.
16
Although the definition of “undertaking” for the purposes of competition law is so broad that it
encompasses natural persons as well. See e.g. AOIP v Beyrard OJ [1976] L6/8 where a patent license
between an individual and a company was held to fall within Art 81(1); Reuter/BASF OJ [1976] L 254/40;
RAI v UNITEL OJ [1978] L 157/39 where opera singers were undertakings; Case C 35/83 BAT v
Commission [1985] ECR 363; French Beef OJ [2003] L 209/12, paras 104-108, upheld on appeal Cases T217/03 and T-245/03 FNCBV v Commission, [2006] ECR II – 4987 etc.
17
See Appl. Nos 7299/75 and 7496/76, Albert & Le Compte v Belgium [1983] 5 EHRR 533, para 29. For a
further discussion on the composite approach see infra notes 65-86 and the accompanied text.
18
As the title of this paper suggests and given limited size, it weal deal only with the unresolved problems.
Positive developments of the EU law in the area are not and most welcomed but will not be discussed in
detail in this paper. For instance concerns have been expressed with respect of the old Merger Regulation
(Council Regulation (EEC) № 4064/89) that given the short terms for review of the notified concentrations
the merging parties were under pressure to accept commitments which were unduly restrictive. This issue
has been addressed with the introduction of the “stop-the-clock” clause in Art 10 of the ECMR (see
Andreangeli A, “Fairness and timing in Merger Control proceedings: will the ‘stop-the-clock’ clause
work?” [2005] E.C.L.R., p 403). Since it is submitted that this represents a satisfactory solution of the
issue, it will not be considered in detail here.
3
As outlined above19 the first question to be answered when analyzing the issue of
the ECHR implications in the EU competition enforcement, is whether the concept of fair
trial as enshrined in Article 6 of the Convention is applicable to the EU competition
procedures. An important issues in that regard is whether these procedures can be
qualified as having criminal or civil procedures for the purposes of Article 6 ECHR as
well as whether undertakings have “human rights”. An examination of the level of
protection of the undertakings’ rights enjoyed under the jurisprudence of the EU Courts is
also needed. Once it has been established that the right of fair trial is applicable to the EU
competition procedures as well as that legal persons are entitled to fair trial as well, it
should be considered whether the Commission’s combined role of “prosecutor and
judge” is compatible with Article 6 of the Convention. These issues are considered in the
following subsections.
A. EU COMPETITION PROCEDURES AND THE EU CONCEPT OF FUNDAMENTAL
RIGHTS
There is a well-known line of EU case-law rejecting arguments based on alleged
violations of ECHR when examining the legality of the actions of the Commission
simply because the Courts found that the Commission cannot be classed as a tribunal
within the meaning of Article 6 of the ECHR and held that for that reason the said
provision was inapplicable.20
It is respectfully submitted that this seems a dubious position to have adopted.
Article 6 of the ECHR explicitly indicates that its provisions should be observed in any
procedure relating to “the determination of his civil rights and obligations or of any
criminal charge”.21 Its applicability depends therefore on the nature of the procedure
concerned, rather than on whether it is in practice a “tribunal” or an administrative body
that investigates the case in question. In the case of procedures involving the
determination of civil rights or of any criminal charge, any party should be “entitled to”
be heard “by an independent and impartial tribunal”. Therefore, the mere fact that the
Commission is not a “tribunal” within the meaning of Article 6(1) should not mean as
such that Article 6(1) is not applicable to the proceedings concerned. On the contrary, the
very fact that, as recognized by the Court of Justice, “the Commission cannot be
described as a tribunal within the meaning of Article 6 of the ECHR” raises precisely the
question whether the parties should not have been entitled to having their case decided by
a true “tribunal”. In that respect, as stated by the ECtHR; “[t]he first issue to be resolved
in the applicability of Article 6(1)… [is]… whether the case involved a ‘determination’
either of a ‘civil right’ or of a ‘criminal charge’”.22
19
Supra notes 16 and 17 and the accompanied text.
See Joined cases 209 to 215 and 218/78 Heintz van Landewyck SARL and Others v Commission [1980]
ECR 3125, para 81; Cases 100-103/80 [1983] Musique Diffusion Francaise v Commission 3 C.M.L.R. 221,
para 7; Case T-11/89 Shell v Commission [1992] ECR II-757, para 39.
21
See supra note 12.
22
Waelbroeck D and Fosselard D, “Should the Decision-Making Power in EC Antitrust Procedures be left
to an Independent Judge? – The Impact of the European Covention of Human Rights on EC Antitrust
Proceedings” [1994] 14 YEL, p 111, at 115 – 116. See Tre Traktorer AB A/159 (1989) ECR 3283, para 35
20
4
In the same time however, from the late 1960s the EU Courts started developing
fundamental rights jurisprudence as part of the general principles of EU law.23 In its
judgment in Nold II24 the Court of Justice held that, in addition to Member States’
constitutions, international conventions could also supply guidelines which could be
taken into consideration by the Court on matters concerning claims to fundamental
rights.25 The ECHR was first specifically referred to by the Court in 1975 in Rutili26 and
has since been quoted by the Court on numerous occasions as having a special
significance as a source of guidance.27
The importance of the ECHR has been confirmed by the fact that it has been
explicitly referred to in the Joint Declaration on Human Rights of the Commission,
Council and the European Parliament28 as well as in the Preamble of the Charter of
Fundamental Rights of The European Union.29 According to the new version of Article 6
EU introduced by the Treaty of Lisbon30 the Charter of Fundamental Rights shall have
the same legal value as the Treaties31 and the Union shall accede to the ECHR.32
Thus, according to the case-law of the EU Courts, rather than being directly
applicable, the ECHR serves as a benchmark for assessment of the observation of
fundamental rights within the Community legal order. This position is probably best
summed by the CFI’s ruling in AC-Treuhand v Commission33 where the Court held that:
“[T]he Court has no jurisdiction to assess the lawfulness of an investigation under
competition law in the light of provisions of the ECHR, inasmuch as those provisions do
not as such form part of Community law. That said, the fact remains that the Community
23
See e.g. Case 29/69, Stauder v Ulm [1969] ECR 419, at 425; Case 11/70, Internationale
Handelsgesellschaft [1970] ECR 1125, at 1134; Case C-60/00 Carpenter v Secretary of State for the Home
Department [2002] CML Rev, p 64, para 40; Case C-112/00 Eugen Schmidberger, Internationale
Transporte und Planzuge v Republic of Austria [2003] CML Rev, p 34, para 81. For a general discussion
on this jurisprudence see Coppel J and O’Neill A, “The European Court of Justice: Taking Rights
Seriously?” [1992] CML Rev., p 669; Besson S, “The European Union and Human Rights: Towards a PostNational Human Rights Institution?” [2006] HRLR, p 323; Acierno S, “The Carpenter judgment:
fundamental rights and the limits of the Community legal order” [2003] E.L. Rev. p 398; Biondi A, “Free
Trade, a Mountain Road and the Right to Protest: European Economic Freedoms and Fundamental
Individual Rights” [2004] 1 E.H.R.L.R, p 51.
24
Case 4/73 [1974] ECR 491
25
Ibid, at 507
26
Case 36/75 [1975] ECR 1219
27
See e.g. Case 44/79, Hauer v Land Rheinland-Pfalz [1979] ECR 3727; Case 36/79, National Panasonic v
Commission [1980] ECR 1979; Case 222/84. Johnson R.U.C. [1986] ECR 1651; Opinion 2/94, supra note
15, para 33; Case C-299/95 Kremzow v Austria [1997] ECR I-2629, para 14.
28
OJ [1977] C 103/1
29
OJ [2000] C 364/1 For a discussion on the Charter see Garcia R “The General Provisions of the Charter of
Fundamental Rights of The European Union” [2002] ELJ, p 492; Arnull A, “From Charter to Constitution and
Beyond: Fundamental Rights in the New European Union” [2003] P.L. Winter, p 774; Carruthers S, “Beware of
Lawyers Bearing Gifts: A Critical Evaluation of the Proposals on Fundamental Rights in the EU Constitutional
Treaty” [2004] 4 E.H.R.L.R., p 424 and Lemmens P, “The Relation between the Charter of Fundamental Rights
of the European Union and the European Convention on Human Rights – Substantive Aspects” [2001] 8 MJ
1, p 49.
30
Supra note 15
31
Ibid, Article 6(1)
32
Ibid, Article 6(2)
33
Case T-99/04
5
judicature is called upon to ensure the observance of the fundamental rights which form
an integral part of the general principles of law and, for that purpose, it draws inspiration
from the constitutional traditions common to the Member States and from the guidelines
supplied by international instruments for the protection of human rights, on which the
Member States have collaborated and to which they are signatories. In that regard, the
ECHR has special significance, as confirmed by Article 6(2) EU […]. That has also been
reaffirmed in the fifth recital in the preamble to the Charter of Fundamental Rights of the
European Union and Articles 52(3) and 53 thereof.”34
B. THE NATURE OF EU COMPETITION PROCEDURES FOR THE PURPOSES OF
ARTICLE 6 OF THE ECHR
As already mentioned35 according to the case-law of the ECtHR the first issue to
be resolved in the applicability of Article 6(1) ECHR is whether the case involved a
“determination” either of a “civil right” or of a “criminal charge”. This subsection
therefore examines the nature first of the procedures under Regulation 1/2003
(concerning the application of Articles 101 and 102 of the TFEU) and then the procedure
under the ECMR. It is submitted that the former has a “criminal” nature whereas the
latter has a “civil” nature and therefore Article 6(1) ECHR is applicable in both cases.
1. The procedure for the application of Articles 101 and 102 TFEU
According to Article 23(5) of the Modernization Regulation fines imposed by the
Commission for violations of Articles 101 and 102 of the TFEU “shall not be of a
criminal law nature”. This provision has been described in the literature as “a doomed
attempt” to avoid the issue of the compatibility of EU competition procedures with
ECHR and even as a “fiction”.36 Indeed, the ECtHR has held in Engel v Netherlands37
that the definition of a criminal charge, for the purposes of the Convention, is
autonomous. It argued that to have permitted the Contracting States to provide definitions
of criminal, regulatory and disciplinary law, and to have obliged the Court to follow such
definitions, would result in the undermining of the objective and purpose of the
Convention.38 The ECtHR then set out the criteria for the autonomous definition of
“criminal charge” under the Convention. It identified three core criteria: the classification
of the offence under national law, the nature of the offense and the severity of the
penalty.39
The application of the Engel criteria in a regulatory context is demonstrated by
Bendenoun v France.40 In that case the Court held that the French national procedures in
34
Ibid, para 45
Supra note 22 and the accompanied text
36
MacCulloch A, “The privilege against self-incrimination in competition investigations: theroretical
foundations and practical implications” [2006] 26 (2) Legal Studies, p 211, at 233
37
[1979-80] EHRR 647
38
Ibid, para 81
39
Ibid, para 82
40
[1994] 18 EHRR 54
35
6
which tax surcharges were imposed were of criminal nature for the purposes of Article
6(1) ECHR. The Court emphasized first, the nature of the offense. It was of general
application, as it covered all citizens in their capacity of tax payers and not a given group
with a particular status. In addition the tax surcharges were intended not as pecuniary
compensation for damage, but essentially as punishment to deter re-offending.
Furthermore, the penalties were imposed under a general rule, whose purpose was both
deterrent and punitive. Secondly, in respect of the severity the penalty, the surcharges
were very substantial, amounting to FrF 422,534 in respect of Mr. Bendenoun personally
and FrF 570,398 in respect of his company.
Having weighed the various factors in the case, the ECtHR noted the
predominance of those which had a criminal connotation. None of them was decisive on
its own, but taken together made the nature of the “charge” in question a criminal one
within the meaning of Article 6(1) ECHR.41
Applying these criteria “the inescapable conclusion is that, for the purposes of
ECHR the [EU competition] procedures and penalties are criminal in nature.”42 First,
competition law is imposed as a general rule applicable to all.43 The aim of competition
law is “to prevent competition from being distorted to the detriment of the public interest,
individual undertakings and consumers.”44 Second, non-compliance with the procedure
leads to the imposition of financial sanctions. Third, as the Commission guideline has
outlined,45this penalty is intended to deter and punish the perpetrators.46 Fourth, the
Commission can impose anything up to 10% of the company’s turnover. In Societe
Stenuit47 the former European Commission on Human Rights (hereafter CHR) considered
the fact that the French Minister of Economic and Financial Affairs could have imposed a
fine for a breach of the national competition law up to 5% of the company’s takeover
which was intended to act as a deterrent, substantial enough to classify the fine as a
criminal sanction.48 Nor has the Commission hesitated to exercise its right to impose such
sanctions. It has imposed fines for cartel activity amounting at EUR 2 271 million in
2008 alone. The Commission imposed the highest fine per cartel case to date of EUR 1
383 million in the Car Glass case49 The biggest fine imposed on single undertaking so far
has been at the amount of EUR 1.06 billion imposed on Intel for violation of Article 102
TFEU.50 It could also be argued that the trend towards criminalization of the violation of
41
Ibid, para 47
Riley A, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”
[2002] 51 ICLQ, p 55, at 67; Waelbroeck and Fosselard, op. cit., p 123; Wils W, “The Combination of the
Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A
Legal and Economic Analysis” [2004] 27(2) World Competition, p 201 at 208-209
43
Riley, ibid
44
National Panasonic, supra note 27, para 20
45
Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003,
OJ C 210 1/9/2006, p 2
46
Aslam I and Ramsden M, “EC Dawn Raids: A Human Rights Violation?” [2008] 5(1) Comp. L. Rev., p
61, at 72
47
Societe Stenuit v France [1992] 14 EHRR 509
48
Ibid, paras 62-64. The case was settled out of court and it never reached the ECtHR.
49
Commission of the European Communities, Report on Competition Policy 2008 COM (2009) 374 final,
para 21
50
See Press release IP/09/745.
42
7
competition rules in some Member States,51 the adoption of Leniency Programs both at
EU and at Member States level, the publicity of enforcement activity and the rhetoric
deployed by public authorities in relation to cartels and other serious infringements of
competition law all signal for increased intolerance towards anticompetitive behavior and
therefore reinforce the “criminal” element of the prohibitions thereof.52
Furthermore, with respect of national competition rules, the ECtHR held in
Deweer v Belgium53 that a prohibition on price fixing could be criminal in nature for the
purposes of the Convention.54
Finally, it should be noted that in the M&Co case55 the CHR has held that “it can
be assumed that the [EU] anti-trust proceedings in question would fall under Article 6
had they been conducted by German and not by European judicial authorities.”
Although the ECtHR has never had the chance to rule directly on the issue
whether the Commission’s procedures in applying Articles 101 and 102 are of criminal
nature56 it is submitted that the analysis of the case-law discussed above reveals
emphatically that these procedures are indeed “criminal” for the purpose of Article 6
ECHR.
2. The procedure under the EUMR
Just like in the case of “criminal charge”, the ECtHR has held that for the
purposes of the Convention “civil rights and obligations” is an autonomous concept
which is not interpreted solely by reference to the categorization of rights or obligations
in domestic law.57
A parallel can be drawn between the EU merger procedure and the proceedings
provided by the laws of certain contracting states to the ECHR and aimed at the
E.g. the introduction of the Cartel Offense in the UK Enterprise Act 2002; See MacCulloch A “The
Cartel Offense and the Criminalization of United Kingdom Competition Law” [2003] J.B.L. p 616
52
Andreangeli A, “EU Competition Enforcement and Human Rights” [2008] Edward Elgar Publishing
Limited, p 28; Nazzini R, “Some Reflections on the Dynamics of the Due Process Discourse in EC
Competition Law” [2005] 2(1) Comp. L. Rev., p 5, at 6
53
[1979-1980] 2 EHRR 439
54
In Deweer the Court emphasized the punitive character of the impugned regulations as a factor weighing
heavily in its decision as to their criminal law character, ibid, para 46
55
Application No. 13258/87, M. & Co v the Federal Republic of Germany
56
This was, inter alia, one of the issues at stake in Senator Lines Gmbh v the 15 Member States of the
European Union 2004-IV 331 [2004] 39 EHRR SE 3. Senator Lines Gmbh alleged a violation of Article 6
ECHR arising out of the refusal to suspend a competition fine pending judicial review by the CFI.
However, the hearing of the case in Strasbourg (which had been fixed for 22 October 2003) was canceled
when the CFI heard the main case and set aside the fine (see Joined Cases T-191/98 etc., judgment of 30
September 2003). A few months later, in March 2004, the ECtHR returned to the matter and rejected the
claim due to the mootness of the issue after the CFI ruling “whatever the merits of the other arguments in
the case.” Commentators have suggested that the decision of the CFI may have been a strategic one, aimed
to avoid conflict with the ECtHR (see Costello C, “The Bosphorus ruling of the European Court of Human
Rights: Fundamental Rights and Blurred Boundaries in Europe” [2006] 6 HRLR, p 87, at 96).
57
See Konig v Germany [1978] 2 EHRR 170, paras 88-89; Ringeisen v Austria (No 1) [1971] 1 EHRR 455,
para 94 and Kaplan v United Kingdom [1980] 4 EHRR 64, paras 132-133. For a general discussion over the
concept of “civil rights and obligations” in the jurisprudence of the ECtHR see Boyle A “Administrative
Justice, Judicial Review and the Right to a Fair Hearing under the European Convention on Human Rights”
[1984] PL, p 89.
51
8
authorization of land transactions. The ECtHR has held with respect of such proceedings
that they fall within the scope of Article 6(1) ECHR, being concerned with the
determination of civil rights and obligations and “decisive for the relations in civil law”
between the applicant and his counterpart in the transaction.58
There are thus strong arguments that Article 6(1) ECHR should apply to the
procedure under EUMR, as it is decisive for the parties’ right to merge or make an
acquisition and thus – to carry on their business.59 However, while Article 6(1) ECHR
will apply to merger proceedings, it should be stressed that the second and the third
paragraphs of Article 6 would only be applicable in cases where fines are imposed since
they protect only persons who are charged with criminal offense.60
C. DO UNDERTAKINGS HAVE “HUMAN RIGHTS”?
Both the CHR and the ECtHR have held on many occasions that the answer of
this question is in the affirmative.61 It is now a settled case-law of the ECtHR that the
ECHR applies to undertakings and individuals alike.62 While it is noted that “not all of
the Convention’s safeguards are equally applicable to business entities: rules enshrining,
for instance, the right to protection against torture or arbitrary detention or the right to
respect for one’s family right are clearly designed only for human beings”63 the
consistent jurisprudence of the ECtHR shows that this is certainly not the case with the
right of fair trial under Article 6 ECHR.64
D. THE COMBINED INVESTIGATIVE, PROSECUTORIAL AND DECISION-MAKING
POWERS OF THE COMMISSION
58
Ser. A No 13, Ringeisen v Austria [1979-1980] 1 EHRR 455, para 94; See also Appl. No 8790/79
Sramek v Austria [1985] 7 EHRR 351 and Andreangeli A, “EU Competition Enforcement and Human
Rights”, p 29.
59
Waelbroeck and Fosselard, op. cit., pp 124 – 125; Wils “The Combination of the Investigative and
Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic
Analysis”, p 209
60
Waelbroeck and Fosselard, op. cit., p 125
61
The CHR stated in Case 3798/68 Church of X v United Kingdom, judgment of 17 December 1968 “it is
clear that the procedural rights guaranteed under this provision may be had and exercised by legal as well
by a natural person”; in the Stenuit report, supra note 48, para 66 it held that “a corporate body can claim
the protection of Article 6 of the Convention when a ‘criminal charge’ has been made against it.” The
ECtHR has implicitly ruled similarly in Case 37/1992/382/460 Dombo Beheer BV v The Netherlands,
judgment of 27 October 1993, Series A No 274 and more explicitly so in Niemitz v Germany [1993] 16
EHRR 97; JA PYE (Oxford) v UK App. No 44302/02, Judgment of 30/08/2007; Demuth v Switzerland
[2004] 38 EHRR 20; Comingersoll SA v Portugal [2001] 31 EHRR 772 – see van Overbeek W, “The Right
to Remain Silent in Competition Investigations: The Funke Decision of the Court of Human Rights Makes
Revision of the ECJ’s Case Law Necessary” [1994] 15(3) ECLR p 127, at 130 and Aslam and Ramsden,
op. cit., p 71
62
Aslam and Ramsden, ibid
63
Andreangeli A, “EU Competition Enforcement and Human Rights”, p 17
64
Or to the rights under Articles 7 and 8 of the Convention; See infra notes 113-188 and the accompanied
text for further discussion on the issue.
9
If one reaches the (as this paper submits – correct) conclusion that the parties to
the EU competition procedures are entitled to a “fair trial” in accordance with Article 6
ECHR, perhaps the most logical question is how is the combined role of the Commission
as an investigator, prosecutor and judge compatible with the right to be heard by an
“independent and impartial tribunal”. Indeed, the ECtHR has recognized that
administrative bodies may come “within the concept of a ‘tribunal’ in the substantive
sense of this expression”,65 provided that their “function is to determine matters within its
competence on the basis of rules of law, following proceedings conducted in a prescribed
manner.”66
Nevertheless, the functional characteristics listed above do not suffice for the
administrative proceedings to comply with the requirements of Article 6(1) ECHR: the
authority in question must also meet guarantees of independence of the executive and
impartiality of its members, in consideration of its composition, manner of appointment,
duration of office and guarantees against bias.67 Admittedly, this is not the case of many
administrative authorities and bodies.68 This is certainly not the case with the
Commission either, as the EU Courts had explicitly confirmed.69 Thus the problem arises
as to “how to accommodate the relative inflexibility of Article 6 with the realities of
administrative decision-making”.70
In that regard it must be recalled that the ECtHR has held that “demands of
flexibility and efficiency […] may justify the prior intervention of administrative or
professional bodies […] which do not satisfy the said requirements [for independent
tribunal] in every respect.”71 Nonetheless:
“[T]he Convention calls at least for one of the two following systems: either the
[administrative] organs themselves comply with the requirements of Article 6(1) or they
do not comply but are subject to subsequent control by a judicial body that has full
jurisdiction and does provide the guarantees of Article 6(1).”72
The ECtHR has thus adopted a composite approach according to which the
conformity with ECHR of certain procedures must be assessed with regard both of its
administrative and judicial phases.73 It should be noted that EU competition proceedings
have been explicitly found by the EU Courts to comply with the requirements of Article 6
ECHR. In its decision in Aristrain74 the CFI held that:
65
Sramek, supra note 59, para 36
Ibid
67
Inter alia App. No 9273/81 Ettl v Austria [1988] 10 EHRR 255 paras 38 and 41; App No 19178/91
Bryan v United Kingdom, Commission Report [1996] 21 EHRR 342, paras 37-38
68
Inter alia App. No 8544/79 Ozturk v Germany [1984] 6 EHRR 409, paras 49-50; Andreangeli A, “EU
Competition Enforcement and Human Rights”, p 52
69
See supra note 20 and the accompanied text.
70
Boyle, supra note 57, p 99
71
Appl. Nos 6878/75 and 7238/75, Le Compte, Van Leuven and de Meyere v Belgium [1982] 4 EHRR 1,
para 51
72
Appl. Nos 7299/75 and 7496/76, Albert & Le Compte v Belgium [1983] 5 EHRR 533, para 29
73
Andreangeli, ibid., p 53
74
Case T-156/94, Siderurgica Aristrain Madrid SL v Commission [1999] ECR II-645
66
10
“[E]ven supposing that the fines imposed under Article 65 of the [ECSC] Treaty
have the nature of penal fines, the applicant’s complaint can be upheld only if the
Commission’s decisions imposing those fines cannot form the subject matter of an appeal
to a judicial authority with unlimited jurisdiction, within the meaning of ECHR.”75
The CFI held that since it was an independent and impartial tribunal with
unlimited jurisdiction to review the penalty in conjunction, where necessary, with the
review of the legality of the other elements of the decision, it is such an authority and
therefore the competition procedure in consistent with the principle enshrined in Article
6(1) of the ECHR.76
It can thus be argued that Article 6(1) ECHR guarantees access to independent
and impartial tribunal at some stage of the procedure, but not necessarily from the
outset,77 particularly because competition law “differs from the hard core of criminal
law”.78 However, it must be taken into account that the ECtrHR has accepted such a twotier judicial review system on an exceptional basis in cases concerning civil rights and
obligations,79 for “disciplinary cases”, involving the military,80 and for criminal cases
involving “minor offenses”.81 Apart from these, rather narrowly-tailored exceptions, “as a
general rule, criminal law proceedings should be heard at first instance by a tribunal
respecting all the requirements of that provision [Article 6 ECHR]”.82 It is therefore
highly dubious the ECtHR would approve the two-tier judicial review system with
respect of the procedures for application of Articles 101 and 102 TFEU to which a
significant public stigma is attached and within which the largest fines in the West for
any civil or criminal offense are being imposed.83
75
Ibid, para 27
Ibid, paras 28-39
77
Andreangeli, ibid., pp 52-53; de la Torre F. C., “Evidence, Proof and Judicial Review in Cartel Cases”,
[2009] 32(4) World Competition, p. 505, at 570-571
78
Wils W, “The Increased Level of EU Antitrust Fines, Judicial Review, and the European Convention on
Human Rights”, forthcoming in World Competition, Volume 33, No. 1, March 2010 and accessible at
http://ssrn.com/abstract=1492736, pp 12-17; the author relies on Application No. 73053/01 Jussila v
Findland where the Court held that in cases which differ from the hard core of criminal law, “the criminalhead guarantees will not necessarily apply with their full stringency” (ibid, para 43). It should be noted,
however, that this case dealt with tax surcharges (ibid.) and remained silent on the issue whether the twotier review system is appropriate in competition procedures. Moreover, in reaching that conclusion the
Court has explicitly considered that the applicant’s reasoning for requesting a hearing “concerned in large
part the validity of the tax assessment, which as such fell outside Article 6” (ibid., para 46 emphasis added)
as well as “the minor sum of money at stake” (ibid., para 48) – factors that are clearly absent from the EU
competition procedures.
79
Le Compte, supra note 71
80
Albert, supra note 72
81
Ozturk v Germany [1984] E.H.R.R. 409, para 56 (a minor traffic violation)
82
See Slater D, Thomas S and Waelbroeck D, “Competition law proceedings before the European
Commission and the right to a fair trial: no need for reform?” GCLC Working Paper 04/08, pp. 26-31 and
the case-law cited therein.
83
Forrester I, “Due process in EC competition cases: A distinguished institution with flawed procedures”,
available
at
http://www.whitecase.com/files/Publication/c4f59abd-fcbe-4330-ae4a3b19769555df/Presentation/PublicationAttachment/cc0bc14b-4ffc-4c40-ba44609dd8338b59/Article_Due_Process_in_EC_Competition_Cases.pdf#page=1, p. 3; Riley A, “The
76
11
Moreover, even if it is accepted that the two-tier judicial review in EU
competition procedures meets the Article 6 criteria, it should not be forgotten that
according to the Imbroscia judgment:84
“Certainly the primary purpose of Article 6 as far as criminal matters are
concerned is to ensure a fair trial by a ‘tribunal’ competent to determine ‘any criminal
charge’, but it does not follow that the Article has no application to pretrial
proceedings.”85
Indeed, if the guarantees enshrined in Article 6 are not observed at the pretrial
stage there is a risk that equitable character of the entire proceedings will be gravely
compromised.86 Therefore, even if one accepts that CFI’s ascertaining that it is in fact a
judicial authority with unlimited jurisdiction, within the meaning of ECHR,87 the
observation of the rights of the parties involved in EU competition procedures at the
administrative stage of the proceedings still needs to be monitored.
E. EU COMPETITION ENFORCEMENT AND THE RIGHT TO A FAIR TRIAL CONCLUSIONS
This Section has shown that the procedure for the application of Articles 101 and
102 TFEU is of criminal law nature whereas the procedure under the EUMR has the
character of determination of civil rights and obligations and therefore Article 6 ECHR
applies to both procedures (the difference being that paragraphs 2 and 3 of Article 6 are
not applicable with respect of the latter procedure).
It has also been shown that while the EU Courts have rejected the direct
applicability of Article 6 ECHR to Competition procedures (on the grounds that the EU is
not a party to the Convention and – perhaps more puzzling – that the Commission is not a
“tribunal” within the meaning of Article 6), they have developed their own fundamental
rights jurisprudence, drawing inspiration, inter alia, from the Convention. Given the fact
that the Charter of Fundamental Rights of The European Union explicitly refers to the
ECHR, and that Regulation 1/2003 states that it “respects the fundamental rights and
observes the principles recognized in particular by the Charter of Fundamental Rights of
the European Union”88 one would expect that the Commission is equally “inspired” by
the ECHR when applying the competition rules. It is however open to discussion whether
the inspiration of both the Commission and the EU Courts has been sufficient to secure
Modernization of EU Anti-Cartel Enforcement: Will the Commission Grasp the Opportunity?” CEPS
Special Report/January 2010, available at http://www.ceps.eu, pp. 12-16
84
A/275 [1993] EHRR 13
85
Ibid, para 36 (Emphasis added)
86
Andreangeli, ibid., p 57
87
For which there are certain doubts – see Section IV of this paper.
88
At Recital 37
12
the observance of fundamental rights enshrined in ECHR at the administrative stage of
the EU competition procedures in all cases. The next Section deals with this issue.
III ECHR PROBLEMS AT THE ADMINISTRATIVE STAGE OF THE EU
COMPETITION PROCEDURES
A. THE INVESTIGATIVE POWERS OF THE COMMISSION UNDER REGULATION
1/2003
1. Dawn raids and the rights to privacy (Article 8 ECHR89)
1.1 Overview of the Commission’s powers
It has been argued that the Commission enjoyed “wide-ranging” investigative
powers already under the predecessor of Regulation 1/2003 – Regulation 17/1962.91
The Modernization Regulation has broadened these powers even further92 and
“transformed the system into a more repressive [one] than in the past”.93
Under Article 20 of Regultaion 1/2003 the Commission has the power to “conduct
all necessary inspections of undertakings and associations of undertakings”.94 The
Commission can conduct these inspections in one of two ways: either on the basis of an
authorization95 or pursuant to a decision.96
90
89
Article 8 of the Convention reads as follows:
1 Everyone has the right to respect for his private and family life, his home and his correspondence.
2 There shall be no interference by a public authority with the exercise of this right except such as is in
accordance with the law and is necessary in a democratic society in the interests of national security, public
safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection
of health or morals, or for the protection of the rights and freedoms of others.
90
Lavoie C, “The Investigative Powers of the Commission with respect to Business Secrets under
Community Competition Rules” [1992] 17 E.L. Rev., p 20, at 21; Vesterdorf B, “Legal Professional
Privilege and the Privilege against Self-incrimination in EC Law: Recent Developments and Current
Issues”, in Hawk (ed.), International Antitrust Law and Policy, Annual Proceedings from the Fordham
Corporate Law Institute [2005] New York: Juris Publishing, p 701, at 702; Erlandson A, “The Defendant’s
Right of Access to the Commission’s File in Competition Cases” [1998] LIEI, p 139
91
OJ 13, 21.02.1962, p. 204/62
92
Inter alia, Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition
Regulation”, p 56; Venit S and Louko T, “The Commission’s New Power to Question and its Implications
on Human Rights”, in Hawk (ed.), International Antitrust Law and Policy, Annual Proceedings from the
Fordham Corporate Law Institute [2005] New York: Juris Publishing, p 675, at 676; Wils W, “Powers of
Investigation and Procedural Rights and Guarantees in EU Antitrust Enforcement: The Interplay between
European and National Legislation and Case-law” [2006] 29(1) World Competition, p 3 at 7; Vesterdorf,
op. cit., p 724
93
Dekeyser K and Gauer C, “The New Enforcement System for Articles 81 and 82 and the Rights of
Defense”, in Hawk (ed.), International Antitrust Law and Policy, Annual Proceedings from the Fordham
Corporate Law Institute [2005] New York: Juris Publishing, p 549, at 550
94
Art 20(1)
95
Art 20(3)
96
Art 20(4)
13
On the basis of an authorization, the undertaking has the right to refuse the
inspection without threat of financial sanction.97 Where pursuant to a decision, the
undertaking is required to submit to inspections and could incur a fine of 1% of its total
turnover if it refuses to do so.98 Further, the Commission could impose a penalty payment
up to 5% of the average daily turnover to compel it to submit to an inspection that has
been ordered by a decision.99
The powers of inspection, either pursuant to an authorization or a decision,
empower the Commission to:
i)
enter business premises;100
ii)
examine and copy business records;101
iii)
seal business premises and records for a period and to the extent necessary
for the inspection;102 and
iv)
ask any staff member on-the-spot questions. Failure to answer correctly,
truthfully or to respond at all on nay facts relating to the subject matter can
lead to the imposition of a fine not exceeding 1% of the total turnover.103
Where an undertaking opposes an inspection to which it is required to submit, the
Member State at whose territory the inspection is to take place “shall afford [the
Commission officials] the necessary assistance, requesting where appropriate the
assistance of the police or of an equivalent enforcement authority, so as to enable them to
conduct their inspection.”104 If judicial authorization is required for such “assistance”
under national law, then it must be applied for.105
Article 20(8) which codifies the Roquette Freres judgment106 sets out the scope of
the review that a national court can undertake in authorizing the assistance. It entitled the
court to verify that the Commission’s decision is authentic and that the coercive measures
envisaged are neither arbitrary nor excessive. In order to ensure proportionality the
national court may ask the Commission for its reasons for suspecting a breach of
competition law, the seriousness of the infringement and the nature of the undertaking’s
involvement. However, it may neither question the necessity for the inspection nor
demand the information in the Commission’s file. Only the ECJ can review the legality
of the Commission’s decision.
Article 21(1) provides that the Commission may enter “any other premises, land
and means of transport, including the homes of directors, managers and other members of
staff of the undertakings and associations of undertakings concerned”. The Commission
can do so only if it has a reasonable suspicion exists that books or other records related to
the business and to the subject-matter of the inspection, which may be relevant to prove a
serious violation of Article 101 or Article 102, are being kept in those premises. The
97
Art 20(3)
Art 20(4), 23(1)(c)
99
Art 24(1)(e)
100
Art 20(2)(a)
101
Art 20(2)(b), (c)
102
Art 20(2)(d)
103
Art 20(2)(e), 23(1)(d)
104
Art 20(6)
105
Art 20(7)
106
Case 94/00 Roquette Freres SA v DGCCF [2002] ECR I-9011
98
14
Commission does not have powers equivalent to those when conducting investigations on
business premises. Whilst it can enter private premises, examine the records and make
copies, it cannot seal the premises or ask on-the-spot questions.107 Entering private
premises must be based on a decision which can only be made after NCAs have been
consulted.108 The Commission cannot execute decision without the prior authorization of
the national judicial authority.109
1.2. The right to privacy
1.2.1. Business premises
When first faced with the issue whether Article 8 ECHR could extend to business
premises in Hoechst110 the ECJ held that Article 8 did not apply to business premises,
only private dwellings or natural persons.111 Furthermore the ECJ refused to extend the
protection to business because there was no ECHR case-law on the matter.112
Subsequent development of the Jurisprudence of the ECtHR has overtaken this
analysis. In Niemitz113 the Court held that:
“[R]espect for private life must also comprise to a certain degree the right to
establish and develop relationships with other human beings [...] there appears,
furthermore, to be no reason of principle why this understanding of this notion of ‘private
life’ should be taken to exclude activities of a professional or business nature since it is,
after all, in the course of their working lives that the majority of people have a significant,
if not the greatest opportunity of developing relationships with the outside world. This
view is supported by the fact that [...] it is not always possible to distinguish clearly
which of an individual’s activities form part of his professional or business life and which
do not.”114
The ECtHR confirmed that Niemitz also applied to legal persons in Societe Colas
Est.115 According to the Court, the Convention is a “living instrument”116 and must be
given a “dynamic interpretation”.117 On this basis, the Court concluded that “the time has
come to hold that in certain circumstances the rights guaranteed by Article 8 of the
Convention may be construed as including the right to respect for a company’s registered
office, branches or other premises”.118 It then held that the French NCA (DGCCRF),
which undertook dawn raids on 56 companies and seized thousands of documents under
107
Art 21(4)
Art 21(2)
109
Art 21(3)
110
Joined Cases 46/87 and 227/88, Hoechst AG v Commission [1989] ECR 2859 at 10
111
Ibid, at 17
112
Ibid
113
Supra note 61
114
Ibid, at 29; In addition, the Court added that in the French version of the ECHR, the term “domicile” is
used, which has a broader meaning than the word “home” and includes a professional office.
115
Societe Colas Est v France [2004] EHRR 17
116
Ibid, at 41
117
Ibid
118
Ibid [Emphasis added]
108
15
French legislation allowing them to do so without any judicial authorization, breached
Article 8(1).
As a result, the Court had to decide whether the interference was justified. First,
the Court concluded that, as the DGCCRF was granted its power under the French
legislation, the interference was in accordance with the law as it has “some basis in
domestic law”.119 Secondly, the DGCCRF was pursuing the legitimate aim of “the
economic well-being of the country” and “the prevention of crime”.120 However, the
Court could not be persuaded that the DGCCRF dawn raid procedure was necessary in a
democratic society, as it did not provide for adequate and effective safeguards against
abuse. This was because “the relevant authorities had very wide powers which, pursuant
to the 1945 ordinance, gave them exclusive competence to determine the expediency,
number, length and scale of inspections. Moreover, the inspections in issue took place
without any prior warrant being issued by a judge and without a senior police officer
being present”.121
The argument that Article 8 does not apply to business premises is no longer
tenable. Following Niemitz and Societe Colas Est, an exercise of the Commission’s
power to enter premises under Article 20 of Regulation 1/2003 would be an infringement
of Article 8(1) ECHR. The crux of the matter is whether the dawn raid procedure is
justifiable under the criteria of Article 8(2) and more centrally, whether it can be said to
be proportionate within the meaning of its being necessary in a democratic society.122
1.2.1.1. Is it in accordance with the law?
Under Article 8(2) the EU dawn raid procedure must pass a three-part test:123 (i)
the measure must have some basis in domestic law; (ii) it must refer to the quality of law;
and (iii) its consequences must be foreseeable and compatible with the rule of law.
Applying the criteria to the dawn raid procedure the following can be concluded:
a) The procedure is in accordance with the law as it is “carried out on the basis of
[Article 101 TFEU] [...] and on the basis of the Regulation”.124 Whilst this test is
formulated with “domestic law” in mind, given that the EU law forms part of domestic
law125 and is constitutionally supreme,126 the EU law can be said to fit into that
category.127 This has been confirmed in Bosphorus Airways where the ECtHR held that
an EU Regulation is law for these purposes as it is “generally applicable” and “binding in
its entirety” on the Member States.128
119
Ibid, at 43
Ibid, at 44
121
Ibid, at 49 [Emphasis added]
122
Aslam and Ramsden, op. cit., p 75
123
Huvig v France [1990] 12 EHRR 528
124
AG Mischo in Roquette Freres at 39
125
Case 6/64 Costa v Enel [1964] ECR 585
126
Case 26/62 Van Gend en Loos v Netherlandse Adminisratie [1963] ECR 1
127
Aslam and Ramsden, op. cit., p 76
128
Bosphorus Airways v Ireland [2005] 42 EHRR 1 at 145
120
16
b) Both the Regulation and the Case-law of the EU are published in the Official
Journal of the EU, which is accessible to all.129
c) The test for foreseeability requires that the law be “Sufficiently clear to give
citizens an adequate indication as to the circumstances in and the conditions on which
public authorities were empowered to resort to such measures”.130 A clear reading of the
Regulation shows the clarity of when and where the Commission can act.131
1.2.1.2. Does it pursue a legitimate aim?
The procedure pursues the legitimate aim of protecting free competition in the
European Union.132 As in Colas, this falls within the public interest exception of
“economic well-being of the country”.133
1.2.1.3. Is it necessary in a democratic society?
It is submitted that is here where the EU dawn-raid procedure falls foul from the
requirements of Article 8(2) ECHR. The similarities with the condemned national
procedure in Colas are obvious. Like the DGCCRF in that case, the Commission is an
administrative body that grants itself an authorization under Articles 20(3) without a prior
judicial warrant.134 Proponents of the Commission’s powers have argued that this is not a
problem because (i) the undertakings can refuse to submit to an inspection based on
simple authorization and then national judicial authorization is required and (ii) the EU
Courts can, nonetheless, review the legality of the Commission’s decision, permitting
down-raid.135
The first point does not appreciate that, up to and until the point where the
undertaking does not oppose the dawn raid, the Commission’s inspection remains invalid
due to its not being authorized by an independent judicial authority. 136 In addition, as
Article 20(8) of Regulation 1/2003 provides, the national court authorizing a judicial
warrant cannot call into question the legality of the Commission’s decision; it should
rather concern itself with whether the Commission’s decision is “authentic” and the
coercive measures are neither arbitrary nor excessive. This clearly is not a true grant of a
real judicial authorization.137 To that point it should be noted that in Niemitz the ECtHR
was unable to justify interference, even where the authorities were granted a warrant
pursuant to a prior judicial authorization, because:
129
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”, p
75
130
Kopp v Switzerland [1998] ECHR 18 at 55
Aslam and Ramsden, ibid
132
Case C-185/95 P Baustalgewebe v Commission [1998] ECR I-8417
133
Or more precisely “the economic well-being of the EU”; Aslam and Ramsden, ibid
134
Ibid, p 77
135
Dekeyser and Gauer, op. cit., pp 555-557
136
Aslam and Ramsden, ibid
137
Ibid
131
17
“[T]he warrant was drawn in broad terms, in that it ordered a search for and
seizure of ‘documents’, without any limitation, revealing the identity of the applicant [...]
The search impinged on professional secrecy to an extent that appears disproportionate in
the circumstances”.138
The limited judicial control exercised by the national courts under Article 20(8) is
suspiciously similar to the one that was found wanted in Niemitz and therefore does not
fulfill the last criterion of Article 8(2) ECHR. Furthermore it should be noted that under
the existing EU case-law challenges of Commission decisions do not have suspensory
effect. An undertaking can seek a suspension of a decision until final judgment. However,
in order to obtain such a suspension it would have to make an application to the General
Court under Article 278 TFEU. In order to succeed a plaintiff should prove that serious
and irreparable damage would occur if the suspension were not granted. It is difficult to
see how an undertaking would be able to provide proof of serious and irreparable damage
simply by permitting entry to Commission inspectors.139 Furthermore, it is doubtful as a
practical matter whether in the circumstances of an unannounced inspection a challenge
under Article 263 TFEU together with an application for suspension could be effected in
time to prevent the inspection decision being implemented.140
The second point seems to neglect the fact that EU Courts can only review the
legality of the inspection after the search takes place. This is contrary to the judgment in
Colas where the ECtHR stated that prior judicial warrant is required. Finally, whilst of
the relevant NCA may accompany the Commission, this does not equate to having a
senior police officer present.141
It thus follows that both the inspections performed under authorization and under
decision are at odds with Article 8(2) ECHR.
1.2.2. Private dwellings
Although the safeguards with respect of private premises laid down in Regulation
1/2003 (the need for existence of reasonable suspicion that documents related to the
inspection are kept in these premises; the more limited powers of the Commission’s
inspectors and the need for a prior authorization from national judicial authority in each
case)142 are noted and welcomed it still remains the case that the prior authorization from
a national court is subject to the same limitations as the authorization for inspections of
business premises143 and therefore cannot be considered as sufficient in the light of the
Niemitz case-law144 whereas the fact that the control from the EU Courts takes place only
after the inspection is contrary to the judgment of ECtHR in Colas.145 Therefore
everything said with respect of the (lack of) compliance of Commission’s inspections of
138
Niemitz, at para 37
As illustrated, inter alia, by the AKZO Order discussed further in this paper
140
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”, p
76
141
Aslam and Ramsden, ibid
142
See supra notes 107-109 and the accompanied text.
143
Art 21(3)
144
See supra notes 136-138 and the accompanied text.
145
Supra note 141 and the accompanied text.
139
18
business premises with Article 8 applies with respect of the inspection of private
premises as well.
2. The power to require information and the privilege against self-incrimination
2.1. Overview of the Commission’s powers
Under Article 18 of Regulation 1/2003 the Commission may require undertakings
and associations of undertakings to provide all necessary information or written answers
to their questions.146 The Commission may do this either by a simple request147 or by a
decision.148 Where the Commission chooses to send a simple request, the undertaking is
under no obligation to respond. The undertaking comes under an obligation not to
provide incorrect or misleading information if and when it voluntarily submits to such a
request.149 Failure to uphold this obligation could lead to the imposition of a fine not
exceeding 1% of the total turnover in the preceding year.150
Where a request is made by a decision undertakings have an obligation to respond
to it.151 The Commission may impose a fine not exceeding 1% of the total turnover where
the undertaking, intentionally or negligently, supplies incorrect, incomplete or misleading
information or where it refuses to answer the questions.152 Furthermore, the Commission
may impose a penalty payment not exceeding 5% of the average daily turnover “in order
to compel them” to supply complete and correct information.153
2.2. The privilege against self-incrimination
The privilege against self-incrimination, which provides for a right to silence and
a right not to incriminate oneself, lies at the heart of a fair criminal procedure and
underlies the legal principle that a person is innocent until proven guilty.154
2.2.1. Early EU case-law
Like in the case of the right to privacy, the ECJ was the first who had the chance
to rule whether the privilege extends to undertakings.155 In Orkem156 the ECJ held that the
privilege was available “only to a natural person charged with an offense in criminal
proceedings” as opposed to “legal persons on economic sphere”. 157 Furthermore, the ECJ
ruled that:
146
Art 18(1)
Art 18(2)
148
Art 18(3)
149
Art 18(2)
150
Art 23(1)(a)
151
Art 18(3)
152
Art 23(1)(b)
153
Art 24(1)(d)
154
Aslam and Ramsden, op. cit., p 67
155
See supra notes 110-112 and the accompanied text.
156
Case 374/87 Orkem v Commission [1989] ECR 3283
157
Ibid, para 29
147
19
“[A]ltough it [Article 6 ECHR] may be relied upon by an undertaking subject to
an investigation relating to competition law, it must be observed that neither the wording
of that article nor the decisions of the [ECtHR] indicate that it upholds the right not to
give evidence against oneself.”158
The ECJ did, however, develop a limited form of the privilege against selfincrimination. A distinction was made between compulsion to provide factual
information and compulsion to directly admitting a violation of competition law. 159 With
respect to the former, the ECJ held that the Commission could “compel an undertaking to
provide all necessary information concerning such facts as may be known to it and to
disclose to it, even if the latter may be used to establish, against it or another undertaking,
the existence of anti-competitive conduct” (factual/indirect incrimination).160 The ECJ
concluded that “the Commission may not compel an undertaking to provide it with
answers which might involve an admission on its part of the existence of an
infringement” (direct incrimination).161 As Professor Riley put it “the Commission cannot
ask the antitrust equivalent of ‘when did you stop beating your wife?’ But it does permit
the Commission to ask for a close examination of her bruises and the instruments by
which they were inflicted.”162
2.2.2. The case-law of the ECtHR
Like in the case of the right to privacy again, the analysis of the ECJ has been
overtaken by the jurisprudence of the ECtHR. In Funke163 French customs officers,
having raided the applicant’s domicile, asked the applicant to produce further documents.
The French authorities imposed a fine for failure to do so. The ECtHR found that Article
6(1) ECHR did include a rule against self-incrimination and the customs authorities’
demand for information, backed by the penal powers of the customs code, amounted to a
violation of that rule. It held that:
“The special features of customs law cannot justify such an infringement of the
right of anyone charged with a criminal offense within the ordinary meaning of this
expression of Article 6, to remain silent and not to contribute to incriminate itself.”164
The ECtHR further elaborated on the scope of the privilege in Saunders165 which
concerned a takeover investigation by the Department of Trade and Industry (DTI). In
deciding the case, the Court noted that, even though it is not explicitly mentioned in
Article 6 ECHR, “the right to silence and the right not to incriminate oneself are
158
Ibid, para 30 [Emphasis added]
Aslam and Ramsden, op. cit., p 68
160
Orkem, para 34
161
Ibid, para 35
162
Riley A, “Saunders and the power to obtain information in Community and United Kingdom
competition law” [2000] 25 E.L. Rev., p 264 at 269
163
Funke v France [1993] I EHRR 297
164
Ibid, para 44
165
Saunders v United Kingdom [1997] 23 EHRR 313
159
20
generally recognized international standards that lie at the heart of the notion of fair
procedure under Article 6.”166 This was because it protected the accused against improper
compulsion and miscarriages of justice, and it was for the prosecution to prove its case
against the accused without resorting to finding evidence through the use of compulsion
and oppression in criminal cases.167
The ECtHR held that the applicant had been subject to compulsion to give
evidence because, had he refused to answer the questions, he would either have been
fined or sanctioned to two years’ imprisonment.168 In addition, the Court stated that the
right not to incriminate oneself:
“[C]annot reasonably be confined to statements of admission of wrong doing or to
remarks which are directly incriminating. Testimony obtained under compulsion which
appears on its face to be of non-incriminating nature – such as exculpatory remarks or
mere information on questions of fact – may later be deployed in criminal proceedings in
support of the prosecution case, for example to contradict or cast doubt upon other
statements of the accused or evidence given by him during the trial or to otherwise
undermine his credibility.”169
This is a clear rejection of the Orkem principle. Orkem established that only direct
incrimination was unlawful; questions concerning facts that could establish an
infringement were permissible. Saunders rejects this proposition.170
In Saunders the ECtHR went on argued that the right not to incriminate oneself is
primarily concerned with respecting the will of an accused person to remain silent. It took
the view however that the right does not extend to the use in criminal proceedings of
material which may be obtained from the accused through the use of compulsory powers
but which had an existence independent of the will of the suspect such as, inter alia,
documents acquired pursuant to a warrant, breath, blood and urine samples and bodily
tissue for the purpose of DNA testing.171
166
Ibid, para 68. Confirmed in Murray v United Kingdom [1996] 22 EHRR 29
Saunders, para 68. Confirmed in Serves v France [1999] 28 EHRR 265
168
Saunders, para 70
169
Ibid, at 71 [Emphasis added]
170
Aslam and Ramsden, op. cit., p 69
171
Saunders, para 69. Riley argues that this casts a shadow over Funke which condemned even the
compulsory obtaining of documents which already existed independently from the will of the suspect,
whereas Saunders explicitly refers to obtaining such documents through a warrant. It thus appears that the
broader protection of Funke is now limited to testimony under the Saunders rule (Riley, “Saunders and the
power to obtain information in Community and United Kingdom competition law”, p 274). However, as
MacCulloch submits, the explanation for this apparent inconsistence may well lay in the difference between
the factual circumstances of both cases. In Funke the tax authorities were not sure of the existence of the
requested documents or whether they were under the control of the accused and their request rather
amounted to a “fishing expedition”. The request for the production of such documents would create
incriminating information beyond that which was contained in the documents themselves. The existence
and type of documents would also be revealed and that could be classed as incriminating testimony - see
MacCulloch, “The privilege against self-incrimination in competition investigations: theoretical
foundations and practical implications”, pp 230-231. This analysis appears to be supported by the
consequent case-law of the ECtHR - see infra notes 172 – 174 and the accompanied text.
167
21
The ECtHR confirmed that the Saunders principle applied equally to documents
as to oral explanations in JB v Switzerland.172 In that case, the tax authorities had
compelled the applicant, with the threat of a criminal sanction, to submit certain tax
documents. The Court held that this infringed the applicant’s privilege under Article 6
ECHR.173 This would not be the case if the information coerced had an existence
independent of the individual involved.174
2.2.3. EU case-law subsequent to ECHR developments
In 1989, the ECJ in Orkem could be forgiven for taking the view that there was
neither a right to silence nor a privilege against self-incrimination. At that time neither
Funke, nor Saunders nor JB had been delivered. Consequently, if the ECJ continued to
apply the Orkem principle, this would imply acceptance of a situation that is not
compatible with the ECHR.175
The CFI in 2001 was asked to rectify the conflict that existed between the two
institutions in Mannesmannrobren-Werke.176 But rather than relying on the ECtHR caselaw under Article 6, as Orkem implicitly said it could,177 the CFI denied itself the
jurisdiction to apply the ECHR when reviewing investigations under competition law on
the grounds that “the Convention is not part of the Community law”.178 As commentators
have noted, “the CFI has moved the goalposts: before the ECtHR held that Article 6
conferred a right of silence in Funke and Saunders, the ECJ was prepared to concede that
Article 6 applied to competition proceedings; once the ECtHR held Article 6 to include
that right, the CFI held that Article 6 did not apply.”179
Overall, the EU standard of protection is not equivalent to the ECHR and it is
submitted that it should be.180 In spite of such objections, the ECJ finally confirmed its
approach in SGL Carbon.181
It has been claimed that the ECtHR’s standard of protection would constitute “an
unjustified hindrance” to the Commission’s powers of investigation.182 This argument
however, fails to take into account the the ECtHR’s jurisprudence. The privilege,
contrary to what the EU Courts believe, is not absolute. As Saunders pointed out, an
172
JB v Switzerland (App No 31827/96), Judgment of 03/05/2001
Ibid, para 66
174
Ibid
175
Van Overbeek, op. cit., p 132; Aslam and Ramsden, op. cit., p 69
176
Case T-112/98 Mannesmannrobren-Werke AG v Commission [2001] ECR II-729
177
See supra note 158 and the accompanied text.
178
Mannesmannrobren-Werke, para 60
179
Aslam and Ramsden, op. cit., p 70
180
Ibid
181
Case C-308/04 SGL Carbon v Commission [2006] CMLR 10; In Joined cases C-238/99 P etc., LVM v
Commission [2002] ECR I-8375 (PVC II) the ECJ opened up the possibility that a challenge to an Article
18(3) request “must take an account” the jurisprudence of ECtHR under Article 6 ECHR (para 274).
However, the ECJ in SGL Carbon held that the ECJ in PVC II “had not reversed its previous case-law on
the point” and that Orkem remained good law (para 45). The ECJ in PVC II also had to determine whether
Article 18(2) breached the privilege. But it held, correctly, that as a simple request for information was
voluntary, it could not be contrary to the privilege – see Aslam and Ramsden, op. cit., p 70.
182
Mannesmannrobren-Werke, para 66; Dekeyser and Gauer, op. cit., p 564
173
22
individual can be compelled to hand over documents if they are requested under a
warrant.183
The problem at the moment is that a Commission decision is not a warrant, as it is
not granted by judicial authorization. The Commission, not being a court, grants itself a
decision. Therefore, the “unjustified hindrance” would no longer exist if the EU was to
change its system so that the Commission’s decision was pre-authorized by a judicial
court granting it a warrant.184
2.3. Article 20(2)(e) of Regulation 1/2003 and oral questions
As already pointed out185 during an investigation the Commission can ask
questions to staff members of the undertaking or association being investigated.
According to Professor Wills this fact does not appear relevant, given that the Regulation
does not allow any penalty to be imposed on such staff members.186 On its face, this
approach seems correct: as the individual does not incur a pecuniary sanction, no element
of compulsion exists. However, it fails to account for the intricate relationship between
the individual and the company. A better view is that, where individuals are “authorized
to speak” on behalf of undertakings, their acts can then be “imputable to the
undertaking”, so when an individual responds a question, it is as though the undertaking
is “speaking”. Where a fine is imposed on the undertaking for refusing to “speak”, the
undertaking should avail itself of the privilege.187 Saunders makes it clear that its
principles equally apply to oral remarks. In that case, Article 20(2)(e) is another example
of the Commission’s powers being contrary to the ECHR.188
3. The EU Leniency program and Article 6(3)(d) ECHR
Under the EU Leniency program cartel participants are encouraged to disclose the
existence and the details of cartel activity in which they were involved in exchange of
immunity from fines or reduction of fines. The current EU leniency policy is set out in
the EU 2006 Leniency Notice.189 It builds on the achievements of the EU 2002 Leniency
Notice190 which replaced the less successful 1996 Leniency Notice.191 Both the 2002 and
183
See supra note 171 and the accompanied text.
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”, p
88; Aslam and Ramsden, op. cit., p 70
185
Supra note 103 and the accompanied text
186
Wils W, “Self-incrimination in EC Antitrust Enforcement: A Legal and Economic Analysis” [2003]
26(4) World Competition, p 567, at 577-578
187
Vesterdorf, op. cit., pp 727-728
188
Aslam and Ramsden, op. cit., pp 73-74
189
European Commission, Commission Notice on Immunity from fines and reduction of fines in cartel
cases [2006], O.J. C 298/17
190
European Commission, Commission Notice on Immunity from fines and reduction of fines in cartel
cases [2002], O.J. C 45/3 See Riley A, “Cartel Whistleblowing: Toward an American Model?” [2002] 9
MJECL, p 67 for a comprehensive review of the strengths and weaknesses of the 2002 Leniency Notice.
191
European Commission, Commission Notice on the non-imposition or reduction of fines in cartel cases,
[1996] O.J. C 207/4
184
23
the 2006 Notices have been highly successful. Philip Lowe, Director General of DG
Competition called the 2002 Notice a “tremendous success”.192
The Commission’s use of the instrument of leniency has been approved by the
ECJ which has held that:
“Article 15(2) of Regulation No 17 does not lay down an exhaustive list of the
criteria which the Commission must take into account when fixing the amount of the fine.
[…] The conduct of the undertaking during the administrative procedure may therefore
be one of the factors to be taken into account when fixing that fine […] Moreover, the
Commission cannot be criticized for having adopted guidelines to direct the exercise of
its discretion concerning the fixing of fines, and for thus better ensuring equal treatment
of the undertakings concerned.”193
The ECJ has rejected the argument that the use of the instrument of leniency
would be contrary to fundamental rights:
“Nor […] can the complaint of infringement of rights of the defense be upheld.
An undertaking which, when challenging the Commission’s stance, limits its cooperation
to that which is required under Regulation No 17 will not, on that ground, have an
increased fine imposed on it. If the Commission considers that it has proved the existence
of an infringement and that the infringement can be imputed on the undertaking, the
undertaking will be fined in accordance with criteria which may lawfully be taken into
account and which are subject to review by the Court of First Instance and by the Court
of Justice.”194
The use of leniency does not raise any objections either with regard to the
privilege against self-incrimination as recognized by the ECtHR. Indeed: “Persons are
always free to incriminate themselves if in doing so they are exercising their own
will.”195 Nor does legal professional privilege stand in the way of lawyer-client
communications being produced in the framework of leniency, since “the principle of
confidentiality does not prevent a lawyer’s client from disclosing the written
communications between them if it considers that it is in his interest to do so”.196
Yet, a tension appears to exist between the right of the leniency applicants to
provide oral corporate statements197 and the right of the accused to have examined
witnesses against himself under Article 6(3)(d) ECHR. The possibility for submission of
oral statements has been introduced in the 2006 Leniency Notice as a way to frustrate
Lowe P. [2003]: “What’s the future for Cartel Enforcement?”, DG Competition, Brussels, 11 February
2003, available at: http://europa.eu.int/comm/competition/speeches/text/sp2003_044_en.pdf
193
Case C-298/98 P, Metsa-Serla (Finnboard) v Commission [2000] ECR I-10171, paras 56-57. As Wils
points out, the Court’s reasoning remains equally valid under Regulation 1/2003, Article 23(2) of
Regulation 1/2003 being identical in this respect to Article 15(2) of Regulation 17 – see Wils, “Selfincrimination in EC Antitrust Enforcement: A Legal and Economic Analysis” p 579
194
Finnboard, para 58
195
Concurring Opinion of Judge Walsh in Saunders; see also Wils, “Self-incrimination in EC Antitrust
Enforcement: A Legal and Economic Analysis” p 580
196
Case 155/79 AM&S v Commission [1982] ECR 1575, para 28; Wils, ibid
197
Para 32 of the 2006 Leniency Notice
192
24
attempts by private litigants to seek discovery of written statements provided to the
Commission and thus –as a further incentive for leniency applicants.198 However, it fails
to take into account the case-law of the ECtHR.
In Unterpertinger199 the ECtHR held that the conviction of Mr. Unterpertinger
mainly on the basis of statements made to the police by members of his family and read
out at the court hearing after the latter had exercised their right under national law to
refuse to give evidence meant that he was convicted on the basis of “testimony” in
respect of which his defense rights were appreciably restricted. That being so, Mr.
Unterpertinger did not have a fair trial and there was a breach of paragraph (1) of Article
6 of the Convention, taken together with the principles inherent in paragraph (3)(d).200
The Court also went on to say that the possibility to put the witnesses' credibility in doubt
was an essential part of Mr. Unterpertinger’s right of fair trial which could not be
exercised absent these witnesses from the court proceeding and that this omission could
not be compensated by the mere fact that he was able to submit his comments freely
during the hearing.201
The analysis of the current EU procedure regarding the acceptance of oral
statements shows that it runs directly against the ECtHR’s judgment in Unterpertinger.
According to para 33 of the 2006 Leniency Notice the addressees of a statement of
objections can have access to the corporate statements and therefore they could submit
their comments during the oral hearing under Article 12 of Commission Regulation №
773/2004202 (hereafter “the Implementing Regulation”). However, neither the
Implementing Regulation, nor the 2006 Notice itself provide for the person who has
made the oral statement to be cross-examined at the oral hearing from the defendant
undertakings with the view of putting his credibility in doubt.203 Moreover, given the
clandestine nature of the cartels and the fact that they either do not produce much
documents related to their activity or are quick to destroy them, one could envisage that
prohibition decisions will often rely mainly on such – uncontested – oral statements, just
like in the Unterpertinger case.
4. Legal Professional Privilege
The confidentiality of communications between a lawyer and his or her client has
been granted legal recognition both at international and at domestic level. 204 Its effective
safeguard was considered to be an “auxiliary principle serving to buttress the cardinal
Sandhu J.: “The European Commission’s Leniency Policy: A Success?” [2007] E.C.L.R., p 148, pp 155,
157
199
Unterpertinger v Austria [1991] 13 EHRR 175
200
The Unterpertinger case as cited under supra note 199, para 33.
201
Ibid., para 32
202
Commission Regulation (EC) No 773/2004 relating to the conduct of proceedings by the Commission
pursuant to Articles 81 and 82 of the EC Treaty [2004] OJ L 123/18
203
See Bunzel R and Miller H, “Defending ‘The Last Man Standing’: Trench Lessons from the 2008
Criminal Antitrust Trial United States v. Swanson” [2008], The Antitrust Source, June 2008, for the
importance of undermining the credibility of the witness in cartel cases.
204
Andreangeli A, “The Protection of Legal Professional Privilege in EU Law and the Impact of the Rules
on the Exchange of Information within the European Competition Network on the Secrecy of
Communications between Lawyer and Client: one step forward, two steps back?” [2005] 2(1) Comp. L.
Rev., p 31, at 32
198
25
principles of unimpeded access to the courts and to legal advice”.205 By affecting “the
ability of the one to seek and the other to give legal advice in confidence”, 206 legal
professional privilege (hereafter LPP) has been regarded as “much more than an ordinary
rule of evidence”,207 and rather as “a functional condition on which the administration of
justice as a whole rests”.208
The application of Articles 6, 8, and to a more limited extent, 10 of the ECHR has
guaranteed a high level of protection to the privilege.209 In this respect, the ECtHR
regarded “an accused’s right to communicate with his advocate out of hearing of a third
person”210 as “part of the basic requirement of a fair trial in a democratic society”. 211 It is
therefore important to understand whether the Community concept of LPP is compatible
with the level of protection granted by the ECtHR.
4.1. The EU concept of LPP
At the EU level, the concept of LPP is a judicial creation; it was established a
developed by the Community Courts.212 Regulation No 17 did not provide explicitly for
right of lawyer-client confidentiality. However, in the seminal AM&S case213 the ECJ
found common ground in the national laws of Member States to the extent that they
protect the confidentiality of written communications between lawyer and client provided
that, on the one hand, such communications are made for the purposes and in the interests
of the client’s rights of defense and, on the other hand, they emanate from independent
lawyers who are not bound to the client by a relationship of employment.214
The ECJ further specified that (i) the confidentiality covered all written
communications exchanged after the initiation of the Commission’s procedure as well as
earlier written communications having a relationship to the subject-matter of that
procedure;215 and (ii) the independent lawyer involved could be any lawyer entitled to
practice his or her profession in one of the Member States.216
Eight years later, in Hilti217 the CFI slightly broadened the scope of LPP by
making it clear that in view of its purpose the principle must be regarded as extending
also to “the internal notes which are confined to reporting the text or the content” of
written communications between lawyer and client.218
This rather narrow scope of the EU principle of LPP which excludes in-house
lawyers from the privilege has been subject if vigorous debates ever since the ruling in
205
R (Daly) v Secretary of State for the Home Department, House of Lords, 24 April, 23 May 2001 [2001]
2 AC 532, per Lord Bingham of Cornhill, para 10
206
R v Derby Magistrates Court ex parte B [1996] 1 AC 487, per Lord Taylor CJ, p 507
207
Ibid
208
Andreangeli, supra note 204, p 33
209
Ibid
210
App No 12629/87, S v Switzerland [1992] 14 EHRR 670, para 48
211
Ibid; See also Golder v United Kingdom, Ser A-No 18 [1979-1980] 1 EHRR 524, para 26
212
Vesterdorf, op. cit., p 702
213
Case 155/79 AM&S v Commission [1982] ECR 1575
214
Ibid, para 21
215
Ibid, para 23
216
Ibid, para 25
217
Order in Case T-30/89, Hilti AG v Commission [1990] ECR II-163
218
Ibid, para 18
26
AM&S.219 Proponents of a broader LPP have argued that the AM&S judgment recognizes
no exceptions, even where in-house lawyers have privilege at a national level.220 It has
been pointed out that “there is no evidence whatsoever of the implied accusation that inhouse counsel act as stooges for management plotting to break the law. In 40 years of EU
decision practice, the Commission can cite no case where this happened.” 221 It has been
further stressed that given the abolishment of the notification procedure by the
Modernization regulation and the increased role of self-assessment of economic behavior
the refusal to grant LPP to in-house lawyers could potentially have a chilling effect on
competition as companies would be discouraged from seeking legal advise.222 In spite of
such objections, the CFI finally confirmed its approach in SGL Carbon and upheld the
privilege as defined in AM&S.223
4.2. The scope of the EU LPP and the case-law of ECtHR
The limited scope of the LPP under the EU case-law appears to be at odds with
the jurisprudence of ECtHR. In AB v Netherlands224 the search and seizure by the prison
authorities from a prisoner’s cell of correspondence between the applicant and his
representative – a former inmate – was held to violate Articles 8 and 10 ECHR. The
Court emphasized that “neither the Convention nor the Rules of procedure of the
European Commission of Human Rights at the material time required the representatives
of applicants to be practicing lawyers”.225
See, inter alia, Carr J, “Should In-House Lawyers have Lawyer/Client Privilege?” [1996] International
Business Lawyer, p 522; Faull J, “In-House Lawyers and Legal Professional Privilege: A Problem
Revisited” [1998] 4 Columbia Journal of European Law, p 139 and Murphy G, “CFI signal possible
extension of professional privilege to in-house lawyers” [2004] E.C.L.R. p 447
220
Carr, op. cit, p 524
221
Murphy op. cit, p 451
222
Ibid, 454
223
Case T-125/03, AKZO Nobel Chemicals v Commission [2008] 4 C.M.L.R. 3 The interim order of the
President of the CFI in the same case ([2003] ECR II-4771) appeared to be a turning point in the
redefinition of LPP, as the President found that “[t]he evidence […] tends to show that increasingly in the
legal orders of the Member States and possibly, as a consequence, in the Community legal order, there is no
presumption that the link of employment between a lawyer and an undertaking will always, as a matter of
principle, affect the independence necessary for the effective exercise of the role of collaborating in the
administration of justice by the courts if, in addition, the lawyer is bound by strict rules of professional
conduct, which where necessary require that he observe the particular duties commensurate with his status”
(Order of the President of the CFI, para 126). The AKZO Order was annulled by the President of the ECJ
due to lack of urgency, but the issue of LPP was not addressed and this was considered only a “minor
procedural setback for the applicants”. However, the final judgment of the CFI was not consistent with
these expectations, as the Court held that the supremacy of EU law and the need to ensure the effet utile of
Regulation 1/2003 required a narrow reading of the existing notion of privilege as an exception to the
Commission’s wide powers of investigation and declined to reconsider the conditions governing the scope
of privilege. The ECJ in PVC II also had to determine whether Article 18(2) breached the privilege. For a
comprehensive overview of the AKZO proceedings see Vesterdorf, op. cit., pp 706-709; Murphy, op. cit.,
pp 447-451; Andreangeli, “The Protection of Legal Professional Privilege in EU Law and the Impact of the
Rules on the Exchange of Information within the European Competition Network on the Secrecy of
Communications between Lawyer and Client: one step forward, two steps back?”, pp 39-42 and
Andreangeli, “EU Competition Enforcement and Human Rights”, p 114.
224
App No 37328 [2003] 37 EHRR 48
225
Ibid, paras 53 and 86
219
27
It thus appears that allegiance to the national Bar or Law Society does not seem to
be considered by the ECtHR as an essential condition for the protection of the “special
status” conferred to the lawyer in a democratic society.226 The Court held in Nikula v
Finland that the primary duty of counsel should be “to defend their clients’ interests
zealously”.227 Accordingly, their “special status” and particularly their freedom of
expression in the court room, should be protected in any case, regardless of the
circumstance that they are not members of the local Bar or Law society.228
In reaching those conclusions, the ECtHR regarded as relevant the fact that
although the applicant was not subject to the disciplinary powers of the Bar Council, she
was nevertheless subject to the supervision of the trial court.229 The Nikula judgment
seems therefore to suggest that, although allegiance to the national Bar or Law Society is
not considered as an essential condition for the protection of his or her “special status”, a
certain degree of control should nonetheless be exercised on the lawyer to ensure the
integrity of his or her function as auxiliary to the proper administration of justice.230
Accordingly, it cannot be excluded that the “special status” of lawyers in a
democratic society, so strongly advocated by the ECtHR, cannot attach to an employed
legal adviser, provided that, as it was suggested in the CFI Order in AKZO, the latter is
“bound by strict rules of professional conduct, which where necessary require that he
observe the particular duties commensurate with his status”.231
It may therefore be concluded, that in order to ensure consistency between the EU
and the ECHR standards regarding the LPP, “the AM&S test should perhaps be replaced
with a more flexible set of conditions allowing for a consideration of whether, in the
particular circumstances of the case, the lawyer, notwithstanding his or her relation of
employment with the client, is subject to binding rules which preserve his integrity and
independence”.232 If the need for uniform application of Articles 101 and 102 TFEU in
all Member States is a concern233, then this concern could be resolved via the EU-wide
harmonization of the position of in-house lawyers, including a satisfactory, EU-wide
definition of in-house lawyer and a satisfactory code of professional ethics, backed up by
a credible disciplinary mechanism, advocated by Faull.234
4.3. The exchange of information within the European Competition Network and
LPP
App No 31611/96, Nikula v Finland [2004] 38 EHRR 45, para 55; Andreangeli, “The Protection of
Legal Professional Privilege in EU Law and the Impact of the Rules on the Exchange of Information within
the European Competition Network on the Secrecy of Communications between Lawyer and Client: one
step forward, two steps back?”, p 41
227
Nikula v Finland, para 54
228
Ibid, para 55
229
Ibid, para 52
230
Ibid, para 45; Andreangeli, The Protection of Legal Professional Privilege in EU Law and the Impact of
the Rules on the Exchange of Information within the European Competition Network on the Secrecy of
Communications between Lawyer and Client: one step forward, two steps back?”, p 42
231
See supra note 223; Andreangeli, ibid.
232
Ibid
233
See the Opinion of AG Warner in the AM&S case, [1982] ECR, at 1631.
234
Faull, op. cit, p 144; see also Carr, op. cit, pp 525-526 where the same approach is being advocated.
226
28
A significant threat to the confidentiality of lawyer-client communications is
posed by the creation of the European Competition Network (hereafter ECN) and in
particular from the provision for the exchange of information between the Commission
and the NCAs and among the NCAs themselves, due to the lack of a common definition
of privilege across the EU and to the absence in Regulation 1/2003 of any rule governing
the use in evidence of the information obtained as a result of that exchange.235
The exchange of information within the ECN was regarded by the Council as an
essential factor to ensure that the Commission and the NCAs apply “the Community
competition rules in close cooperation”.236 In this respect, the Commission viewed “the
power of all the competition authorities to exchange and use information […] collected
by them for the purpose of applying [Article 101 or Article 102 TFEU]” as “a
precondition for efficient and effective allocation and handling of cases”.237
Accordingly, Article 12(1) of the Modernization Regulation authorizes “the
Commission and the competition authorities of the Member States [...] to provide one
another with and use in evidence any matter of fact or of law, including confidential
information” in proceedings enforcing [Article 101 or Article 102 TFEU]. Paragraph 2
further establishes that evidence so obtained can be deployed as evidence only “for the
purpose of applying [Article 101 or Article 102 TFEU] and in respect of the subjectmatter for which it was collected by the transmitting authority”. An exception to that rule
is provided by paragraph 2 in fine, according to which exchanged information may be
used by the receiving authority in order to enforce national competition law when the
latter is applied in parallel with the EU rules and does not “lead to a different outcome”.
Article 12, even though it creates a legal basis for the exchange of any
information within the Network, does not provide any rule governing the use of the
evidence obtained. In particular, it is not clear whether the receiving NCA could use in
evidence information obtained as a result of the application of Article 12 which it could
not have collected itself, because that information was protected from disclosure during
the investigation proceedings.238 On the point, the Commission stated in its Network
Notice that “[t]he question whether information was gathered in a legal manner by the
transmitting authority is governed on the basis of the law applicable to this authority”.239
The position of the Commission therefore seems to support the view that, once the
information has been lawfully gathered by the transmitting authority, and constituted
admissible evidence in this jurisdiction, then the receiving authority should be
empowered to deploy it in the course of its own proceedings, although the rules
applicable in the latter’s jurisdiction may differ, and especially may be more protective as
regards the question of the admissibility of that information as evidence.240
235
Andreangeli, ibid, p 43
Recital XV to Regulation 1/2003
237
Commission Notice on cooperation within the Network of Competition Authorities (2004/C 101/03)
(hereafter the Network Notice), para 26; see also Bloom M, “Exchange of Confidential Information among
Members of the EU Competition Authorities: Possible Consequences of a Relatively Broad Scope for
Exchange of Confidential Information on National Procedural Laws and Antitrust Sanctions”, in
Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of
Competition Authorities (2004) Oxford, Portland, OR: Hart Publishing, p 389, at 390
238
Andreangeli, ibid, p 44
239
Para 27
240
Andreangeli, ibid
236
29
The obvious consequence of such broad interpretation of the use of the
information exchanged through the ECN is that the country granting the lowest degree of
protection would impose its standard across the whole EU241 and the erosion of the
fundamental rights available in the receiving jurisdiction.242
The Council has attempted to avoid such criticisms by declaring that “[t]he rights
of defence enjoyed by undertakings in the various systems can be considered as
sufficiently equivalent”.243 However, this is manifestly not the case with respect of the
LPP and in particular whether it extends to in-house lawyers. Indeed, “the protection of
confidentiality of lawyer-client communication remains uneven across the European
Union”.244
To that point it is recalled that the OFT has already stated that:
“Whilst UK privilege rules would apply to cases being investigated in the UK by
the OFT on its own behalf under national and EC law, the OFT could be sent the
communications of in-house lawyers by a NCA from another Member State where the
communication of in-house lawyers is not privileged. Under those circumstances, the
OFT may use the documentation received from the other NCA in its investigation.”245
There are two possible arguments if one seeks to justify the position expressed by
both the Commission in its Network Notice and the OFT in its Guidelines. The first is to
claim, as Professor Wils does, that “[t]he ‘eroded fundamental rights’ can […] only be
rights of legal persons which are recognized neither in the case-law of the European
Court of Human Rights, nor in the fundamental rights case-law of the Court of
Justice”.246
It is true that with respect to LPP, no ruling has been handed down to date as
regards communications between lawyer and a corporate client. However, it is worth
noting that the CHR declared admissible a complaint brought by a Swedish company and
concerning the seizure of documents exchanged between the applicant and its lawyers
and stored in the office of the law firm.247 Although the case was settled out o court,248
Andreangeli points out that “the CHR’s report constitutes a clear indication that the
protection of the confidentiality of lawyer-client correspondence enshrined, inter alia, in
Martinez Lage S and Brokelmann H, “The Possible Consequences of a Relatively Broad Scope for
Exchange of Confidential Information on National Procedural Laws and Antitrust Sanctions”, in
Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of
Competition Authorities (2004) Oxford, Portland, OR: Hart Publishing, p 405, at 416
242
Araujo M, “The Respect of Fundamental Rights within the European Network of Competition
Authorities”, in Hawk (ed.), International Antitrust Law and Policy, Annual Proceedings from the Fordham
Corporate Law Institute [2005] New York: Juris Publishing, p 511, at 530
243
Recital XVI to Regulation 1/2003
244
Andreangeli, ibid, pp 45-46
245
Office of Fair Trading, Powers of Investigation, Draft Competition Law guideline for consultation
(April 2004), para 6.3, p 17 (available at http://www.oft.gov.uk/Business/Legal+Powers/modconduct.htm)
246
Wils W, “Powers of Investigation and Procedural Rights and Guarantees in EU Antitrust Enforcement:
The Interplay between European and National Legislation and Case-law”, p 24
247
App No 14369/88, Noviflora Sweden AB v Sweden, Commission Decision [1993] 15 EHRR CD6; para
2(b) and 4
248
Report of the Commission adopted on 8 July 1993, para 13-16
241
30
Article 8 ECHR also extends to cases where the client is not a natural person”.249 This
combined with the principles laid down by the ECtHR as regards the protection of the
“special status of lawyers”250 in the interest of both the sound administration of justice
and the right of individuals and undertakings to receive legal advice and assistance, in
accordance with Article 6 ECHR251, renders the first arguments inoperable.
The second argument would be that once undertakings are aware of the fact that
communications with their in-house lawyer are not protected in the jurisdiction where
they are likely to be collected, they should not be entitled to expect that, in the event of
documents being transmitted to another NCA, the higher standards for the protection of
privilege available in the receiving authority’s jurisdiction would apply.252
However, this argument seems misconceived, since it appears to disregard the
circumstance that to allow that use of the exchanged evidence would place the
undertakings concerned at a significant disadvantage vis-à-vis other firms affected by
competition proceedings before the receiving NCA the evidence against which was not
located outside the authority’s jurisdiction. Whereas the latter could successfully claim
privilege on the communications with their legal adviser, the former would not be able to
do so, although proceedings are carried out in the same jurisdiction and by the same
NCA, and therefore the position of the two groups of undertakings can be considered
comparable.253 Accordingly, it could be argued that this hypothetical scenario would
constitute a violation of the right against discrimination in the enjoyment of fundamental
rights to privacy and fair procedure as enshrined, inter alia, in respectively, Articles 6, 8
and 14 ECHR.254
It thus follows from the analysis of Article 12 of the Modernization Regulation on
the circulation and use in evidence of information covered by LPP that there are serious
issues regarding the fairness of the proceedings before the receiving NCA and in
particular a clear risk that the protection of LPP may be “watered down”, to the detriment
of the right of the undertaking concerned to receive legal assistance.255
There are two possible solutions for this problem. The first is the EU-wide
harmonization of the status of in-house lawyers and the concomitant broadening of the
scope of the EU LPP advocated above.256 The second is the adoption of a procedure
249
Andreangeli, ibid, pp 36-37
See supra notes 226-230 and the accompanied text.
251
Andreangeli, ibid, p 48
252
Ibid, p 47
253
Cf., inter alia, Fredin v Sweden, Ser. A-No 192 [1991] 13 EHRR 784
254
Inter alia (mutatis mutandis), Belgian Linguistics Case, Ser. A-No 6 [1979-1980] 1 EHRR 252, sect. I
B, para 9; Andreangeli, ibid, p 47
255
Andreangeli, ibid, p 49; Further concerns have been raised that despite of the limitations set out in Art
12(3) of Regulation 1, information covered by LPP might be obtained by non-Member Sate jurisdictions,
imposing criminal sanctions on individuals for antitrust offenses, most notably the US. See for discussion
on those issues Curtin J, Savrin D and Bigelow B, “Collateral Consequences of Expanded European
Antitrust Investigative Authority for Defendants in U.S. Proceedings”, in Hawk (ed.), International
Antitrust Law and Policy, Annual Proceedings from the Fordham Corporate Law Institute [2005] New
York: Juris Publishing, p 533 and Venit T and Louko T, “The Commission’s New Power to Question and
its Implications on Human Rights”, in Hawk (ed.), International Antitrust Law and Policy, Annual
Proceedings from the Fordham Corporate Law Institute [2005] New York: Juris Publishing, p 675
256
See supra notes 232-234 and the accompanied text.
250
31
similar to the one set out by the ECJ in the AKZO Chemie judgment,257 under which if the
undertakings claim LPP they are entitled to a reasoned decision for exchange of
information within the ECN from the transmitting authority open to judicial review.258
While the importance of securing the useful effect of the Modernization Regulation is
noted,259 it is equally important to safeguard the rights of defense and the struck the right
balance between the two. It is respectfully submitted that the proposed measures will
achieve this aim.
5. Commission’s investigative powers and ECHR: towards a reform of the
Modernization Regulation?
This Section has analyzed the investigative powers of the Commission and has
argued that many of them are at odds with ECHR. Subsection 4 has already suggested the
way the problems related to LPP could be addressed. As to the other issues outlined
above, Professor Riley has proposed a reform of the Commission’s procedure which
would bring it in line with the case-law of the ECtHR without hampering the
Commission’s ability to detect and punish violations of Articles 101 and 102 TFEU. This
new procedure would include obtaining of an investigation warrant from the General
Court permitting telephone tapping and sophisticated electronic surveillance against the
suspected undertaking. Following evidence obtained under the investigation warrant the
Commission could then decide to proceed to an unannounced on-the-spot investigation,
having again obtained warrant from the General Court. Having assessed the collected
evidence, the Commission could decide to prosecute the suspect undertaking before an
independent competition tribunal or the General Court.260 In the hearing before the
independent competition tribunal or the General Court the Commission would be able to
ask the representatives of undertakings questions, if the representatives refused to answer,
257
Case 53/85 AKZO Chemie v Commission [1986] ECR 1965
Andreangeli A, “The impact of the Modernization Regulation on the guarantees of due process in
competition proceedings” [2006] 31 E.L. Rev., p 342, at 356-358. Such a procedure was indeed provided
for in Case 36/92 P SEP v Commission [1994] ECR I-1911, para 39, with respect of transfer of information
from the Commission to a NCA under Regulation 17. Martinez Lage and Brokelmann (op. cit., p 414)
argue that SEP remains good law under Regulation 1/2003, because it is founded on the fundamental right
of the defendant.
259
Bloom, op. cit., p 399
260
Article 103(1) TFEU gives a wide mandate to the Council, acting by a qualified majority on a proposal
from the Commission and after consulting the European Parliament, to lay down “the appropriate
regulations or directives to give effect to the principles set out in Articles 101 and 102”. Article 103(2)(d)
specifically adds that the Council’s regulations and directives shall be designed in particular: “to define the
respective functions of the Commission and of the Court of Justice in applying the provisions laid down
[under Article 103(1)]”. As Wils (“The Combination of the Investigative and Prosecutorial Function and
the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis”, pp 210-211)
argues, this provision would appear precisely to allow the Council to transfer the decisional power from the
Commission to the Courts. Indeed, that the Commission would prosecute before the Court appears also to
have been the understanding of the Spaak Report preceding the adoption of the EC Treaty. Moreover,
Article 261 TFEU provides that regulations adopted by the Council may give the EU Courts “unlimited
jurisdiction with regard to the penalties provided for in such regulations”. As Wils explains, that such
“unlimited jurisdiction” can take the form not only of unlimited review of a Commission decision, but also
of imposition of penalties directly by the EU Courts, is apparent from the German language version of
Article 261.
258
32
inferences could be drawn from their silence. And if deliberately untruthful answers were
given the representatives could be charged with perjury.261 Proceedings before and
independent judicial authority would also allow for cross-examination of the authors of
oral leniency statements (if the need be, at in camera hearings, so that their identity
remains secret for private litigants) in order to ensure compliance of the 2006 Leniency
Notice with Article 6(3)(d) ECHR.262
As Riley explains, every new power for the Commission outlined above is
compatible with the ECtHR’s case-law.263 Telephone tapping and electronic surveillance
powers are permitted under the Convention. As long as such powers are set out in a legal
instrument that is accessible to the public, is clear in its terms as to categories of persons
to whom it applies and provides for independent supervision, it is unlikely to be the
subject of a successful ECHR challenge.264 The ruling of ECtHR in Niemitz has indicated
and the judgment in Colas Est has confirmed that Article 8 ECHR applies to business
premises.265 However, the Colas Est ruling also indicates that so long as a judicial
warrant is obtained then the interference is likely to be justified under Article 8(2) ECHR,
as providing adequate safeguards.266 The ECHR case-law, following the ruling in John
Murray v United Kingdom permits interferences to be drawn from a refusal to answer
questions under certain conditions.267 Furthermore, if evidence were taken on oath any
deliberately false answers could result in criminal prosecution.268
Riley, “Saunders and the power to obtain information in Community and United Kingdom competition
law”, pp 279-280
262
A number of other advantages of such a system, going beyond the ECHR discourse can easily be
identified. First, this will allow the ever overloaded Commission to allocate considerably more resources to
prosecuting antitrust violations (Riley, “The ECHR Implications of the Investigation Provisions of the
Draft Competition Regulation”, p 88). Secondly, this would eliminate the risk of prosecutorial bias and
would diminish the administrative cost of the procedure, as under the present system there is a duplication
of the decision-making functions of the Commission and the CFI (Wils, “The Combination of the
Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A
Legal and Economic Analysis”, pp 212-222). Thirdly, such a system would allow for criminalization of the
EU competition law and imposition of custodial sanctions on individuals guilty of antitrust offenses. As
Wils argues the minimum level of fines required generally to deter cartels would be on the order of 150%
of the annual turnover in the products concerned by violation which is likely regularly to breach the
statutory ceilings of fines which can legally be imposed. Hence is the value of criminalization, which
provides antitrust laws with a significant additional deterrent element (see Wils W: “Is Criminalization of
EU Competition Law the Answer?” EUI Antitrust Workshop [2006], available at
http://www.iue.it/RSCAS/Research/Competition/2006(pdf)/200610-COMPed-Wils.pdf).
263
Riley, “Saunders and the power to obtain information in Community and United Kingdom competition
law”, p 280
264
See Malone v United Kingdom [1985] 7 EHRR 14.
265
See supra notes 113-121 and the accompanied text.
266
Subject, of course, to the considerations set out in Niemitz – see supra notes 137-138 and the
accompanied text.
267
[1996] 22 EHRR 29, para 54 It would appear that inferences could be drawn from the silence of the
accused so long as there are adequate safeguards. In that case the consequences of remaining silent had
been explained to the accused; there was a formidable case against him; there were restrictions on the
inferences that could be made and a judge rather than a jury was the trier of fact.
268
Severes v France [1999] 28 EHRR 265, para 47; The ECtHR held that the purpose of the oath is to
ensure that a person tells the truth, not to levy compulsion upon him. The right to silence remains.
261
33
B. NE BIS IN IDEM AND RECIDIVISM
This subsection analyses the two closely related concepts of ne bis in idem (or non
bis in idem) and recidivism and their application in the EU antitrust enforcement. The
principle of ne bis in idem, which is the European equivalent of the double jeopardy
clause in the United States, restricts the possibility of a defendant being prosecuted or
punished several times for the same offense.269 Article 4 of Protocol No 7 to the ECHR
reads as follows:
“1 No one shall be liable to be tried or punished again in criminal proceedings
under the jurisdiction of the same State for an offence for which he has already been
finally acquitted or convicted in accordance with the law and penal procedure of that
State.
2 The provisions of the preceding paragraph shall not prevent the reopening of the
case in accordance with the law and penal procedure of the State concerned, if there is
evidence of new or newly discovered facts, or if there has been a fundamental defect in
the previous proceedings, which could affect the outcome of the case.”
Article 50 of the Charter of Fundamental Rights of the EU provides that:
“No one shall be liable to be tried or punished again in criminal proceedings for
an offence for which he or she has already been finally acquitted or convicted within the
Union in accordance with the law.”
Thus, the scope of Article 50 of the Charter is wider that that of Article 4 of
Protocol No 7 ECHR, since the latter article prohibits a second trial or a second
punishment only within the jurisdiction of one and the same State, whereas the former
prohibits such a trial or punishment in any State of the EU. Apart from this aspect, Article
50 has the same meaning and the same scope as Article 4 of Protocol No 7, 270 in
accordance with Article 52(3) of the Charter.271
1. The ne bis in idem principle in EU competition enforcement
Several issues arise with respect of the application of the ne bis in idem principle
in EC competition enforcement. These are discussed below.
Wils W, “The Principle of Ne Bis in Idem in EC Antitrust Enforcement: A Legal and Economic
Analysis” [2003] 26(2) World Competition, p 131
270
Lemmens P, “The Relation between the Charter of Fundamental Rights of the European Union and the
European Convention on Human Rights – Substantive Aspects” [2001] 8 MJ 1, p 49, at 66
271
Art 52(3) of the Charter reads as follows:
“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 Union law providing
more extensive protection.”
269
34
1.1. Can participants in a world-wide cartel be fined in both EU and another
jurisdiction outside the EU?
The ECJ has encountered this issue in the Boehringer case.272 The Court held, on
the facts, that the agreements that were the subject-matter of the criminal prosecution in
US were different in “their object and their geographical emphasis” to the cartel
investigated by the Commission.273 As a consequence, no issue of ne bis in idem arose.
It is submitted that the approach of the ECJ is correct. Indeed, as we have seen,
there is currently no world-wide principle of ne bis in idem recognized. Article 4 of
Protocol No 7 ECHR limits the application of the principle to a single State, whereas
Article 50 of the European Charter extends its scope only within the EU.274
1.2. Can the Commission re-adopt its decision quashed due to procedural
irregularities?
The ECJ has held in the PVC (No 2) case275 that:
“The application of that principle […] presupposes that a ruling has been given on
the question whether the offense has in fact been committed or that the legality of the
assessment thereof has been reviewed. Thus, the principle of non bis in idem merely
prohibits a fresh assessment in depth of the alleged commission of an offense which
would result in the imposition of either a second penalty, in addition to the first, in the
event the liability is established for a second time, or a first penalty in the event that
liability not established by the first decision is established by the second.”276
It thus follows that where a Commission’s decision has been annulled merely due
to procedural breaches it can be re-adopted with the Commission observing the
safeguards for the right of defense. Such approach appears consistent with the wording of
Article 4(2) of Protocol No 7 ECHR.
1.3. Can an undertaking be fined twice for the same offense by different
competition authorities within the EU?
The PVC (No 2) case was concerned by subsequent proceedings brought by the
same authority. The problem is further complicated because the same agreement or
conduct may give rise to liability under different legal systems with the EU. EU law and
national law may both apply to the same anti-competitive agreement or conduct. The
principle of double jeopardy comes into play where the same undertaking is subject to
272
Case 7/72 Boehringer Mannheim GmbH v Commission [1972] ECR 1281
Ibid, para 4
274
See also Dekeyser and Gauer, op. cit., pp 578-579
275
Joined Cases C-238/99 P etc. Limburgse Vinyl Maatschapij NV (LVM) v Commission (PVC No 2)
[2002] ECR I-8375
276
Ibid, paras 61-62
273
35
fines for the same or substantially the same facts albeit under different legal provisions in
different legal systems.277
The ECJ has held in Walt Wilhelm278 that parallel proceedings under EU and
national competition laws are not contrary to the ne bis in idem principle, given the
differences between the two laws, notably because the EU law focuses on the effect on
trade between Member States.279 That Court did however add that “if […] the possibility
of two procedures being conducted separately were to lead to the imposition of
consecutive sanctions, a general requirement of natural justice […] demands that any
previous punitive decision must be taken into account in determining any sanction which
is to be imposed”.280
Following the 2001 judgment of the ECtHR in Franz Fischer v Austria,281 it has
become highly doubtful whether one can still consider that there is no violation of the ne
bis in idem principle in the case of double prosecutions under Articles 101 and 102 TFEU
and under national competition law because of EU law’s specific focus on the effect of
trade between Member States.282 In that case the ECtHR has held that:
“[T]he wording of Article 4 of Protocol No 7 does not refer to ‘the same offense’
but rather to trial and punishment ‘again’ for an offense for which the applicant has
already been finally acquitted or convicted. Thus, while it is true that the mere fact that a
single act constitutes more than one offense is not contrary to this Article, the Court must
no limit itself to finding that the applicant was, on the basis of one act, tried or punished
for nominally different offenses. The Court […] notes that there are cases where one act,
at fist sight, appears to constitute more than one offense, whereas a closer examination
shows that only one offense should be prosecuted because it encompasses all the wrongs
contained in the others […] An obvious example would be an act which constitutes two
offenses, one of which contains precisely the same elements as the other plus an
Nazzini R: “Some Reflections on the Dynamics of the Due Process Discourse in EC Competition Law”
[2005] 2(1) CLR, p 5, at 13
278
Case 14/68 Walt Wilhelm v Bundeskartellamt [1969] ECT 1
279
Ibid, paras 3 and 11
280 Ibid, para 11. According to Art 11(6) of Regulation 1/2003 the initiation by the Commission of
proceedings for the adoption of a decision under Chapter III shall relieve the competition authorities of the
Member States of their competence to apply Articles 101 and 102 TFEU. This, however, does not eliminate
the double jeopardy, because: (i) the Commission might start its proceedings after the NCAs have adopted
their decisions; (ii) this rule does not refer to the cases where two or more NCAs are prosecuting the same
anticompetitive behavior – under Art 13(1) where competition authorities of two or more Member States
have received a complaint or are acting on their own initiative under Article 101 or Article 102 TFEU
against the same agreement, decision of an association or practice, the fact that one authority is dealing
with the case shall be sufficient grounds for the others to suspend the proceedings before them or to reject
the complaint, but there is no obligation to do so; and (iii) according to Art 3(2) Member States shall not be
precluded from adopting and applying on their territory stricter national laws which prohibit or sanction
unilateral conduct engaged in by undertakings. Therefore, even if one accepts that initiation of Commission
proceedings for application of Art 101 TFEU must result in termination of NCAs proceedings not only for
the application of Community law, but for the application of national law as well (based on the first indent
of Article 3(2)), initiation of Commission proceedings under Article 102 TFEU still does not discard the
application of such stricter national laws towards the same unilateral behavior.
281
App No 37/950/97, judgment of 29 May 2001, unreported
282
Wils, “The Principle of Ne Bis in Idem in EC Antitrust Enforcement: A Legal and Economic Analysis”,
p 143
277
36
additional one. There may be other cases where the offenses only slightly overlap. Thus,
where different offenses based on the same act are prosecuted consecutively, one after the
final decision of the other, the Court has to examine whether or not such offenses have
the same essential elements.”283
Indeed, whereas Articles 101 and 102 TFEU contain an element not embraced by
the national law, namely the effect on trade between Member States, the essential
elements of national competition laws would appear to cover the same ground as Article
101 and 102.284
It also follows from Franz Fischer that violation of the principle of ne bis in idem
cannot be avoided by reducing the amount of the second punishment by the amount of
the first punishment but also double prosecution.285
As already mentioned286, the problem stems not only from the text of Article 4 of
Protocol No 7 ECHR, which only prohibits double prosecution within one State, but also
from Article 50 of the European Charter of Fundamental Rights which makes this
prohibition EU-wide.287 This, combined with the provision of Article 52(3) of the
Charter, means that the judgment in Walt Wilhelm is no longer a good law.
It has been argued that “[t]he system of Regulation No 1/2003 is built on the
assumption that there is only an issue of ne bis is idem where a competition authority has
already imposed a fine on a give territory [of a Member State] for a certain
infringement”288 and that following the approach of the ECtHR in Franz Fischer would
lead either to “systematic under-punishment” of the competition violators,289 or to
“preemptive prosecution” of favored defendants from the NCAs as well as of “forumshopping” in applying for leniency in the jurisdiction with more lucrative leniency
program.290 These concerns, however, can and must be addressed via the mechanisms set
out in Regulation 1/2003 as well as via the harmonization of the fines imposed by the
NCAs and of the national leniency programs, rather than through the violation of
fundamental rights as guaranteed by the ECHR and the jurisprudence of the ECtHR.291
1.4. Can a subsequent investigation from an NCA be barred by a Commission
decision accepting commitments under Art 5 of Regulation 1?
Dekeyser and Gauer argue that the answer to that question should be negative
since “these decisions take a position neither on the existence of an infringement prior to
the commitments, nor on the absence of infringement after the commitments”.292 This,
283
Franz Fischer v Austria, para 25 [Emphasis added]
Wils, ibid
285
Franz Fischer v Austria, para 30; Wils, ibid, p 144
286
See supra notes 270-271 and the accompanied text.
287
See also Wils, “The Principle of Ne Bis in Idem in EC Antitrust Enforcement: A Legal and Economic
Analysis”, p 145.
288
Dekeyser and Gauer, op. cit., p 584
289
Ibid, p 585
290
See Wils, “The Principle of Ne Bis in Idem in EC Antitrust Enforcement: A Legal and Economic
Analysis”, p 147
291
See Wils, ibid, pp 147-148.
292
Dekeyser and Gauer, op. cit., pp 581-582
284
37
however, appears to be at odds with the ECJ’s ruling in Criminal proceedings against
Husein Gozutok and Klauss Brugge.293
Criminal proceedings for breach of the Convention Implementing the Shengen
Agreement (which in Chapter 3 of Title III, provided for the application of the ne bis in
idem principle), against Mr. Gozutok in the Netherelands had been discontinued
following acceptance by Mr. Gozutok to pay a sum of money determined by the
prosecution. The German authorities wanted to prosecute Mr. Gozutok for the same
offense. Proceedings against Mr. Brugge raised the same question. The Court held that
where the prosecution is discontinued by decision of the prosecuting authority and on
condition that the accused performs obligations determined by the prosecution, further
proceedings are precluded. However, the Court clarified that e relevant fact in reaching
this conclusion was that under national law a further prosecution was definitely barred.294
Therefore, the consequences of discontinuing proceedings under national law were
material to the decision as to whether the discontinuance was a final disposal of the case.
The Court also stated that what matters is not the procedure per se, e.g. whether the
discontinuance of proceedings is embodied in a formal judicial decision, but the effect of
discontinuing proceedings.295
2. Commission’s policy towards recidivism
The substance of the institute of recidivism is that previously committed offenses
are taken into account as an aggravating factor when determining the fine of the offender.
Because recidivism constitutes a second penalty based on the existence of a past
infringement that has already been subject of penalty, it constitutes an exception to the
principle of non bis in idem.296 While the Commission rightly considers recidivism to be
a very serious issue297, certain aspects of its policy appear to be at odds with the ECHR
standards.
2.1. The principles of No Punishment without Law and No Retroactive
Application of Unfavorable Law
Article 7(1) ECHR provides that:
“No one shall be held guilty of any criminal offence on account of any act or
omission which did not constitute a criminal offence under national or international law
at the time when it was committed. Nor shall a heavier penalty be imposed than the one
that was applicable at the time the criminal offence was committed.”
293
Joined Cases C-187/01 and C-385/01 [2003] ECR I-1345
Ibid, para 30
295
See Nazzini, op. cit., p 14
296
Nordlander K, “The Commission’s policy on recidivism: legal certainty for repeat offenders?” [2005]
2(1) CompLRev, p 55, at 55-56. See Guidelines on the method of setting fines imposed pursuant to Article
23(2)(a) of Regulation No 1/2003 (2006/C 210/02), para 28, first indent: “where an undertaking continues
or repeats the same or a similar infringement after the Commission or a national competition authority has
made a finding that the undertaking infringed Article 81 or 82: the basic amount will be increased by up to
100 % for each such infringement established.”
297
Nordlander, op. cit., p 55
294
38
This Article reflects the generally recognized fundamental principle of nullum
crimen, nulla poena sine lege, i.e. only the law can define and prescribe a penalty. 298 In
LRAF299 the CFI has explicitly held that the principle of non-retroactivity of fines is
applicable in EC competition procedures.
There is a general uncertainty as to the legal basis for determining recidivism as
an aggravating circumstance in the Commission’s procedures. The Commission itself
claims that the legal basis is provided by Regulations 17/1962 and 1/2003 which both
state that “[i]n fixing the amount of the fine, regard shall be had both to the gravity and to
the duration of the infringement.”
It is, however, not clear that applying recidivism as an aggravating factor follows
from the obligation in the Regulations to consider the “gravity” and the “duration” of the
infringement. First, neither the TFEU, nor the Regulations contain an explicit reference to
the possibility of increasing fines based on recidivism. Secondly, recidivism is based on
the characteristic of the recidivist, i.e. the legal person which infringed the competition
rules, and has nothing to do with the nature of the infringement, its duration or gravity.
Arguably, therefore, the Regulations do not provide the necessary clear and unambiguous
legal basis for recidivism.300
Indeed, the first explicit mention of recidivism as an aggravating factor has been
made in Commission’s 1998 Fining Guidelines.301 It is questionable whether Guidelines
alone could constitute a sufficient legal basis for recidivism. Guidelines are not formally
legally binding302 and serve only to explain in more detail the Commission’s practical
implementation of the framework for imposing fines provided for by the Regulations and
the TFEU. If the Regulations do not provide a legal basis for recidivism, then arguably
the Guidelines go beyond the scope of the Commission’s discretion pursuant to the
Regulations and are invalid on this point.303
Even if one considers that the Guidelines do provide a sufficient legal basis for
recidivism, the fact remains that such basis was not provided for until 1998 and therefore
no infringements committed before that date should be taken into account as aggravating
circumstances. In Anchour v France304 the ECtHR has explicitly held that the relevant
legal basis must be assessed at the time of the first, infringement, because the first and
second offenses, which constitute the basis for recidivism, must be seen as “forming an
indivisible whole” and “[i]t would be pointless to set up an opposition between the
components of recidivism, […] and to take only one into account or minimize the
significance of one in relation to the other”.305
298
Ibid, p 61
Case T-23/99 LRAF v Commission [2002] II 1705
300
Nordlander, op. cit., p 63
301
Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and
Article 65(5) of the ECSC Treaty [1998] OJ, C 009. Mentioning of recidivism as an aggravating factor was
thereafter reproduced in the 2006 Fining Guidelines – see supra note 296.
302
They only bind the Commission because they create legitimate expectations among the undertakings
that the Commission will impose fines in a certain way - Nordlander, ibid.
303
Ibid
304
App No 67335/01, judgment of 10 November 2004
305
Ibid, para 36; Nordlander, op. cit., p 65
299
39
In its practice so far, however, the Commission has used as aggravating
circumstances infringements committed well before 1998306 in contradiction with the
ECtHR’s judgment in Anchour.
2.2. The principles of proportionality and legal certainty
2.2.1. Proportionality
It is a fundamental principle of EU law the means used by the Union must be in
proportion to their purpose.307 Article 5(4) TEU provides that “the content and form of
Union action shall not exceed what is necessary to achieve the objectives of the Treaties”.
The Fining Guidelines do not provide for limitation period after which previous
infringement cannot be considered as aggravating circumstance. As Nordlander argues,
the Commission’s insistence to impose increased fines based on infringement which
occurred several decades ago equates EU competition law infringements with the most
serious crimes which is hardly proportional.308
2.2.2. Legal certainty
All legal systems are based on the principle that the application of the law to a
specific situation must be predictable. The principle of non-retroactivity discussed above
aims to ensure legal certainty. Time limits and periods of limitation also serve to ensure
legal certainty.309 In the Dyestuff Cases the ECJ invoked a limitation period as a general
principle of law:
“[T]he fundamental requirement of legal certainty has the effect of preventing the
Commission from indefinitely delaying the exercise of its power to impose fines.”310
Under the Commission’s current policy an infringement of EU competition rules
at any point back in time,311 anywhere in the world,312 with respect to any product
market, by any entity within the same economic unit313 could potentially lead to an
increased fine314 which clearly contradicts the principle of legal certainty.
306
See Nordlander, op. cit., p 63 and the cases cited there.
Nordlander, ibid., p 66
308
Ibid, pp 59-60 and 68; As the author points out the criminal laws of most Member States provide for a
maximum period of time between the first and the second conviction, beyond which the first conviction
cannot be taken into account for the purposes of recidivism. The only exception is the crimes against
humanity. Serious as certain antitrust violations (e.g. hard-core cartels) may be, they certainly do not
amount to genocide!
309
Ibid, p 66
310
Case 48/69 Imperial Chemical Industries v Commission [1972] ECR 619, para 49
311
See Case No COMP/E-2/37.533 – Choline Chloride, Commission Decision of 9 December 2004 [2005]
OJ L 190/22, where BASF received a 50% fine increase because it had already been fined for cartel
activities between 1964 and 1967 and between 1980 and 1984, i.e. conduct committed forty and twenty
years previously respectfully.
312
See Michelin, Commission Decision of June 20, 2001, [2002] OJ L 143/1
313
See e.g. Michelin, supra note 312, where the Commission applied recidivism to a company which had
not previously been found guilty of any offense, but which was 99% owned by the same parent company
307
40
C. ACCEESS TO THE FILE AND THE RIGHT TO A FAIR HEARING
The right of the undertakings concerned to access the Commission’s file is one of
the most important elements of the right to be heard and therefore – of the right of
defense.315 The evolution of this right is another example of the positive development of
EU law. While in Hercules316 the CFI found that “there are no provisions which require
the Commission the divulge the contents of its files to the parties concerned” and that
access to the file should be granted solely on the basis of legal certainty, as the
Commission may not depart from its self-imposed rules,317 in its Soda-ash judgment the
Court held that the right was based on the fundamental right of defense. 318 The
development of this case-law has been reflected in the Modernization Regulation319 as
well as in the Commission’s Notice on the access to the file.320 However, certain
concerns regarding that right remain unanswered. These are considered below.
1. The limitations of the right of access
According to both Regulation 1/2003321 and the Notice322 the parties shall not
have access to internal documents, business secrets of other undertakings, or other
confidential information.
Neither the TFEU, nor any of the implementing regulations, defines the concept
of business secret or list the sort of matters it could cover. This omission is probably
intentional.323 The Postbank judgment324 defines business secrets as information about an
that also held 99% of a company that had committed a previous offense. Commission’s decision was
upheld by the CFI, Case T-203/01 Michelin v Commission [2003] ECR II 4071, para 290
314
Nordlander, op. cit., pp 58-59; 66-67
315
Erlandson, supra note 90, pp 140-142
316
Case T-7/89 SA Hercules Chemicals NV v Commission [1991] ECR II-1711
317
Ibid, paras 53-54; In its XII Report on Competition Policy (1982), paras 34-35 and 40 the Commission
has stated that it would grant access to file, allowing companies to examine and take copies of all
documents in its file, with the exception of those containing business secrets and other confidential
information and internal Commission documents. The CFI therefore ruled that the Commission had
imposed an obligation on itself to do so. The disadvantages of such approach are obvious – the
Commission could, at any time, state publicly that it would no longer grant access to the file and thus no
obligation under the legal certainty doctrine would exist.
318
Cases T 30-32/91 Solvay v Commission and T 36-37/91 ICI v Commission [1995] ECR II-1775; See to
the same point Joined Cases T-10/92 etc. SA Cimenteries CBR and Others v Commission [1992] ECR II 1571, para 38
319
See in particular Recital 31 and Article 27(2) which explicitly mention the right of access to file
320
Commission Notice on the rules for access to the Commission file in cases pursuant to Articles 81 and
82 of the EC Treaty, Articles 53, 54 and 57 of the EEA Agreement and Council Regulation (EC) No
139/2004, OJ (2005/C 325/07) (hereafter the Notice)
321
Art 27(2)
322
Section II. B. 2.
323
Joshua J, “Balancing the Public Interests: Confidentiality, Trade Secrets and Disclosure of Evidence in
EC Competition Procedures” [1994] ECLR, p 68, at 72. The author argues that no intrinsic definition of
trade secret is satisfactory. This makes the effective control from an independent judicial body over the
decision to refuse access to certain documents even more important.
41
undertaking’s activity, whose disclosure could result in a serious harm to the same
undertaking.325 This clearly calls for a case-by-case approach. The Commission has given
as example information relating to undertaking’s know-how, methods of assessing costs,
production secrets and processes, supply sources, quantities produced and sold, market
shares, customer and distributor lists, marketing plans, cost and price structure and sales
strategy.326
The main drawback in the notion of business secrets is the fact that it has no true
definition. Since business secrets must be considered an important limitation of the right
of access to the file, this constitutes a huge source of legal uncertainty for undertakings. It
could be argued that due to this lack of definition, in combination with the fact that there
exists no consensus on a EU level as to what the concept implies, the Commission is
allowed too much discretion in deciding the issue.327 The same goes for the concept of
“other confidential information”.328
The Commission has given as examples of internal documents drafts, opinions,
memos or notes from the Commission departments or other public authorities
concerned.329 The refusal to grant access to such documents has been justified with the
notion that internal documents lack evidentiary value and that the Commission cannot
rely on them when assessing the case.330 Such notion, however, disregards the cases
where there exist doubts whether the Commission’s decision has been lawfully
adopted,331 or to the real motives of the decision.332 It therefore appears that the
Commission enjoys an unjustified discretion to declare such documents devoid of
evidentiary value.333
2. The definition of “file”
According to the Notice, the “file” consists of all documents which have been
obtained, produced and/or assembled by the Commission Directorate for Competition
(hereafter DG COMP), during the investigation.334 It has been argued that this definition
is too narrow and that the principle of equality of arms dictates that the “file” should
include at least all documents in the possession of DG COMP, i.e. also documents
primarily relating to other alleged infringements or indeed all relevant documents in the
possession of the Commission as a whole and not those in the hands of DG COMP. This
is particularly important since the final decision is an act of the Commission as a
collective body.335
324
Case T-353/94 Postbank NV v Commission [1996] ECR II-921
Ibid, para 87
326
Section II. B. 3.2.1 of the Notice
327
Erlandson, op. cit., p 150
328
Ibid, pp 156-157
329
Section II. B. 3.1.1 of the Notice
330
Ibid
331
See Joined Cases T-134/94 etc. NHM Stahlwerke GmbH and Others v Commission [1996] ECR II-537
332
See Joined Cases 142 and 156/84 British American Tobacco Company Ltd and R.J. Reynolds Industries
Inc v Commission [1987] ECR 4487
333
Erlandson, op. cit., pp 152-156
334
Section II. B. 1., para 8
335
Erlandson, op. cit., p 181
325
42
It is submitted that such broader definition of the “file” is supported by the
judgment of CFI in Solvay v Commission that in certain circumstances documents
obtained throughout the course of one investigation can be important for the defense of
an undertaking in other case and that by not providing access to such evidence the
Commission has infringed the applicant's rights of defense.336
The Notice further states that following a “more detailed examination” of the
documents collected by the Commission it may find that some of these documents are
unrelated to the subject-matter of the case in question and to return them to the
undertaking from which they have been obtained. Upon return, these documents will no
longer constitute part of the file.337 As Erlandson notes, such an approach invites
arguments to the effect that “the documents that were returned must have left some traces
on the mind of the case handler” or “the Commission seeks to dispose of documents
unhelpful to its case”. One way to solve this problem would be to work out, according to
good administrative practice and with the help of information technology, a system of
registration of in- and outgoing documents for every file, just as documents are recorded
in official registers at the courts and other official authorities in the Member States.338
3. Time of granting of access to the file
According to the Notice, access is granted following the notification of the
Commission’s statement of objections (hereafter SO).339 The point of time for allowing
access has been criticized as too late. The argument is that since years often elapse
between the Commission’s fact-finding investigations and the release of the SO, it may
become increasingly difficult to verify or refute certain assertions of fact. The danger also
exists that in the meantime, more Commission officials will have built their conviction on
elements which the inspector may have misunderstood, but which the defendant has been
unable to “nip in the bud”. It has been therefore argued that the earlier access to file is
given, the fewer misunderstanding about the facts will result.340
4. “Non-confidential” versions of documents
Throughout the competition procedure, the Commission must balance between
the obligation to safeguard the undertakings’ right of defense341 and the confidentiality of
the information obtained.342 The method of doing so encouraged by the CFI in Sodaash343 and adopted by the Notice344 is to provide non-confidential versions of confidential
documents.
336
Solvay v Commission, supra note 318, paras 84 and 100
Section II. B. 1., para 9
338
Erlandson, op. cit., p 180; Cf. Art 11 of Regulation (EC) No 1049/2001 of the European Parliament and
of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission
documents [2001] OJ L 145/43, which provides for the creation of such registers.
339
Section II. C.
340
Erlandson, op. cit., p 161
341
See supra note 318 and the accompanied text.
342
Supra notes 321-322 and the accompanied text
343
ICI, supra note 318, paras 102-104 and 111 and Solvay, supra note 318, para 101
344
Section IV. A.
337
43
This problem, however, is far from being perfect. In an anti-dumping case AG
Darmon rejected such a solution as “inadequate” where figures are involved.345
Inevitably, after having deleted all confidential information in a document, the document
will in most cases be of no use for the defendant undertaking. This is either because it
then no longer contains any information useful for the defense or because the way in
which the Commission has described the document is too succinct or inadequate for the
defendant to be able to assess the relevance of the document for its defense.346
Thus, the method is one-sided: it protects the interest of the owner of the
information but does not protect the interest of the defendant undertaking, whereas it is
submitted that the primary position should always be that confidentiality can never deny
a defendant the right to defend himself.347
5. The lack of judicial control over the Hearing Officer’s decision whether to
grant access to confidential information
The Commission has introduced and further strengthened the figure of the
Hearing Officer as a “neutral chair” to the hearing with the aim of increasing the
transparency and fairness of its procedure.348 According to the Notice if a party considers
that, after having access to the file, it requires knowledge of specific non-accessible
information for its defense it may submit a reasoned request to that end to the
Commission. If the DG COMP refuses the request the party may refer the issue to the
Hearing Officer.349
The Notice, however, does not provide for a right to appeal the decision of the
Hearing Officer. This opportunity was rejected by the CFI in Cimenteries.350 While
acknowledging the importance of access to file as a means by which undertakings
exercise the rights of defense, the Court held that:
“Commission measures refusing access produce in principle only limited effects,
characteristic of preparatory measure forming part of a preliminary administrative
procedure. Only measures immediately and irreversibly affecting the legal situation of the
undertakings concerned would be of such of nature as to justify, before completion of the
administrative procedure, the admissibility of an action for annulment.”351
This approach is in contrast with the one concerning the protection of confidential
information. In AKZO Chemie352 the CFI held that where the Commission intents to
345
Case C-49/88 Al-Jubail Fertilizer Company and Saudi Arabian Fertilizer Company v Council [1991]
ECR I-3187, para 110 of AG’s Opinion
346
Erlandson, op. cit., p 163
347
Ibid, pp 163-164
348
See Commission Decision of 23 May 2001 on the terms of reference of hearing officers in certain
competition proceedings, OJ L162/21. For a general discussion of the role and functions of the hearing
officer see Kerse C, “Procedures in EC Competition Cases: The Oral Hearing” [1994] 15 ECLR, p 40 and
Giannakopoulos T, “The Right to be Orally Heard by the Commission in Antitrust, Merger, Antidumping/Anti-subsidies and State Aid Community Procedures” [2001] 24 World Competition, p 541
349
Section IV. C., para 47
350
Supra note 318
351
Ibid, para 42
352
Supra note 257
44
disclose protected information over the objection of the owner, adoption of a formal
decision to that effect is required, subject to an interlocutory appeal before the Court.353
This seems to be another example of how the Court is putting the interest of the owner of
confidential information over the rights of defense of the accused undertaking.
6. Third parties’ access to the file
The ECJ has held in Re: FEDETAB case354 that complainants enjoyed only “a
right to be heard and not a right to receive confidential information”.355 Consequently, the
Commission could “communicate to such a party certain information covered by the
obligation of professional secrecy”, but only “in so far as it is necessary to do so for the
proper conduct of investigation”.356 It follows that, although the right of access to the file
by third parties is clearly linked to the need to ensure a meaningful exercise of their right
to be heard, its scope is by no means equivalent to that enjoyed by investigated
undertakings.357 Moreover, any such access must be granted only upon the procedure set
out in paragraph 29 of the AKZO Chemie judgment.358
Joshua has argued that, as a result of that ruling, the Commission will probably
decide in the future to do entirely without the complainant input on the documentary
evidence, rather than risking undue delay.359 He has been proven right – the Notice states
that “complainants cannot claim a right of access to the file as established for parties”360
and that they will be only provided with access to documents on which the Commission
has based its provisional assessment in case the latter intents to reject the complaint,361
but, nonetheless, “[c]omplainants do not have a right of access to business secrets or
other confidential confirmation”.362
This policy has been criticized on the main grounds: (i) that it unduly restricts the
right of third parties, whose interests have been affected by the alleged anticompetitive
behavior, to be heard;363 and (ii) that it runs counter to the interest of a more intense factfinding procedure.364
7. The right of access to file and ECHR - conclusions
This subsection has argued that there are still many problems regarding the access
to file in Competition procedures. They all apparently stem form two major factors: (i)
353
Ibid, para 29
Joined Cases 209/78 etc. Heinz Van Landewyck Sarl and Others v Commission (re: FEDETAB) [1980]
ECR 3125
355
Ibid, para 46
356
AKZO Chemie, para 26
357
Andrangeli, “EU Competition Enforcement and Human Rights”, pp 78-79
358
See supra note 353
359
Joshua, op. cit., p 78
360
Section III. A., para 30
361
Section III. A., para 31
362
Section III. A., para 32
363
Jellema C, “The Redheaded Stepchild of Community Competition Law: The Third Party and its Right to
be Heard in Competition Proceedings” [2002] 20 Boston University International Law Journal, p 211, at
278-291
364
Joshua, op. cit., p 79
354
45
that the Commission still enjoys wide discretion regarding the composition and granting
access to file; and (ii) that currently the balance between the interests of the owners of
(allegedly) confidential information and the other participants in the proceedings seeking
to exercise their right to be heard is heavily tipped in favor of the former.
As to the first problem, there are two possible solutions: either the decision of the
Hearing Officer, refusing access to “sensitive information” should be subjected to
interlocutory appeal before the General Court,365 or the investigative and decisionmaking powers should be separated between the Commission and an independent judicial
body (the General Court or a special competition tribunal) in which case all decision
regarding the access to the file will be taken by that body.366 Adoption of either of those
solutions appears to be only way to make access to file compatible with the case-law of
the ECtHR which has emphasized that the constant review of the trial judgment over the
circumstances concerning disclosure of evidence in criminal procedure is essential to
protect the rights of the accused.367
As to the second problem, it is recalled that the US practice has shown that there
are numerous way to safeguard “sensitive information” without compromising the other
parties’ right to be heard such as protection orders, in camera hearings, sealing the
records and ordering those involved in the litigation not to disclose an alleged trade secret
without prior judicial approval.368 The Commission and the EU Courts are respectfully
advised to embrace them.
D. DECENTRALIZED APPLICATION OF COMPETITION RULES AND THE LEGALITY
OF SANCTIONS
One of the main features of the Modernization of EU Competition law is the
decentralization, that is, the EU Competition rules are to be applied both by the
Commission and by the NCAs and national courts.369 There is, however, a potential
conflict between such decentralized enforcement and the principle of legality of
sanctions, enshrined in Article 7 ECHR,370 which not only prohibits the retrospective
application of more severe sanctions, but also requires “predictability” or “foreseeability”
(that is, offenses should be clearly defined by the law).371 This condition is satisfied when
an individual is in a position to know in advance how the courts will interpret the acts
and/or omissions that can make him liable for infringing the law.372
Thus, according to the ECtHR:
Erlandson, op. cit., p 183; Andrangeli, “EU Competition Enforcement and Human Rights”, pp 89-90
Waelbroeck and Fosselard, op. cit., p 136
367
App No 39482/98 Dowsett v United Kingdom [2004] 38 EHRR 41, paras 50-51; Andreangeli, ibid
368
Joshua, op. cit., pp 75-76
369
See Recitals 3 and 4, Articles 3(1) and 5 of Regulation 1/2003
370
See supra note 298 and the accompanied text.
371
Kokkinakis v Greece, judgment of 25 1993; Series A, No 260-A, para 52
372
Waelbroeck D, “‘Twelve Feet All Dandling Down and Six Necks Exceeding Long’: The EU Network of
Competition Authorities and the European Convention on Human Rights and Fundamental Freedoms”, in
Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of
Competition Authorities (2004) Oxford, Portland, OR: Hart Publishing, p 465, at 468
365
366
46
“[W]hen speaking of law, Article 7 alludes to […] a concept which comprises
statutory law as well as case-law and implies qualitative requirements, notably those of
accessibility and foreseeability.”373
As Waelbroeck argues, it is difficult to explain these requirements are being met
in a system where 28 competition authorities impose different sanctions, apply different
national procedures and may well reach different conclusions with respect of the same
type of economic behavior.374 Such uncertainty is likely to persist until the establishment
of clear case-allocation criteria and mutual recognition of the decisions of the different
competition authorities within the NCA, as well as of harmonization of the procedural
laws and the fines imposed by them.375
IV THE COMPATIBILITY OF THE JUDICIAL PROCEEDINGS
BEFORE THE EU COURTS WITH ARTICLE 6 ECHR
It has already been explained that Article 6 ECHR impliedly protects the right to a
court at some point of the procedure where an individual or an undertaking faces charges
of criminal matter or a determination of his or hers civil rights.376 Any study of the ECHR
implications of the EU competition enforcement therefore necessitates an analysis of the
proceedings before the EU Courts.377
A. LOCUS STANDI
As the ECtHR held in Golder v United Kigdom,378 “[it] must be established that
the degree of access […] was sufficient to secure the individual’s ‘right to a court’,
having regard to a rule of law in a democratic society”. 379 Indeed, the breadth of judicial
review counts for little if one is deprived from access to a court. It is therefore important
to understand first whether the persons affected by the Commission’s decision have a
sufficient access to EU Courts.
373
App No 17862/91 Cantoni v France, unreported, HUDOC case number 45/1995/551/637
Waelbroeck, op. cit., pp 469-470. As the author points out, it is important to realize that competition law
is not merely about prohibition of hard-core cartels, but often involves appraisal of much more complicated
economic facts.
375
Ibid.
376
See supra notes 66-74 and the accompanied text. See Hickman T, “The ‘uncertain shadow’: Throwing
Light on the Right to a Court under Article 6(1) ECHR” [2004] P.L. Spring, p 122 for a critique of the
concept of right to a court in the jurisprudence of the ECtHR.
377
And, more particularly – before the General Court, given the limited review over its judgments,
exercised by the Court of Justice
378
[1975] 1 EHRR 524
379
Ibid, para 57
374
47
Under Article 263(4) TFEU non-privileged applicants can bring review
proceedings (i) where there is a decision addressed to the applicant; (ii) where there is a
decision, addressed to another person, but of “direct and individual concern of him”; or
(iii) where there is a decision in the form of regulation and the applicant claims that it is
of direct and individual concern of him or her.380
It is clear from the existing case-law that under the first hypothesis undertakings
to whom the Commission’s antitrust or merger decisions are addressed, have the right to
have these decisions reviewed by the EU Courts.381
As for the standing of interested third parties, it clearly falls under the second
hypothesis depends on the EU Courts’ interpretation of “direct and individual concern”.
While the EU Courts have traditionally given extremely restrictive interpretation of that
concept,382 commentators have noted that the case-law with respect of competition
decisions has been “more liberal”.383 Thus, in the Metro I case384 the applicant, seeking to
annul Commission’s decision addressed to SABA, was accorded standing. Two factors
were particularly important in reaching that conclusion. On the one hand, Metro was the
firm which was being excluded from the SABA distribution system. On the other hand, it
was also the undertaking which has initiated the complaint under Article 3(2)(b) of
Regulation 17, which allowed private parties to bring such matters to the Commission’s
attention.385 Commentators have noted that under the Plaumann test Metro would not
have been given standing.386
The more recent EU case-law has gone further, by taking into consideration not
only whether the applicant has participated in the administrative proceedings before the
Commission, but also its market position vis-à-vis the addressees of the impugned
decision,387 whether or not, in cases of selective distribution agreements, the applicant
had been refused access to the system388 and the fact that the applicant had already
initiated damages proceedings before the competent national court.389
This “more flexible approach” when it comes to granting standing of third parties
in antitrust proceeding ha prompted Andreangeli to argue that the EU Courts’ position
appears to be “by and large consistent with the ECHR”.390
See Craig P, “Legality, Standing and Substantive Review in Community Law” [1994] 14 OJLS, p 507,
at 508
381
See, inter alia, Joined Cases T-374//94 etc. European Night Services and Others v Commission [1998]
ECR II-3141, para 61; Case T-22/97, Kesko Oy v Commission [1999] ECR II-3775, para 57
382
See, inter alia, Case 25/62 Plaumann & Co v Commission [1963] ECR 95, paras 106-107; Case 1/64
Glucoseries Reunies v Commission [1964] CMLR 596; Case 11/82 AE Piraiki-Petraiki v Commission
[1985] ECR 207, paras 242-243. See Craig, op. cit., pp 508-516 for overview of that case-law.
383
Craig, op. cit., pp 516-520
384
Case 26/76 Metro-SB-Grossmarkte GmbH & Co KG v Commission [1977] ECR 1875
385
Cf. Art 7(2) of Regulation 1/2003 which authorizes “natural or legal persons who can show a legitimate
interest” to file complaints with the Commission
386
Craig, op. cit., pp 518-519
387
Joined Cases T-528/93 etc. Metropole Television SA and Others v Commission [1996] ECR II-649, para
61
388
Case 210/81 Demo-Studio Schmidt v Commission [1983] ECR 3045
389
Case T-231/99 Joynson v Commission [2002] ECR II-2085; Case T-131/99 Shaw and Falla v
Commission [2002] ECR II-2023
390
Andreangeli, “EU Competition Enforcement and Human Rights”, pp 157, 184
380
48
Specific problems do exist, however, in the area of merger control. While the
general trend of EU case-law is towards broad standing similar to the one in antitrust
cases,391 the same does not hold true with respect of the minority shareholders and the
recognized representatives of the employees of the merging undertakings. Regarding the
former, the CFI held in Zunis Holding392 that the impugned decision was “not of such
nature as by itself to affect the substance or extent of the rights or the ability to participate
in the company management conferred on them by such rights”.393
Regarding the latter, the CFI ruled in Grandes Sources394 that:
“[O]nly a decision which may have an effect on the status of the employees’
representative organizations or on the exercise of the prerogatives and duties given them
by the legislation in force can affect such organizations’ own interests. That cannot be the
case with a decision authorizing a concentration.”395
The organizations in question were therefore granted limited standing only for the
purposes of examining whether their right to be heard before the Commission as
recognized by the 1989 Merger Regulation has been infringed.396 This solution was
criticized as “wholly inappropriate” and inconsistent with the case-law concerning the
standing requirements of third parties in the field of merger control.397
B. THE SCOPE OF THE REVIEW
A further essential issue is whether the scope of judicial control exercised by the
EU Courts is in conformity with the ECtHR’s requirement for “full jurisdiction” of the
reviewing independent tribunal.398
Under Regulation 1/2003 the EU Courts have “unlimited jurisdiction to review
decisions whereby the Commission has fixed a fine or periodic penalty payment”.399As to
391
See Case T-2/93 Air France v Commission (Re: TAT)[1994] ECR II-323, paras 44-46; Case T-3/93 Air
France v Commission (Re: Dan Air)[1994] ECR II-121, paras 80-82; Joined Cases C-68/94 and C-30/95
France and Others v Commission [1998] ECR I-1375; Case T-119/02 Royal Philips Electronics NV v
Commission [2003] ECR II-1433, paras 276-285; Case T-114/02 BaByliss SA v Commission [2003] ECR
II-1279, paras 89, 95,96; Case T-158/00 ARD v Commission [2003] ECR II-3875, para 72, 76. For a
comprehensive overview of that case-law see Andreangeli, “EU Competition Enforcement and Human
Rights”, pp 158-160
392
Case T-83/92, Zunis Holding v Commission [1993] ECR II-1169
393
Ibid, para 35
394
Case T-96/92, Comite Central d’Enterprise de la Societe Generale des Grandes Sources and Others v
Commission [1995] ECR II-1213
395
Ibid, para 38
396
Ibid, para 46
397
See Arnull A, case comment to Case T-96/92, Comite Central d’Enterprise de la Societe Generale des
Grandes Sources and Others v Commission; Case T-12/93 Comite Central d’Enterprise de la Societe
Anonyme Vittel and Others v Commission [1996] 33 C.M.L. Rev., p 319, at 328-333
398
See supra note 72 and the accompanied text.
399
Art 31. This provision has been adopted on the basis of Art 229 EC Treaty (now Art 261 TFEU)
according to which “[r]egulations adopted jointly by the European Parliament and the Council, and by the
49
the other elements of the antitrust decisions Article 263(2) TFEU limits the scope of the
review to four grounds for annulment: (i) lack of competence; (ii) infringement of an
essential procedural requirement; (iii) infringement of the Treaty or of any rule of law
relating to its application; and (iv) misuse of powers. Consequently, the Court cannot
substitute its own assessment to the economic and legal appraisal contained in the
decision.400 Its jurisdiction will be limited to ensuring that the Commission did not
overstep the limit of its discretion and did not commit any error of law or of fact in the
assessment of the evidence before it.401
It could be argued that this type of review complies with the requirements of
Article 6 ECHR, given the fact the judgment of the ECtHR in Zumtobel appears to give
preference to the interpretation of the concept of “full jurisdiction” as implying only a
“full review of legality” rather than implying the “power to remake entirely the
decision”.402
It should be stressed, however, that according to the Belilos judgment a tribunal
will only meet the requirement of Article 6(1) ECHR when it is able not only to control
fully the objective legality of an act but at least also to review fully the facts upon which
a decision is based.403 This is clearly not the case with the Court’s self-imposed restraint
regarding when faced with “complex economic assessments”. Thus in Matra Hachette404
the CFI held that:
“[W]here complex economic facts are involved judicial review of the legal
characterization of the facts is limited to the possibility of the Commission having
committed a manifest error of assessment…”405
Such approach is undoubtedly open to criticism. As AG Jacobs has stated, “the
technical nature of a case should not cause the Court to forsake its duty […] to ensure
that the law is observed”.406 Thus, there is no intellectual reason why the Court cannot
review the accuracy of the Commission’s economic and market analysis and the
correctness of its legal conclusions.407 One difficulty of this approach is that it is not
Council, pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction with
regard to the penalties provided for in such regulations”.
400
Case 74/74 CNTA SA v Commission [1975] ECR, paras 21-22; Case T-155/04 SELEX Sistemi Integrati
SpA v Commission [2007] 4 CMLR 10, para 28
401
Craig, op. cit., p 530; Andreangeli, “EU Competition Enforcement and Human Rights”, pp 164-165. For
a comprehensive review on the issue see Bailey D, “Scope of Judicial Review under Article 81 EC” [2004]
41 CML Rev, p 1327
402
See App No 12235/86 Zumtobel v Austria [1994] 17 EHRR 116, para 32; Waelbroeck and Fosselard,
op. cit., pp 127-131
403
App No 10328/83 Belilos v Switzerland [1988] 10 EHRR 466, para 70; Waelbroeck and Fosselard, op.
cit., p 132
404
Case T-17/93 Matra Hachette v Commission [1994] ECR II-595
405
Ibid, para 104
406
Case C-269/90 Technische Universitat Munchen v Hauptzollamt Munchen-Mitte [1991] ECR I-5469,
per AG Jacobs
407
Opinion of AG Tesauro in Cases C-68 etc France v Commission (“Kali und Salz”) [1998] ECR I-1375,
at note 33
50
always clear when the analysis is sufficiently complex and thus when judicial review
ought to be limited,408 to the detriment of legal certainty.
Finally, this approach is contrary to the standards of judicial review in merger
cases where the EU Courts have shown much more willingness to scrutinize the
economic assessments of the Commission.409 Such a contradiction is paradoxical: EU
Courts apply stricter standards of review in merger cases, which are involved with
determination of civil rights and obligations, than in antitrust cases, which concern
charges of criminal nature.410
The EU Courts’ self-imposed restraint in the review of “complex economic
assessments” in antitrust cases therefore casts a major shadow over the compatibility of
the EU judicial procedure with Article 6 ECHR.
V CAN UNDERTAKINGS OBTAIN EFFECTIVE REDRESS FOR THE
VIOLATION OF THEIR RIGHTS?
Section III of this paper has highlighted the existing incompatibilities between the
Commission’s competition procedures and the ECHR standards whereas Section IV has
argued that certain aspects of the EU Courts’ case-law governing the standing and the
scope of judicial control do not satisfy the criteria for full jurisdiction under Article 6(1).
It is therefore important to understand whether the parties affected by EU competition
procedures can claim remedy for their violated rights. Since the European judicatory is “a
three-tier tightly woven structure of national, supranational and international legal
systems”,411 it is necessary to examine the view of all the systems involved.
A. THE VIEW OF THE ECTHR
It is a settled case-law that applications against the EU are inadmissible ratione
personae insofar the EU is not party to the ECHR.412 Members, in contrast, have been
held in M & Co413 to be “responsible for all acts and omissions of their domestic organs
allegedly violating the Convention regardless of whether the act or omission in question
408
Bailey, op. cit., p 1342
This approach is perhaps best summarized in Kali und Salz, supra note 402 and in Case C-12/03 P,
Commission v Tetra Laval (Tetra Laval II) [2005] ECR I-987. See Bay M and Ruiz Calzado J, “Tetra
Laval II: the Coming of Age of the Judicial Review of Merger Decisions” [2005] 28(4) World Competition,
p 433
410
Andreangeli, “EU Competition Enforcement and Human Rights”, pp 185-186
411
Canor I, “Primus inter pares. Who is the ultimate guardian of fundamental rights in Europe?” [2000] 25
E.L. Rev., p 3. Cf. Nazzini, op. cit., pp 8-9 who identifies six interacting systems: international standards
not effective under national law; international standards effective under national law; EU law; national
constitutional standards; national laws; and aspirations of the users of the system (“legitimate
expectations”).
412
App No 8030/77 CFDT v European Communities [1979] 13 D & R 231, para 3.
413
App No 13258/87, M. & Co v the Federal Republic of Germany [1990] 64 D & R 138
409
51
is a consequence of domestic law or regulations or of the necessity to comply with
international obligations.”
In the same decision, however, the CHR severely limited the application of the
Convention case-law to the EU legal order, by holding that “the transfer of powers to an
international organization is not incompatible with the Convention provided that within
that organization fundamental rights will receive an equivalent protection”,414 and by
finding that “the legal system of the European Communities not only secures
fundamental rights but also provides for control of their observance”. In order to reach
that conclusion, the CHR relied on Joint Declaration on Human Rights of the
Commission, Council and the European Parliament415 which underscored the importance
of the ECHR as well as on the case-law of the EU Courts concerning the protection of
fundamental rights.416 M & Co’s application was therefore rejected as inadmissible.
The case of Matthews417 was heralded as “a significant development” of the
Strasbourg case-law.418 The applicant claimed a violation by the United Kingdom of her
right to participate in free elections, by virtue of the fact that, as British national resident
in Gibraltar, she was unable to vote in the 1994 elections to the European Parliament.
Despite of the fact that the European Parliament, together with the Council, enacted
legislation which applied to Gibraltar, Annex II the Act Concerning the Election of the
Representatives of the European Parliament by Direct Universal Suffrage of 20
September 1976 (the 1976 Act) which was attached to the Council Decision 76/787 (“the
Council Decision”) did not provide for the Gibraltar residents to vote in these elections.
The ECthR reaffirmed the position that Member States’ responsibility continues even
after the transfer of competences to the EC419
The Court also stated that:
“[T]he Convention is a living instrument which must be interpreted in the light of
present-day conditions […]. The mere fact that a body was not envisaged by the drafters
of the Convention cannot prevent that body from falling within the scope of the
Convention. To the extent that Contracting States organise common constitutional or
parliamentary structures by international treaties, the Court must take these mutually
agreed structural changes into account in interpreting the Convention and its
Protocols.”420
On the merits, the Court found that Ms. Matthews’ right to vote was denied, and
therefore there was a breach of Article 3 of Protocol No. 1 to the ECHR.
414
Ibid, emphasis added
Supra note 28
416
See supra notes 23-27 and the accompanied text.
417
App No. 24833/94, Matthews v United Kingdom [1999] 28 EHRR 361. For comments see: Harmsen R,
“National Responsibility for European Community Acts Under the European Convention on Human
Rights: Recasting the Accession Debate” [2001] 7(4) EPL, p. 625, Schermers H, “Case Law, Matthews v
United Kingdom, Judgment of 18 February 1999” [1999] 36 CML Rev., p 673
418
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”, p
82
419
Matthews, para 32
420
Ibid, para 39
415
52
The judgment in Matthews was hailed by commentators for the “tightening of
language” compared to the judgment in M & Co and particularly for the fact that it
insisted on the need the Convention rights to be “secured” rather than seeking “equivalent
protection.” It has been suggested that this judgment was a sign that the ECtHR was now
more willing to assert its jurisdiction over the EU legal order. It has been also argued that
there is no reason why the concept of the “living instrument”421 could not be applied to
the entire acquis Communitaire which did not exist at the time of the adoption of the
Convention either.422
However, the explanation for the sympathetic stance of the Court towards the
applicant might well lay in the specific circumstances of that case. The acts from which
the violation flawed - the Council Decision, the 1976 Act and the Maastricht Treaty,
which amended the powers of the European Parliament, - all constituted international
agreements that were freely entered into by the UK. As an international agreement and
not an act adopted by the Community institutions, the 1976 Act could not be challenged
before the Community judicature.423 It has been therefore argued that the fact that the
ECtHR believed that Ms. Matthews had not effective remedy may have had a decisive
influence on the outcome of the judgment.424
The latter interpretations of the Matthews judgment appear to be confirmed by the
more recent Bosphorus judgment.425 In that case the applicant had alleged that the
impoundment by the Irish authorities of an aircraft belonging to the national airline
company of the Federal Republic of Yugoslavia, imposed to fulfill the obligations on
Ireland as a result of the Council Regulation426 enacted to give effect to the UN
Resolution imposing economic sanctions on former Yugoslavia, violated its rights to
enjoy property peacefully. The Court confirmed the principle of continuing Convention
liability in respect of treaty commitments subsequent to the entry into force of the
Convention.427
On the merits, however, the Court found no violation of the Convention. First, it
returned to the “equivalence” standard from the M & Co judgment and specified that:
“By ‘equivalent’ the Court means ‘comparable’; any requirement that the
organisation's protection be ‘identical’ could run counter to the interest of international
cooperation.”428
The ECtHR then held that the effectiveness of the substantive guarantees of
fundamental rights “depends on the mechanisms of control in place to ensure their
421
See supra note 420 and the accompanied text.
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”,
pp 84-85
423
Matthews, para 33
424
Riley, op. cit., p 83
425
Application no. 45036/98, Bosphorus Hava Yollari Turizm Ve Ticaret Anonim Şirketi v Ireland
[2006]42 EHRR 1
426
Council Regulation (EEC) No. 990/93 of 26 April 1993 concerning trade between the EEC and the
Federal Republic of Yugoslavia (Serbia and Montenegro), [1993] OJ L102/14
427
Bosphorus, para 154
428
Ibid, para 155
422
53
observance”429 and found that “the protection of fundamental rights by Community law
can be considered to be, and to have been at the relevant time, ‘equivalent’ […] to that of
the Convention system”.430 In reaching this conclusion, the Court emphasized on the
substantive content of the EC general principles of law, as developed by the ECJ and the
role played by the ECHR in that context.431
The ECtHR held that:
“If such equivalent protection is considered to be provided by the organisation,
the presumption will be that a State has not departed from the requirements of the
Convention when it does no more than implement legal obligations flowing from its
membership of the organisation.
However, any such presumption can be rebutted if, in the circumstances of a
particular case, it is considered that the protection of Convention rights was manifestly
deficient. In such cases, the interest of international cooperation would be outweighed by
the Convention's role as a ‘constitutional instrument of European public order’ in the
field of human rights.”432
As for the judgment in Matthews, the Court stated that it could be distinguished
from the case in question: the acts for which the United Kingdom was found responsible
were “international instruments which were freely entered into” by it as opposed to acts
of organization to whom the State has transferred part of its sovereignty.433
The Bosphorus judgment has been widely criticized both in the concurring
opinions on the case434 and in the literature435 as creating double standards of protection
of fundamental rights,436 leading “tacitly to substitution, in the field of Community law,
of Convention standards by Community standards”,437 and ultimately – for introducing
such a high standard for cases concerning EU law than those are virtually excluded from
a review in Strasbourg.438
The concept of “manifest deficiency” contained in judgment should be
particularly alarming for undertakings willing to invoke the breach of their fundamental
rights in EU competition procedures before the ECtHR. What this means is unclear. No
guidelines were given by the Court. If “manifestly deficient” is taken to mean that the EU
429
Ibid, para 160
Ibid, para 165
431
Ibid, paras 159, 164
432
Ibid, para 156
433
Ibid, para 157
434
See Joint Concurring Opinion of Judges Rozakis, Tulkens, Traja, Botoucharova, Zagrebelski and
Garlicki and Concurring Opinion of Judge Ress
435
See Eckes C, “Does the European Court of Human Rights Provide Protection from the European
Community? – The Case of Bosphorus Airways” [2007] 13 EPL, p 47; Banner C and Thomson A, “Human
Rights Review of State Acts Performed in Compliance with EC Law - Bosphorus Airways v Ireland”
[2005] 6 E.H.R.L.R. p 649; Costello C, “The Bosphorus Ruling of the European Court of Human Rights:
Fundamental Rights and Blurred Boundaries in Europe” [2006] 6 HRLR.
436
Eckes, op. cit., p 65
437
Joint Concurring Opinion of Judges Rozakis, Tulkens, Traja, Botoucharova, Zagrebelski and Garlicki,
para 3
438
Eckes, op. cit., p 64
430
54
must apply substantially the same standards of human rights as enshrined in the ECHR
then Sections III of this papers contains abundant evidence of manifest deficiency.
However, if “manifest deficiency” is understood to mean simply lack of procedural
mechanism of control, as the joint reading of Matthews and Bosphorus tends to suggest,
then undertakings cannot hope for any success in Strasbourg.439 The same holds true even
taking into account the shortcomings of the EU judicial procedures, outlined in Section
IV, given the abstract approach in Bosphorus where the ECtHR was happy to examine
the overall state of these procedures,440 rather than busying itself with the particular
details which might rebut the presumption of equivalent protection.
Given this jurisprudence of the ECtHR it is even more important to understand
whether one can obtain effective remedy from the EU Courts or from the courts of the
Member States.
B. THE VIEW OF EU COURTS
As already pointed out the EU Courts’ case-law has undergone a significant
development from denying applicability of ECHR in EU legal order441 to holding that EU
Courts are called to observe the protection of fundamental rights and acknowledging the
“special significance” of the ECHR in that respect.442 In some more recent judgment the
EU Courts have even applied provisions of the ECHR directly without transposing them
into “general principles of law”.443
Against this background one should expect the EU Courts to provide at least the
same level of protection of the undertakings’ rights as the one provided by the ECtHR.
Such expectation is reinforced by the text of Article 52(3) of the Charter of Fundamental
Rights of the European Union, according to which:
“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 Union law providing more extensive
protection.”
As the argument goes, EU Courts “would almost certainly take the view that the
Strasbourg case law determined authoritatively ‘the meaning and scope’ of the rights
guaranteed by the ECHR”444 and therefore further convergence between the EU and the
ECtHR case-law is to be expected. Or, in alternative, “[the] notion of same meaning and
439
Aslam and Ramsden, op. cit., pp 84-85
See Andreangeli, “EU Competition Enforcement and Human Rights”, p 14
441
See Case 1/58 Friedrich Stork & Co v High Authority of the ECSC [1959] ECR 7; Joined Cases 36/59
etc. Geitling v High Authority of the ECSC [1960] ECR 523; Case 40/64 Sgarlata v Commission [1965]
ECR 215; Case 45/69 Boehringer Mannheim Gmbh v Commission, [1970] ECR 153.
442
See supra notes 20-27; 34-35 and the accompanied text.
443
See e.g. the Carpenter judgment, supra note 23.
444
Arnull, op. cit., pp 785-786
440
55
scope may well be used by undertakings to argue that a similar approach should be used
in respect of fundamental rights in the general principles of [EU] law”.445
Yet serious questions have been raised as to whether the EU judicature is “taking
[fundamental] rights seriously”.446 It has been widely acknowledged that ECJ’s early
case-law embraced the concept of fundamental rights in order to secure the supremacy of
EU law against the objections of the courts of Germany and Italy who were concerned by
the lack of fundamental rights protection.447 More recently references have being made
by the EU Courts in order to extend their jurisdiction into areas previously reserved to
Member States’ Courts and to expand the influence of the EU over the activities of the
Member States.448 It has been further argued that in each case involving fundamental
rights issues the EU Courts have “manipulated the usage of fundamental rights principles
with just enough significance in Community terms to allow for the triumph of the
Community will”.449
When one looks, for instance, at the EU judicature’s approach to the privilege
against self-incrimination450 it is hard to disagree with such conclusion. Before the
ECtHR held that Article 6 ECHR conferred a right of silence in Funke and Saunders, the
ECJ was prepared to concede that Article 6 applied to competition proceedings; once the
ECtHR held Article 6 to include that right, the CFI held that Article 6 did not apply. As
commentators have suggested (and the CFI has explicitly confirmed in para 66 of the
Mannesmannrobren-Werke judgment) the only reasonable explanation for such a
puzzling “moving of the goalposts” was that the Court has “made a conscious policy
decision not to extend to Commission investigations the safeguards against selfincrimination provided by Article 6 of the ECHR” fearing that this would “constitute an
unjustified hindrance” to the Commission’s powers of investigation.451
Therefore undertakings would be best advised not to be overly enthusiastic about
the possibility to receive from the EU Courts protection of their fundamental rights
similar to the one granted by the ECtHR – particularly where, in the Courts’ view, such
protection might jeopardize the exercise of Commission’s competences.
C. THE ROLE OF THE NATIONAL COURTS
It has been argued that proceedings before the National Courts of the Member
States could be used by the defendant undertakings to trump the powers of the
445
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”, p
87
Coppell and O’Neill, op. cit, p 669
Ibid, pp 669-672; Besson, op. cit., pp 343-344; See Andreangeli, “EU Competition Enforcement and
Human Rights”, pp 7-8
448
Coppell and O’Neill, op. cit, pp 673-691
449
Ibid, pp 682-683
450
See supra notes 155-182 and the accompanied text.
451
Aslam and Ramsden, op. cit., p 70
446
447
56
Commission with the international obligations of the Member States set out in ECHR.452
The basis for this is provided by two important rules.
First, according to Article 351 TFEU:
“The rights and obligations arising from agreements concluded before 1 January
1958 or, for acceding States, before the date of their accession, between one or more
Member States on the one hand, and one or more third countries on the other, shall not be
affected by the provisions of this Treaty.
To the extent that such agreements are not compatible with this Treaty, the
Member State or States concerned shall take all appropriate steps to eliminate the
incompatibilities established. Member States shall, where necessary, assist each other to
this end and shall, where appropriate, adopt a common attitude.”
Since most of the Member States have acceded to the ECHR prior to joining the
EU, they remain bound by the higher standards of protection provided by the ECtHR as
long as they have not denounced the Convention, which seems rather impossible from
political point. Given the fact that under Article 299 TFEU enforcement of Commission
decisions imposing fines or periodic penalty payments is sought by National Courts, the
application of EU competition law decisions may be successfully resisted on the grounds
that they require a Member State to violate its pre-existing obligations to third parties
under the ECHR.453 It also enables National Courts to exercise real judicial control when
authorizing Commission’s inspections, despite of the delimitations set out in Article
20(8) of Regulations 1/2003.454
Secondly, Article 53 ECHR provides that:
“Nothing in this Convention shall be construed as limiting or derogating from any
of the human rights and fundamental freedoms which may be ensured under the laws of
any High Contracting Party or under any other agreement to which it is a Party.”
It is clear for the very wording of this provision that it only permits national
fundamental rights provisions offering higher human rights standards to be applied in
place of the ECHR. Since this paper has shown that on many occasions the EU standards
are in fact lower than the Convention ones, this provision also allows Commission’s
procedures to be questioned on the basis of ECHR before National Courts.455
While these arguments are undoubtedly correct, whether the National Courts
would have the courage to go against the doctrine of EU law supremacy,456 even armed
with Article 351 TFEU and Article 53 ECHR, is another matter. As commentators note, a
State acting in this matter is “arguably acting in breach of Community law (and may
conceivably open up the governments to claims of Francovich damages)”.457
452
Riley, “The ECHR Implications of the Investigation Provisions of the Draft Competition Regulation”, p
55
453
Ibid, pp 78-81
See mutatis mutandis, Aslam and Ramsden, op. cit., pp 86-87
455
Riley, ibid., pp 85-86; Aslam and Ramsden, ibid
456
See, inter alia, Case 6/64, Costa v Ente Nazionale per l'Energia Elettrica (Enel) [1964] C.M.L.R. 425.
457
Aslam and Ramsden, ibid, p 87; See Cases C-6/90 & 9/90 Andrea Francovich and Another v The
Republic (Italy) [1993] 2 C.M.L.R. 66
454
57
VI CONCLUSIONS
This paper has argued that number of inconsistencies between the EU competition
enforcement and the ECHR exist and has discussed the ways to remedy this. It is
unfortunate that although it is possible to reconcile the competition procedures with the
Convention without jeopardizing the Commission’s powers to enforce competition rules
to the benefit of consumer welfare (and arguably, by even reinforcing these powers), the
Council and the Commission have been reluctant to do so. To that extent they have been
authorized by the EU Courts who have in practice refused to apply the Convention
standards as well as by the ECtHR itself who has turned the proverbial blind eye on the
Community legal order as long as there is a possibility to appeal before the EU Courts.
It has often been argued that the only way to ensure the observance of human
rights in the Union as a whole as well as in the EU competition procedure in particular is
the accession of the EU to the ECHR458 - a view which is very much supported by the
author of this paper. The sooner the accession provided for by the Lisbon Treaty occurs,
the better.
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