Prepared by the ICC Commission on Competition
Summary:
Analysis of current EU antitrust proceedings
Commission's Explanatory Note on inspections
Information sharing among competition authorities
225/717 CI/zse 15 April 2014
DUE PROCESS IN EU ANTITRUST PROCEEDINGS
Comments on and Analysis of the European Commission’s and EU Courts’ Antitrust Proceedings
1.
Introduction
1.1. In March 2010, ICC had commented on due process in response to, inter alia, DG COMP’s consultation in relation to Best Practices in antitrust proceedings. ICC believes that its paper on due process needs to be updated in light of the many developments in the practice of DG COMP and of the Courts in Luxembourg in the intervening four years.
1.2. We continue to believe that it is essential that a fundamental review of due process and procedural fairness in EU antitrust cases is formally carried out (in spite of or particularly because of the widely debated Menarini case of the European Court of Human Rights). This is not to impugn the professionalism, dedication and commitment of the talented staff at DG COMP, the Commission’s Legal Service or the European Courts. Yet, ICC believes that the European Commission’s procedures for enforcing antitrust law and the General Court’s practices in reviewing antitrust decisions are currently inadequate to guarantee procedural fairness; they may even reduce the prestige of the institutions as antitrust enforcers and the acceptability of the important competition policy objectives they are pursuing. To maintain the exceptional success of the European Commission in enforcing antitrust law, its own practices need to be the best in the world and subject to minute judicial review, such that all stakeholders are convinced that those procedures are robust, fully in line with all safeguards of the rights of the defence and incapable of being politically influenced. This is why due process and scrupulous attention to procedural fairness are imperative if justice is not only to be done, but also seen to be done.1
1.3. The key features of a competition regime that the business community requires are certainty, predictability, consistency, and confidence in the process. Companies doing business in Europe want competition rules which are strong but fair. The business community desires the Commission to have the best possible procedures – and for the Commission to adopt procedures which are the benchmark and which compare
favourably to global best practices. The growing perception of unfairness of the Commission’s and EU courts' competition procedures is something that the business community therefore regrets.
1.4. The European Commission is made up of 28 experienced political figures, one from each Member State. In most areas of EU law, it acts as the EU executive and as the draftsman of new EU legislation. Yet in the antitrust field, it also acts as investigator, prosecutor and adjudicator, and imposes enormous criminal sanctions for antitrust infringements. We have no doubt that if the EU were to put in place antitrust rules today, starting with a clean slate, it would design the decision making process differently.
1.5. We therefore believe DG COMP should not merely look at continually improving Best Practices in existing procedures, but that they (and indeed the EU institutions as a whole) should address a wider question: is more fundamental reform of EU institutions and particularly of EU antitrust procedures desirable? We believe it is not only
desirable, but inevitable (see section 2).
1
“[J]ustice should not only be done, but should manifestly and undoubtedly be seen to be done”: R v. Sussex Justices, ex p McCarthy [1924] 1 KB 256, 259 per Hewart LCJ.
1.6 In this context, ICC also would like to briefly comment on the Commission's
Explanatory Note on Inspections (section 3) and on the information sharing among competition authorities (section 4).
2.
Analysis of due process in current EU antitrust proceedings
2.1. Current EU antitrust proceedings are not in line with the European Convention on Human Rights (ECHR)
2.1.1. The ECHR guarantees fundamental rights of natural and legal persons involved in proceedings before an authority of a signatory state. These rules apply throughout the EU as all 28 Member States are signatories to the ECHR, as the Charter of
Fundamental Rights of the EU (the Charter) requires that the rights recognised in it be given the same meaning and scope as under the ECHR,2 and even more so as the European Union itself will soon accede to the ECHR as Article 6(2) Treaty on European Union stipulates.
2.1.2. Article 6(1) ECHR sets specific minimum due process requirements that must be met before criminal punishments can lawfully be imposed. These requirements in criminal proceedings include the right to a public hearing3 before an independent and impartial tribunal4 at first instance5 with the opportunity inter alia to give evidence in one’s own defence,6 hear the evidence of the prosecution7 and examine and cross-examine the witnesses.8 Proceedings must not exceed a reasonable time.9 This principle of effective judicial protection also is a general principle of European Union law to which expression is given by Article 47 of the Charter and which corresponds, in European Union law, to Article 6(1) of the ECHR,10
2.1.3. After a long debate, it is generally accepted by now11 that when penalties are imposed for violations of the EU antitrust rules, these penalties constitute a "criminal charge"
2
Article 52(3) of the Charter of Fundamental Rights provides: “In so far as this Charter contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.” Further, since the entry into force of the Lisbon Treaty on 1st
December 2009, the Charter of Fundamental Rights has the same legal value as the Treaties themselves; see Article 6(1) of the TEU provides that: “The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties.” (Emphasis added.) See also recently Court of Justice of the EU, judgment of 18July 2013, Case C-501/11 P, Schindler, at para 32.
3
Fredin v Sweden, [1991] EHRR 784, para. 21.
4
Campbell and Fell v United Kingdom, [1984] EHHR 165, para. 78.
5
Findlay v. the United Kingdom,[1997] EHRR 221, para. 79.
6
Hulki Gunes v Turkey, App. 28490/95, Judgment of 19 June 2003.
7
Ekbatani v Sweden, [1988] EHRR 504, para. 25.
8
Isgro v Italy, judgment of 19 February 1991, Series A, No 104.
9
Eckle v Germany, [1982] EHRR 1, para. 76.
10
Court of Justice of the EU, judgment of 18July 2013, Case C-501/11 P, Schindler, at para 36.
11
See, e.g., C. Bellamy, "ECHR and competition law post Menarini: An overview of EU and national case law, e-Competitions, N°47946, 5 July 2012; E. Morgan de Rivery/E. Lagathu/E.Chassaing, "EU Competition Fines and Fundamental Rights: Correcting the Imbalance", European Law Reporter 2012, 190; Opinion of Advocate General Sharpston of 11 February 2011 in Case C-272/09 KME Germany and Others v Commission, para 64; W. Wils, “The Increased Level of EU Antitrust Fines, Judicial Review, and the European Convention on Human Rights”, [2010] World Competition 5; F. Castillo de la Torre, “Evidence, Proof and Judicial Review in Cartel Cases”, [2009] World Competition 505; I. Forrester, “Due Process in EC competition cases: a distinguished institution with flawed procedures", [2009] European Law Review 817; Jürgen Schwarze, Rainer Bechtold and Wolfgang Bosch, Deficiencies in European Community Competition Law, Stuttgart 2008; Opinion of Mr Vesterdorf, acting as Advocate General, of 10 July 1991 in
within the meaning of the ECHR. This has recently been confirmed by the European Court of Human Rights (ECtHR) in the case Menarini, referring to a number of precedents in that respect12, and by the EFTA Court in the case Posten Norge.13 An obvious and indispensable consequence to be drawn from these precedents is that the guarantees of due process set out in Article 6(1) ECHR, in particular the right to be heard before an independent and impartial tribunal at first instance, fully apply. If that consequence were not drawn, the categorization of antitrust fines as criminal sanctions would be meaningless because due process guarantees would then be open to
arbitrary treatment.
2.1.4. However, some authors, notably from inside the European Commission14, disagree. According to them, cartel investigations comply with the guarantees of Article 6(1) ECHR if the sanction decisions can be appealed before a Court that has full
jurisdiction. At first sight, it seems that these authors have received some support from the Menarini decision of late 2011. Menarini Diagnostics S.R.L. had complained that the Italian proceedings leading to a fine violated the fair trial principles of Article 6 ECHR, given that the decision of the Autorità Garante della Concorrenza e del Marcato had not been reviewed closely enough by the Italian Courts on appeal. On the merits, when assessing whether the administrative decision was subject to review by a Court having “full jurisdiction”, the ECtHR looked at the review of the fining decision actually undertaken in two instances by Italian administrative Courts, including the Italian Council of State. The majority in Menarini found that these domestic Courts, notably the Council, had gone beyond a “simple legality control”, and had therefore exercised “full jurisdiction”.15 On closer scrutiny though, this decision is far from being convincing
and can hardly be construed in such a broad manner as to have resolved one of the key issues of due process once and for all.
2.1.5. It is true that violations of some guarantees of Article 6(1) ECHR can frequently be cured by an appellate instance with full jurisdiction. Yet according to the long standing (pre-Menarini) case law of the ECtHR, this cure is to be applied only most exceptional-ly to the most fundamental right, nameexceptional-ly the right to an independent and impartial tribunal at first instance. In its leading decision in De Cubber, the ECtHR had to decide whether it would infringe the right to an independent and impartial tribunal if, in the same case, the same person were to successively exercise the function first of
investigating judge and then of trial judge of the first instance Oudenaarde Court. This was common practice under Belgian law at the time. The ECtHR first recalled that "a
Joined Cases T-1/89 to T-4/89 and T-6/89 to T-15/89, Rhône-Poulenc and Others v Commission, [1991] ECR II-869 at 885; Opinion of Advocate General Léger of 3 February 1998 in Case C-185/95 P, Baustahlgewerbe v Commission, [1998] ECR I-8422, para. 31; Judgment of 8 July 1999 in Case C-199/92 P, Hüls v Commission, [1999] ECR 4287, para. 150.
12
ECtHR, Judgment of 27 September 2011, A Menarini Diagnostics SRL v Italy, paras 38-44.
13
EFTA Court, Judgment of 18 April 2012, Case E-15/10, para 88: "Having regard to the nature of the infringements in question and to the potential gravity of the ensuing penalties, it must be held that the proceedings at hand fall, as a matter of principle, within the criminal sphere for the purposes of Article 6 ECHR."
14
Wils, op. cit.; pp. 12-19; Castillo de la Torre, op. cit., pp.570-572; W. Wils, The compatibility with fundamental rights of the EU antitrust enforcement system in which the European Commission acts both as investigator and as first-instance decision maker, World Competition, Volume 37, March 2014, 1-19. It should be noted though that this view is not uniform. Cf., for instance, Georg-Klaus de Bronett, former member of DG Competition, The Legality of the recent fining practice of the Commission for infringements of Article 23 (1) of Regulation No. 1/2003, WuW 2012, 1140 et seq.; Plädoyer für eine Reform der Aufgabenverteilung zwischen der Kommission und dem Gerichtshof der EU bei der Anwendung der Art. 101 und 102 AEUV in Einzelfällen, ZWeR 2012, 157 et seq.
15
restrictive interpretation of Article 6(1) – notably in regard to observance of the fundamental principle of the impartiality of the Courts – would not be consonant with the object and purpose of the provision, bearing in mind the prominent place which the right to a fair trial holds in a democratic society within the meaning of the Convention", and then held with remarkable clarity:16
"At the hearings, the Commission's Delegate and the applicant's lawyer raised a further question […]: had not "the subsequent intervention" of the Ghent Court of Appeal "made good the wrong" or "purged" the first-instance proceedings of the "defect" that vitiated them? […] The possibility certainly exists that a higher or the highest Court might, in some circumstances, make reparation for an initial violation of one of the Convention's provisions […]. The circumstances of the present case, however, were different. The particular defect in question did not bear solely upon the conduct of the first-instance proceedings: its source being the very composition of the Oudenaarde criminal Court [i.e. the first instance], the defect involved matters of internal organization and the Court of Appeal did not cure that defect since it did not quash on that ground the judgment [of the first instance] in its entirety." [emphasis added]
The judgment confirmed that in criminal proceedings each instance, including the first, has to be constituted of an independent and impartial tribunal. This has explicitly been confirmed in the Findlay judgment.17 The reason is obvious: the right to an independent and impartial tribunal is so fundamental for the safeguarding of human rights that it has to be complied with at each instance, and most importantly at the first instance. If this were not the case, the inevitable "prosecutorial bias" of the partial authority in the first instance18 will have such a strong impact that the deficiencies and flaws cannot be remedied at the second instance (see in more detail at section 2.1.14 below). The De Cubber decision had a far-reaching impact on various signatory states of the ECHR in that they had to reform their criminal procedure laws. As a result, it would seem obvious today that for all signatory states it would constitute an infringement of Article 6(1) ECHR if a prosecutor were to hear later as a judge a case that he himself had investigated earlier.
2.1.6. The strict rule and general application of De Cubber requiring an independent and impartial tribunal at each instance including the first is subject to only one limited exception: The ECtHR's Öztürk decision – which involved a fine of DEM 60 for causing a traffic accident - established the so-called "minor offences" exception. The Court held the following:19
"Having regard to the large number of minor offences, notably in the sphere of road traffic, a Contracting State may have good cause for relieving its Courts of the task of their prosecution and punishment. Conferring the prosecution and punishment of minor offences on administrative authorities is not inconsistent with the Convention provided
16
ECtHR, Judgment of 26 October 1984, De Cubber v Belgium, para 30 in fine and para 33.
17
ECtHR, Judgment of 25 February 1997, para 79.
18
This is a neutral and objective statement related to human nature and not meant to blame any individual at an authority.
19
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 56. The complaint of Mr. Öztürk was in fact directed against paying the interpreter's fees of some DEM 63.90 in the proceedings which was, in his view, not compatible with Article 6(3)(e) ECHR according to which everyone charged with a criminal offence has the right to have the free assistance of an interpreter if he cannot understand or speak the language used in Court.
that the person concerned is enabled to take any decision thus made against him before a tribunal that does offer the guarantees of Article 6 [...]." [emphasis added] 2.1.7 The genesis of this exception should be assessed in the context of the historic
development of the ECtHR's case law. The ECtHR had continuously expanded the notion of "criminal charge" to cover every punitive or deterrent sanction irrespective of the amount of the fine imposed.20 If the ECtHR had applied its De Cubber judgment with all severity, it would no longer have been possible for administrative bodies to impose any kind of minimal fines, including minor fines for traffic, tax, or customs offences. It is obvious that it would have placed a very high burden on signatory states if they had been obliged to install independent and impartial first instance Courts for these minor offences. The ECtHR has summarized the legitimate considerations of the Contracting States in Öztürk as follows:21
"By removing certain forms of conduct from the category of criminal offences under domestic law, the law-maker may be able to serve the interests of the individual (...) as well as the needs of the proper administration of justice, in particular in so far as the judicial authorities are thereby relieved of the task of prosecuting and punishing contraventions – which are numerous but of minor importance – of road traffic rules. The Convention is not opposed to the moves towards 'decriminalisation' which are taking place – in extremely varied forms – in themember States of the Council in Europe. (...) Nevertheless, if the Contracting States were able at their discretion, by classifying an offence as 'regulatory' instead of criminal, to exclude the operation of the fundamental clauses of Articles 6 and 7, the application of these provisions would be subordinated to their sovereign will."
2.1.8 Therefore, the ECtHR found it wise to devise a limited exception to the De Cubber rule. However, this exception only applies to minor offences occurring in large numbers. In Öztürk, the ECtHR reported that, according to the German Government, each year in the Federal Republic of Germany there were 4.7 to 5.2 million decisions imposing a fine (Geldbusse) and 15.5 to 16 million warnings accompanied by a fine
(Verwarnungsgelder)22. It is common to the case law regarding minor offences that the discretion of the competent administrative bodies is very limited both regarding the elements of the offence and its legal consequences. Fines are regularly imposed based on a pre-defined general tariff. Hence, as the ECtHR put it in Jussila, these cases "do not carry any significant degree of stigma."23
2.1.9 Antitrust cases with fines of millions or even billions of Euros cannot be regarded as minor offences in this sense. 24 The punishments of the European Commission have by now become so severe and receive such wide publicity that they inevitably constitute a
20
Whether a sanction constitutes a criminal charge is assessed based on the so-called Engel criteria; see ECtHR, Judgment of 8 June 1976, Engel et al v The Netherlands, para 82.
21
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 49
22
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 40
23
ECtHR, Judgment of 23 November 2006, Jussila v Finland, para 43.
24
The EFTA Court in Posten Norge explicitly held in that respect (at para 90):"Having regard to the nature and the severity of the charge at hand, the present case cannot be considered to concern a criminal charge of minor weight. The amount of the charge in this case is substantial [EUR 12.89m] and, moreover, the stigma attached to being held accountable for an abuse of a dominant position is not negligible."
considerable stigma for the company concerned.25 There is a strong stigma on infringing companies and their managers.26To antitrust officials, there is no difference between a manager accused of fraud and a manager "cheating" in a cartel to the disadvantage of numerous buyers or consumers.27 Contrary to offences that led to the Öztürk exception, the number of cartel cases of the European Commission per year is fairly limited (six decisions in cartel cases on average in the years 2008-2012) and fines cannot be said to be based on a general tariff. Further, antitrust cases often involve a complex set of economic and technical facts that are often highly disputed. Therefore, antitrust cases are much more comparable to white collar criminal offences such as fraud or embezzlement for which it is undisputed that the De Cubber rule applies. Nobody would seriously suggest today that in fraud cases the roles of
investigator, prosecutor, judge and jury should all be ascribed to the same body. Yet in antitrust cases the European Commission does act as investigator, prosecutor, judge and jury.28
2.1.10 A simple comparison may help illustrate the situation: let us assume that in a lengthy and complex criminal trial, e.g. for fraud, the prosecutor also had the right to render the judgment. After years of investigation, the prosecution may know the intricate set of facts very well but inevitably there will be a prosecutorial bias in the prosecutor's judgment. (If it were otherwise, far fewer cases in the actual criminal law practice would be set aside or reversed in Court.) In our hypothetical case, the prosecution's charge would effectively constitute the judgment at first instance, admittedly with a right to appeal. Nobody would accept such a blatant violation of the Convention rights in a criminal trial.
2.1.11 Allegedly, the ECtHR's Menarini29judgment in September 2011 allowed exactly this set-up for competition law infringements. The case concerned a fine of € 6 million imposed by the Italian Competition Authority in 2003 on Menarini for alleged price fixing. Menarini asserted that this fine had to be considered a criminal sanction within the meaning of Article 6 ECHR. Furthermore, Menarini complained that the fine
violated the fair trial principles of Article 6 ECHR given that the Authority’s decision had
25
For instance, see specific web page on DG COMP website regarding the Intel case with quote from the Commissioner and video excerpt of her press conference, available at http://ec.europa.eu/competition/sectors/ICT/intel.html or the press release in the Power Transformers case, where the Commissioner stated “The Commission has now put an end to this rip-off by the self-appointed "Gentlemen"”, available at
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1432&format=HTML&aged=0&language=EN&guiLangu age=en.
26
In Jussila v Finland, Judgment of 23 November 2006,a case about a tax surcharge of approx. EUR 300.--, the ECtHR held in para 43 that there are "criminal cases which do not carry any significant degree of stigma". This is true for minor offences in the sense of Öztürk and other cases, including tax surcharges, but this is not true for cartel cases. To the extent that the ECtHR in Jussila mentions competition law as an example for "cases not strictly belonging to the traditional categories of the criminal law" (also in para 43), this is (i) an obiter dictum only, (ii) refers to the case Société Stenuit v. France of 27 February 1992 which has been withdrawn and concerned a fine of approx. EUR 7,620.—and (iii) does not take into account that competition law infringements today carry a highly significant degree of stigma.
27
See, for instance, then Commissioner for competition Neelie Kroes in her press release of November 12, 2008 in which she stated as follows with regard to the car glass cartel and the record fine at the time: "The overall fines are high because of the large market (worth two billion euros in the last year of the cartel), the seriousness of the case, and Saint-Gobain's earlier offences. The Commission has imposed such high fines because it cannot and will not tolerate such illegal behaviour. Management of companies that damage consumers and European industry by running cartels must learn their lessons the hard way – if you cheat, you will get a heavy fine. (...) For this unethical and wholly illegal behaviour, Saint Gobain has been fined €896 000 000 for 5 years participation in the cartel. This includes an increase of 60% as Saint Gobain is a repeat offender."
28 Cf. N. Hauger & C. Palzer, Investigator, Prosecutor, Judge … and Now Plaintiff? The Leviathanian Role of the European
Commission in the Light of Fundamental Rights, World Competition 2013, 565-583
29
not been reviewed closely enough by the Italian Courts on appeal. Overruling Italy’s objections, the Court agreed with Menarini that the Italian competition law fine, notably because of its severity, amounted to a criminal sanction within the meaning of Article 6 ECHR. However, on the merits a majority of the Court sided with Italy. It found that the Italian Competition Authority could lawfully impose a criminal sanction within the meaning of Article 6 ECHR, as long as this decision was subject to review by a Court having “full jurisdiction” to examine that decision.
2.1.12 What were the reasons for the ECtHR to come to that conclusion? Following its confir-mation that the guarantees of the Convention have to be assessed under the notion of a criminal charge, the Court briefly noted that the sanction in question was not
imposed by a judge but by the Italian Competition Authority. It then immediately referred to specific case law (quoting Kadubec v. Slovakia of 1998 and Canady v. Slovakia of 2004) according to which it is (allegedly) not incompatible with the Convention for an administrative authority to impose sanctions, as long as the
defendant can appeal the decision to an independent tribunal.30 However, the majority opinion in the ECtHR's Menarini judgment completely misapplied both of these
precedents by omitting the decisive element of minor offences. In fact, the ECtHR had stated the following in Canady:
"The Court has previously found that the general character of the legal provisions governing minor offences under the Minor Offences Act of 1990 together with the deterrent and punitive purpose of the penalty imposed for their infringement suffices to show that such offences are, in terms of Article 6 of the Convention, criminal in nature (...). It recalls that, while entrusting the prosecution and punishment of similar minor offences [emphasis added] to administrative authorities is not inconsistent with the Convention, the person concerned must have an opportunity to challenge any decision made against him or her before a tribunal that offers the guarantees of Article 6 (see Kadubec v. Slovakia)"31
2.1.13 Taken literally by its wording, the Menarini judgment would entirely reverse the fundamental De Cubber rule (and its narrowly construed exceptions in, e.g., Öztürk, Kadubec and Canady32) since it suggests that every criminal sanction (and not only minor offences) can be imposed at first instance by a (partial and dependent) admin-istrative body as long as it can be appealed before a Court with full jurisdiction. We doubt that the judges of the Menarini case consciously decided to reverse the long standing De Cubber rule without even mentioning let alone discussing and distingui-shing it. The ECtHR in Menarini completely fails to address the crucial question
whether antitrust proceedings in fact constitute minor offences. The stigma attached to
30
ECtHR, Judgment of 27 December 2011, A Menarini Diagnostics SRL v Italy, para 58 ."Si confier à des autorités administratives la tâche de poursuivre et de réprimer les contraventions n’est pas incompatible avec la Convention, il faut souligner cependant que l’intéressé doit pouvoir saisir de toute décision ainsi prise à son encontre un tribunal offrant les garanties de l’article 6 […]."
31
ECtHR, Judgment of 16 November 2004, Canady v. Slovakia, para 31; similarly the judgment of 2 September 1998, Kadubec v Slovakia,at para. 57.
32
It should be noted that Kadubec was about an applicant that had been fined 1,000 Slovakian korunas (SKK) under the Slovakian Minor Offences Act for having disturbed boarders in a spa establishment by his noisy behavior and refusal to obey police officers. In Canady, the applicant also had been fined 1,000 SKK under the same Minor Offences Act for having prevented his neighbor from fixing a broken connection of his house pipes to the gas supply in the street. The Kadubec and Canady examples thus show that the case law cited by the majority opinion in Menarini addresses exceptions for de minimis sanctions that are by no means comparable to the magnitude of sanctions for serious infringements of antitrust law.
the alleged infringement as set out in Jussila (see 2.1.8 and 2.1.9 above), and which could be used as a good test, is not mentioned either. Moreover, Menarini is not a judgment by the Grand Chamber, and there is a powerful dissenting opinion.
2.1.14 Judge Pinto de Albuquerque held in his dissenting opinion that the texts governing the different tribunals, and their judgments, made it clear that the Italian courts could not, and had not, exercised the full jurisdiction required by Article 6(1) ECHR. Under the Italian system, fundamental concepts such as the relevant market, abuse of domi-nance or the notion of agreements restricting competition were effectively outside the control of the Courts. In the instant case, moreover, the Italian Courts had merely gone through the motions of reviewing the decisions, often simply repeating the findings of the competition authority.33 According to Judge Pinto de Albuquerque, that approach was not compatible with Article 6 (1) ECHR. He rightly summarized this crucial problem as follows:34
"L'acceptation d'un 'pseudo-droit pénal' ou d'un 'droit pénal à deux vitesses', où
l'administration exerce sur les administrés un pouvoir de punition, imposant parfois des sanctions pécuniaires extrêmement sévères, sans que s'appliquent les garanties classiques du droit et de la procédure pénale, aurait deux conséquences inévitables: l'usurpation par les autorités administrative de la prérogative juridictionnelle du pouvoir de punir et la capitulation des libertés individuelles devant une administration publique toute-puissante."35
2.1.15 ICC respectfully submits that antitrust violations are far from being of minor importance in the sense of Öztürk. Some commentators argue that competition law infringements are not "hardcore" criminal law because in the European Union fines can only be imposed on the undertakings concerned but not on individuals. This argument is unconvincing. First, the competition law regimes of some member states do allow for fines to be imposed on individuals (e.g., Germany) and even for jail sentences (e.g., United Kingdom). This strongly corroborates the fact that in the EU infringements of antitrust law are considered a serious violation warranting severe personal
consequences and not of minor importance, even though the European Commission itself does not (yet) have the competence to impose sanctions on individuals.36 Second, and more importantly, in many of the cases in which the European Commission imposes high fines on companies, the managers responsible for the infringements are liable under their employment contracts and may lose their jobs.
33
ECtHR, judgment of 27 September 2011, Menarini Diagnostics SRL v Italy, dissention opinion, para 5 and para 7.
34
ECtHR, judgment of 27 September 2011, Menarini Diagnostics SRL v Italy, dissention opinion, para 9. It should be noted that judge Albuquerque came to the conclusion that independent and impartial judges with unlimited jurisdiction
therefore must have the last word. However, as set out in this section 2.1, the theoretical possibility of (allegedly) "full judicial review" cannot and in fact does not solve this fundamental problem.
35
“Accepting a ‘pseudo-criminal law’ or a ‘two-tiered criminal law’ in which the administration exerts penal power over the administrated, sometimes imposing pecuniary sanctions that are extremely severe, without the application of the classical guarantees of law and of the criminal procedure, would have two inevitable consequences: the usurpation of the jurisdictional prerogative by the administrative authorities to have the power to punish and the capitulation of the individual liberties in front of an omnipotent public administration.” (English convenience translation)
36
The EU lacks the competence for criminal law. This is why Article 23(5) Regulation No 1/2003 asserts that fining decisions taken pursuant to paragraphs 1 and 2 shall not be of a criminal law nature. Yet W. Wils, op. cit. World Competition 2014, 5-6 continues to quote this article in order to support his classification of antitrust fines as not falling under the “hard core of criminal law” for which the criminal-head guarantees of Article 6 ECHR do not necessarily apply with their full stringency. N. Hauger & C. Palzer, op. cit., 573-574 rightly comment that the wording of Article 6 ECHR does not provide a point of reference for such a differentiation and that procedural efficiency reasons may well justify an exception for cases of mass administration or minor offences but not for cartel fines because anticompetitive behaviour is a serious offence.
Further repercussions could be difficulties in finding another suitable position. The personal consequences can thus be considerable, even without direct sanctions imposed on individuals. Third, fines against undertakings are imposing substantial financial burdens on the affected shareholders, and are therefore ultimately always targeted (at least indirectly) at individuals. In other words, the fines must be paid by natural persons even if they are imposed on legal persons. Finally, as the "inability to pay" cases demonstrate, the fines imposed by the European Commission can lead – in theory and practice – to the need for restructuring or to bankruptcy, entailing job losses for employees that quite likely were never involved in the infringement. That also indicates the need for strict procedural safeguards when imposing fines on undertakings.
2.1.16 Allowing administrative authorities to impose high fines in first instance antitrust pro-ceedings (contrary to the De Cubber rule) deprives the companies concerned of the most fundamental defence rights conferred by the ECHR. The theoretical possibility of an independent review of all relevant facts and circumstances by an appeal tribunal with unlimited jurisdiction (even assuming it would be in fact fully exercised; c.f. the discussion under 2.2 below) cannot cure this fundamental defect. In cases involving a criminal charge it is impossible to fulfil the fundamental guarantee of an independent and impartial tribunal only on appellate level,37 because there is a fundamental difference in the mindset of the deciding tribunals. Acting as first instance, a tribunal must carefully assess all facts and evidence put forward by the prosecution before it can impose a sanction. It must weigh the evidence and hear witnesses of the
prosecution and the defence. If there remain any reasonable doubts, it cannot impose a sanction. On appeal, the starting point is completely different. The appellate tribunal reviews the decision of the first instance, and the review process is limited. The
appellate tribunal may only address the pleas in fact and in law brought forward by the defendant. The weighing of the evidence is not be undertaken anew but merely
assessed for major flaws or inconsistencies as set forth in the administrative decision. In any complex case, the difference between the procedural guarantees applying to each instance therefore matter greatly to the defendant. This is exactly the reason the exceptions for minor offences must be narrowly construed in order not to jeopardize the Convention guarantees of Article 6(1) ECHR.
2.1.17. Consequently, antitrust proceedings must comply with the De Cubber rule because they are not about minor offences. It is clear that this significantly impacts how EU bodies take decisions in antitrust proceedings. Considerations of efficiency and costs cannot be given priority if an authority assumes the competence to issue criminal sanctions, contrary to the guarantees in Article 6(1) ECHR and Article 47 of the Charter. The ECtHR held this in no unclear terms in De Cubber in response to Belgium’s argument that requiring an independent and impartial tribunal at first instance would entail serious consequences for Belgian Courts with limited staff: "The Court recalls that the Contracting States are under the obligation to organise their legal systems "so as to ensure compliance with the requirements of Article 6 para. 1
37
Similarly E. Morgan de Rivery/E. Lagathu/E.Chassaing, "EU Competition Fines and Fundamental Rights: Correcting the Imbalance", European Law Reporter 2012, 193: "Furthermore, once the first instance phase is tainted by impartiality, one can hardly see how a Court, on appeal, could cure such original sin. In addition, it would also place an unattainable burden of proof to require the applicant to establish that the substance of the decision itself was tainted by that
(Article 6-1)" [...]; impartiality is unquestionably one of the foremost of those
requirements. The Court's task is to determine whether the Contracting States have achieved the result called for by the Convention, not to indicate the particular means to be utilised."
2.1.18 Allowing the Convention States and the EU to shift antitrust proceedings (by
structuring them as administrative proceedings) to the area of (allegedly) non-hardcore criminal law, would result in the unacceptable situation characterized in Öztürk as follows (cf. 2.1.6 above)38:
Nevertheless, if the Contracting States were able at their discretion, by classifying an offence as 'regulatory' instead of criminal, to exclude the operation of the fundamental clauses of Articles 6 and 7, the application of these provisions would be subordinated to their sovereign will."
2.1.19. In conclusion, the normal due process standards established by the ECHR and upheld by the ECtHR for criminal matters must apply to Commission competition procedures. The Commission undisputedly is not an independent tribunal and does not provide for the ECHR guarantees. Since there is no "minor offences" exception available in the competition law context from the rule that an independent and impartial tribunal must decide in the first instance, the current Commission procedures do not meet the
required standard. The Menarini decision of the ECtHR is far from being the "panacea" to the shortcomings of the EU proceedings, as some commentators would like to argue. It was limited to the specific case under the Italian system (including the full judicial review actually undertaken), and did not give its blessing to European antitrust proceedings. Therefore, Menarini must be carefully distinguished from a system in which, unlike in Italian antitrust proceedings, a college of Commissioners as a political executive body makes the decision, the level of fines is exponentially higher, and the courts cannot and in fact do not exercise full jurisdiction with regard to the alleged infringement (see 2.2 below). It is therefore submitted that it is necessary to change the current system. ICC thus urges the EU to reorganise its antitrust proceedings in a manner that is fully compliant with Article 6(1) ECHR and Article 47 of the Charter. This would foster the rule of law which the EU claims to uphold. The inevitable restructuring should aim for a system in which the Commission would act as investigating and prosecuting authority only, and an independent and impartial tribunal would make the fining decision. That tribunal could be the GC or a new competition court acting as first instance, at which the Commission would have to present its indictment and to prove the alleged violations of EU competition law calling for a sanction.39
2.2. EU Courts’ Legality Review does not meet the ECHR Standards
2.2.1 If one were (hypothetically) to assume that a system of administrative competition law enforcement is compatible with the strictures of Article 6 ECHR and Article 47 of the Charter, the review by the Courts of such an administrative fining decision necessarily
38
ECtHR, Judgment of 21 February 1984, Öztürk v Germany, para 49.
39
Such a system would not be entirely novel since the system in Germany is actually such that the fining decision of the Federal Cartel Office is turned into an indictment if the fined undertaking objects to it. The enforcement competence shifts from the Federal Cartel Office to the Public Prosecution. N. Hauger & C. Palzer, op. cit., 582-583 come to a similar conclusion calling the GC to taking its jurisdiction seriously: “Thus the GC would de facto evolve to a Court of Appeal, really deserving its name, proceeding to its own assessment of the facts gathered by the Commission in the course of its investigation. Then, however, the power to impose fines might as well be conferred upon the GC.”
must meticulously observe all guarantees Article 6 ECHR and Article 47 of the Charter provide for proceedings with criminal charges. This is all the more important in view of the Commission’s current triple role in competition investigations, as an investigator, a prosecutor and a judge.40 The (fining) decisions of the Commission therefore must be “subject to subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of Article 6 para. 1”.41 In order for a Court to have “full jurisdiction” within the meaning of the ECHR, the ECtHR held that the judicial body must have “the power to quash in all respects, on questions of fact and law, the decision of the body below” – and actually exercise such jurisdiction.42
2.2.2 On the basis of this standard, the GC will have to undertake the first independent review of the case and act accordingly. This is the very reason why such a two-tiered system, in the assumed hypothetical scenario, can be in line with the ECHR. ICC emphasizes once again that such a system would be the exception (Öztürk) to the rule (de Cubber, cf. sections 2.1.6 and 2.1.7) according to which there must be an inde-pendent tribunal in the first instance. Exceptions in cases involving criminal charges must be construed narrowly. In order to fully provide the guarantees of the ECHR in the second instance, the EU Courts inevitably must change their mindset (cf. section 2.1.15) when reviewing fining decisions. They must act as if the Commission decision were only an indictment. To hold otherwise would render the Convention guarantees meaningless insofar as the EU Courts were to delegate assessment and judgment to the Commission.
EU Courts lack the legal basis for a full judicial review
2.2.3 Since the EU Courts are not reviewing an administrative decision but a criminal sanction imposed by the Commission, their review must be undertaken painstakingly, always bearing in mind the guarantees of Article 6 ECHR and Article 47 of the Charter. As a matter of fact though, the EU Courts lack the legal basis for such a full judicial review. In addition, up to now, they do not exercise their jurisdiction to its full extent. The existing level and depth of review fails to provide the guarantees of Article 6 ECHR and Article 47 of the Charter.
2.2.4 The Court of Justice of the European Union (CJEU) does not share this view and takes the following position (cf. 2.2.8 below in more detail): "As the review provided for by the Treaties involves review by the European Union judicature of both the law and the facts, and means that it has the power to assess the evidence, to annul the contested decision and to alter the amount of a fine, the Court has concluded that the review of legality provided for under Article 263 TFEU, supplemented by the unlimited
jurisdiction in respect of the amount of the fine, provided for under Article 31 of
40
It is worth mentioning in addition that the Commission also acts as legislator and even as plaintiff in actions for damages based on its own fining decisions.
41
ECtHR, Judgment of 10 February 1983, Albert and Le Compte v Belgium, para. 29 (emphasis added).
42
ECtHR, Judgment of 23 October 1995, Schmautzer v Austria, para. 36. See also the later Kyprianou case where the ECtHR ruled on whether the review by the Cypriot Supreme Court of a condemnation for criminal contempt could cure the flaws that affected the trial before the lower Court. Noting the absence of retrial of the case because the Supreme Court was lacking the competence to deal de novo with the case, the ECtHR concluded that the defects were not cured on appeal. (ECtHR, Judgment of 27 January 2004, Kyprianou v Cyprus, paras 43-46. Subsequently, the Grand
Chamber upheld the judgment of the Chamber and did not overrule the conclusions or the reasoning reproduced above - ECtHR, Judgment of 15 December 2005 (Grand Chamber), Kyprianou v Cyprus, para. 134.). Similarly ECtHR, Silvester’s Horeca Service c. Belgique, judgment of 4 March 2004, paras 26-27.
Regulation No 1/2003 is not contrary to the requirements of the principle of effective judicial protection which is currently set out in Article 47 of the Charter".43
2.2.5 These arguments are unconvincing because the CJEU attempts to blur the fact that the predominant review standard of the EU Courts in an action of nullity is a legality review of the Commission decision. It should be recalled that Article 261 TFEU as legal basis in the Treaties explicitly restricts the "unlimited jurisdiction" to fines: "Regulations adopted jointly by the European Parliament and the Council, and by the Council, pursuant to the provisions of the Treaties, may give the Court of Justice of the
European Union unlimited jurisdiction with regard to the penalties provided for in such regulations." Article 31 Regulation 1/2003 accordingly states: "The Court of Justice shall have unlimited jurisdiction to review decisions whereby the Commission has fixed a fine or periodic penalty payment. It may cancel, reduce or increase the fine or
periodic penalty payment imposed." Yet this seemingly broad mandate does not cover the Commission’s underlying finding of an infringement44, in particular since the "full
jurisdiction" is explicitly limited to a mere legality review supplemented by the unlimited jurisdiction concerning the amount of the fine (cf. article 263(1) and (2) TFEU45). In criminal proceedings, how would a convicted defendant react if he were told that the independent appellate tribunal could only undertake a legality review of the verdict in terms of underlying facts, but could review the sentence without any limitation? Even if the findings of an infringement may be implicitly and partly be reviewed by the EU Courts, this is not a full judicial review as required by Article 6(1) ECHR and Article 47 of the Charter, particularly if seen in light of the fact that, in the words of the CJEU (see 2.2.5 above), the legality review is carried out "on the basis of the evidence adduced by the applicant in support of the pleas in law put forward."
2.2.6 C. Bellamy shares this critique and rightly commented as follows: 46
"Article 261 TFEU and its EFTA equivalent simply do not envisage a full jurisdictional control. Secondly, the argument that the control exercised in practice, irrespective of the texts, is sufficient to comply with article 6(1) ECHR, is unpersuasive: a situation in which the decisional practice of the Courts diverges from the texts governing their jurisdiction is legally unsound. A right as fundamental as the right to a Court of full jurisdiction cannot be founded on ambiguity, but should be anchored, fairly and
squarely, in the founding texts of the Treaties. Thirdly, whatever gloss may be found in the jurisprudence seeking to emphasize the intensity of the Court's review over the facts and law, and the obligation to give reasons, it is simply inherent in the concept of the control of legality that it is a lesser form than full jurisdiction. Under a control of legality approach, it is inevitable that the Commission will always retain a substantial margin of discretion.
43
CJEU, Case C-386/10 P, Chalkor, at para 67; Case C-501/11 P, Schindler, at para 38.
44
See, e.g., the distinction drawn by AG Sharpston in her Opinion of 10 February 2011 in Case C-272/09 P, KME [2011] at para. 70.
45 Under Article 263 TFEU, the Community Courts’ competence is limited to voiding decisions that are illegal, without the
possibility to substitute their own decision to that of the Commission. If a decision is annulled, it is then for the
Commission to take the necessary measure to implement the judgment. The illegality can be found on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers (cf. article 263(2). Concurring insofar W. Wils, op. cit., World Competition Review March 2014, 7-8, 13-14 but wrongly alleging that this legality review meets the “full jurisdiction” standard of the ECtHR.
46
See C. Bellamy, "ECHR and competition law post Menarini: An overview of EU and national case law, e-Competitions, N°47946, 5 July 2012
2.2.7 The review by the Community Courts and by the GC in particular therefore does not meet the standard set out in Schmautzer, Kyprianou and other cases of the ECtHR. The recent Menarini judgment also calls for an unlimited judicial review, including allowing the European Courts to substitute their own evaluation of the facts for that of the Commission.47 A mere legality control does not correspond to the required in-depth review by which the GC should itself assess all evidence, including hearing witnesses and assessing the credibility of corporate statements against preexisting documentary evidence. Indeed, the weak legal review restricts the ability of the addressees of the Commission decision to bring effective challenges to the substance of the infringement decisions. At the same time, this weakness (or even helplessness) reinforces the compulsion to make a leniency application or to reach a settlement, sometimes contrary to better knowledge.
2.2.8 Hence, based on the rules of the TFEU, it seems impossible for the EU Courts to undertake a full judicial review. In this situation, the EU Courts are left with two options: Either they accept that the existing rules do not comply with the guarantees provided in the ECHR and the Charter and therefore quash all fining decisions of the Commission from the outset. Or, they could live up to the high expectation as truly independent Courts, adapt their internal rules if necessary, change their mindset and undertake a full judicial review whilst at the same time meticulously observing the Convention guarantees. If the CJEU argues that, irrespective of the (at least shaky) legal basis in the TFEU, the EU Courts in fact would exercise full jurisdictional control in practice (see section 2.2.4 above), it cannot, unfortunately, be demonstrated on the basis of the existing case law to date. This shall be illustrated in the following sections.
The Commission's Margin of Discretion is Unacceptable under the ECHR
2.2.9 The EU Courts have traditionally granted the European Commission a margin of discretion in respect of “complex economic or technical assessments”. In these instances, the EU Courts, taking into account “[the] nature [of these evaluations]”48 have confined themselves “to an examination of the relevance of the facts and of the legal consequences which the Commission deduces therefrom”49 and therefore limited their review to “checking whether the relevant rules on procedure and on stating reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers.”50 While the EU Courts are nowadays claiming that they actually exercise full jurisdiction (see sections 2.2.8 et seq. below) and have abandoned the previous practice, this is effectively not the case. Instead, in substance, they continue to adhere to the
traditional deferential standards of review.
2.2.10 While in the early days of competition law, the EU Courts seem to have restrained their marginal review to allow the Commission to design its competition policy51, it now
47
It is debated whether full jurisdiction within the meaning of Article 6 ECHR requires a power of substitution. Contra E. Morgan de Rivery, E. Lagathu, E. Chassaing, op. cit., 194, see also T. Bombois, L’arrêt Menarini c. Ialie de la Cour européenne des droits de l’homme, [2012] Cah. Dr. eur., 541589, 559.
48
See, e.g., Case 56/64 and 58/64, Consten and Grundig [1966] ECR 299, at p. 347.
49
See, e.g., Case 56/64 and 58/64, op. cit., p. 347.
50
See, e.g., Case T-201/04, Microsoft [2007] ECR II-3601, at para. 87.
51
E.g. case 56/64 and 58/64, op. cit and case C-42/84, Remia [1985] ECR 2545, at paras. 26-27, 34-36, 40-48. See by contrast, case C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85, A. Ahlström Osakeyhtiö [1993] ECR I-1307at paras. 43-45, 51-52, 69, 101, 118, 126-127, 135-138, 183-185.. See also E. Morgan de Rivery, E.
applies to all complicated economic or complex technical issues. In competition law, the EU Courts have found quite a number of Commission assessments that are key to an infringement decision to be “complex”. Examples include the definition of product markets and geographic markets,52 the assessment of exchanges of price
information53 and the tests determining the existence of predatory prices.54 In some instances, it was even expanded to all “economic assessments, regardless of their complexity”, like in merger review.55 With such marginal review (referred to above
under 2.2.6), the European Courts seem to have abandoned their review power (or at least part of it) to the benefit of the Commission,56 although it is not a tribunal within the meaning of Article 6 ECHR and it combines the triple role of investigator, prosecutor and judge. Such a marginal review by the EU Courts is far from the “full”, effective review required by Article 6(1) ECHR to remedy the deficiencies of the Commission proceedings in the first instance. It is unacceptable that an administrative and also political body such as the Commission is granted any discretion with regard to (criminal) liability and sanctions. This amounts to a rather obvious violation of Article 6(1) ECHR. Or, as judge Albuquerque stated more colorfully in Menarini, the system amounts to "the usurpation of the jurisdictional prerogative by the administrative authorities to have the power to punish and the capitulation of the individual liberties in front of an omnipotent public administration."57
The Court of Justice superficially tailored the Legality Review to meet the ECHR Standards
2.2.11 The CJEU seems to have taken note of the implications of the ECtHR’s judgment in Menarini. Only a few months later, the Court took pains to make the limitations inherent in a legality review (under Article 263 TFEU) more palatable from a
fundamental rights perspective. According to the Court of Justice, “the Courts must carry out the review of legality incumbent upon them on the basis of the evidence adduced by the applicant in support of the pleas in law put forward. In carrying out such a review, the Courts cannot use the Commission’s margin of discretion – either as regards the choice of factors taken into account in the application of the criteria mentioned in the Guidelines or as regards the assessment of those factors – as a basis for dispensing with the conduct of an in-depth review of the law and of the facts.”58
2.2.12 Having said this, and having pointed as well to its “unlimited jurisdiction” to review the Commission’s fines, the Court concluded that the EU Courts provide effective judicial
Lagathu, E. Chassaing, op. cit., 195.
52
Case T-446/05, Amann & Söhne [2010] ECR II-1255, at para. 136.
53
Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, Aalborg Cement [2004] ECR I-123, at para. 279.
54
Case C-280/08 P, Deutsche Telekom [2010] ECR 0000, at paras. 143-148; Case C-202/07 P, France Télécom [2009] ECR I-2369, at para. 7.
55
See E. Morgan de Rivery, E. Lagathu, E. Chassaing, op. cit., citing Case T-48/04, Qualcomm, [2009], ECR II-2029 at paras. 89, 91, 92.
56
I. Forrester, A bush in need of pruning: the luxuriant growth of light judicial review, in: Claus-Dieter Ehlermann and Mel Marquis, eds., European Competition Law Annual 2009: Evaluation of Evidenceand its Judicial Review in Competition Cases, 2011, Oxford/Portland, Hart Publishing, p. 407.
57
ECtHR, judgment of 27 September 2011, Menarini Diagnostics SRL v Italy, dissention opinion, para 9.
58
Case 272/09 P, KME [2011], at para. 102-103; Case 386/10 P, Chalkor [2011], notably para. 50-51; Case C-501/11 P, Schindler [2013], at paras 33-35.
protection within the meaning of Article 47 of the Charter. Although the General Court, in the case under appeal, had referred a number of times to the Commission’s
discretion as being “wide” or “substantial”, according to the Court of Justice this had not prevented the General Court from engaging in “the full and unrestricted review, in law and in fact, required of it.”59 Similarly, in a recent appeal the Court of Justice criticized the deferential language chosen by the General Court in reviewing the Commission’s calculation of the fine (i.e., leniency discounts), but nevertheless concluded that the actual review conducted by the General Court was sufficiently in-depth.60
2.2.13 This exercise is artificial and has been criticized as purely formalistic. In none of these cases, “did the Court find that the General Court’s review had not met the standard, despite the very limited review of certain aspects of the Commission’s decision.”61
Indeed, such an approach is highly unsatisfactory. ICC strongly believes that the EU Courts are neither sufficiently well-equipped nor really willing yet to exercise the actual full judicial review required by Article 6 ECHR. Without fundamental changes of the mindset and the Court's proceedings, the alleged "full" judicial review pays mere lip service to the guarantees of Article 6 ECHR and Article 47 of the Charter.
Shortcomings of the Current Proceedings at the EU Courts
2.2.14 There are various shortcomings of the current proceedings at the EU Courts, which illustrate the failure to comply with the requirements of Article 6 ECHR. For instance, just to mention a few particularly notable facts, the EU Courts only have a limited case file at their disposal and they lack fact-finding powers.62 It seems rather obvious that this set-up is flawed from the outset. It is impossible for a Court to undertake a full review without complete, unabridged case file. Moreover, even an independent Court cannot establish or assess the facts (or measure them against the required standard of proof) if it lacks fact-finding tools; instead, it is left with the facts as established by the Commission. In criminal proceedings, such a set-up would be perceived as an egregious violation of the ECHR.
2.2.15. Another striking example is the reluctance of the Courts to hear witnesses or to be assisted by technical experts. According to Article 6(3)(d) ECHR, everyone charged with a criminal offence has the minimum right "to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him". Therefore, if motions to hear witnesses are categorically dismissed, it is a blatant violation of the ECHR. An illustrative example in that respect is the recent decision of the GC in Duravit.63 The plaintiffs had questioned the facts as established by the Commission in its fining decision regarding the bathroom fittings cartel64 and asked the GC to hear specifically named witnesses, based on Article 68 Rules of Procedure of the GC and referring to Article 6(3)(d) ECHR. The GC, however, was reluctant to do so and dismissed all (!)
59
Chalkor, id., at para. 109.
60
CJEU, Case C-501/11P, Schindler, judgment of 18 July 2013, at paras. 156-158.
61
See E. Morgan de Rivery, E. Lagathu, E. Chassaing, op. cit., 195. See also T. Bombois, op. cit., 579, 581 and 582.
62
See also K. Nordhandler, P. Harrison, “Are Rights Finally Becoming Fundamental?”, [2012] CPI Antitrust Chronicle, 2-13, 8.
63
Case T-364/10, Duravit v. Commission, judgment of 16 September 2013
these various motions with the same stereotyped arguments. It referred to its
discretion in hearing witnesses and repeatedly stated that, based on the subject matter of the complaint and the Court's files, it is neither required nor appropriate to comply with the request to hear witnesses.65
2.2.16 The CJEU as well as the GC assume that the hearing of witnesses is discretionary, such that the GC is "the sole judge of whether the information available concerning the cases before it needs to be supplemented".66 Allegedly, this discretion comports with Article 6(3)(d) ECHR because the defendants do not have an absolute right to present witnesses.67 Whilst this may be true in the abstract, in practice the Courts’ logic
demonstrates the ineffectuality of the current system: the Courts have established the rare exception to the rule and then adamantly refused to apply it. It should be recalled that the GC as independent tribunal is called upon to undertake a "full judicial review". According to the CJEU, this standard requires that "the Courts cannot use the
Commission’s margin of discretion […] as a basis for dispensing with the conduct of an in-depth review of the law and of the facts".68 Consequently, the GC must not freely exercise its discretion only in observing the principles of a fair hearing.69 Categorical dismissals of requests to hear witnesses cannot be reconciled with the guarantee in Article 6(3)(d) ECHR. In criminal proceedings in which a tribunal acts as first instance, the denial of a request to hear witnesses or present other evidence is usually an absolute ground for appeal.
2.2.17 Equally dissatisfying is the situation to date with regard to the right of Article 6(3)(d) ECHR to examine or have examined witnesses against the applicants. In a few cases, the CJEU and the GC have heard "witnesses for the applicants" whose hearing had been applied for by the applicants.70 To the best of ICC's knowledge and as far as is evident, a hearing of "witnesses for the prosecution" by the CJEU or the GC has hardly ever taken place in any proceedings under EU competition law.71 At the time of
proliferating leniency applications, these witnesses are hardly ever heard by the Commission either. In practice, this means that numerous corporate leniency statements are prepared and read out by external lawyers and that the Commission never meets the actual witnesses (i.e. the individuals) face to face. Nils Wahl, judge at the GC, has drawn attention to the apparent difference between (authentic) recitals by the persons involved in a cartel and the leniency applications written by lawyers: "Often it is not very clear to the court who said what, and under what circumstances…
Leniency applications are, I would say, inherently unreliable and you have to be careful with them."72 Moreover, the Commission may invite or even encourage companies to make questionable statements with regard to factual circumstances (in order to have
65 See Case T-364/10 – Duravit, at paras 135, 200, 214, 236, 240, 245, 253, 270, 283, 290 and 305
66 Cf. CJEU, Joined cases C-189/02 and others – Dansk Rørindustri A/S v Commission, para 67 with reference to
consistent case law
67 See Case T-364/10 – Duravit, at paras 49-54 68
Case 272/09 P, KME [2011], at para. 102-103; Case 386/10 P, Chalkor [2011], notably para. 50-51; Case C-501/11 P, Schindler [2013], at paras 33-35.
69 Cf. U. Soltesz, Due Process and Judicial Review – Mixed Signals from Luxembourg in Cartel Cases, ECLR 2012, 245 70 Cf. Court of Justice, Joined cases C-100-103/80 – SA Musique Diffusion française and others v. Commission, at paras
50 and 57; GC, T-141/94 – Thyssen Stahl AG v. Commission, at paras 67 et seq., 530 et seq.; GC, T-145/98 – ADT Projekt Gesellschaft der Arbeitsgemeinschaft Deutscher Tierzüchter mbH v. Commission, at paras 39 and 99 et seq.
71
U. Soltesz, op. cit., ECLR 2012, 245. To the best of ICC's knowledge, no witness has been heard during the last ten years.
72
"better" facts for proving an infringement) since the reporting witnesses do not have to fear ever being tested. The lawyers who deliver the confessions of the guilty managers are encouraged to incriminate others. With no confrontation of witnesses, the setting for making leniency confessions makes it easy to exaggerate against competitors. There is thus a structural tendency in the leniency procedure to encourage
embellishment and, consequently, the defending company incriminated by the corporate statement has no opportunity to cross-examine the witnesses against it, either in the stage of the Commission proceedings or in Court. This is yet another violation of Article 6(3)(d) ECHR, in particular since the interest of a leniency applicant is to downplay its own role and to exaggerate the role of other participants.73
2.2.18 According to the Commission and the GC, there is allegedly no incentive for a leniency applicant to submit such distorted evidence because such behavior could entail losing the leniency status. For instance, the GC stated in the Siemens case as follows: "That does not however mean that ABB’s statements are to be regarded as devoid of all credibility. In that regard, it has been held that the fact of seeking to benefit from the application of the Leniency Notice in order to obtain a reduction in the fine does not necessarily create an incentive to submit distorted evidence. Indeed, any attempt to mislead the Commission could call into question the sincerity and the completeness of cooperation of the person seeking to benefit, and thereby jeopardise his chances of benefiting fully under the Leniency Notice (Case T-120/04 Peróxidos Orgánicos v Commission [2006] ECR II-4441, paragraph 70)."74However, this argument lacks any empirical basis. To the best of ICC's knowledge, there has not been one single case in which the leniency applicant lost its status for having exaggerated the role of other participants and downplayed its own role.75 Up to date, these corporate statements have not been tested in court, e.g. by hearing witnesses and have them questioned by the incriminated company, but have only been dealt with as part of the case file in written proceedings. The GC assessed the "credibility" of various (leniency applicant) statements in lengthy detail and compared them with the statements of other
witnesses without seeing, hearing and examining a single named witness in person and instead relying exclusively on written records.76 Such a practice based on theoretical and abstract considerations is not sufficient in terms of providing the guarantees of Article 6 ECHR in the judicial review process. ICC believes that it is difficult to assess the credibility of any witness without actually seeing and hearing him or her in person, and that defendants in competition proceedings should be afforded the same opportunity to confront live witnesses as defendants receive as of right in other types of criminal proceedings.77
73
U. Soltesz, op. cit., ECLR 2012, 245 et seq., with highly illustrative examples. He emphasizes that the informants are not always idealists who feel a sense of duty to help implement antitrust law, but instead are very frequently motivated by pure self-interest. For example, one of the main inculpatory witnesses in the Copper Plumbing case (COMP/E-1/38.069) was a former managerial employee of one of the undertakings concerned, who had left his former employer following disagreements and who was entangled in numerous legal and patent disputes with the latter at the time he made his witness statement.
74 GC, T-110/07 – Siemens AG v Commission, at paras 65. 75
Cf. U. Soltesz, op. cit., ECLR 2012, 246 with further references.
76 Cf. GC, T-110/07 – Siemens AG v Commission, at paras 62 et seq., 78 et seq., 90 et seq. 180 et seq., as reported by U.
Soltesz, op. cit., ECLR 2012, 247
77
According to U. Soltesz, op. cit., ECLR 2012, 246, a "particularly good illustration is provided by the case of the state's witness Mike Sadler (a former manager of the leniency applicant Micron), whose statement the US Department of Justice heavily relied on in the DRAM case. In separate criminal proceedings under antitrust law against one of the managers accused, this government 'star witness' was apparently unable to convince the court of his credibility. The jury
