Presumption of Innocence in EU Anti-Cartel Enforcement [1 ed.] 9789004384651, 9789004384668

Citation preview

Presumption of Innocence in EU Anti-​Cartel Enforcement

Nijhoff Studies in European Union Law Series Editors Prof. Fabian Amtenbrink (Erasmus University Rotterdam) Prof. Ramses A. Wessel (University of Twente)

volume 15 Nijhoff Studies in European Union Law is a refereed scholarly monographs series dedicated to the critical analysis of the current state and development of European Union law in a broad sense. Apart from constitutional, institutional and substantive issues of eu law, the series also embraces state-​of-​the-​art interdisciplinary, comparative law and eu policies research with a clear link to European integration. Titles in the Nijhoff Studies in European Union Law series will be of particular interest to academics, policy makers and practitioners dealing with eu law and policies, as well as national and international (non-​) governmental institutions and bodies.

The titles published in this series are listed at brill.com/​seul

Presumption of Innocence in EU Anti-​Cartel Enforcement By

Aistė Mickonytė

LEIDEN | BOSTON

This publication was supported by the Styrian Provincial Government, Austria. Library of Congress Cataloging-in-Publication Data Names: Mickonytė, Aistė, author. Title: Presumption of innocence in EU anti-cartel enforcement / by Aistė Mickonytė. Description: Leiden ; Boston : Brill, 2019. | Includes bibliographical references. Identifiers: LCCN 2018047461 | ISBN 9789004284668 Subjects: LCSH: Cartels–European Union countries. | Presumption of innocence–European Union countries. | Convention for the Protection of Human Rights and Fundamental Freedoms (1950 November 5). Classification: LCC KJE6471 .M53 2019 | DDC 343.2407/21–dc23 LC record available at https://lccn.loc.gov/2018047461

Typeface for the Latin, Greek, and Cyrillic scripts: ‘Brill’. See and download: brill.com/​brill-​typeface. ISSN 2210-​9765 ISBN 978-​90-​04-​28466-​8 (hardback) ISBN 978-​90-​04-​38465-​1 (e-book) Copyright 2019 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi, Brill Sense, Hotei Publishing, mentis Verlag, Verlag Ferdinand Schöningh and Wilhelm Fink Verlag. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, usa. Fees are subject to change. This book is printed on acid-​free paper and produced in a sustainable manner.

Skiriu mylimiems tėvams Tatjanai ir Gediminui, kurių palaikymas ir tikėjimas manimi atvėrė duris į pasaulį To my beloved parents Tatjana and Gediminas

∵

Contents Preface xi List of Abbreviations xiii 1 Introduction 1 1 Problem Overview 1 2 Challenging the Paradigms of EU Anti-​Cartel Enforcement: Key Assumptions Guiding This Work 6 2.1 Legal Nature of EU Cartel Procedure 6 2.2 Parental Liability: Compliance with Principles In Dubio Pro Reo and Nulla Poena Sine Culpa under Article 6(2) echr 9 2.3 Duty to Cooperate in EU Cartel Procedure: Compliance with the Privilege against Self-​Incrimination 11 3 Objectives and Approach 12 2 Functions of the Presumption of Innocence 15 1 Introduction: Paradox of the Presumption of Innocence 15 2 Three Rationales of the Presumption of Innocence 18 2.1 Protection from Wrongful Convictions 18 2.2 Balanced Treatment of the Accused 19 2.3 Preservation of the Rule of Law 20 3 Narrow and Broad Concepts of the Presumption of Innocence 21 4 Concluding Remarks 23 3 Presumption of Innocence under Article 6(2) echr: Meaning and Scope 24 1 Introduction 24 2 The Concept of a ‘Criminal Charge’ under Article 6(2) echr 25 2.1 Autonomous Interpretation of a Criminal Charge 25 2.2 Conception of the Term ‘Criminal Charge’: Engel and Others v. the Netherlands 27 2.2.1 Facts of the Case 27 2.2.2 Establishment of the Engel Criteria 29 2.2.3 Outcome of Engel and Others v. the Netherlands 33 2.3 Engel Criteria: Application to Domestic Competition Law 35 2.4 Distinction between Hard Core and Peripheral Criminal Law: Jussila v. Finland 40 2.4 .1 Facts of the Case 40

viii Contents 2.4 .2 Findings of the Court 41 2.4 .3 Implications of Jussila v. Finland 43 2.5 Jussila: Gateway to Arbitrariness? 44 3 Presumption of Innocence: Specific Guarantees 47 3 .1 Evidence-​Related Rules 48 3 .1.1 Burden of Proof 48 3 .1.2 Standard of Proof 50 3 .2 Presumptions: Parallels between the Burden of Proof and Principle of Fault 53 3 .2.1 General Concept of a Presumption 53 3 .2.2 Types of Presumption 55 3 .2.3 Interrelationship between Presumptions and Nulla Poena Sine Culpa: Salabiaku v. France 58 3 .3 Privilege against Self-​Incrimination 64 3 .3 .1 Background 64 3 .3 .2 Emergence of a Broad Privilege against Self-​ Incrimination: Funke v. France 67 3 .3 .3 Privilege in Later Cases: Saunders v. United Kingdom 68 4 Protection of Legal Persons under Article 6(2) echr 70 5 Concluding Remarks 75 4 Legal Framework of EU Anti-​Cartel Enforcement Procedure 76 1 Introduction 76 2 Framework for EU Anti-​Cartel Enforcement 76 2.1 Principal Provisions 76 2.2 Fundamental Rights in EU Competition Enforcement 80 3 Principal Features of EU Anti-​Cartel Procedure under Regulation 1/​2003 83 3 .1 The Commission’s Role 83 3 .2 Investigation 84 3 .2.1 Power to Request Information 84 3 .2.2 Power to Take Statements 85 3 .2.3 Inspections of Business and Other Premises 85 3 .2.4 Statement of Objections 87 3 .2.5 Oral Hearing 88 3 .3 Decision to Impose a Sanction under Article 23 of Regulation 1/​2003 89 4 Judicial Review of the Cartel Procedure 93 4 .1 Background 93

Contents

ix

4 .2 Judicial Review: Main Characteristics 95 4 .2.1 Key Features 95 4 .2.2 Objective Control of Legality 101 4 .2.3 Full Judicial Review: Unlimited Review of Fines 103 5 Concluding Remarks 107 5 Classification of EU Anti-​Cartel Proceedings 108 1 Introduction 108 2 Classification by the EU Courts 109 2.1 Administrative Classification under EU Law 109 2.2 Application of Article 6 echr in the Anti-​Cartel Procedure 111 2.3 Ambiguity in Classification 119 3 EU Competition Law: Penalties in Light of the Engel Criteria 122 3 .1 Domestic Classification 122 3 .2 Nature and Severity of Penalty 123 3 .3 Nature of the Offence 128 4 Concluding Remarks: Comprehensive Fulfilment of the Engel Criteria 134 6 Parental Liability: Compliance with Article 6(2) echr 135 1 Introduction 135 2 Parental Liability: Background 137 2.1 Main Features of the Single Economic Entity Doctrine 137 2.2 Presumption of Decisive Influence 140 3 Parental Liability in Light of Article 6(2) echr 143 3 .1 Stages of Development of the see Doctrine 143 3 .2 Emergence of the see Doctrine: Early Concept 144 3 .3 Development of the Concept of Presumption of Decisive Influence 147 3 .3 .1  a eg Telefunken: Emphasis on the Prerogatives of the Sole Shareholder 147 3 .3 .2 Stora Kopparsberg: Complementary Proof Needed 149 3 .3 .3 Akzo Nobel v. Commission: Clarification of the Presumption 150 3 .4 Presumption of Decisive Influence: Rebuttability in Light of Principles In Dubio Pro Reo and Nulla Poena Sine Culpa 155 3 .4 .1 Rebutting the Irrebuttable? 155 3 .4 .2 Principle of Proof Proximity 158 3 .4 .3 The ‘Purely Financial Investor’ Defence: a Valid Defence? 161

x Contents 3 .4 .4 The Commission’s Stance: In Dubio ‘Contra Reum’? 165 3 .4 .5 Internal Contradictions of the Presumption 168 3 .4 .6 Nulla Poena Sine Culpa: Personal Responsibility of the ‘Undertaking’? 171 4 Concluding Remarks 174 7 Duty of Cooperation: Compliance with Nemo Tenetur under Article 6(2) echr 176 1 Introduction 176 2 Concept of Privilege under EU Law 176 2.1 Scope of Privilege: Prohibition against Coercing a Confession under Orkem v. Commission 176 2.2 Reinforcement of Orkem Principles 179 2.3 Assessment of Privilege in Light of the echr 180 3 Concluding Remarks 183 8 Proposals for Improvement 185 1 Introduction and Retrospective Remarks 185 2 Concrete Proposals 186 2.1 Proposals for Amending Parental Liability: Compliance Programmes 186 2.1.1 Emphasis on Personal Responsibility 186 2.1.2 Conditions in Detail 187 2.2 Proposals for Amending the Obligation to Cooperate with the Commission 189 2.2.1 Focus on Inspections and Positive Incentives 189 2.2.2 Proposals in Detail 189 3   Concluding Remarks 191 9 Conclusions 192 Bibliography 197 Index 227

Preface Fundamental-​rights safeguards are only as good as their enforcement in practice. Starting from that premise, this book critically examines the complex dynamics of European fundamental rights and EU anti-​cartel enforcement. The book builds on my doctoral thesis, written at the University of Graz while working as a research fellow at the Institute of European Law between 2012 and 2016, and at the Russian East European Eurasian Studies Centre (reees). This study began with a focus on the liability of parent companies for anti-​ trust infringements committed by their subsidiaries. However, it transformed itself into a broader inquiry into the interplay of parental liability with one of the cornerstones of judicial procedure –​the presumption of innocence. In the European legal tradition, the right to be presumed innocent until proved guilty according to law is a fundamental safeguard endorsed by Article 6(2) of the European Convention on Human Rights (echr) as well as Article 48 of the Charter of Fundamental Rights of the European Union. And it is hard to overstate the significance of this right. The guiding thought behind this work has been that the presumption of innocence under Article 6(2) echr is an indispensable procedural guarantee that restricts interference by the state with the liberty and autonomy of the accused in the criminal procedure of a liberal democratic society. Building on that same notion, the book explores how this fundamental guarantee operates in EU anti-​cartel enforcement. In particular, this study scrutinizes and analyzes how the de facto automatic liability of parent companies for infringements committed by their wholly-​owned subsidiaries measures up against the yardstick of Article 6(2) echr.

…

This book was made possible by encouragement, support, generosity and insights from many people. First of all, I am deeply indebted to my thesis supervisors, Professor Hans-​Peter Folz and Professor Tomislav Borić, for their unstinting support and encouragement throughout my doctoral studies. I am especially grateful to them for the opportunity to explore and develop my ideas, and for their critical remarks, which kept me on the right track. I would also like to express my heartfelt gratitude to my mother Tatjana and my late father Gediminas for their immeasurable kindness and love, and for their paving the way for me to choose the path of law. Warm thanks go to my beloved partner, Benedikt Harzl, for his love and patience, for relentlessly cheering me on, and for his astute remarks, which

xii Preface considerably improved the book. Particular thanks are owed to Benedikt’s parents Elfriede and Franz, and his sister Friederike, whose kindness was invaluable in the final stages of writing. I would also like to thank Professors Fabian Amtenbrink and Ramses A. Wessel for including my work into their excellent book series. Finally, I appreciate language input from Christopher Goddard, whose eagle eye was immensely helpful in preparing the final manuscript of this book.

Abbreviations AG Advocate General art(s) Article(s) Appl no Application number bgh Bundesgerichtshof BverG Bundesverfassungsgericht cfi Court of First Instance cfr Charter of Fundamental Rights of the EU Ch Chapter cisg Convention on Contracts for the International Sale of Goods cmlr Common Market Law Review cup Cambridge University Press dg comp Directorate General for Competition DM Deutsche Mark ecj European Court of Justice ecli European Case Law Identifier eclr European Competition Law Review ecu European Currency Unit ed(s) editor edn edition eec European Economic Community eg exempli gratia (for example) echr European Convention on Human Rights ECtHR European Court of Human Rights elr European Law Reporter elrev European Law Review EuCommHR European Commission on Human Rights EU European Union et al et alia (and others, and so on, and the like) ff and following fn footnote (from external work) frf French Franc GC General Court ibid ibidem ie id est (that is[to say]) mlr Modern Law Review n footnote (in this work) nca National Competition Authority

xiv Abbreviations No Number oecd Organisation for Economic Co-​operation and Development OJ Official Journal ogh Oberster Gerichtshof (Austrian Supreme Court) oup Oxford University Press para(s) paragraph(s) Pt Point Rec Recital Reg Regulation RP Rules of Procedure § Section sds Selective Distribution System see Single economic entity doctrine SO Statement of Objections teu Treaty on European Union tfeu Treaty on the Functioning of the European Union UK United Kingdom usa United States: noun (US: adjective) vat Value-​added tax

­c hapter 1

Introduction 1

Problem Overview If it is sufficient to accuse, what will become of the innocent? emperor julian 1

Combat against cartels, or, less lyrically put, ‘trustbusting’, is where a lot of the European Commission’s resources and efforts go.2 The Commission counts the break-​up of cartels as a top priority and one of the tasks lying at the very core of its activities.3 That is no wonder: cartels, planting the seeds of an anti-​competitive business climate, are universally perceived as decidedly harmful to the open market economy.

1 Numerius was on trial for embezzlement before the Emperor Julian. He claimed to be innocent. The prosecutor Delphidius, realising that he had insufficient evidence against the accused, said: ‘Oh illustrious Caesar! If it is sufficient to deny, what hereafter will become of the guilty?’ The emperor responded: ‘If it is sufficient to accuse, what will become of the innocent?’ Ammianus Marcellinus, Rerum Gestarum, lib 18, c 1, cited in: Denis Waelbroeck, Mathieu Vancaille, ‘Oh illustrious Caesar! If it is sufficient to deny, what hereafter will become of the guilty? On the presumption of innocence, the burden of proof, and the standard of proof in EU competition law’, in: Edward, MacLennan, Komninos (eds), A Scot Without Borders Liber Amicorum (Volume I & II), Ian Forrester, Concurrences (2015), 372‒403, at 372. 2 The scope of this work is confined to the procedure for imposing fines under Art 23(2)(a) of Reg 1/​2003 for infringements of Art 101 tfeu. Art 102 tfeu and other competition provisions fall outside this scope. 3 European Commission, ‘Antitrust: Commission fines car parts producers € 137 789 000 in cartel settlement’ Press release, 27 January 2016, available at ; European Commission, ‘Fighting cartels ‒ Commission sanctions retail food packaging cartel and sends Statement of Objections in suspected car battery recycling cartel’, Statement, 24 June 2015, available at ; European Commission, Joaquín Almunia, ‘Fighting against cartels: A priority for the present and for the future’, Speech, 3 April 2014, available at ; also:  Javier Ruiz Calzado, Gianni de Stefano, ‘Rights of Defence in Cartel Proceedings: Some Ideas for Manageable Improvements’, in Cardonnel, Rosas, Wahl (eds), Constitutionalising the EU Judicial System: Essays in Honour of Pernilla Lindh (London:  Bloomsbury Publishing, 2012), 429‒39; Ian Forrester, ‘A Challenge for Europe’s Judges: The Review of Fines in Competition Cases’, 36 ELRev (2011), 185‒207, at 187.

© Koninklijke Brill NV, Leiden, 2019 | DOI:10.1163/9789004384651_002

2 ­chapter  This particularly holds true in the EU, where cartels are perceived as a major obstacle to achieving the objectives of the internal market.4 After all, it would be counterintuitive –​and counterproductive –​to break down trade barriers between Member States if the private actors on the market could erect new barriers along national borders via collusion.5 Indeed, colluding undertakings6 face outright condemnation in the EU: to use the stern words of the European Commission (‘The Commission’), cartels steal from consumers’ pockets,7 amounting to viruses8 or even a cancer9 on the open market economy. No doubt, cartels have a lot to answer for: price-​fixing, market-​sharing, bid-​rigging, creating entry barriers for new market players, instituting production quotas or putting restraints on technological development ‒ all cast a major shadow on the internal market’s barrier-​free approach. This list of malign effects can easily be enlarged, too. These activities have the power to disrupt the mechanisms of the open market economy, reportedly reducing consumer welfare by billions of euros a year.10 4 5

6

7

8

9

10

This is reflected, eg, in Art 3(1)(b) tfeu, which prescribes exclusive EU competence to establish competition rules necessary for the functioning of the internal market. Lee McGowan, ‘Theorising European integration: Revisiting neofunctionalism and testing its suitability for explaining the development of EC competition policy?’, 11(7) European Integration online Papers (EIoP) (2007), available at . Art 101 tfeu is aimed at ‘undertakings’, so that this term is generally used throughout this work. However, as to the issue of parental liability, this work refers to companies. This term is here understood as a legal person in the form of a duly incorporated company under the rules of the country where it is incorporated. The relationship of companies to the term ‘undertakings’ is examined in detail in Ch 6. Former Commissioner Kroes: ‘It is for us to show that when we break up cartels, it is to stop money being stolen from customers’ pockets’: European Commission, Neelie Kroes, ‘Taking Competition Seriously –​Anti-​Trust Reform in Europe’, Speech, International Bar Association and European Commission Conference ‘Anti-​trust reform in Europe: a year in practice’, Brussels, 10 March 2005, available at . Former Commissioner Neelie Kroes: ‘Cartels are always changing shape –​adapting like viruses to fight our attempts to kill them off’: European Commission, Neelie Kroes, ‘Tackling Cartels –​A Never-​Ending Task’, Speech, Anti-​Cartel Enforcement: Criminal and Administrative Policy –​Panel session, Brasilia, Brazil, 8 October 2009, available at . Former Commissioner Mario Monti: ‘Cartels are like cancers on the open market economy, which forms the very basis of our Community’: European Commission, Mario Monti, ‘Fighting Cartels Why and How? Why should we be concerned with cartels and collusive behaviour?’ Speech, 3rd Nordic Competition Policy Conference, 11‒12 September 2000, available at . European Commission, ‘White Paper on Damages actions for breach of the EC antitrust rules’ (2008) COM (2008) 165 final, 14–​15.

Introduction

3

It is thus no surprise that, across the Atlantic, the late US Supreme Court Judge Antonin Scalia referred to cartels as ‘the ultimate evil of antitrust’.11 Alternatively, to use the words of Mark Whitacre, famous for exposing a global multi-​million dollar cartel in the animal food industry, ‘[i]‌t’s tempting to see [a cartel] as victimless because each customer is hurt only a little. But it’s bank robbery without the mask and gun’.12 An equally robust position on cartel activity is articulated in the European approach as well. One of the Commission’s key tasks is to enforce the anti-​cartel rules of Article 101 tfeu by seeking to punish colluding companies and to deter them from reoffending.13 The Commission fulfils this task by imposing drastic fines, which are indeed intended to have a strong punitive and deterrent effect.14 To this end, in the period between 1990 and 1999, fines for infringements of Article 101 tfeu reached a total of over eight hundred million euros. However, in the Commission’s pursuit of deterrence, the later period between 2000 and 2009 saw total fines skyrocket to thirteen billion euros.15 This tendency still prevails today: between 2015 and 2016, over four billion euros-​worth of total fines have been imposed on cartel conspirators.16 Individual sanctions are impressive as well: currently they can reach up to five or seven hundred million euros, although until the late 2000s the average fine per undertaking rarely exceeded 20 million euros.17 In 2016, the truck producer Daimler received a fine exceeding one billion euros, while its fellow

11

12 13 14

15 16 17

Verizon Communications, Inc. v Law Offices of Curtis V. Trinko, LLP, (Verizon) 540 U.S. 398, 408 (2004), cited by: Andreas Scordamaglia, ‘Cartel Proof, Imputation and Sanctioning in European Competition Law: Reconciling effective enforcement and adequate protection of procedural guarantees’, 7(1) The Competition Review (2010), 5‒52, at 7. William H.  Shaw, Vincent Barry, Moral Issues in Business (Boston:  Cengage Learning, 2015), 279. Peter Whelan, The Criminalization of European Cartel Enforcement. Theoretical, Legal, and Practical Challenges (Oxford: oup, 2014), 3. ‘Fines should have a sufficiently deterrent effect, not only in order to sanction the undertakings concerned (specific deterrence) but also in order to deter other undertakings from engaging in, or continuing, behaviour that is contrary to Articles [101 and 102 tfeu] (general deterrence)’. European Commission, Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation 1/​2003, OJ C 210, 1.9. 2006, 2‒5; ­Walter Frenz, Handbuch Europarecht (Berlin:  Springer, 2015)  905; Ernst-​Joachim Mestmäcker, Heike Schweitzer, Europäisches Wettbewerbsrecht (Munich: C.H. Beck, 2014, 3rd edn), 556. European Commission, ‘Cartel Statistics’, 12 December 2016, available at . ibid. ibid.

4 ­chapter  conspirators Volvo/​Renault and daf were fined amounts of 670 and 750 million euros, respectively.18 The profoundly harmful effects of cartels make it clear that the Commission needs a large stick to crack down on them in a truly effective manner.19 However, the severity of competition fines raises doubts whether the administrative model of public enforcement of EU anti-​cartel rules,20 created at the time when competition fines were rather minor,21 still corresponds to the reality of anti-​cartel enforcement today.22 Indeed, it is hardly disputed nowadays that these fines are de facto criminal penalties.23 The issue of the true nature of EU anti-​cartel enforcement unfolds its relevance in the realm of due process requirements, which are stricter in criminal proceedings. Thus, the classification of these Commission proceedings largely determines the nature and extent of procedural safeguards available to companies comprising undertakings exposed to these proceedings. Indeed, in the past decade, critical voices have grown louder, asking whether the procedural safeguards available in EU anti-​cartel procedure comply with the requirements

18 19

20

21 22

23

European Commission, ‘Antitrust:  Commission fines truck producers € 2.93 billion for participating in a cartel’, Press release, 19 July 2016, available at ; ‘Cartel Statistics’, (n 15). Helena Andersson, ‘Fundamental Rights and Antitrust Proceedings –​A Perfect Match or the Wedding from Hell?’, in: Pierce, Persson, Sobhani, Medzmariashvili (eds), Fundamental Rights and EU Competition Law, Special Edition, Lund Student Law Review, Lund University (2012), 11‒21, at 11, available at . There are two forms of EU competition enforcement: public and private. This work focuses solely on public enforcement of Art 101 tfeu by the Commission under Reg 1/​2003 and other legal instruments at its disposal. Private enforcement is an enforcement instrument whose role continues to grow in the EU. It is based on actions for damages by private individuals. The Damages Directive adopted in 2014 represents the guiding principles for private enforcement by means of actions for damages. More: Dir 2014/​104/​EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349, 5.12.2014, 1–​19. The first competition fine of 500,000 ecu was imposed on companies involved in a quinine cartel in 1969. European Commission, Decision 16 July 1969, Case IV/​26.045, Quinine, OJ L 192/​5, 05.08.1969, 5‒22. Eg: The Economist, ‘Antitrust in the European Union ‒ Unchained watchdog: Businesses think Europe’s trustbusters should be kept on a tighter leash’, 18 February 2010, available at , cited in: Scordamaglia, (n 11) 5. Alison Jones, Brenda Sufrin, EU Competition Law: Text, Cases & Materials (Oxford: oup, 2011), 1041.

Introduction

5

of the European Convention on Human Rights (echr), particularly with the rights enshrined in Article 6(1) and (2) echr.24 This debate is hardly a novelty. Even in the 1990s, Advocate General (AG) Vesterdorf argued that in spite of its administrative qualification, the anti-​ cartel procedure clearly had a ‘criminal law character’, requiring a ‘reasonable’ standard of procedural guarantees in order to avoid any justified critique of deficient compliance with the echr.25 This debate acquired new impetus after the Lisbon Treaty introduced a new constitutional order in 2009, reinforcing the role of fundamental rights. Article 6(1) teu granted the Charter of Fundamental Rights (cfr) legally binding status, placing it on an equal footing with the Treaties,26 whereas Article 6(2) teu imposed an obligation on the EU to accede to the echr. Furthermore, Article 52(3) cfr stipulated that the Charter provisions must have the same meaning and scope as the corresponding rights under the echr, as they are interpreted in the case law of the European Court of Human Rights (ECtHR).27 By virtue of this provision, the Charter essentially incorporated the echr and the case law of the ECtHR,28 affirming the Convention as the minimum standard of protection in the EU legal order.29 These provisions signal the commitment of the EU to respect, inter alia, the procedural rights enshrined in Article 6 echr. The importance of these rights in the anti-​cartel procedure is difficult to overstate. Indeed, AG Ruiz Jarabo Colomer has emphasised that ‘the rights of defence of those subject to the [anti-​cartel] procedure must be recognised without reservation and respected’,

24 25 26

27

28 29

Philip Kienapfel, Artikel 23, in: Schröter, Jakob, Klotz, Mederer (eds), Europäisches Wettbewerbsrecht (Baden-Baden: Nomos, 2014, 2nd edn), 1197. Opinion of AG Vesterdorf delivered on 10 July 1991 in Case T-​1/​89, Rhone-​Poulenc SA v. Commission, ECLI:EU:T:1991:38, para 885. Also: Scordamaglia, (n 11) 50. Art 6(1) teu. Thorsten Kingreen, in: Calliess, Ruffert (eds), EUV/​AEUV. Das Verfassungsrecht der Europäischen Union mit Europäischer Grundrechtecharta (Kommentar) (Munich: C.B. Beck, 2016), Rec 8‒14; Christoph Grabenwarter, Katharina Pabel, Europäische Menschenrechtskonvention (Munich: Verlag C.H. Beck, 2016, 6th edn), 26. Accordingly, Art 48(1) of the Charter on the presumption of innocence corresponds to Art 6(2) and (3) echr. Hans-​Peter Folz, Art 48, in: Vedder, Heintschel von Heinegg (eds), EUV/​AEUV. Kommentar (Baden-​Baden: Nomos, 2011, 1st edn), 1167‒68; Explanations Relating to the Charter of Fundamental Rights, OJ 2007/​C 303/​17, 14.12.2007, 17‒35, at 34. For more on Art 52(3) CFR: Hans-​Peter Folz, in: Vedder, Heintschel von Heinegg (eds) (n 27) 1178‒1179. Explanations Relating to the Charter of Fundamental Rights, at 33; for more, see also, eg, Ian Forrester, ‘Due Process in EC Competition Cases:  A Distinguished Institution with Flawed Procedures’, 34 ELRev (2009), 817‒43. Folz, (n 27) 1179.

6 ­chapter  given the Commission’s broad powers of enforcement.30 Precisely in this context unfolds one of the dominant issues in EU anti-​cartel enforcement. This issue encompasses the allegedly deficient compliance of EU anti-​cartel enforcement with the presumption of innocence under Article 6(2) echr. It is precisely this very issue of compliance that constitutes the central issue, the focus, of this work. The law –​and particularly its enforcement –​is determined by the assumptions held by those who enforce it. Thus, this key question of compliance is articulated below by challenging three pivotal assumptions that are held by the EU Courts and the Commission about anti-​cartel enforcement at EU level. These challenges also epitomise the underlying substantive approach to dealing with the problem question that this work addresses. 2

Challenging the Paradigms of EU Anti-​Cartel Enforcement: Key Assumptions Guiding This Work

2.1 Legal Nature of EU Cartel Procedure Article 6(2) echr contains a set of fundamental procedural guarantees applicable in criminal procedure. Article 6(2) places the burden of proof on the prosecution, requiring presentation of sufficiently convincing evidence of the guilt of the accused and stipulating that all doubts about the evaluation of evidence must be interpreted in favour of the accused.31 Inherent aspects of the burden of proof also include the principle of fault, or nulla poena sine culpa,32 and the privilege against self-​incrimination, or nemo tenetur.33 30 31 32 33

Opinion of AG Ruiz Jarabo Colomer, delivered on 11 February 2003 in: ecj, Case C-​204/​00 P, ECLI:EU:C:2003:85, para 26. ECtHR, Barberà, Messegué and Jabardo v. Spain, Appl. nos. 10588/​83; 10589/​83; 10590/​83, judgment 6 December 1988, para 77. Eg: Opinion of AG Kokott, delivered on 28 February 2013 in: ecj, Case C-​681/​11, Schenker & Co AG and Others v. Commission, ECLI:EU:C:2013:126, para 41; Walter Frenz, Handbuch Europarecht Band 2: Europäisches Kartellrecht (Berlin: Springer, 2015), 922. On the privilege against self-​incrimination:  ECtHR, Allen v.  United Kingdom, Appl no 25424/​09, judgment 12 July 2013, para 93: ‘[v]‌iewed as a procedural guarantee in the context of a criminal trial itself, the presumption of innocence imposes requirements in respect of, inter alia, (…) the privilege against self-​incrimination (…)’; for more on this privilege: ECtHR, Saunders v. the United Kingdom, Appl no 19187/​91, judgment 17 December 1996, paras 65, 68‒69; ECtHR, Heaney and McGuinness v. Ireland, Appl no 34720/​97, judgment 21 December 2000, para 47. Also:  Simon Hirsbrunner, Artikel 18 (n 24), 1171; Ian Dennis, ‘Instrumental protection, human right of functional necessity? Reassessing the privilege against self-​incrimination’, 54(2) Cambridge Law Journal (1995), 342‒76, at 343; 353ff; Angus MacCulloch, ‘The privilege against self-​incrimination in competition

Introduction

7

These guarantees, in their most robust form, apply only in proceedings falling within the criminal sphere.34 However, the European Court of Justice (ecj) classifies the anti-​cartel procedure as administrative. The Commission is competent to impose only administrative fines, as reflected by Article 23(5) of Regulation 1/​2003.35 Moreover, a judgment dating back to 2003, Volkswagen AG v. Commission,36 stipulated that the procedure is not criminal, a classification that would seriously impede the effectiveness of anti-​cartel enforcement. Numerous other pre-​Lisbon judgments explicitly refer to the procedure as ­administrative.37 Moreover, a series of prominent post-​Lisbon judgments of 2012, such as Chalkor v. Commission38 and kme Germany v. Commission,39 maintained that compliance with the echr is a non-​issue, as the anti-​cartel procedure meets the requirements under Article 47 cfr. The 2011 judgment of the General Court (GC)40 in Schindler v. Commission recognised that the anti-​cartel procedure was in principle criminal under the echr. Notwithstanding, one of the key findings in this case suggested that the guarantees of Article 6 echr apply to the procedure only to some extent, in line with the 2006 ECtHR judgment in Jussila v. Finland, which concerned the distinction between peripheral and

34

35 36 37

38 39 40

investigations:  theoretical foundations and practical implications’, 26(2) Legal Studies (2006), 211‒37, at 220. Art 6 ECHR: 1.  In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to (…) 2  Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. Council Reg (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 L 001, 4.1.2003, 1–​25. ecj, Case C-​338/​00 P, Volkswagen AG v.  Commission, judgment 18 September 2003, ECLI:EU:C:2003:473, para 97. ecj, Case C-​ 194/​ 99 P, Thyssen Stahl v.  Commission, judgment 2 October 2003, ECLI:EU:C:2003:527, para 30. Also:  ecj, Case C-​85/​76, Hoffmann-​La Roche v.  Commission, judgment 13 February 1979, ECLI:EU:C:1979:36, para 9 (concerning a violation of Art 102 tfeu); ecj, 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 Portland and  Others v.  Commission, judgment 7 January 2004, ECLI:EU:C:2004:6, para 200; ecj, Case 45‒69, Boehringer Mannheim GmbH v.  Commission, judgment 15 July 1970, ECLI:EU:C:1970:51, para 23. ecj, Case C-​386/​10 P, Chalkor v. Commission, judgment 8 December 2011, ECLI:EU:C:2011:815, paras 50‒51. ecj, Case C-​272/​09 P, KME Germany and Others v.  Commission, judgment 8 December 2011, ECLI:EU:C:2011:810, paras 91‒92. Ch 5 for a more detailed analysis. For the sake of clarity, the General Court (GC) is referred to by this name throughout this work, even when referring to judgments at the time this Court was called the Court of First Instance (cfi).

8 ­chapter  hard core criminal law.41 In short, the jurisprudence of the EU Courts seemingly embraces the paradigm of administrative anti-​cartel procedure under EU law. However, this work explores and contests that paradigm by reference to the case law of the ECtHR. The extraordinary gravity of EU competition sanctions, along with their deterrent as well as punitive nature, corresponds to a ‘criminal charge’ under Article 6 echr, based on the Engel criteria,42 which we will later examine in detail. The Strasbourg Court developed these criteria aiming to establish which legal proceedings fall into the criminal sphere, irrespective of their domestic classification. This work also challenges the idea that the guarantees under Article 6 echr apply to the anti-​cartel procedure only to an extent, following the apparent logic of the ECtHR in Jussila v. Finland.43 A broad reading of that case may lead to the conclusion that some criminal charges fall outside the comprehensive protection granted by Article 6 echr. Jussila seemingly pushed competition law within the periphery of criminal charges, hence fuelling debate on the true extent of the procedural safeguards in EU anti-​cartel enforcement.44 However, by virtue of a highly casuistic and functional interpretation of the Engel criteria by the ECtHR,45 a restrictive reading of the term ‘criminal charge’ is called into question in this work. Indeed, this work challenges the very idea of a two-​tier criminal law under Article 6 echr. The idea that some criminal charges must meet the conditions of Article 6 should be scrutinised in light of its inherent risk of exposing some criminal proceedings to deficient standards of legal remedies.46 Hence, the underlying nature of a particular procedure needs to be elucidated in order to ensure that a more lenient standard of protection is applied to it on proper grounds. The formally administrative nature of a particular procedure may reveal pronounced criminal connotations, thus excluding a formalistic approach to the dichotomy between hard-​core and peripheral criminal law. Building on 41 42 43 44 45 46

gc, Case T-​185/​07, Schindler Holding and  Others v.  Commission, judgment 13 July 2011, ECLI:EU:T:2011:362, para 52. ECtHR, Engel and Others v. The Netherlands, Appl nos 5100/​71; 5101/​71; 5102/​71; 5354/​72; 5370/​72, judgment 8 June 1976. ECtHR, Jussila v. Finland, Appl no 73053/​01, judgment 23 November 2006, para 43. Eg: Jones & Sufrin (n 23) 1041; Mestmäcker & Schweitzer (n 14) 558. Franz C. Meyer, Art 6, in: Karpenstein, Meyer (eds), EMRK: Konvention zum Schutz der Menschenrechte und Grundfreiheiten (Munich: Verlag C.H. Beck, 2012), 144‒45. Partly dissenting opinion of Judge Loucaides joined by Judges Zupancic and Spielmann in: ECtHR, Jussila v. Finland, (n 43).

Introduction

9

these considerations, this work challenges the idea that workable procedural protection would be ensured in EU anti-​cartel enforcement if it had to satisfy a merely watered-​down version of the guarantees under Article 6 echr. Parental Liability: Compliance with Principles In Dubio Pro Reo and Nulla Poena Sine Culpa under Article 6(2) echr The second challenge articulated in this work revolves around the imposition of joint and several liability47 on parent companies for infringements of Article 101 tfeu committed by their wholly-​owned48 subsidiaries. Upon closer inspection, a particularly thorny relationship of that liability with Article 6(2) echr emerges. The root of this issue lies in the interpretation of the term ‘undertaking’ under Article 101 tfeu.49 The addressee of the prohibition in Article 101 tfeu is an undertaking.50 However, understood as a broad economic concept, the term ‘undertaking’ may encompass several distinct legal persons linked by various economic, legal or organisational ties.51 Indeed, an individual fine for a competition infringement must be addressed to a specific legal person.52 But which legal person should be held liable for an infringement committed by a wholly-​owned subsidiary? 2.2

47

48

49

50 5 1 52

Kienapfel, (n 24) 1208. Joint and several liability is a concept of private law. In the context of the see doctrine, joint and several liability means the opposite of individual liability. This type of liability means that the creditor has the discretion to require payment of the obligation in question in total or partially from each of the joint and several debtors. Joint and several liability has no explicit basis in Council Reg 1/​2003. Frenz, (n 14) 904. This work refers to wholly-​owned subsidiaries or subsidiaries in which one company holds 100% capital. This term is here understood as a company owned by another company. This work does not analyse parental liability of parent companies that are not sole owners of their subsidiaries. ‘[A]‌ny entity engaged in an economic activity, regardless of the legal status of the entity or the way in which it is financed. That concept must be understood as covering an economic unit, even if, from a legal perspective, that unit is made up of a number of natural or legal persons (…)’. ECJ, Joined Cases C-​231/​11 P to C-​233/​11 P, Siemens Österreich v.  Commission, ECLI:EU:C:2014:256 judgment 10 April 2014, para 43. Also:  ecj, C-​97/​08 P, Akzo Nobel v. Commission, ECLI:EU:C:2009:536, judgment 10 September 2009, para 55; ecj, Case C-​90/​09 P, General Química, judgment 20 January 2011, para 35. For more: Ivo Van Bael, Jean-​François Bellis, Competition Law of the European Community (Alphen aan den Rijn: Kluwer Law International, 2009), 17. Kienapfel, (n 24)  1205; Antoine Colombani, Jindrich Kloub, Ewoud Sakkers, ‘Cartels’, in:  Faull, Nikpay (eds), in:  The EU Law of Competition, Oxford:  oup, 2014), 1023‒1363, at 1251. Mestmäcker & Schweitzer (n 14) 563. GC, Joined Cases T-​305/​94 et  al, Limburgse Vinyl Maatschappij et  al v.  Commission, ECLI:EU:C:2002:582 judgment 20 April 1999, para 978. Also, eg: Kienapfel, (n 24) 1206.

10 ­chapter  In these situations, the Commission may hold the parent company of a subsidiary jointly and severally liable for infringement. This holds true even when the parent was not directly involved in a competition offence. The fining practice of the Commission draws on its position that the parent company of a wholly-​owned subsidiary constitutes an economic entity, or undertaking, with the subsidiary.53 This approach to fining practice reflects the so-​called single economic entity (see) doctrine.54 Under the see doctrine, a parent company constitutes an economic entity –​or unit –​with its subsidiary if it exercises a decisive influence over the subsidiary’s conduct in the market.55 Where the parent owns all the shares in a subsidiary, a rebuttable presumption of decisive influence emerges, entailing an assumption that the parent actually exercises a decisive influence. This presumption is notoriously difficult to rebut: in fact, no parent has ever succeeded in rebutting it, despite numerous attempts.56 Although the ecj firmly rejects

5 3 54

55

56

Van Bael & Bellis (n 49) 1151. For more on the see doctrine, Ch 6. Also: ECJ, Siemens Österreich (n 49) para 43. Also: ECJ, Akzo Nobel, (n 49) para 55; General Química, (n 49) para 35; Stefan Lorenzmeier, ‘Kartellrechtliche Geldbußen als strafrechtliche Anklage im Sinne der Europäischen Menschrenrechtskonvention’, 1 Zeitschrift für Internationale Strafrechtsdogmatik (2008), 20‒30; Stefan Thomas, ‘Guilty of Fault that one has not Committed. The Limits of the Group-​Based Sanction Policy Carried out by the Commission and the European Courts in EU-​Antitrust Law’, 3(1) Journal of European Competition Law & Practice (2012), 11‒27. The see applies to numerous contexts of EU competition law as well. In this work, its analysis is confined to the context of parental liability. However, it is also relevant in merger control. To illustrate, the Merger Regulation determines whether the provisions enshrined in it apply to a concentration with an EU dimension (Art 1) by calculating the global turnover of an ‘undertaking’ rather than a particular company as a legal person. Furthermore, the see doctrine may be applied to exclude agreements between legal persons belonging to one undertaking from the scope of Art 101 tfeu. On the Merger Regulation: Council Reg (EC) No 139/​2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Reg), OJ L 024, 29.1.2004, 1‒22; on agreements between companies belonging to one undertaking: ecj, Case C-​73/​95 P, Viho, judgment 12 January 1995, ECLI:EU:C:1996:405, para 50. ecj, General Química, (n 49) para 37; Akzo Nobel, (n 49) paras 58‒60. Also: ecj, Case C-​ 286/​98 P, Stora Kopparbergs Bergslag AB v.  Commission, judgment 16 November 2000, ECLI:EU:C:2000:630, para 26. Also:  ecj, Case C-​48/​69, Imperial Chemical Industries v. Commission, judgment 14 July 1972, ECLI:EU:C:1972:70, paras 132‒33; ecj, Case C-​52/​69, Geigy v. Commission, judgment 14 July 1972, ECLI:EU:C:1972:73, para 44. Laura Atlee, Yves Bottlerman, Julian Joshua, ‘ “You Can’t Beat the Percentage” –​The Parental Liability Presumption in EU Cartel Enforcement’, 7. For cases in which this attempt has been made in vain, Ch 7.

Introduction

11

claims of irrebuttability,57 this work challenges that position, arguing that the Court’s approach fails to reflect the reality behind the presumption. Indeed, the presumption is applied more or less automatically, with scant regard for evidence of a subsidiary’s autonomy on the market or a parent’s lack of direct involvement in an infringement.58 The factually irrebuttable nature of the presumption of decisive influence may lead to a potential conflict with Article 6(2) echr, in particular the principles nulla poena sine culpa and in dubio pro reo. In line with the judgment in Salabiaku v. France, a presumption invoked to impose criminal liability must be effectively rebuttable, so as not to deprive the accused of all means of defence.59 The ECtHR views automatic application of criminal liability based on a presumption as contrary to the very substance of Article 6(2) echr.60 The complexities of parental liability in light of the presumption of innocence will be centred precisely on this position of the Strasbourg Court. Duty to Cooperate in EU Cartel Procedure: Compliance with the Privilege against Self-​Incrimination The final challenge addressed in this work concerns the interplay between the duty of undertakings to actively cooperate with the Commission and the privilege against self-​incrimination. In a cartel investigation, an undertaking has an obligation to supply the Commission with all required information, even information that may later be used to find that the undertaking infringed EU competition rules.61 This duty represents an indispensable element of effective anti-​cartel enforcement, which is compatible with the echr, at least as far as the Commission and the EU Courts are concerned.62 This work challenges that paradigm, on the basis that the privilege against self-​incrimination is a broad functional principle whose scope encompasses both paragraphs 1 and 2 of Article 6 echr.63 Closely tied to the burden of 2.3

57 5 8 59 60 61 62 63

ecj, C-​440/​11 P, Portielje v.  Commission, judgment 11 July 2013, ECLI:EU:C:2013:514, para 71; ecj, Case C-​521/​09 P, Elf Aquitaine v.  Commission, judgment 11 October 2013, ECLI:EU:C:2013:644, paras 60, 70. Scordamaglia, (n 11) 34. ECtHR, Salabiaku v. France, Appl no 10519/​83, judgment 7 October 1988, para 28. ibid. ecj, Case C-​374/​87, Orkem v. Commission, judgment 18 October 1989, ECLI:EU:C:1989:387, para 34. More: Jones & Sufrin (n 23), 1060; Colombani et al, (n 50) 1162. ecj, C-​301/​04 P, Commission v.  SLG Carbon AG, ECLI:EU:C:2006:432, judgment 29 June 2006, para 41 ; ecj, Limburgse Vinyl, (n 52) para 272; ecj, Orkem, (n 61) para 19. ECtHR, Allen v. United Kingdom, (n 33) para 93; ECtHR, Saunders v. the United Kingdom, (n 33) paras 65, 68‒69. Also: Dissenting opinion of Judge Pavlovichi in: ECtHR, O’Halloran and Francis v. United Kingdom, Appl nos 15809/​02 and 25624/​02, judgment 29 June 2007,

12 ­chapter  proof, this privilege obliges the prosecution to prove an infringement without compelling the accused to give self-​incriminating evidence.64 Thus, the duty of an undertaking to hand over all information relating to its potential role in a cartel is explored, seeking to detect and appraise any divergences in this matter between the case law of Strasbourg on the one hand and Luxembourg on the other. The three issues outlined above will be examined not only with a view to informing and critically evaluating the debate on compliance with Article 6(2) echr of selected aspects of EU anti-​cartel enforcement. Building on the need not to undermine the effective functioning of EU competition rules, this work also proposes amendments to the EU anti-​cartel procedure, seeking to strike a balance between compliance with the presumption of innocence and the sufficiently deterrent and punitive effect of competition sanctions. Although the scholarly literature to date addresses many of the issues raised above, its predominant focus is on guarantees under Article 6(1) echr.65 In contrast, this work aims to fill the gap with a corresponding analysis of Article 6(2) echr. 3

Objectives and Approach

The three challenges to the paradigms maintained in EU anti-​cartel enforcement correspond to the three principal objectives underpinning this work. This work aims, firstly, to ascertain whether the EU anti-​cartel procedure may be classified as criminal under the echr, and if so to what extent the guarantees under Article 6(2) echr apply to the procedure. Additionally, the autonomous term ‘criminal charge’ under Article 6(2) echr is explored, along with the specific guarantees behind the presumption of innocence. The contours of the substance of the specific guarantees arising from Article 6(2) echr are drawn, as well as the extent to which legal persons may derive rights from Article 6 echr. The ultimate aim of this exercise is to establish the nature of

64 6 5

27; also: Dennis, (n 33) 373, Hirsbrunner (n 33) 1171; Dennis, (n 33) at 343, 353ff; Angus MacCulloch, ‘The privilege against self-​incrimination in competition investigations: theoretical foundations and practical implications’, 26(2) Legal Studies (2006), 211‒37, at 220. EctHR, Saunders v. the United Kingdom, (n 33) para 68. Eg: Wouter P.J.Wils, ‘EU Antitrust Enforcement Powers and Procedural Rights and Guarantees: The Interplay Between EU Law, National Law, the Charter of Fundamental Rights of the EU and the European Convention on Human Rights’ (2011), available at , 1‒32, also published in:  34(2) World Competition: Law and Economics Review (2011), 189‒213.

Introduction

13

EU anti-​cartel enforcement in line with the criteria established in Engel and Others v. the Netherlands. This work focuses on a specific aspect of EU cartel procedure –​namely, imputation of joint and several parental liability, measuring it against the conditions of Article 6(2) echr,66 particularly in light of the principles in dubio pro reo and nulla poena sine culpa. That liability is explored in light of the principles laid down, in particular, in the ECtHR judgment in Salabiaku v. France. Finally, the obligation to actively cooperate with the Commission from the perspective of the privilege against self-​incrimination underpinning the presumption of innocence is scrutinised against the benchmark of the ECtHR judicature on this issue, with the aim of identifying compliance issues –​if any –​arising from potentially divergent interpretations of this privilege under EU law and the echr. The general approach underlying this work involves reconciling the fundamental rights narrative in the Strasbourg system with effective EU competition enforcement. The aim is to uncover the multi-​faceted narrative of Article 6(2) echr in ECtHR case law, particularly in proceedings concerning non-​ traditional criminal charges, such as those relating to competition law. In addition to the rich body of literature,67 emphasis will be placed on an analysis of the jurisprudence of the ECtHR as the benchmark for the case law of the ecj and the General Court. The author will zero in on the post-​Lisbon period, since the fundamental rights debate emerged in full force with the constitutionalisation of the Charter of the Fundamental Rights following the entry into force of the Lisbon Treaty. Earlier case law indicating that this debate began to simmer in the pre-​Lisbon period will also be given due consideration. This work will broadly rely on a comparative analysis68 of the underlying rationales shaping the differing concepts and interpretations of the presumption 66

67

68

The author recognises that EU anti-​cartel enforcement has a tense relationship with a number of fundamental rights, such as the right to access to file under Article 41 of the Charter of the Fundamental Rights. However, the scope of this work is limited to the presumption of innocence only. This review focused, in particular, on the works of outstanding legal scholars and practitioners published largely after the entry into force of the Lisbon Treaty in 2009. Literature relating to the theoretical framework of the presumption of innocence is not confined to a particular time frame. Written law relating to the subject matter of this work offers no definite answers to the issues raised, thus making case law the key source of information and interpretation. Although the scholarly community remains divided on the question whether comparative law is a method or a field of law in its own right, for the purposes of this work, it will be perceived as a research method. For this dispute in more detail: Geoffrey Samuel, An Introduction to Comparative Law Theory and Method (London: Hart Publishing, 2014).

14 ­chapter  of innocence in the jurisdictions of the ECtHR and the ecj, respectively. Hereby the book will adopt the evaluative-​critical point of view,69 reflecting in particular upon the shortcomings of EU anti-​cartel procedure as well as the means of how these shortcomings can be diminished.70 The findings of this work are presented according to the following structure. The book is divided into ten Chapters listed in Arabic numerals. The Chapters themselves are further divided into sections, for example, Sections A, B, or C, which are divided into yet smaller sections 1, 2, or 3, and so on. In terms of topics, this work is outlined as follows. Following the introduction laid down in the present Chapter, Chapters 2 –​3 detail the functions, the rationales and the scope attributed to the presumption of innocence. They consider the narrow and broad concepts of the presumption of innocence, emphasising the tendency towards a broad concept in the case law of the ECtHR. Chapters 4 –​5 outline the substantive and procedural norms governing the EU cartel procedure, shedding light on the competences of the Commission and the position of undertakings vis-​à-​vis the C ­ ommission, and examine the dualistic legal nature of EU cartel procedure and its relationship with the safeguards enshrined in Article 6 echr. Chapters 6 –​7 consider compliance by selected aspects of EU cartel enforcement cases with Article 6(2) echr:  (1) attribution of joint and several liability to parent companies for infringements committed by their subsidiaries; and (2) the duty to actively cooperate with the Commission in the EU cartel procedure, evaluating the duty from the perspective of the right not to incriminate oneself. Based on the findings of the preceding chapters, Chapter 8 proposes a reformulated concept of parental liability for infringements committed by a subsidiary. ­Chapter  9 offers the conclusions reached in this work. Finally, Chapter  10 comprises a bibliography. References to scholarly works are listed alphabetically, as are online references that have an author. The case law and diverse documents are presented in chronological order. The case law of the EU Courts is cited using the European Case Law Identifier (ecli). All internet links were last accessed on 1 May 2018. 69 70

For more:  Tamara Hervey, Robert Cryer, Bal Sokhi-​Bulley, Alexandra Bohm, Research Methodologies in EU and International Law (London:  Bloomsbury Publishing, 2011), 5‒10, 34‒41. ibid.

­c hapter 2

Functions of the Presumption of Innocence 1

Introduction: Paradox of the Presumption of Innocence

The presumption of innocence is universally recognised as a fundamental and inalienable right applicable in the criminal justice systems of all liberal democracies.1 It is protected by all treaties on human rights on an international and regional scale and in countless national constitutions.2 To mention just a few, Article 6(2) echr, Article 48(1) of the cfr, and Article 11(1) of the Universal Declaration on Human Rights all entail an obligation to respect this guarantee. However, despite its universality and prevalence in criminal procedure across jurisdictions, and despite the abundance of academic literature on the presumption,3 its scope and meaning nevertheless remain disputed in the scholarly community and specific jurisdictions.4 In very general terms, the presumption may be described as a ‘moral and political principle, based on a widely shared

1 Andrew Ashworth, ‘Four threats to the presumption of innocence’, 10(4) International Journal of Evidence and Proof (2006), 241‒79, at 243. 2 Comparable safeguards of the presumption of innocence can be found in most national legal systems, eg: Arts 20(3) and 28(1) of the Bonner Grundgesetz of Germany; § 8 of the Austrian Code of Criminal Procedure; Art 9 of the Declaration of the Rights of Man and of the Citizen; Art 49 of the Russian Constitution; Art 27 of the Italian Constitution; the 5th, 6th and 14th Amendments of the US Constitution; § 11 of the Canadian Charter of Rights and Freedoms; Art 5 of the Brazilian Constitution, to name just a few. More: Ferry de Jong, Leonie van Lent, ‘The Presumption of Innocence as a Counterfactual Principle’, 12(1) Utrecht Law Review (2016), 32‒49, at 32; Pamela R. Ferguson, ‘The Presumption of Innocence and its Role in the Criminal Process’, Criminal Law Forum (2016), 131‒58, at 132. 3 Antony Duff, ‘Who Must Presume Whom Innocent of What?’, 42(3) Netherlands Journal of Legal Philosophy (2013), 170‒92; Ashworth, (n 1) 241‒79; de Jong & van Lent, (n 2) 32‒49; Ferguson, (n 2) 131‒58, to name just a few. 4 Eg, in the Anglo-​American system, it is disputed whether the presumption of innocence applies beyond the actual trial. In continental law and the Strasbourg system of human rights, on the other hand, presumption of innocence is perceived more broadly, requiring pre-​trial proceedings also to treat the accused as if innocent, thereby ensuring sufficient procedural guarantees. Eg: Ashworth, (n 1) 243. Furthermore, some voices in the scholarly community disagree on whether the presumption of innocence encompasses such elements as the standard of proof or the privilege against self-​incrimination. Thomas Weigend, ‘Assuming that the Defendant is Not Guilty: The Presumption of Innocence in the German System of Criminal Justice’, 8(2) Criminal Law and Philosophy (2014), 285‒99, 285.

© Koninklijke Brill NV, Leiden, 2019 | DOI:10.1163/9789004384651_003

16 ­chapter  conception of how a free society (as distinct from an authoritarian society) should exercise the power to punish’.5 However, the very notion of the presumption of innocence is strikingly contradictory, if not wholly paradoxical. This paradox can be explained as follows: the presumption of innocence applies only to persons accused of having committed an offence punishable by criminal law. One may thus suppose that the presumption is only relevant in situations in which a person is, indeed, de facto presumed to be guilty. Otherwise, there would likely be no investigation or trial with regard to that person. The resolution of this conundrum lies in that the presumption of innocence is not really a presumption, but rather a legal assumption. Generally speaking, a presumption is a proposition or a conclusion that is drawn based on certain facts. To give an example, in English tort law, negligence by the accused is presumed when ‘the facts speak for themselves’ (res ipsa loquitur).6 To give a further example, many jurisdictions presume that the husband is the father of his wife’s children.7 These presumptions are based on common sense or ­experience. Yet the presumption of innocence is not based on facts or experience. As Weigend aptly puts it, the presumption of innocence is most certainly not based on common sense: common sense cannot demonstrate that the person concerned has not committed the particular offence of which they are accused.8 On the contrary, the experience of liberal democratic countries shows that the large majority of those formally accused of a crime are found to be actually guilty.9 5 6 7 8 9

Ashworth, (n 1) 249. More: Jenny Steele, Tort Law: Text, Cases, and Materials (Oxford: oup, 2014), 136. Weigend, (n 4), 286. ibid, 287. Eg, looking at the conviction and acquittal rates across various jurisdictions, we see that the usa has a conviction rate of 93 %, ie, 93 % of persons charged with a criminal offence are found guilty. In the uk, this number is 84 %, whereas in Japan it is as high as 99 %.  Acquittal rates indicating how many persons have been found not guilty are consistently low throughout diverse jurisdictions. In Russia and post-​Soviet states, the acquittal rate is under 1%, whereas in Germany around 3% of all accused persons are acquitted. Jacqueline E. Ross, Stephen C. Thaman, Comparative Criminal Procedure (Cheltenham: Edward Elgar Publishing, 2016), 86. For statistics on the usa: US Department of Justice, Executive Office for United States Attorneys, ‘United States Attorneys’Annual Statistical Report’ (2010), available at ; United Kingdom: Ministry of Justice, ‘Criminal Justice Statistics. Quarterly Update to March 2016’ (2016), available at ; Japan: J.

Functions of the Presumption of Innocence

17

Therefore, the ‘factual’ and the ‘legal’ understanding of guilt and innocence should be separated. The authorities may have a strong, evidence-​based case against the accused and therefore know, factually speaking, that the accused is guilty. However, the presumption of innocence nevertheless requires them to act as if the accused were innocent.10 Following this logic, Packer aptly defines the presumption of innocence as a legal fiction, which ‘permits the successful assertion of defences having nothing to do with factual guilt’ and allows ‘the proposition that the factually guilty may nonetheless be legally innocent and should therefore be given a chance to qualify for [fair] treatment [in criminal proceedings]’.11 Similarly, Ferguson asserts that this presumption should be understood as a normative concept representing how a citizen accused of a criminal offence should be treated in the administration of criminal justice.12 Therefore, it is not a presumption stricto sensu but a legal assumption, requiring specific conduct on the part of the authorities. Thus, a ‘factually’ guilty person may not necessarily be convicted, as his guilt from the legal point of view is not identical to factual guilt.13 Again, the conduct of officials appears to be central here. Put simply, the presumption does not impose upon the prosecuting authorities the idea that the defendant is actually innocent. Rather, it prescribes treatment based on the consideration that the defendant has not yet been found to be guilty according to law.14 Indeed, in the absence of the presumption of innocence, any attempt to exercise rights of defence would arguably be a mere illusion, as the outcome of criminal procedure would already be decided at the outset. As to the concept of the presumption of innocence discussed above, this represents three prevailing rationales:  prevention of wrongful convictions,

1 0 11 12

13

14

Mark Ramseyer, Eric Bennett Rasmusen, ‘Why Is the Japanese Conviction Rate So High?’ (1998), available at . Weigend, (n 4), 285. Herbert L.  Packer, The Limits of the Criminal Sanction (Palo Alto:  Stanford University Press, 1968), 167. Ferguson, (n 2), 138. She cites Herbert Packer, who views the presumption of innocence, first and foremost, as an order to the authorities about how to conduct criminal proceedings. Herbert L. Packer, ‘Two Models of the Criminal Process’ 113(1) University of Pennsylvania Law Review (1964), 1‒68, and Packer, (n 11), 161. Instead of the terms ‘factual’ and ‘legal’ guilt, other authors refer to material innocence (the defendant has not actually committed the crime of which he is accused) and probatory innocence (the defendant was not convicted of a crime before a court of law). Ferguson, (n 2), 138, citing L. Laudan, Truth, Error, and Criminal Law: An Essay in Legal Epistemology (Cambridge: cup, 2006), 12. de Jong & van Lent, (n 2), 41.

18 ­chapter  balanced treatment of the accused, and preservation of the rule of law.15 These three rationales –​as well as a broad and a narrow concept of the presumption of innocence –​are briefly elucidated in the following. 2

Three Rationales of the Presumption of Innocence

2.1 Protection from Wrongful Convictions A society corresponding to a liberal democratic model16 deals with an inherent contradiction in its criminal justice system. On the one hand, it is entrusted with the duty to protect the common good and to punish individuals that pose a threat to the common good. On the other, this same society must also respect and preserve individual rights, including the rights of those who have been accused of violating the vital interests of society.17 These two tasks must reflect a system of checks and balances, instrumentalising the presumption of innocence as a counterforce to the disparity of power between the state and the individual. These checks and balances play a pivotal role in criminal procedure: as Barkow puts it, ‘the state poses no greater threat to individual liberty than when it proceeds in a criminal action’.18 Hence, liberal democracy dictates the need to limit and to justify any interference with the autonomy and liberty of the individual in criminal procedure. This very need further allows resort to criminal punishment only after a fair, impartial and public trial in which the prosecution proves the guilt of the accused to the requisite degree, allowing the accused to challenge the accusations against him. The presumption of innocence thus represents a functional element of criminal proceedings, intended to ensure that no one is wrongly 15 16

1 7 18

Andrew Stumer, The Presumption of Innocence: Evidential and Human Rights Perspectives (London: Bloomsbury Publishing, 2010), xxxix, 37. Generally speaking, liberal democracy is a political-philosophical ideology of constitutional governance combining representative democracy and protection of basic rights and freedoms. Its principal features are free and fair general elections, separation of powers, rule of law, protection of human rights, and civil rights and liberties. Besides, a liberal democratic state typically has a constitution defining the powers of the government and stipulating individual rights and freedoms protected by the state. More: Michael J. Perry, The Political Morality of Liberal Democracy (Cambridge: cup, 2010), 9‒11; Sylvia Chan, Liberalism, Democracy and Development (Cambridge: cup, 2002), 10‒20; Neal Riemer, Douglas Simon, The New World of Politics: An Introduction to Political Science (Lanham: Rowman & Littlefield, 1997), 104. Stumer, (n 15), 43. Rachel E.  Barkow, ‘Separation of Powers and Criminal Law’, 58 Stanford Law Review (2006), 989‒1054, at 995.

Functions of the Presumption of Innocence

19

convicted.19 As Dworkin put it, ‘[p]‌eople have a profound right not to be convicted of crimes of which they are innocent’.20 As numerous authors emphasise, a wrongful conviction is inherently unjust and morally harmful,21 as it deprives the individual of agency and autonomy.22 In this way, the presumption of innocence acts as a ‘counter-​factual assumption’,23 aimed at avoiding conviction of the innocent. However, experience shows that some wrongful convictions are inevitable. The presumption of innocence may reduce judicial errors by steering them in a direction that benefits the accused, in particular by imposing the burden of proof on the prosecuting authority.24 Put differently, the presumption of innocence allocates to the prosecution, rather than to the accused, the risk of failing to persuade the court and thereby losing the case.25 The risk of judicial error is also alleviated by the principle in dubio pro reo, which requires all doubts in the assessment of evidence to benefit the accused. 2.2 Balanced Treatment of the Accused The second principal rationale of the presumption of innocence concerns protecting the accused from excessively coercive measures before being found guilty. The state can apply broad coercive measures in criminal procedure, such as arresting the accused or freezing their financial assets, thereby restricting the liberty of the accused.26 These broad competences of the state already place the accused in a rather vulnerable and inferior position. Moreover, the presumption of innocence obliges the authorities to treat the accused as if innocent, so that punishment does not de facto begin prior to conviction by applying excessive measures.27 This requirement for balanced treatment of the accused can take a number of forms. For instance, it prohibits the agents of the state from making public pronouncements on the guilt of the accused, orally or in writing, before a finding of guilt.28 Moreover, this 19 2 0 21 22 23 24 25 26 27 28

Ferguson, (n 2), 133; de Jong & van Lent, (n 2), 34; Ronald M Dworkin, ‘Principle, Policy and Procedure’, in Tapper (ed), Crime, Proof and Punishment (Oxford: Butterworths, 1981), 193–​225; Ashworth, (n 1) 247; Stumer, (n 15), 32. Dworkin, (n 19), 193, as cited in Stumer, (n 15), 32. M Dworkin, (n 19), 193–​225; Stumer, (n 15), 32; de Jong & van Lent, (n 2), 34. Stumer, (n 15), 43. Weigend, (n 4), 287. de Jong & van Lent, (n 2), 35; Stumer, (n 15), 36. de Jong & van Lent, (n 2), 34. Weigend, (n 4), 287. Stumer, (n 15), xxxviii; Weigend, (n 4), 287. ECtHR, Minelli v.  Switzerland, Appl no 8660/​79, judgment 25 March 1983, para 37. Also: Meyer, (n 45 of Chapter 1) 186.

20 ­chapter  requirement precludes excessive means of investigation, as these can indicate that the authorities are de facto treating the accused as guilty, thus beginning his punishment prematurely, in anticipation of a damning verdict.29 Ensuring a perception of the accused as innocent improves the likelihood that the fundamental rights of the accused will be respected.30 However, the authorities are not obliged to treat the accused identically to non-​suspected persons. For example, an accused may be required to answer questions of the investigating authority or to have his business or home premises searched. Deployment of proportional coercive measures reflects the general interest of ensuring effective administration of justice.31 2.3 Preservation of the Rule of Law The presumption of innocence contributes to preservation of the rule of law as perceived in liberal democratic societies.32 This particular aspect of the presumption is also mirrored in Strasbourg. The ECtHR explicitly stated in its 1988 judgment in Salabiaku v. France that the presumption of innocence embodies the rule of law.33 Similarly, the Contracting States of the echr also refer to the presumption of innocence as an element of the rule of law: for instance, Germany’s Bundesverfassungsgericht has emphasised the presumption of innocence as a special characteristic of the Rechtsstaat.34 However, the concept of the rule of law is somewhat elusive both in national legal systems and in international law. As a result, there is no widely agreed-​ upon definition of the concept.35 Indeed, the presumption of innocence does not receive explicit mention in these contexts. Nevertheless, an indirect link between the rule of law and the presumption of innocence is evident in various definitions of the rule of law provided by international bodies, such as the European Commission for Democracy through Law (Venice Commission), the 2 9 30 31 32

33 34 35

Weigend, (n 4), 288; de Jong & van Lent, (n 4), 35. ibid. Ferguson, (n 2), 141. Stumer, (n 15), 36–​38; Geranne Lautenbach, The Concept of the Rule of Law and the European Court of Human Rights (Oxford: oup, 2013), 126. Also: ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 28; ECtHR, EL, RL, and JO-​L v. Switzerland, Appl no 20190/​90, judgment 22 November 1995, para 53. ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 28. Weigend, (n 4), 286, citing: BVerG, 26.3.1987, 74 BVerfGE 358, 370. Robert McCorquodale, ‘Defining the International Rule of Law: Defining Gravity?’, 65 International and Comparative Law Quarterly (2016), 277‒304, at 279; Brian Z. Tamanaha, ‘The History and Elements of the Rule of Law’, Singapore Journal of Legal Studies (2012), 232‒47, at 232. Also: Kenneth J. Keith, ‘The International Rule of Law’, Leiden Journal of International Law (2015), 403‒17.

Functions of the Presumption of Innocence

21

United Nations, or the Organisation for Economic Cooperation and Development (oscd). Many of them define the rule of law as a principle of governance, which connects three underlying ideas. The rule of law is linked to the trial and respect for human rights.36 Additionally, the rule of law postulates the necessity to limit the power of the state authorities by law. Moreover, the rule of law encompasses the principle of equality, thereby excluding arbitrariness in applying the law. Common to these ideas is the requirement of limiting the power of the state to interfere, particularly in an arbitrary manner, with the autonomy and liberty of the individual. In this respect, the obligation of the prosecution to prove the guilt of the accused contributes to the legitimacy of ‒ and trust in ‒ the criminal justice system.37 Moreover, restraint of state power and the prohibition of arbitrariness justify punishment only of an individual who has been found guilty in accordance with the law.38 Precisely in this respect, the ties of the presumption of innocence with the rule of law are most evident. 3

Narrow and Broad Concepts of the Presumption of Innocence

The presumption of innocence may be viewed narrowly or broadly, as Weigend suggests.39 Framed in rather narrow terms, this guarantee is little more than a rule allocating the burden of proof, which requires the authorities to refrain from prematurely referring to the accused as guilty40 and obliges them to treat an accused as if innocent. This rather narrow interpretation proposes that the presumption of innocence is indifferent to the standard of proof, other than in common law legal systems, which require proof to 36

3 7 38 39 40

European Commission for Democracy Through Law (Venice Commission), ‘Report on the Rule of Law’, Adopted by the Venice Commission at its 86th plenary session, Venice, 25‒26 March 2011, available at ; Report of the Secretary-​General of the Security Council of the United Nations, ‘The rule of law and transitional justice in conflict and post-​conflict societies’, 23 August 2004, available at ; Brian Z. Tamanaha, (n 35) 236. Tamanaha, (n 35) 238. Stumer, (n 15) 38. Weigend interprets this presumption rather narrowly, whereas Ashworth, Ferguson or Stumer see it in a rather broad sense. Weigend, (n 4), 285‒99; Ferguson, (n 2), 131‒58; Ashworth, (n 1) 241‒79. Alastair Mowbray, Cases, Materials, and Commentary on the European Convention on Human Rights (Oxford: oup, 2012), 448‒52.

22 ­chapter  be beyond reasonable doubt. This interpretation also excludes the privilege against self-​incrimination or the right to remain silent from the scope of the ­presumption.41 The considerations driving this rather restricted concept of the presumption of innocence involve strict separation of the presumption of innocence from the right to a fair trial.42 In line with this view, various procedural guarantees relating to fair trial stem not from the idea according to which a suspect is innocent but rather reflect general considerations of human dignity or principles of justice and fairness.43 In essence, this reading seeks to avoid treating the presumption of innocence as a general basis for a fair trial, rather than as a specific and precisely defined guarantee. However, the ECtHR views the presumption of innocence as ‘one of the elements of the fair criminal trial that is required by paragraph 1 [of Article 6]’.44 This holistic perception of the presumption of innocence perceives it ‘from the standpoint of these two provisions taken together’, having regard to ‘the criminal proceedings as a whole’.45 The ECtHR presupposes, further, that the presumption may not unfold its full potential if the accused has not had ‘the opportunity of exercising his rights of defence’.46 A rather broad understanding of the presumption of innocence also finds a reflection in the scholarly literature, which takes a favourable view of including a fair procedure and a requisite standard of proof as significant in applying the presumption of ­innocence.47 4 1 42

43 44 45

46 47

Weigend, (n 4) 288. The right to a fair trial is a very broad term with no single comprehensive definition. A fair trial as enshrined in Art 6(1) echr should be understood as a body of fundamental judicial guarantees relating to organisation of legal procedure under civil and criminal law. In particular, they include the right to a fair and public hearing within a reasonable time by an independent and impartial tribunal, as enshrined in Art 6(1) echr. Christoph Grabenwarter, § 6 Justiz-​und Verfahrensgrundrechte in: Ehlers, Becker (eds), European Fundamental Rights and Freedoms (Berlin: De Gruyter, 2007), 160‒61; David John Harris, Michael O’Boyle, Ed Bates, Carla Buckley, Harris, O’Boyle & Warbrick: Law of the European Convention on Human Rights (Oxford: oup, 2014), 376‒79. ibid. ECtHR, Janosevic v. Sweden, Appl no 34619/​97, judgment 25 May 2003, para 96; ECtHR, Bernard v. France, Appl no 22885/​93, judgment 23 April 1998, para 37. ECtHR, Bernard v. France, (n 44) para 37. To that effect, also: ECtHR, Deweer v. Belgium, Appl no 6903/​75, judgment 27 February 1980 para 56; ECtHR, Minelli v. Switzerland, (n 28) para 27; ECtHR, Allenet de Ribemont v. France, Appl no 15175/​89, judgment 10 February 1995, para 35. Also: Scordamaglia, (n 11 of Chapter 1) 16. ECtHR, Minelli v. Switzerland, (n 28) para 37. Also: ECtHR, Barberà et al v. Spain, (n 31 of Chapter 1) para 77. Weigend, (n 4) 288.

Functions of the Presumption of Innocence

23

Arguably, then, the ECtHR is adamant in appraising the presumption of innocence as a comprehensive set of guarantees that are closely tied to the notion of fair trial. To reflect this approach by the Strasbourg Court, a rather broad reading of the presumption of innocence is embodied in this work, perceiving this right as an expansive and highly functional instrument of ensuring a variety of safeguards. 4

Concluding Remarks

The presumption of innocence embodies a universally recognised and pivotal principle inherent to the criminal procedure of liberal democracies. It epitomises a legal assumption prescribing treatment of the accused as if innocent, until the prosecution proves guilt to the requisite degree.48 This assumption is rooted in the understanding that the criminal procedure of the omnipotent state is liable to substantially interfere with the autonomy and liberty of the individual. Hence, this power must be limited by law in order not to undermine the fundamental rights which the individual enjoys. The presumption of innocence is one of the legal instruments deployed in order to restrain the power of the state. Conventionally accepted rationales underpinning this guarantee encompass prevention of wrongful convictions, balanced or proportional treatment of the accused, and preservation of the rule of law.49 These rationales epitomise the comprehensive role of the presumption of innocence in safeguarding the rights of the accused in criminal procedure. Arguably, these rationales illustrate the defining role of the presumption of innocence: without it, other guarantees available at trial could lose their significance, as the outcome of the procedure –​establishing the guilt of the accused –​would be known in advance. Accordingly, the ECtHR seemingly favours a broad, holistic perception of the presumption of innocence in order to let it unfold its full effectiveness. In the following, specific aspects of the presumption of innocence under Article 6(2) echr will be examined. 48 49

ibid, xxxix. Stumer, (n 15), xxxviii.

­c hapter 3

Presumption of Innocence under Article 6(2) echr: Meaning and Scope 1 Introduction The presumption of innocence under Article 6(2) echr is an overriding principle of criminal procedure. It also represents one of the key structural elements of fair criminal procedure,1 although this very guarantee should be separated from the general right to a fair trial under Article 6(1) echr. An elaborate mechanism of specific safeguards confers upon the presumption of innocence the power to protect individuals and legal persons from arbitrary treatment by the state authorities.2 Anyone charged with a criminal offence is entitled to be treated as innocent until the prosecution proves their guilt with sufficiently strong and weighty evidence.3 The principle of fault, or the requirement to interpret remaining doubts to the advantage of the accused, exemplifies only a part of the safeguards inherent to Article 6(2) echr. However, one cannot analyse these safeguards without first comprehending the type of legal proceedings in which they gain relevance. Consequently, a two-​step approach defines this Chapter. Firstly, the autonomous meaning of the term ‘criminal charge’ under the echr is elucidated. This analysis provides the legal context in which the specific guarantees of Article 6(2) echr may apply. In particular, analysis focuses on the leading principles established in the ECtHR judgment Engel and Others v. the Netherlands that were transformed into the famous Engel criteria. After reflecting on these criteria, we move on to consider their primary outcome  –​the gradual conversion of diverse administrative proceedings into a ‘criminal charge’ within the meaning of the echr. After explaining the

1 Meyer, (n 45 of Chapter 1) 184. It applies to the entirety of proceedings for the determination of a ‘criminal charge’, including the investigative phase and appeal proceedings. ECtHR, Minelli v. Switzerland, (n 28), para 27; ECtHR, Konstas v. Greece, Appl no 53466/​07, judgment 28 November 2011, para 36. 2 Meyer, (n 45 of Chapter 1) 149. 3 ECtHR, Barberà et al v. Spain, (n 31 of Chapter 1) para 77. Also: ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) paras 96‒97; ECtHR, Telfner v. Austria, Appl no 33501/​96, judgment 20 June 2001, para 15.

© Koninklijke Brill NV, Leiden, 2019 | DOI:10.1163/​9 789004384651_004

Presumption of Innocence under Article 6(2) ECHR

25

evolution of the term ‘criminal charge’, the discussion turns to the alleged narrowing down of this term, which came with the ECtHR judgment in Jussila v. Finland. This analysis offers an insight into the potential of that judgment as well as its limitations. Secondly, after elaborating on proceedings that trigger application of Article 6(2) echr, the specific guarantees under that provision are identified and overviewed, allowing full comprehension of the practical meaning of this provision in criminal procedure. 2

The Concept of a ‘Criminal Charge’ under Article 6(2) echr

2.1 Autonomous Interpretation of a Criminal Charge Article 6 echr, as a whole, governs a spectrum of procedural guarantees applicable in civil and criminal proceedings alike. Paragraph 1 of this provision essentially defines what constitutes a fair trial in both the civil and the criminal sphere, such as the right to a fair and public hearing by an independent and impartial tribunal. Beyond that, proceedings involving a criminal charge are exposed to additional requirements established in paragraphs 2 and 3 of Article 6 echr:4 Article 6 echr 1. In the determination of (…) any criminal charge against him, everyone is entitled to a fair and public hearing (…) 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 (…) The guarantees enshrined in these distinct paragraphs can be invoked separately, as they are independent from each other.5 However, compliance by a Contracting State with the practical implications of the presumption of innocence may also be scrutinised, if necessary, from the perspective of Article 6 echr, taken as a whole.6 Thus, the considerations of the Court as to the autonomous interpretation of a ‘criminal charge’ are relevant to this work even 4 George Peretz, Tim Ward, Ronit Kreisberger, ‘Enforcement and Procedure’, in: Roth WC, Rose (eds), European Community Law of Competition (Oxford: oup, 2008, 6th edn), 1181‒1371, 1196. 5 Harris et al, (112), 299. 6 ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) para 96; ECtHR, Bernard v. France, (n 44) para 37; ECtHR, Deweer v. Belgium, (n 45 of Chapter 2) para 56; ECtHR, Minelli v. Switzerland, (n 28) para 27; ECtHR, Allenet de Ribemont v. France, (n 45 of Chapter 2), para 35.

26 ­chapter  when they relate to parts of Article 6 echr having no direct connection to the presumption of innocence. The ECtHR has established an autonomous meaning of the term ‘criminal charge’,7 having regard to the importance of the rights of defence in criminal proceedings.8 This special significance determines the Court’s broad and decidedly functional approach to Article 6 echr, which emphasises the ‘object and purpose’9 of this provision, aiming to unfold its full potential. Indeed, this broad interpretation reflects the pivotal role of judicial rights in a liberal democratic society.10 Consequently, the Court is compelled to examine the material nature of a specific given procedure irrespective of its apparent features in the relevant domestic legal order.11 Thus, the aggregate characteristics of a disputed procedure prevail over its formal features, in terms of establishing whether the procedure falls within the criminal sphere.12 An autonomous perception of the term corresponds to the need for uniform and effective application of Article 6 echr in all Signatory States. Thus, it aims to prevent states from circumventing the due process requirements by re-​classifying an offence as non-​criminal.13 In particular, observation by states of their obligations under the echr might be impaired if they could arbitrarily deprive a particular offence of its criminal classification, seeking to alter the due process requirements applicable to that offence.14 Hence, the term ‘criminal charge’, or ‘criminal offence’ under Article 6 echr portrays a concept which is defined by the ECtHR, having regard to the very

7 8 9 10 11 12 13 14

Also: ECtHR, König v. Germany, Appl no 6232/​73, judgment 28 June 1987, para 88; ECtHR, Ringeisen v. Austria, Appl No 2614/​65, judgment 16 July 1971, para 94; Lorenzmeier, (n 54 of Chapter 1), 23. Peretz et al, (n 4), 1181‒1371, 1196. Eg: ECtHR, De Cubber v. Belgium, Appl no 9186/​80, judgment 26 October 1984, para 32. ECtHR, Deweer v. Belgium, (n 45 of Chapter 2) para 44. ibid. ECtHR, Engel, (n 42 of Chapter 1) para 82; Scordamaglia, (n 11 of Chapter 1) 15; Ben Emmerson, Andrew Ashworth, Alison Macdonald, Human Rights and Criminal Justice (London: Sweet & Maxwell, 2012), 212‒14. ECtHR, Engel, (n 42 of Chapter 1) para 82. Also: Waelbroeck & Vancaille, (n 1 of Chapter 1) 376. ECtHR, Öztürk v. Germany, Appl no 8544/​79, judgment 21 February 1984, para 49. Furthermore, it is also irrelevant, in principle, which institution has jurisdiction in a particular case: ‘The character of the legislation which governs how the matter is to be determined (civil, commercial, administrative, etc.) and that of the authority which is invested with jurisdiction in the matter (ordinary court, administrative body, etc.) are therefore of little consequence’. ECtHR, Ringeisen v. Austria, (n 7) para 94.

Presumption of Innocence under Article 6(2) ECHR

27

purpose of this Convention provision.15 The term may be broken down into two terms: ‘criminal’ and ‘charge’. The term ‘charge’ represents ‘the official notification given to an individual by the competent authority of an allegation that he has committed a criminal offence’.16 However, even in the absence of a formal notification, a charge may nevertheless exist, if ‘the situation of the [suspect] has been substantially affected’ by the actions of the authorities.17 The term ‘charge’ does not represent a point of contestation in terms of the particular subject matter of this work. Therefore, the focus of the following discussion is solely on the term ‘criminal’. The term ‘criminal charge’ was famously interpreted in the landmark judgment Engel and Others v. the Netherlands.18 Since that judgment defined this particular term in rather brief statements, subsequent cases, such as Öztürk v.  Germany,19 have significantly contributed to its present manifestation, as noted below. Conception of the Term ‘Criminal Charge’: Engel and Others v. the Netherlands 2.2.1 Facts of the Case The judgment in Engel and Others determined the criteria according to which a particular procedure falls within the criminal sphere for the purpose of Article 6 echr. By identifying these criteria, Engel ultimately led to something close to a revolution in the concept of criminal law from the perspective of state obligations under the echr. The seminal importance of this case warrants a detailed insight into the factual circumstances that prompted the ECtHR to delineate the contours of criminal procedure. The proceedings before the Strasbourg Court in Engel and Others arose from a dispute about military disciplinary offences under Dutch law. Mr Engel and other applicants were conscript soldiers serving in the Dutch armed forces. Throughout their service, the applicants received various penalties for violating military discipline. The first applicant, Mr Engel, asked his commanding officer to give him leave of absence in order to attend a meeting of a particular association of 2.2

1 5 16 17 18 19

Meyer, (n 45 of Chapter 1) 143. ECtHR, Phillips v. the United Kingdom, Appl no 41087/​98, judgment 12 December 2001, paras 39, 42 and 46; ECtHR, Eckle v. Germany, Appl no 8130/​78, judgment 15 July 1982, para 73; Christopher Grabenwarter, European Convention on Human Rights: Commentary, 167. ECtHR, Deweer v. Belgium, (n 45 of Chapter 2) para 46. More: Meyer, (n 45 of Chapter 1) 148. ECtHR, Engel,(n 42 of Chapter 1) para 81ff. More: Kienapfel, (n 24 of Chapter 1) 1200. ECtHR, Öztürk v. Germany, (n 14) para 48ff.

28 ­chapter  conscript soldiers, but did not receive it. Consequently, he fell ill and went on sick leave. His supervising officer checked upon him at home and found that he was not there on the day the meeting was to take place. Subsequently, suspecting that Engel sought to avoid his duties, the officer sentenced him to four days of house arrest. The second applicant, Mr Van der Wiel, showed up for duty four hours late one day, as his car had broken down on the road. He did not take the next train to work, but rather waited until the car was fixed. He, too, received four days of house arrest for failing to show up for duty. The third applicant, Mr de Wit, was charged for failing to follow orders and driving irresponsibly while on duty. For this infringement, he received a stricter penalty:  de Wit was committed to a disciplinary unit for three months and was sentenced to twelve days of aggravated arrest. This was the harshest punishment in the applicable disciplinary law of the Netherlands.20 The fourth and fifth applicants, Mr Dona and Mr Schul, also served interim custodial sentences in the form of aggravated arrest for three and four months, respectively. Their penalties related to editing a journal whose content was deemed to violate an army decree on distribution of publications. In addition to the arrest, the penalties imposed on these soldiers involved loss of wages.21 These penalties were also liable to affect their chances of promotion, although no criminal records appeared as a result. The applicants complained to the European Commission of Human Rights (ECommHR),22 claiming, inter alia, that the procedure according to which they were punished constituted a violation of Article 6(1) echr. The Dutch Government argued that the proceedings against the applicants fell outside the scope of Article 6 echr, as they did not involve a criminal 20

21 2 2

A member of the Dutch military who was sentenced to aggravated arrest was still obliged to perform his duties. At the same time, he had to remain in a special (unlocked) unit for punished soldiers. The offender could receive visitors if permitted by his commander, but could not freely move within the territory of the barracks, eg, to go to the cinema, canteen or other facilities available to the soldiers. At night, these offenders were supposed to be separated from other soldiers. ECtHR, Engel, (n 42 of Chapter 1) para 19. ECtHR, Engel, (n 42 of Chapter 1) para 16. Since 1954, and at the time of the case, the ECommHR examined complaints alleging a violation of the ECHR in the first instance. It used to forward a complaint by an individual to the ECtHR only if it considered it to be well-​founded. Protocol No. 11 to the echr of 1994 abolished the Commission and granted the possibility for applicants to complain to the ECtHR directly. Protocol No. 11 to the Convention for the Protection of Human Rights and Fundamental Freedoms, restructuring the control machinery established thereby, Strasbourg, 11 May 1994. More: William A. Schabas, The European Convention on Human Rights: A Commentary (Oxford: oup, 2015), 732‒35.

Presumption of Innocence under Article 6(2) ECHR

29

charge. Although the ECommHR accepted this argument, the ECtHR found that the penalties in question had a repressive character,23 warranting an investigation both into their substance and the proceedings in which they were imposed. 2.2.2 Establishment of the Engel Criteria It should not go unnoticed that the Court approached the problematic of the term ‘criminal charge’ rather cautiously, declaring that it confined its analysis to disciplinary proceedings in the sphere of military service only.24 One may view this caution as an attempt to avoid the sweeping consequences of clarifying the scope of Article 6 echr in an overly expansive manner. Yet, as the elaboration of the Engel criteria in subsequent jurisprudence reveals, this caution was abandoned in favour of a rather flexible approach. Engel unequivocally recognised the freedom of the Signatory States to draw a distinction between disciplinary and criminal proceedings in their respective legal orders.25 It was established that, as a rule, disciplinary proceedings manifest themselves in a less repressive manner, having a relatively small impact on an individual’s legal status. They usually also result in milder sentences than criminal proceedings. In contrast, criminal proceedings had a more clearly pronounced repressive character. The Court underlined that criminal law also typically affords higher procedural safeguards than disciplinary procedure in order to counterbalance the repressive nature of criminal law.26 In spite of this discretion to classify diverse proceedings, a Contracting State is not completely free to define the nature of offences. It will certainly respect its obligations under the Convention by classifying an offence as criminal, thus including it in the scope of Article 6 echr. However, there is no comparable discretion to remove an offence or procedure from the scope of this provision. Granting such discretion to a Contracting State would unjustifiably expose application of Article 6 echr to the caprice of states.27 Any resulting arbitrariness would violate the ‘purpose and object’ of this provision.28 The need to preclude this unsatisfactory situation compelled the ECtHR to examine the material characteristics of the disciplinary offence in question, seeking to establish whether it belonged to the criminal sphere for the 23 24 25 26 27 28

ECtHR, Engel, (n 42 of Chapter 1) para 79. ibid, para 82. ibid, para 80. ibid, para 81. ibid. ibid.

30 ­chapter  purposes of the Convention. Three distinct Engel criteria emerged from this attempt by the Court to distinguish substantively criminal proceedings from genuinely non-​criminal ones.29 These criteria are: (1) the classification of the offence in the national legal system; (2) the nature of the offence; (3) the severity and nature of the penalty that the accused risks incurring.30 However, this judgment signified only the very early understanding of the Engel criteria, defining them in rather brief terms. Subsequent case law fleshed them out in more detail.31 Thus, the present analysis must inevitably discuss these criteria with reference also to the aspects added to them in subsequent case law. The three Engel criteria do not carry equally important weight in determining the criminal nature of an offence. The first criterion –​the domestic classification –​is the least relevant, serving only as a starting point for the Court’s analysis.32 A Contracting State is not precluded from criminalising an act if it considers that act as contrary to the exercise of an individual’s rights protected by the state. By contrast, the ECtHR does not treat classifying a certain act as a non-​criminal or ‘mixed’ offence with indifference.33 Hence, the last word on classification belongs to the ECtHR, making the first criterion not decisive for determining the existence or otherwise of a criminal charge.34 Conversely, the second and third criteria play a pivotal role in detecting the genuine legal nature of a particular disputed offence.35 These criteria are regarded as alternative, rather than cumulative.36 However, both of them will be considered together if analysis of each criterion leads to no definite conclusion.37

29 30 31 32 33 34 35 36

37

ibid, para 82. ibid. Eg, ECtHR, Öztürk v. Germany, (n 14) para 53. Grabenwarter & Pabel, (n 26 of Chapter 1) 479. ECtHR, Engel, (n 42 of Chapter 1) para 81. Grabenwarter & Pabel, (n 26 of Chapter 1) 479. Since the Court was rather brief with respect to these criteria in Engel, the following analysis refers also to subsequent case law that clarified these criteria in more detail. ECtHR, Engel, (n 42 of Chapter 1) para 82; ECtHR, Ezeh and Conners v. United Kingdom, Appl nos 39665/​98 and 40086/​98, para 86. Also: Grabenwarter & Pabel, (n 26 of Chapter 1) 479; Shabas, (n 22)  277; ECtHR, Guide on Article 6. Right to a Fair Trial (criminal limb), Case-​law guide, 2014, available at . ECtHR, Bendenoun v.  France, Appl no 12547/​86, judgment 24 February 1994, para 47. Also: Scordamaglia, (n 11 of Chapter 1) 16.

Presumption of Innocence under Article 6(2) ECHR

31

Diverse indicia can suggest whether a given procedure or sanction has an inherent ‘criminal connotation’.38 The second criterion is concerned with the inherent nature of the offence. In Engel, the Court was very brief about it, stating simply that the ‘very nature’ of an offence may determine its criminal classification.39 One should thus mention that the ECtHR elaborated in the 1984 case of Öztürk v. Germany that a legal norm has an inherently criminal nature if it aims to punish and to deter recurrence of the offence in question: Above all, the general character of the rule and the purpose of the penalty, being both deterrent and punitive, suffice to show that the offence in question [is], in terms of Article 6 (art. 6) of the Convention, criminal in nature.40 The punitive and deterrent nature of an offence operates as a response by the state to conduct that contravenes the general interests of society.41 Violation of those interests may evoke moral condemnation as well as reputational damage for the perpetrator. Thus, the stigmatising effect of a norm is also an indicator of its criminal character,42 although the Engel judgment does not explicitly say so. Perhaps this reference was omitted since the case dealt with custodial sentences whose very severity per se implies the existence of a stigma, without the Court having to mention it specifically. Subsequent case law of the ECtHR also invoked the generally binding character of a rule as a signal that it ‒ or breach of it ‒ may have criminal traits.43 However, attention should be drawn to the fact that the procedure scrutinised in Engel was binding on a defined group of persons –​military personnel –​so it was not inherently generally binding. These minor contradictions signal the rather casuistic manner of the Engel criteria.

38 39 40 41 42 43

Partly dissenting opinion of Judges Costa, Cabral Barreto and Mularoni joined by Judge Caflisch in: ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 9. The Court essentially dedicated one sentence to it, stating that ‘[t]‌he very nature of the offence is a factor of greater import’. ECtHR, Engel, (n 42 of Chapter 1) para 82. ECtHR in Öztürk v. Germany, (n 14) para 53. Grabenwarter & Pabel, (n 26 of Chapter 1) 479. ECtHR in Öztürk v. Germany, (n 14) para 53; ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 43. This aspect of the Engel criteria was not elaborated in Engel; however, it was added in the further development of these criteria in Öztürk. More: Grabenwarter & Pabel, (n 26 of Chapter 1) 479.

32 ­chapter  Similarly to the very nature of the offence, the nature and severity of the penalty which the accused person may incur represents the third Engel criterion.44 A penalty may be deemed criminal if its ultimate aim is to punish and to deter reoffending, rather than to grant pecuniary compensation to the victims for the damage inflicted by the person responsible.45 Hence, a loose relationship between the penalty and the harm incurred is characteristic of criminal sanctions. These sanctions do not ‘put a price’ on unlawful conduct, seeking to offset the costs incurred. On the contrary, they aim to punish the perpetrator and to forbid this conduct unconditionally.46 A penalty does not have to reach a specific minimum severity in order to fall within the scope of criminal law.47 Moreover, the potential ‒ rather than the sanction actually imposed ‒ is decisive. Thus, the risk of a substantial sanction alone may contribute to classifying a sanction as criminal, even if only a fraction of the potential penalty had been imposed on the applicant.48 Nevertheless, the Court may scrutinise the sanction actually imposed as well.49 To sum up, in Engel the ECtHR proceeded to define the effective meaning of the term ‘criminal charge’, although with a significant caveat: it confined the interpretation of this term to the specific circumstances of the case at hand. One should be aware that the Engel criteria were worded in an immensely brief manner. Nevertheless, the Court specified three points of reference for determining the genuine nature of a particular procedure: the domestic classification, whose role is minimised by the need to free the guarantees of Article 6 echr from the arbitrary will of Contracting States; the very nature of an offence; and the nature as well as the gravity of the potential maximum penalty. The second and third criteria undeniably dominate assessment of whether a 44 45

46

47 4 8 49

ibid, 480. Donald Slater, Sebastien Thomas, Denis Waelbroeck, ‘Competition law proceedings before the European Commission and the right to a fair trial: no need for reform?’, The Global Competition Law Centre Working Paper 5 (2008), available at , 6. Wouter P.J. Wils, ‘Is Criminalization of EU Competition Law the Answer?’ (2005), available at , 3‒52, at 6, also published in:  Ehlermann, Atanasiu (eds), European Competition Law Annual 2006: Enforcement of Prohibition of Cartels (London: Hart Publishing, 2006), 267‒317; Cseres, Schinkel, Vogelaar (eds), Criminalization of competition law enforcement (Cheltenham: Edward Elgar Publishing, 2006), 60‒109. ECtHR, Campbell and Fell v. United Kingdom, Appl no 7819/​77, judgment 28 June 1984, para 72. However, the sanction actually imposed can also be appraised in determining the existence of a criminal charge. ECtHR, Ezeh and Conners v. United Kingdom, (n 36). Grabenwarter & Pabel, (n 26 of Chapter 1) 480; Meyer, (n 45 of Chapter 1) 144. ibid.

Presumption of Innocence under Article 6(2) ECHR

33

specific offence is criminal. Insofar as they display the punitive and deterrent character of an offence, the Court is likely to attribute criminal connotations to that offence. 2.2.3 Outcome of Engel and Others v. the Netherlands The criteria defined above prompted the Court to detect a criminal charge in some of the penalties disputed in Engel. All of the sanctions scrutinised in this case concerned deprivation of liberty, sparking a conclusion by the Court that in a society based on the rule of law, deprivation of liberty necessarily belongs to the criminal sphere unless the duration or the manner of deprivation is too minor to be ‘appreciably detrimental’.50 The substantial consequences of such a penalty and general respect for physical liberty prompted the Court to construe this sanction as criminal.51 However, only the complaints by Mr de Wit, Mr Dona and Mr Schul, who served their penalties for three to four months in a military unit and under aggravated arrest, fell within the scope of Article 6 echr, having regard to their gravity.52 House arrest failed to achieve the necessary severity in this regard, particularly in light of its very short duration. The seemingly specific circumstances of this case –​military proceedings –​ could potentially have made Engel irrelevant for the large majority of potential future applicants. However, the significance of this judgment extends far beyond the concrete circumstances of Mr Engel and his co-​applicants. Subsequent judgments, such as Öztürk v. Germany, represent the Court’s willingness to apply the Engel criteria to a myriad of mostly administrative proceedings, exposing the term ‘criminal charge’ to a sweepingly broad interpretation. Indeed, the term ‘criminal charge’ operates in a decidedly functional and casuistic manner that does not have a very clearly defined doctrinal basis.53 It should not go unnoticed that the qualities of punishment and deterrence play a pivotal role in establishing a criminal charge, although the ECtHR does not really elucidate the choice to invoke these very qualities as primary indicators of a criminal offence. Thus, as Meyer aptly argues, the term ‘criminal charge’ is defined in a highly flexible and dynamic fashion in order to unfold the broadest possible protection under Article 6 echr.54

50 51 52 53 54

ECtHR, Engel, (n 42 of Chapter 1) para 82. ibid. ibid, para 85. Meyer, (n 45 of Chapter 1) 144–​45. ibid, 145.

34 ­chapter  Indeed, one may undeniably detect this aspiration to confer flexibility on the term ‘criminal charge’ in subsequent cases as well, particularly in Öztürk v. Germany. Öztürk was a Turkish national residing in Germany. Following a traffic accident, which he caused in 1978, the local administrative authorities fined him for careless driving under a Road Traffic Regulation (Strassenverkehrsordnung). This Regulation sets financial penalties for regulatory offences (Ordnungswidrigkeit).55 Öztürk was ordered to pay around 70 DM. Öztürk appealed the administrative decision to a court, but later withdrew his appeal. He was consequently ordered to pay the costs incurred by the court amounting to around 190 DM, including 64 DM for the fee of the interpreter who was hired to assist the applicant in the proceedings. Öztürk argued that free assistance by an interpreter to those who cannot speak the language of the court was an inherent right under Article 6(3) echr. However, in the proceedings before the ECtHR, the German government contended that the traffic offence in question was regulatory rather than criminal in nature. Germany had recently decriminalised petty road traffic offences, seeking to relieve its judicial system from prosecuting millions of minor offences. Moreover, individuals sanctioned for traffic offences incurred no criminal record, thus generally avoiding a stigmatising effect on their reputation.56 The ECtHR commended the decriminalisation efforts, yet in its assessment these efforts had no effect on the autonomous interpretation of a ‘criminal charge’. It should also be emphasised that Öztürk prompted the Court to apply the Engel criteria outside the context of specific military disciplinary proceedings. These criteria were deemed ‘also relevant, mutatis mutandis, in the instant case’.57 Equally important is to note the Court’s willingness to disregard the minor nature of an offence. No matter how minor,58 the penalty in question manifested punitive and deterrent qualities.59 A rather insignificant degree of stigma tainting the reputation of a traffic offender had no impact on the ultimate classification of the offence. The ECtHR noted in this regard that the Convention entails no reference to a ‘certain degree of seriousness’ as a prerequisite

55 56 57 58 59

ECtHR, Öztürk v. Germany, (n 14) para 11. ibid, para 8. ibid, para 48. ECtHR, Öztürk v. Germany, (n 14) para 54: ‘The relative lack of seriousness of the penalty at stake cannot divest an offence of its inherently criminal character’. The Court also added that as a result of a road traffic offence, the driving licence of the offender could be suspended or revoked, whereas the fine itself could be included in the central traffic register (Verkehrszentralregister).

Presumption of Innocence under Article 6(2) ECHR

35

for applying Article 6 echr.60 Moreover, the generally binding nature of this rule, prescribing a type of conduct which an undefined group of persons must comply with, confirmed its criminal character.61 In the light of Öztürk, one can no longer dispute the ECtHR’s decidedly liberal approach to the term ‘criminal charge’.62 Further manifestations of a highly inclusive and non-​fixed concept of Article 6 echr are easy to find as well. As the Court stated in the much later case of O’Halloran and Francis v. United Kingdom in 2007, the rights pertaining to this provision may, indeed, be non-​ absolute in nature, yet they ‘cannot be the subject of a single unvarying rule but must depend on the circumstances of the particular case’.63 Since one of the core issues addressed in this work concerns the allegedly criminal nature of EU competition law, the next section will articulate the Court’s approach to competition offences, which originated in domestic proceedings. These cases provide rather certain indications that competition law, as such, displays criminal connotations for the purposes of Article 6 echr. 2.3 Engel Criteria: Application to Domestic Competition Law Perhaps unsurprisingly, Öztürk v. Germany sparked a surge of complaints concerning domestic proceedings of an administrative nature. After all, this judgment unequivocally signalled a very broad scope of application of a ‘criminal charge’. And quite predictably, not all of the disputed proceedings fulfilled the Engel criteria.64 Nevertheless, post-​Öztürk, various financial penalties gained a criminal character within the meaning of Article 6 echr. For instance, in the 1994 judgment in Bendenoun v. France, the criminal nature of tax surcharges of 65,000 and 90,000 euros was confirmed by their ‘very substantial’ amount.65 Similarly, in the 2009 judgment in Dubus S.A. v. France, removal of a company from a 60 61

6 2 63 64

65

ECtHR, Öztürk v. Germany, (n 14) para 53. ibid, para 53: ‘Above all, the general character of the rule and the purpose of the penalty, being both deterrent and punitive, suffice to show that the offence in question was, in terms of Article 6 (art. 6) of the Convention, criminal in nature’. In this regard, also: ECtHR, Bendenoun v. France, (n 37) para 47; Wils, (n 46), 8. Whelan, (n 13 of Chapter 1) 119. ECtHR, O’Halloran and Francis v. United Kingdom, (n 63 of Chapter 1), para 53. The ECtHR was reluctant to apply Art 6 ECHR to an administrative procedure if it was purely investigative in form and substance. It denied the existence of a criminal charge in such administrative proceedings, which did not determine criminal liability of the persons concerned but were confined to establishing facts for further use by other competent authorities. ECtHR, Saunders v. United Kingdom, (n 33 of Chapter 1) para 67; ECtHR, Fayed v. United Kingdom, Appl no 17101/​90, judgment 21 September 1994, para 61. ECtHR, Bendenoun v. France, (n 37) para 47.

36 ­chapter  bank register and a penalty corresponding to the company’s minimum capital unequivocally enjoyed the guarantees under Article 6 echr.66 Evidently, even a sanction amounting to several hundred euros can now trigger the guarantees of the Convention if the ultimate goal is to punish and deter the offender.67 One may wonder whether competition law could equally qualify as criminal. However, competition law is a rare guest in the chambers of the Strasbourg Court. The ECtHR has dealt with appeals concerning competition law only on a few occasions: in the appeal proceedings Société Stenuit v. France,68 M & Co v. Germany,69 Senator Lines,70 Neste v. Russia71 and Menarini Diagnostics S.R.L. v. Italy.72 In the 1992 case Société Stenuit v.  France,73 the applicant was a company penalised under French law for bid-​rigging in public tenders for landscape gardening projects. The French Minister of Trade imposed on Stenuit a fine of 50,000 frf. The applicant appealed to the Minister invoking the French Amnesty law. However, the request was denied, since the law applied exclusively to criminal proceedings. The Conseil d’Etat also qualified competition penalties as administrative. Subsequently, Société Stenuit lodged a complaint before the ECommHR, claiming the need for criminal-​level guarantees in light of the nature of the penalty imposed on it. The company was convinced that the penalty had to be imposed by an independent and impartial tribunal pursuant to Article 6(1) echr. The ECommHR accepted that the nature of the offence –​especially its aim of protecting the general interest –​and the severity of the penalty imposed on Stenuit propelled it into the criminal sphere. The maximum applicable fine of five per cent of annual turnover also exposed the offender to substantial and severe sanctions.74 66 67 68 69

70 71 72 73 74

ECtHR, Dubus S.A. v. France, Appl no 5242/​04, judgment 11 September 2009. ECtHR, Jussila v. Finland, (n 43 of Chapter 1) paras 29‒39. ECtHR, Société Stenuit v. France, Appl no 11598/​85, Commission report of 30 May 1991, judgment 27 February 1992. At the time, the ECommHR dealt with applications at first instance. Schabas, (n 22) 732‒35. Société Stenuit v. France (n 68) and M & Co v. Germany (n 76) were not considered by the ECtHR on the merits: the former withdrew its application and the complaint by the latter was declared inadmissible by the ECommHR. ECtHR, Senator Lines GmbH v.  Austria and others, Appl no 56672/​ 00, decision 10 March 2004. ECtHR, Neste v. Russia, Appl nos 69042, 69050, 69054, 69055, 69056, and 69058/​01, decision on admissibility 3 June 2004. ECtHR, Menarini Diagnostics S.R.L. v. Italy, Appl no 43509/​08, judgment 27 September 2011. ECtHR, Société Stenuit v. France, (n 68). More:  Wouter P.J. Wils, Efficiency and Justice in European Antitrust Enforcement (London: Bloomsbury Publishing, 2008), 159; Scordamaglia, (n 11 of Chapter 1) 17.

Presumption of Innocence under Article 6(2) ECHR

37

Evidently, the ECommHR was convinced about the relevance of the Engel criteria to the French competition rules. However, before this case could reach the ECtHR, the applicant withdrew its complaint, reaching an agreement with the French government. Thus, the ECtHR struck this case off the list, leaving its merits unexamined.75 The earlier 1990 case of M & Co v. Germany is similar to Stenuit in many aspects that should not go unmentioned.76 The case concerned a Commission decision imposing a fine of 1,450,000 ecu for a violation of EU competition rules. The applicant contested an enforcement order (Vollstreckungsklausel) obtained by the EU Commission from the German authorities in order to facilitate payment of the fine. M & Co maintained that Germany had enforced the penalty without ensuring that the Commission proceedings corresponded to the conditions of Article 6 echr. However, the complaint was inadmissible ratione personae, since the ECommHR was not competent to review an EU act. Nevertheless it viewed the nature of the proceedings through the prism of a criminal charge, stating: ‘[F]‌or the purpose of the examination of this question it can be assumed that the anti-​trust proceedings in question [that is, EU completion procedure] would fall under Article 6 had they been conducted by German and not by European judicial authorities’.77 Nearly a decade later, in its 1998 decision in Senator Lines, the Strasbourg Court again had to deal with a complaint relating to execution of EU cartel sanctions.78 The complaint concerned a Commission decision fining a shipping company ‒ Senator Lines ‒ in the amount of 13,750,000 euros for a violation of Article 101(1) tfeu. However, while the Convention proceedings were pending, the General Court quashed the fine imposed on the applicant,79 leaving it without standing under Article 34 echr.80 Evidently, diverse circumstances precluded these cases from contributing to an unequivocal conclusion that competition enforcement generally 7 5 76 77 78 79 80

For more on this judgment, eg: Peretz et al, (n 4) 1197. ECommHR, M & Co. v. Germany, Appl no 13258/​87, Commission decision 9 January 1990. ECommHR, M & Co. v. Germany, (n 76). ECtHR, Senator Lines (n 70). More: Wils, (n 46) 8. GC, Joined Cases T-​191/​98, T-​212/​98, T-​213/​98 and T-​214/​98, Atlantic Container Line and Others v. Commission, judgment 30 September 2003, ECLI:EU:T:2003:245. For more on cases in which the ECtHR indirectly examined EU law: Vassilis P. Tzevelekos, ‘When elephants fight it is the grass that suffers: “hegemonic struggle” in Europe and the side-​effects for international law’, in: Dzehtsiarou, Konstadinides, Lock (eds), Human Rights Law in Europe: The Influence, Overlaps and Contradictions of the EU and the ECHR (Abingdon: Routledge, 2014), 9‒35, 17.

38 ­chapter  corresponds to the Engel criteria. Nevertheless, the criminal qualities of competition proceedings that are inherently punitive and deterrent in nature can no longer be seriously put into question. This also holds true if we look at the ECtHR decision in Neste v. Russia, in which the Court, paradoxically, qualified the procedure as non-​criminal. This case revolved around a competition infringement at the time of deep economic turmoil in Russia, known as the 1998 crisis. Specifically, the infringement occurred in the midst of the so-​called 1999 ‘petrol crisis’, marked by a shortage of fuel and a sharp increase in petrol prices in St. Petersburg. Witnessing a major increase in petrol prices, the Russian competition authority launched an investigation in the oil product market.81 The finding of a concerted practice aimed at profiting from speculating with fuel prices prompted the Russian competition authority to order the applicants to pay to the national treasury the profit gained from unlawful price increases. The companies appealed, requesting, inter alia, access to the files on which the competition authority based its decision. A denial of this request on the grounds of protecting ‘commercial secrets’82 encouraged the companies to lodge a complaint with the ECtHR, claiming a violation of the presumption of innocence and the principle of equality of arms. Here, though, the Court showed markedly less willingness to qualify the legal situation in criminal terms. Although the very liberal concept of a ‘criminal charge’ prompted the applicants to argue that competition law necessarily fell within the sphere of criminal law, the ECtHR demonstrated a degree of restraint. It held that any proceedings, including those at the heart of the current dispute, had to be evaluated in light of their specific individual circumstances in order to ascertain whether the Engel criteria were fulfilled.83 However, few characteristics of the procedure before the Russian authority had inherently criminal connotations. For instance, the applicants were not at risk of criminal responsibility under Russian competition rules. Only individuals, such as company managers, could be prosecuted under the Russian Criminal Code. This procedure was, however, reserved to a prosecutor acting outside the competition proceedings, but not to the competition authority.84 It should be underlined that lack of an explicit character of the Russian competition procedure could not be decisive, as far as its genuine legal nature is concerned. After all, in line with Engel and Öztürk, the qualities attributed to 81 82 83 84

ECtHR, Neste v. Russia, (n 71) 2ff. ibid, 3. ibid, 9. ibid, 10.

Presumption of Innocence under Article 6(2) ECHR

39

an offence by domestic law could not ultimately determine the nature of the offence within the meaning of Article 6 echr. However, the Court established that the Russian competition authorities were simply not competent to impose actual sanctions for substantive violations. Instead, their powers were confined to purely administrative measures for obstructing a competition investigation, which were neither punitive nor deterrent in their very essence.85 Indeed, the confiscation measures applied in this case served, primarily, as pecuniary compensation for the damage incurred. Consequently, punishment and deterrence were not at the core of these measures. It is thus unsurprising that the ECtHR rejected the complaint by the Russian petrol sellers as inadmissible ratione materiae under Article 35(3) echr. This case may have not resulted in finding a criminal charge, yet it exemplifies in a decidedly unequivocal manner that a procedure whose aims entail deterrence and punishment will almost inevitably fall within the sphere of criminal law. Indeed, it may no longer be seriously called into question that competition law corresponds to the Engel criteria, a fortiori after the ECtHR judgment in Menarini Diagnostics S.R.L. v. Italy. The circumstances surrounding the Menarini case strongly resembled a typical administrative procedure. The Italian competition authority imposed on Menarini Diagnostics a substantial fine amounting to six million euros. The inherent character of the competition authority was clearly non-​judicial: it encompassed broad investigatory, prosecutorial and adjudicatory functions with regard to enforcement of Italian competition rules. Incidentally, the very character embodied by the authority closely resembled the European Commission and its competences in the realm of EU anti-​trust law. The applicant complained that the fine imposed by the authority corresponded to a criminal penalty. Underlining the key task of the Italian competition authority –​to tackle agreements distorting competition and abuses of a dominant position –​the ECtHR compared this task to safeguarding the paramount interests of society, which was normally the objective of criminal law.86 Moreover, the fine imposed on Menarini pursued the two-​fold purpose of punishment and deterrence, hence corresponding to a repressive ‒ rather than a compensatory ‒ penalty.87 The expansive approach of the ECtHR in tackling a variety of proceedings normally falling outside the boundaries of criminal law led to establishment of 85 86 87

ibid. ECtHR, Menarini Diagnostics S.R.L. v. Italy, (n 72) para 40. ibid.

40 ­chapter  the so-​called criminal administrative procedure.88 This evolution of the term ‘criminal charge’ resulted in a considerable strengthening of the guarantees under Article 6 echr in proceedings which do not normally afford them in domestic law. Although the nature of this term is inherently casuistic, the numerous –​and rather diverse –​cases in which the Engel criteria have applied evoked an impression that any domestic procedure could fall within the scope of Article 6 echr if an element of deterrence or punishment could be detected in it. Requiring inherently non-​criminal proceedings to correspond to the complete guarantees of Article 6 echr came with its very own set of problems. One may argue that effective administration of regulatory, tax and similar norms at least partially depends on expediency and the broad discretionary competences conferred upon the administrative authorities enforcing those norms. Thus, a considerable extension of the guarantees available in such proceedings may arguably impair their effectiveness. In particular, one may call into question whether the character of these proceedings –​for instance, they do not typically entail custodial penalties –​can really justify the need for criminal-​ level safeguards.89 It is precisely these considerations that may have motivated the ECtHR to reconsider some of the tenets prevailing in its jurisprudence on the term ‘criminal charge’. One might even suggest that this very liberally applied term experienced a certain backlash in the case law of the ECtHR itself. As discussed in the following, the prominent 2006 judgment in Jussila v. Finland seeks to address the debate on the extent to which administrative proceedings actually belong to the criminal sphere under Article 6 echr.90 Distinction between Hard Core and Peripheral Criminal Law: Jussila v. Finland 2.4.1 Facts of the Case The dispute that gave rise to the famous Jussila case revolved around one of the pivotal rights of Article 6(1) echr –​the right to an oral hearing –​and thus has no immediate connection to the specific guarantees of the presumption of innocence. The case is nevertheless of paramount significance to this work. It was precisely the Strasbourg Court’s attempts to tackle the issue of criminal administrative procedure that prompted the widespread idea that EU competition law may correspond to a rather lenient interpretation of Article 6 echr. 2.4

8 8 89 90

Whelan, (n 13 of Chapter 1) 120; Meyer, (n 45 of Chapter 1) 184. For similar considerations on competition law, specifically: Whelan, (n 13 of Chapter 1) 121ff. Scordamaglia, (n 11 of Chapter 1) 29.

Presumption of Innocence under Article 6(2) ECHR

41

This particular relevance of Jussila warrants a closer look into the factual circumstances of this case. The Jussila case reached Strasbourg after a rather ordinary legal dispute. Mr Jussila, a Finnish citizen, submitted a deficient value-​added tax (vat) declaration to the local tax authority. His mistake did not go unnoticed: the tax authority not only ordered him to pay the missing vat, but also imposed a tax surcharge of ten per cent as a penalty. Jussila had to pay 1,836 Finnish Marks, amounting to 309 euros for his mistake. Feeling that justice was not served to him, Jussila appealed the decision of his local tax office to a Finnish administrative court. Contesting the accuracy of the calculations by the tax office, the applicant requested an oral hearing. Acting under the conviction that the tax inspector not only inaccurately calculated his vat but also had reliability issues, Jussila wished to cross-​examine the inspector and call a tax expert to the witness stand. However, the administrative court was not as convinced about the need for an oral hearing. It found that an oral hearing was ‘manifestly unnecessary’ in the dispute, since both the applicant and the tax office already had the chance to exchange written statements about all the relevant facts of the case. After losing his appeal at all domestic judicial instances, Jussila lodged a complaint before the ECtHR. He alleged a violation of the right to a fair and public hearing under Article 6(1) echr.91 2.4.2 Findings of the Court The initial assessment of the ECtHR resembled a typical examination of a traditionally non-​criminal procedure that nevertheless fell within the scope of Article 6 echr. The settled principle depriving the domestic classification of its power was reiterated in this case.92 Echoes of Engel and Öztürk were also evident in the analysis of the repressive nature of the penalty in question. In typical fashion, a punitive and deterrent element of the tax surcharge imposed was detected, ruling out the possibility that it could be compensatory in nature.93 Since the Finnish rule prescribed a generally binding rule of conduct, which was aimed at an undefined group of persons, these qualities further reinforced its criminal character. The comparably minor character of this penalty apparently had no impact on the assessment of the Court, which held that ‘[t]‌he relative lack of seriousness of the penalty cannot divest an offence of its inherently criminal 91 92 93

ECtHR, Jussila v. Finland, (n 43 of Chapter 1) paras 9‒13. ibid, para 37. ibid, para 38.

42 ­chapter  character’.94 This particularly held true since the maximum potential penalty that could have been imposed on the applicant was rather substantial given its ten per cent ceiling. Up until this point, Jussila essentially reiterated the principles firmly established in an array of judgments following Engel and Others. In particular, the Court explicitly recognized that any proceedings relating to a criminal charge could potentially have grave consequences for the legal position of the accused, due to the inherently severe nature of criminal responsibility. However, the ECtHR did not stop at this. Quite the contrary, it took the opportunity to clarify particular aspects relating to the expansive interpretation of the term ‘criminal charge’. The Court’s reasoning may be summarised as follows. Although the gravity of criminal proceedings is undeniable, the simple fact remains that –​according to the Court –​not every single case which is criminal for the purposes of Article 6 echr displays ‘any significant degree of stigma’.95 The absence of ‒ or a very mild ‒ stigmatising effect renders these cases inherently different from criminal law strictu senso. Indeed, one may even say that such cases embody criminal charges of a ‘different weight’.96 Despite these apparent divergences between the various proceedings falling into the ambit of Article 6 echr, the autonomous interpretation of a criminal charge in Engel unleashed a teleological process of expanding the term to encompass all of these proceedings. In the course of this expansion, even offences that do not strictly embody any of the traditional categories of criminal offences acquired a criminal classification. The Court listed administrative, prison disciplinary, customs, competition and financial penalties among such proceedings.97 Penalties comparable to tax surcharges, such as those disputed in the present case, fell outside of the hard core of criminal law. Rather, they represented criminal charges lying only on the periphery of criminal law, according to the ECtHR. The underlying –​and perhaps even inevitable –​consequence of this categorisation was an apparent narrowing of the safeguards applicable to these cases under Article 6 echr. Indeed, in criminal cases lying outside hard core criminal law, the criminal-​head guarantees of Article 6 echr will ‘not necessarily apply with their full stringency’.98 Put differently, the ECtHR seemingly

94 95 96 97 98

ibid, para 31. ibid, para 43. ibid. ibid. ibid.

Presumption of Innocence under Article 6(2) ECHR

43

removed the penalty in question from the scope of the complete and unrestricted guarantees of Article 6 echr. It should not remain unnoticed, however, that the penalty in question and the relating fundamental rights guarantees were nevertheless scrutinised in detail. After identifying the underlying motivation of Mr Jussila for an oral hearing –​to verify the accuracy and reliability of the decision to impose a tax surcharge –​the ECtHR focused on the necessity for an oral hearing in this particular case. As noted earlier, written statements and explanations by the tax inspector and an expert chosen by the applicant himself were collected by the Finnish court. The information entailed in these documents, reasoned the ECtHR, allowed the domestic judicial body to make a thorough assessment of the matter at the centre of the dispute. Therefore, the domestic court’s decision to exclude an oral hearing as ‘manifestly unnecessary’ was deemed correct by the ECtHR. Finding no particular credibility issues concerning the tax inspector or the tax office in general, the Court found no reason why the absence of an oral hearing could have impaired the applicant’s rights.99 This conclusion by the Court may be rooted in the circumstance that the dispute in question concerned only a ‘minor sum of money at stake’,100 although prior cases of the ECtHR, such as Öztürk, dismissed the minor nature of the penalty as not decisive in determining its ultimate nature. Thus, in the specific circumstances of this case, the ECtHR found no violation of Article 6(1) echr, as the very essence of the relevant guarantees retained their power even without an oral hearing.101 Despite a seemingly insignificant dispute which gave rise to this judgment, the Court’s position on the apparently revised understanding of a criminal charge fuelled a lively debate.102 Its implications are now discussed below. 2.4.3 Implications of Jussila v. Finland The cautious or reserved approach by the Court in Jussila seemingly contrasts with its previous insistence on establishing the existence of a criminal charge in a myriad of cases with varying degrees of seriousness. What sparked this move  –​to suddenly return to a distinction between criminal and administrative law? Does this rather atypical approach epitomise the Court’s wish to refrain from interfering in proceedings of a minor character, seeking not to 99 100 101 102

ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 47. ibid, para 48. ibid, paras 48‒49. Kienapfel, (n 24 of Chapter 1) 1201; Wils, (n 46) 9; Jones & Sufrin, (n 23 of Chapter 1) 1042.

44 ­chapter  impede the effective administration of justice unnecessarily? Yet in Öztürk, for example, the ECtHR did not take into account the circumstance that the regulatory offence in question was non-​criminal due to Germany’s attempts to optimise its administration of justice by decriminalising minor offences. It thus remains unclear whether precisely this consideration moved the Court to revise its own case law, as it seemingly did in Jussila. Equally plausible, however, is that no particular change was introduced in that judgment. After all, the Court found, strictly speaking, that the highly specific circumstances of the case displayed no signs of a Convention violation after scrutinising them in a decidedly thorough manner. Thus, to assume a considerably lower standard of protection in cases lying on the periphery of criminal law seems not very plausible. Whatever the true motivation of the Court behind this judgment, the distinction between two apparently non-​ equal categories of criminal law may be viewed in a highly critical manner. In particular, the partly dissenting opinion of Judge Loucaides in Jussila aptly reveals the weaknesses of the distinction between hard core and peripheral criminal law. 2.5 Jussila: Gateway to Arbitrariness? The notions of the ECtHR as conveyed in Jussila arguably contain not insignificant limitations. The partly dissenting opinion of Judge Loucaides, joined by two more colleagues, provides insights which are decidedly critical towards the majority decision. The principal argument against the distinction between hard core and peripheral criminal law rests on the consideration that such a distinction ‒ at least, the way it is construed in Jussila ‒ can open the gateway to arbitrariness and, as a corollary, to watered-​down procedural safeguards.103 These arguments, drawing attention to the significant weaknesses of Jussila, reflect a critical approach to the possible implications of this judgment in the broader context of Article 6 echr. To begin with, speculation about the relative weight of the stigma attached to particular proceedings lacks a stable foundation, according to Loucaides. Criminal responsibility, argued the Judge, inevitably gives rise to some degree of stigma. This may, of course, differ depending on the proceedings in question. Nevertheless, the element of stigma remains inherent to any criminal proceedings, regardless of how minor they may be.104

103 Partly dissenting opinion of Judge Loucaides joined by Judges Zupancic and Spielmann in: ECtHR, Jussila v. Finland, (n 43 of Chapter 1) 20. 104 ibid.

Presumption of Innocence under Article 6(2) ECHR

45

Moreover, the guarantees under Article 6 echr represent only the minimum guarantees that are prerequisite in every criminal trial. Explicitly laid down in this provision, they ought to be perceived as ‘unqualified and indispensable’.105 In this respect, we may recall that an oral hearing may potentially be unnecessary in appeal proceedings, but not in a trial at first instance.106 Indeed, an alternative interpretation of the guarantees inherent in this Convention provision could potentially endanger their very substance. Probably one of the key arguments against the distinction between cases corresponding to hard core criminal law and in cases lying only on its periphery is its highly arbitrary nature. How can anyone decide in which cases procedural safeguards will apply in full and in which they will not? The risk arises of sliding into arbitrariness when attempting to categorise criminal law as ‘severe’ and ’not so severe’ by amending procedural rules. Accepting such a categorisation of criminal law prompted Loucaides to ask: Where does one draw the line? In which category does one place those offences which on their face value do not appear severe, but if committed by a recidivist may lead to serious sanctions? (…) [T]‌o accept such distinctions would open the way to abuse and arbitrariness.107 One may interpret Loucaides’ passionate plea as a call to perceive the guarantees arising from Article 6 echr as a sine qua non, applying them with full stringency as soon as it becomes evident that a particular offence corresponds to the Engel criteria.108 One may well agree with Loucaides that Jussila raises substantial concerns about the potentially harmful implications of the Court’s argumentation in this case. Did the ECtHR mean to say that all proceedings falling outside

105 106

ibid. ECtHR, Helmers v. Sweden, Appl no 11826/​85, judgment 29 October 1991, para 36: ‘Provided a public hearing has been held at first instance, the absence of such a hearing before a second or third instance may accordingly be justified by the special features of the proceedings at issue. Thus, leave-​to-​appeal proceedings and proceedings involving only questions of law, as opposed to questions of fact, may comply with the requirements of Article 6 (art. 6), although the appellant was not given an opportunity of being heard in person by the appeal or cassation court (…)’. Also: ECtHR, Axen v. Germany, Appl no 8273/​78, judgment 8 December 1983, para 28; ECtHR, Jan-​Åke Andersson v. Sweden, Appl no 11274/​84, judgment 29 October 1991, para 27. 107 Partly dissenting opinion of Judge Loucaides joined by Judges Zupancic and Spielmann in Jussila v. Finland, (n 43 of Chapter 1) 20. 1 08 ibid.

46 ­chapter  ‘traditional’ criminal law had to meet a lower threshold of protection? Could it be expected that the ECtHR would scrutinise a specific procedure in order to establish whether it has ‘any significant stigma’ before considering it as falling outside traditional criminal law?109 After all, in Neste v. Russia, the ECtHR itself emphasised that ‘it [is] more appropriate to consider the applicant companies’ individual situation against the principal criteria defining the notion of ‘criminal’,110 rather than to view the term ‘criminal’ as a fixed concept. In this regard, one should emphasise that the individual situation of Mr Jussila was markedly different from the proceedings, which deal with more than a fine of several hundred euros for an ordinary tax offence. Thus, it may not be ruled out that the principles apparently inherent to the Jussila judgment may have been motivated by the comparatively minor nature of the case. This, then, warrants the question whether these principles would be applicable to cases dealing with more serious penalties. For instance, in the 2011 case of Menarini Diagnostics S.R.L.  v.  Italy111 the ECtHR recognised that Article 6(1) echr may apply somewhat differently with regard to non-​traditional criminal proceedings, such as competition law, than it does in criminal law stricto sensu. However, Italian competition law was not exempted from the obligations of Article 6 echr. The Contracting States may potentially have wider discretion as regards the means of implementing Article 6 echr (‘elles peuvent néanmoins influencer les modalités de leur application’). Yet, according to the Court, they are not relieved of the obligation to satisfy all the safeguards under the criminal head of Article 6 echr (‘obligation de respecter toutes les garanties offertes par le volet pénal de l’article 6’).112 The question therefore arises what this apparent differentiated standard of protection actually means. Indeed, it is difficult to draw the conclusion that so-​called peripheral criminal proceedings are in essence ‘off the hook’ in terms of obligations under Article 6 echr. Compliance of these proceedings with Article 6 echr can be ‒ and should be ‒ expected to be robustly assessed by the ECtHR, if Menarini and even assessment on the merits in the very same Jussila case are anything to go by. In both of these cases, the ECtHR ultimately fell back to robust scrutiny, rather than classifying the proceedings before the court as peripheral and leaving the Contracting State a broad leeway to enforce Article 6 echr leniently. 109 110 111 112

ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 43. ECtHR, Neste v. Russia, (n 71) 9. ECtHR, Menarini Diagnostics S.R.L. v. Italy, (n 72) para 62. ibid. This judgment is not available in English, hence, the original French version is provided, seeking to convey the full meaning of the Court’s statements.

Presumption of Innocence under Article 6(2) ECHR

47

Therefore, it may not be stated with actual certainty that Jussila has established a lower standard of protection for all cases falling outside traditional criminal law, as a mere cursory reading might suggest. Moreover, if we consider the concerns expressed by Judge Loucaides about the dangers of arbitrariness and watered-​down protection, then merely partial application of Article 6 echr seems to be decidedly dubious. Insofar as a particular procedure is deemed criminal in light of Engel, all the guarantees under Article 6 echr should generally apply to that procedure. This is particularly crucial in light of the underlying role of a fair trial in a liberal democratic society.113 Moreover, viewing Article 6 echr in light of its objectives114 places the distinction between ‘hard core’ and ‘peripheral’ criminal law on a rather wobbly foundation. In consideration of the substantial concerns surrounding the very notion of peripheral criminal law, this book contends that –​despite Jussila –​Article 6 echr should fully apply to traditionally non-​criminal proceedings, such as competition law, as long as they fulfil the Engel criteria. Therefore, in the subsequent section on the constitutive elements of the presumption of innocence, no distinction is drawn between hard core and peripheral criminal law. These constitutive elements are illustrated as inherent to any proceedings in which Article 6(2) echr applies. It may not be ruled out that in the future the ECtHR will clarify the concepts devised in Jussila. Until this happens, the implications of the distinction between hard core and peripheral criminal law may be seen as too vague to be broadly applied to every procedure falling outside traditional criminal law. 3

Presumption of Innocence: Specific Guarantees L’équité naturelle demande que le degré de preuve soit proportionné à la grandeur de l’accusation. montesquieu 115

113 114 115

ECtHR, Deweer v. Belgium, (n 45 of Chapter 2) para 44. ECtHR, De Cubber v. Belgium, (n 9) para 32. Montesquieu, De l’esprit des Lois (Paris: Garnier Frères, 1874, reprint), 628 (‘Natural justice requires that the level of proof should be proportionate to the gravity of the accusation’ –​ translation by the author).

48 ­chapter  3.1 Evidence-​Related Rules 3.1.1 Burden of Proof The presumption of innocence under Article 6(2) echr embodies a spectrum of rather specific guarantees representing diverse manifestations of the presumption. In particular, it entails rules pertaining to allocation of the burden and the standard of proof, as discussed in the following. Collecting and assessing evidence is the cornerstone of criminal proceedings. Whoever bears the burden of this duty also bears the risk of losing the case for failing to convince the judge of his arguments. Placing this responsibility on the accused could likely amount to an insurmountable burden, given the vastly greater resources of the omnipotent state.116 As Stephen wrote, ‘The society (…) is so much stronger than the individual, and is capable of inflicting so very much more harm on the individual than the individual as a rule can inflict upon society, that it can afford to be generous’.117 To address this power imbalance, the risk of proof is borne by the prosecution. In essence, the burden of proof encompasses the following matters. It deals with the issue of who carries the burden of proof and what is to be proved. Moreover, in this context the issue of reversal of the burden of proof arises, tackling legal situations in which a certain reversal of the burden on to the accused may legitimately emerge. The question also arises whether the burden of proof may be discharged by relying on a presumption. The way in which these questions can be dealt with intrinsically relates to the specific legal context in which they arise. One should emphasise that criminal and administrative proceedings govern the burden of proof in a considerably more rigid fashion than civil law. Whereas civil law may generally permit a shift of the burden between the parties, it is rather atypical in more repressive proceedings due to the inherent risk of impairing the rights of the accused, should such a reversal occur. Even at the dawn of European civilisation, considerations of this burden occupied the minds of law makers. The Code of Justinian, or Corpus Juris Civilis, imposed the duty of proving an infringement on the accuser, safeguarding the accused from a situation in which he would be compelled to prove his innocence. It should not go unnoticed that the rules inherent to the Code

1 16 Weigend, (n 4 of Chapter 2), 292. 117 James Fitzjames Stephen, A  History of the Criminal Law of England, Volume 1 (Cambridge: cup, 2014, reprint), 354.

49

Presumption of Innocence under Article 6(2) ECHR

of Justinian not only allocated the burden, but also quantified it, in a way, by requiring a conviction to be based on ‘conclusive’ and ‘indubitable’ proof.118 In the present day, the burden of proof has not ceased its significance in criminal procedure. This paramount element of the presumption of innocence also permeates its very essence in the Strasbourg system of human rights protection.119 In proceedings dealing with a criminal charge, unlike in their civil counterparts,120 allocation of the burden of proof always benefits the accused.121 It follows that all doubts that the court may have in assessing the evidence submitted to it must be interpreted in favour of the accused in accordance with the principle in dubio pro reo.122 Only evidence capable of demonstrating, to a sufficiently requisite standard, that the accused has indeed committed the criminal offence with which he is charged, represents the basis of a legitimate conviction.123 This rigid approach precludes, in particular, a reversal of the burden of proof by placing it on the accused.124 At the same time, this approach takes quite a different form if we distinguish between the legal and the evidentiary burden of proof.125 The legal burden of proof invariably rests on the shoulders of the prosecution, which is obliged to prove the offence. However, in the sphere of .

118 The Code of Justinian provided: ‘Let all accusers understand that they are not to prefer charges unless they can be proven by proper witnesses or by conclusive documents, or by circumstantial evidence which amounts to indubitable proof and is clearer than day’, Code of Justinian, Book IV, Title 19, Clause 25, cited in: Stumer, (n 15 of Chapter 2), 1. The translation of the clause from the Code of Justinian is taken from: Coffin et al v. the United States, 156 US 432 (1895), available at . Mistakenly, this judgment attributes this quote to Title 20 of Book IV. 119 Whelan, (n 13 of Chapter 1) 123; de Jong & van Lent, (n 2 of Chapter 2) 35. 120 Ola Johan Settem, Applications of the ‘Fair Hearing’ Norm in ECHR Article 6(1) to Civil Proceedings: With Special Emphasis on the Balance Between Procedural Safeguards and Efficiency (Berlin: Springer, 2015), 73. 121 Meyer, (n 45 of Chapter 1) 184. 122 ECtHR, Barberà et  al v.  Spain, (n 31 of Chapter  1) para 77; ECommHR, Austria v.  Italy (Pfunders case), Appl no 788/​60, decision 30 March 1963; ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) para 97. Also: Meyer, (n 45 of Chapter 1) 184; Schabas, (n 22) 298; Stephanos Stavros, The Guarantees for Accused Persons Under Article 6 of the European Convention on Human Rights: An Analysis of the Application of the Convention and a Comparison with Other Instruments (Martinus Nijhoff, Publishers, 1993), 222; Harris et al, (n 42 of Chapter 2) 461; Stumer, (n 15 of Chapter 2), xi. For the history of the principle in dubio pro reo: James Q. Whitman, The Origins of Reasonable Doubt: Theological Roots of the Criminal Trial (New Haven: Yale University Press, 2008), 123ff. 123 ibid. 124 ECtHR, Telfner v. Austria, (n 3) para 15. 125 David Bailey, ‘Presumptions in EU competition law’, 31(9) European Competition Law Review (2010), 20‒27, at 20.

50 ­chapter  dealing with concrete facts in the course of criminal as well as administrative procedure, another form of the burden emerges: the evidentiary burden. This concept is considerably less rigid, so that allowing the burden of proving that a particular fact is true may shift from one party to the other. In essence, the evidentiary burden corresponds to the principle ei incumbit probatio qui dicit, non qui negat –​he who asserts must prove, not he who denies. The prosecution can discharge its evidentiary burden by making a claim and supporting it with evidence. It follows that the evidentiary burden has shifted to the accused, who must produce contrary evidence disproving these particular claims by the prosecution. Nevertheless, it should be recognised that the prosecution may not discharge the evidentiary burden by hypothetical speculation. Yet, if the prosecution does bring forward sufficiently weighty proof, the defendant may be required to produce a counterargument capable of reasonably calling into question the accuracy or reliability of the prosecution’s assertions.126 3.1.2 Standard of Proof 3.1.2.1 Concept of the Standard of Proof Whereas the burden of proof is concerned with allocating the risk of failing to persuade the judge, the standard of proof governs the quantitative aspect of the matter. That is, the standard of proof determines how much evidence is needed in order to establish an infringement. The concept thus revolves around setting the threshold of certainty applicable to proof.127 The standard of proof can also be seen as setting the benchmark which the probative value of evidence must reach in order to convince the judge of the defendant’s guilt. Perhaps unsurprisingly –​given what is at stake in criminal proceedings –​this standard is higher in criminal proceedings in comparison to civil and administrative cases.128 The strictness of the standard carries an inherent risk of letting a guilty person walk free. Yet conviction of the innocent is deemed a greater evil and therefore less desirable than acquittal of the guilty.129 If we perceive the standard of proof in light of possible judicial errors, its aim is to ensure that such an error –​should it occur at all –​exclusively benefits the accused. Moreover, the standard of proof may be viewed as a legal device intended to restrain 126

Douglas Walton, Burden of Proof, Presumption and Argumentation (Cambridge:  CUP, 2014), 105. 127 Whelan, (n 13 of Chapter 1) 121. 1 28 ibid, 122; Liz Campbell, ‘Criminal Labels, the European Convention on Human Rights and the Presumption of Innocence’, 76(4) MLR (2013), 681–707, at 683. 129 Campbell, (n 128) 683.

Presumption of Innocence under Article 6(2) ECHR

51

the occasionally excessive zeal of the prosecution. Put differently, a prosecutor may be less willing to bring charges against a person in the knowledge that the evidence it has against that person will not meet the requisite threshold. The standard of proof –​and the importance attached to it –​differs across jurisdictions and legal traditions. Common law prescribes a clearly defined standard, which varies depending on the field of law. In criminal cases, this standard is strictly pre-​determined: the guilt of the accused must be proved ‘beyond reasonable doubt’.130 In other words, if the court entertains any reasonable doubt about whether the accused is guilty, the accused has to be acquitted. In civil cases, however, common law stipulates a much lower standard: an infringement must be proved based on a ‘balance of probabilities’ or the ‘preponderance of evidence’. This means that a party which presents a more probable interpretation of the dispute involved is more likely to win the case.131 Evidently, this standard does not strive to achieve objective truth, but rather to find a workable solution to the legal dispute in question. A comparably strict and pre-​defined standard of proof, which prevails in the Anglo-​American tradition, is not known to the continental law tradition to which the large majority of the Contracting States and EU Member States belong.132 Dating from the time of the French Revolution, European lawyers apply a decidedly less formalistic standard of intime conviction of the judge, which applies both in criminal and civil cases.133 Therefore, in jurisdictions belonging to the continental law tradition, the amount of evidence required in order to conclude that the party has fulfilled its burden of proof depends on how much is needed to convince the judge in a particular case.134 This means that ultimately it is for the judge to adjudicate in accordance with their personal conviction.135 To put it differently, after weighing the evidence against the accused and the arguments submitted by the defence, the judge must raise

1 30 131 132 133

Eg: Ashworth, (n 1 of Chapter 2) 244. Julianne Kokott, Basic Concepts of Criminal Law (Oxford: oup, 1998), 16. Whelan, (n 13 of Chapter 1) 123; Kokott, (n 131) 16‒17, 123. Eddy de Smijter, Ailsa Sinclair, ‘The Enforcement System under Regulation 1/​2003’, 100; Ioannis Lianos, Christos Genakos, ‘Econometric Evidence in EU Competition law: an empirical and theoretical analysis’, in: Lianos, Geradin (eds), Handbook on European Competition Law: Enforcement and Procedure (Cheltenham: Edward Elgar Publishing, 2013), 1‒137, at 79. 134 Kevin Clermont, Emily Sherwin, ‘A Comparative View of Standards of Proof’, 50 American Journal of Comparative Law (2002), 243‒75, at 254. 1 35 Per Hellström, ‘A Uniform Standard of Proof in EU Competition Proceedings’, in Ehlermann, Marquis (eds), European Competition Law Annual 2009: Evaluation of Evidence and its Judicial Review in Competition Cases (London: Hart Publishing, 2010), 147‒57, at 148‒49.

52 ­chapter  the question: ‘Am I convinced?’.136 If we perceive the standard of proof from this perspective, parallels with the principle in dubio pro reo emerge. Indeed, as noted earlier, this underlying principle, which is inherent to the presumption of innocence, requires a court that entertains any remaining doubts about the guilt of the accused to enter a finding of ‘not guilty’. 3.1.2.2 The Standard of Proof in the Jurisprudence of the ECtHR A cursory look at the standard of proof suffices to reveal that the understanding of this concept is not uniform across diverse jurisdictions. Just like the majority of the countries adhering to the civil law tradition, the ECtHR offers no particularly defined concept of the standard of proof.137 While one of the overriding principles of criminal procedure –​as far as Article 6(2) echr is concerned –​allocates the burden of proof to the prosecution, this selfsame provision is somewhat silent on the standard of proof. Article 6 echr is rather indifferent to both the admissibility and the use of evidence, leaving it to domestic regulation.138 The absence of a defined standard reflects, inter alia, the role of the ECtHR in the echr system: the Court’s primary task is not to rule on the civil or criminal liability of applicants but rather to decide whether the Contracting States have met their obligations under the Convention, as enshrined in Article 19 echr.139 In view of that task, the Court does not generally seek to call into question a particular standard of proof according to which a domestic court has reached its factual findings.140 Nevertheless, certain indirect clues as to this standard may be detected in a number of ECtHR judgments. For instance, the 1988 case of Barberà, Messegué and Jabardo v. Spain epitomises that the presumption of innocence requires the prosecution to produce ‘evidence sufficient to convict [the accused]’, whereby any facts that leave room for doubt must be interpreted exclusively

136 Vallerie Dervieux, ‘The French System’, in: Delmas-​Marty, Spencer (eds), European Criminal Procedures (Cambridge: cup, 2002), 218‒92, at 233‒34. 137 Whelan, (n 13 of Chapter 1) 123‒24. 138 Petra Viebig, Illicitly Obtained Evidence at the International Criminal Court (Berlin: Springer, 2016), 249; Schabas, (n 22) 300; Eric Gippini-​Fournier, ‘The Elusive Standard of Proof in EU Competition Cases’, in Ehlermann, Marquis (eds), European Competition Law Annual 2009: Evaluation of Evidence and its Judicial Review in Competition Cases (London: Hart Publishing, 2010), 295‒319, at 296‒97. 139 ECtHR (Grand Chamber), Nachova and Others v.  Bulgaria, Appl nos 43577/​98 and 43578/​98, judgment 5 July 2005, para 147. 140 Harris et al, (n 42 of Chapter 2) 463; Weigend, (n 4 of Chapter 2) 291. Also: ECtHR, Husayn (Abu Zabaydah) v. Poland, Appl no 7511/​13, judgment 24 July 2014, para 349.

Presumption of Innocence under Article 6(2) ECHR

53

for the benefit of the accused.141 Similarly, the Court has required a conviction to be based on ‘sufficiently strong, clear and concordant inferences or of similar unrebutted presumptions of fact’.142 Arguably, the reference to ‘sufficiently strong’ evidence without an ex ante standard places the concept of the standard of proof under the echr firmly in the continental law tradition.143 While the Court indeed used the traditional common law term ‘beyond reasonable doubt’ in its assessment,144 it is not arguable that this term should be understood as requiring an equally high degree of probability as is demanded in common law.145 Nevertheless, it follows from these examples that, even in the absence of a defined burden of proof, any doubts arising in the evaluation of evidence should not operate against the accused.146 The Court will generally review whether ‘both prosecution and defence [have been] given the opportunity to have knowledge of and comment on the observations filed and the evidence adduced by the other party’.147 However, these rather broadly understood requirements do not come close to a strictly pre-​determined approach to the treatment of evidence. Presumptions: Parallels between the Burden of Proof and Principle of Fault 3.2.1 General Concept of a Presumption At the same time, we may claim that the administration of justice could encounter not insubstantial practical obstacles if the prosecution was required to prove to a particularly high standard every single item on which it may wish to base its accusations. We may consider, in particular, that some facts are more likely to be true than others. It would create an unsatisfactory situation from the public policy perspective if the prosecution was compelled to needlessly expend precious public resources to prove a particular fact, although in most cases common sense would dictate that this fact would almost necessarily be true. 3.2

141

ECtHR, Barberà et al v. Spain, (n 31 of Chapter 1) para 77. Also: ECommHR, Austria v. Italy (Pfunders Case), (n 122) 784. 142 ECtHR (Grand Chamber), Nachova and Others v. Bulgaria, (n 139) para 147. 1 43 More: Gippini-​Fournier, (n 138) 296‒97. 1 44 ECtHR (Chamber), Nachova and Others v. Bulgaria, (n 139), para 166. 145 ibid. 146 Harris et al, (n 42 of Chapter 2) 461. 147 ECtHR, Brandstetter v. Austria, Appl nos 11170/​84; 12876/​87; 13468/​87, judgment 28 August 1991, paras 66‒67.

54 ­chapter  These situations may be addressed by allowing the prosecution to invoke a presumption of law or fact. The potency of this instrument in criminal procedure is undeniable: a presumption essentially obliterates the need for the prosecution to produce proof in order to establish an infringement. Precisely this non-​negligible role of presumptions in finding the accused guilty necessitates at least a cursory look into these evidentiary devices in light of Article 6(2) echr. Presumptions may be described as products of legal reasoning devised to fulfil a highly practical function: to assist the decision-​maker in reaching a decision in the absence of specific proof.148 These evidentiary devices also greatly benefit the prosecution, considerably alleviating its evidentiary burden. The paramount importance of the presumption of decisive influence to the subject matter of this work compels a brief consideration of the general mechanism of how presumptions function, both in a general sense and in the highly specific context of the echr. In legal proceedings, presumptions can have a number of functions, which are not necessarily rooted in the need to address lack of evidence. These legal instruments operate across jurisdictions and branches of law as normative or procedural ‘corrective devices’149 aiming to predetermine and steer in a particular direction judicial errors, which can inevitably occur in proceedings due to human error or other circumstances. To this end, presumptions can seek to protect individual rights or enforce a particular public policy –​in that regard the presumption of innocence is the prime example. Moreover, presumptions can be instrumentalised for the purposes of efficient administration of justice, having regard to their capacity to remove the need to adduce proof.150 To put it into different words, invoking a presumption may permit the prosecution to discharge its evidentiary burden: without relying on particular evidence, the prosecution may send the proverbial ball back into the court of the accused, who is then required to disprove conclusions based on the presumption in question. This dynamic mechanism may allow the court to reach a verdict in light of experience or common sense showing the probability of the factual occurrence of a disputed fact relevant to the particular case.151 1 48 Bailey, (n 125) 21. 149 Cristina Volpin, ‘The Ball is in your Court:  Evidential Burden of Proof and the proof-​ Proximity Principle in EU Competition Law’, 51 CMLR (2014), 1159‒86, at 1163. 150 ibid, 1164. 151 Dyson Heydon, Cross on Evidence (London: LexisNexis Butterworths, 2013, 9th edn), 299; Gregory Durston, Evidence: Text & Materials (Oxford: oup, 2011), 141‒42.

Presumption of Innocence under Article 6(2) ECHR

55

In this way, a presumption could be construed as a device that helps to decide who loses the case even when the factual situation at hand is not entirely clear from a legal perspective.152 This function of presumptions carries particular weight in cases where only circumstantial evidence is available to the prosecution.153 That said, a presumption nevertheless does not, as such, shift the legal burden of proof, which always remains with the prosecution.154 However, the accused can be required to adduce evidence disproving conclusions drawn from a particular presumption. 3.2.2 Types of Presumption Presumptions come in a myriad of shapes and forms.155 Knowing that there is no comprehensive theory or doctrine relating to presumptions, it is unsurprising that presumptions correspond to great variations in nature as well as the use to which they are put.156 This lack of a consistent approach should not discourage us from distinguishing between numerous presumptions common to the majority of the echr Contracting States. For instance, we may distinguish between legal and factual presumptions, which can be further sub-​divided into conclusive and rebuttable presumptions. Generally speaking, legal presumptions represent evidentiary devices whose application is standardised in law. The inherent feature of these presumptions is their resemblance to a legal rule, rather than a particular speculation based

152 Leslie J.  Harris, ‘Constitutional Limits on Criminal Presumptions as an Expression of Changing Concepts of Fundamental Fairness’, 77(2) The Journal of Criminal Law and Criminology (1986), 308‒57, at 308. 153 Volpin, (n 149) 1165. 154 ibid, 1161. As regards the use of presumptions, criminal proceedings differ from civil and administrative law. In civil law a presumption may shift the burden of proof and the evidential burden to the other party, whereas public law does not generally allow such a shift due to considerations of the rights of defence. But in administrative procedure, where the parties generally have a duty to cooperate with the authorities, a presumption can extend this duty by requiring the party concerned to disprove the assertions of the authorities. Thus in administrative law, presumptions can, in principle, decide the result of the case if certain matters remain non liquet, that is, when doubts may not be excluded from the point of view of the applicable law. Andreas Heinemann, ‘Access to Evidence and Presumptions –​Communicating Vessels in Procedural Law’, in: Hüschelrath, Schweitzer (eds), Public and Private Enforcement of Competition Law in Europe: Legal and Economic Perspectives (Berlin: Springer, 2014), 167‒93, at 179. 155 Harris, (n 152) 310. 156 Durston, (n 151) 141.

56 ­chapter  on common sense or experience. Legal presumptions mandate that if fact x is established, the court must presume fact y.157 To find an example of such a formalised presumption, one need not look far: Russian civil law, for instance, mandates that a person can be deemed deceased if he has been missing for a period defined in a particular law.158 If we turn to the British Isles for more examples of legal presumptions, we see that under English common law a child under the age of ten is presumed to be incapable of committing a crime.159 As these two examples demonstrate, a legal presumption may not necessarily reflect the reality: after all, a missing person may, in principle, still be alive and a child may theoretically be sufficiently mature for their age to understand their actions. However, in the eyes of the law, public policy prevails over these speculations in order to reflect social, moral or economic values promoted and protected by the state.160 Factual presumptions, on the other hand, are considerably less formalised. In essence, they correspond to certain indirect inferences based on common sense or experience, which may or may not be relied on in court. To put it differently, factual presumptions can be compared to a form of circumstantial evidence or indicia. The mechanism of a factual presumption stipulates that if fact x is true in most cases, the presumption is that it will be true in a specific case as well, unless the accused proves to the contrary. This approach is particularly apt at helping the authorities to conserve their resources, which would otherwise be spent in proving that fact x is true, although life experience already confirms this.161 To give an example of a factual presumption, the EU Commission may presume that particular commercial practices, such as selling for a price that clearly lies below cost, or adopting exclusive supply agreements, indicate abuse of a dominant position contrary to Article 102 tfeu.162 Similarly, if an agreement between competitors can be shown to be anti-​ competitive by object, it can be presumed that the effects of the agreement are

157 Eg, the presumption examined in the subsequent section on the ECtHR judgment in Salabiaku v. France is a legal presumption as laid down in French law. It requires the court to deem a person liable for smuggling prohibited goods if found in possession of those goods. ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 15. 158 Under Art 45 of the Russian Civil Code, an individual may be presumed dead if missing for five or more years. 159 § 50 of the Children and Young Persons Act 1933 (applicable in England and Wales). 160 Jefferson L. Ingram, Criminal Evidence (Abingdon: Routledge, 2014), 156. 161 Bailey, (n 125) 25. 162 ibid, 23.

Presumption of Innocence under Article 6(2) ECHR

57

also anti-​competitive for the purposes of Article 101 tfeu.163 Another apt example of a factual presumption stipulates that an undertaking that exchanges information with competitors actually uses this information for its benefit if it continues commercial activities in the market.164 Presumptions may correspond to yet another categorisation:  they can be conclusive or rebuttable. To put it briefly, conclusive presumptions are irrebuttable. One may legitimately claim that in reality they are not presumptions in the strict sense, but rather rules of substantive law disguised as presumptions. Representing a formalised legal rule, these presumptions may not be rebutted by evidence. Quite the contrary, a conclusive presumption dictates that if fact x is established, the existence of the presumed fact is deemed to be beyond ­dispute.165 This brings us back to the legal presumptions discussed above. As already noted, English law presumes that children under ten years old cannot commit a crime. This may be viewed as a legal presumption, but at the same time is it really a presumption that can be rebutted or called into question with evidence? The answer to this question is negative: we are dealing here with a predominantly substantive legal rule that children of this age may not be found guilty of any offence.166 Hence, a conclusive presumption does not offer an alternative to presuming that if fact x is established, then fact y is true. Thus it would bring no success to argue before an English judge that a particular child under ten years old is so mature for his age that he was able to understand the consequences of his actions. Rebuttable presumptions, on the other hand, are rather provisional in nature. Thus, the conclusions one may draw from them can be disproved if the accused gathers sufficient evidence to call into question the merits of these conclusions in his particular case. Therefore, the party against whom a rebuttable presumption is used can defend itself by rebutting this ­presumption.167

163 Opinion of AG Kokott, delivered on 19 February 2009 in: ecj, Case C‑8/​08, T-​Mobile Netherlands BV and Others v. Commission, ECLI:EU:C:2009:110, para 43. 164 ecj, Case C-​ 49/​ 92 P, Commission v.  Anic Partecipazioni, judgment 8 July 1999, ECLI:EU:C:1999:356, para 121. 165 Durston, (n 151) 142. 166 ibid. 167 Eddy de Smijter, Ailsa Sinclair, ‘The Enforcement System under Regulation 1/​2003’ in: Faull, Nikpay (eds), The EU Law of Competition (Oxford: oup, 2014, 3rd edn), 91‒183, 99; Bailey, (n 125) 21.

58 ­chapter  3.2.3

Interrelationship Between Presumptions and Nulla Poena Sine Culpa: Salabiaku v. France 3.2.3.1 Facts of the Case The dispute which gave rise to the famous 1988 judgment in Salabiaku v. France, arose after a French court applied a legal presumption to impose criminal liability on an individual. The implications of the case in terms of understanding the wide-​reaching, teleological understanding of Article 6(2) echr by the Strasbourg Court are profound. It had an unequivocal spillover effect on substantive criminal law, encompassing the question of fault in line with the principle nulla poena sine culpa, even though Article 6(2) echr is predominantly concerned with procedural guarantees. The very essence of the applicant’s claim may be construed as an attempt to contest the rebuttability of a legal presumption applied to him by the French authorities. To Salabiaku’s mind, this presumption violated his right to be presumed innocent, as the presumption of this particular French law was effectively impossible to rebut. Put differently, we are dealing with a dispute that raises the issue of criminal liability imposed without having regard to the fault of the accused. The applicant, Mr Salabiaku, a Zairese national residing in France, went to an airport in Paris to collect a parcel. As he later claimed, the parcel was supposed to contain food from his family in Zaire. However, when he arrived at the airport, Salabiaku could not find any parcel addressed to him. As he was looking for a parcel to pick up, an airport official showed him a locked parcel carrying an ‘Air Zaïre’ tag, but no name of the addressee. The parcel had not been claimed by anyone. The airport official consulted airport policy and strongly advised Mr Salabiaku not to take the parcel with him unless he was sure that it was indeed addressed to him. However, Salabiaku dismissed the official’s warning and took his new property through the green customs channel with its ‘nothing to declare’ sign. He did not open the parcel to inspect its contents. Quite predictably, the customs authorities detained Salabiaku as soon as he had gone through the customs channel. After they tried to establish whose parcel Salabiaku was carrying, he told them that the parcel belonged to him. Subsequently, perhaps unsatisfied with Salabiaku’s answers or acting on a pre-​ existing suspicion, the customs officials searched the object. Underneath food items, they found a false bottom hiding ten kilos of cannabis. The applicant denied knowing anything about the cannabis. Although he had just maintained ownership of this parcel, Salabiaku changed his position, arguing that he had taken it by mistake. Notably, some days later, when the applicant was already in custody, Salabiaku’s landlord was informed that a

Presumption of Innocence under Article 6(2) ECHR

59

parcel –​indeed, with Mr Salabiaku’s name and address –​had landed in Brussels. A Belgian investigating judge opened it, only to find unsuspicious food items, such as oil and butter. Nonetheless, back in France Mr Salabiaku was charged with the criminal offence of illegal import of narcotics and the customs offence of smuggling prohibited goods. The French court convicted him on both counts, imposing a prison sentence for the offence of illegal import of drugs and a fine for the customs violation.168 However, the court of appeal acquitted Salabiaku on the charge of illegal importation of drugs, on the basis that the defendant’s guilt was not sufficiently proved.169 It was established that Salabiaku had no key to the parcel, or a ticket or a receipt for picking up the item. Moreover, there was no name on the parcel. It followed, according to the court, that it was not impossible that Salabiaku may have genuinely believed that the parcel was intended for him. The court gave him the benefit of the doubt and set aside the judgment as regards the criminal offence. However, the rules for establishing liability for the customs offence of smuggling prohibited goods evidently compelled the court to uphold the judgment at first instance with respect to that offence. According to French customs law, any person caught in possession of prohibited or undeclared goods ‘shall be presumed to be legally liable for the offence’.170 One may construe this provision as establishing a presumption of criminal liability. Presumably, this legal rule reflected an experience-​based motivation: after all, as a matter of principle, a person caught carrying undeclared or prohibited goods could reasonably be assumed to be the owner of those goods. French law provided no particular additional requirements for holding a person responsible. The law was silent, in particular, on the question of fault on the part of the person caught in an alleged act of smuggling. Nevertheless, the jurisprudence of the French courts applied the law in a manner that left open the possibility to rebut this presumption of liability: in theory, the domestic courts accepted that proving a specific instance of force majeure could exculpate the accused. However, this approach –​perhaps somewhat more flexible than the written rule itself –​was of no help to Mr Salabiaku. The court of appeal was not convinced by the applicant’s explanations. One may recall that after it was revealed that the parcel contained unlawful drugs, Salabiaku maintained that he

168 ibid, paras 9‒13. 169 ibid, para 14. 170 ibid. More: Mowbray, (n 40 of Chapter 1) 452.

60 ­chapter  had taken it by mistake. However, before this parcel was opened, the applicant had no issue with agreeing that this was his property. Moreover, in this case, no instance of unavoidable error could be established. It is true that the applicant may have genuinely believed that he was simply picking up a package with food items from his family. Yet he was explicitly advised by an airport official to take this parcel only if he was sure it was intended for him. In fact, the official tried to persuade him not to accept this parcel. This circumstance was particularly decisive in the assessment of the French court. Seemingly, it interpreted the failure to double-​check the contents of this package –​in spite of the warning by the airport official –​as indicating that Salabiaku’s excuses lacked credibility. Following an unsuccessful marathon of appeals before the French courts, Mr Salabiaku lodged a complaint before the ECtHR. As earlier noted, he alleged a violation of his rights under Article 6(2) echr caused by an ‘almost irrebuttable presumption of guilt’ which resulted in a conviction without fault. To strengthen his case, the applicant further claimed that this presumption clearly ‘operated in favour of the customs authorities’.171 3.2.3.2 Assessment by the ECtHR In response to Salabiaku’s allegations, the French government articulated its arguments before the ECtHR, maintaining full compliance with the presumption of innocence, since the liability of the accused was determined ‘according to law’, precisely as required by the Convention provision on the presumption of innocence. It followed, argued the government, that Mr Salabiaku was legitimately punished based on a ‘rebuttable presumption of fact and liability’.172 No conflict of this provision with the Convention was apparent to the French authorities in view of the Contracting States’ discretion to define the constituent elements of a criminal offence without restraints imposed by Article 6(2) echr. After all, it should indeed be mentioned that Article 6 echr does not impose any particular requirements as to establishing the fault of the accused.173 Hence, in the perception of the French government, punishing an individual for particular conduct hardly violated the principles enshrined in the echr, irrespective of whether the individual concerned acted with or without fault.174 171 172 173

ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 15. ibid, 26. Peter Lewisch, Verfassung und Strafrecht:  verfassungsrechtliche Schranken der Strafgesetzgebung (Vienna: Facultas/​Maudrich, 1993), 294. 174 ibid, 27. Also: ECtHR, G. v. United Kingdom, Appl no 37334/​08, decision 30 August 2011, para 27. In this case, the Court acknowledged that it was not its task to determine the

Presumption of Innocence under Article 6(2) ECHR

61

In response to the Contracting State’s arguments, a broad teleological concept of the presumption of innocence emerged in this case. The ECtHR agreed, in principle, that states might, under certain conditions, penalise an objective fact, irrespective of whether the fact arises from guilt or negligence, such as the mere fact of possessing prohibited goods.175 This can, as a matter of principle, correspond to the requirement of Article 6(2) echr to prove the guilt of the charged person ‘according to law’. However, this freedom may not be construed in absolute terms. Quite the contrary, the phrase ‘according to law’, which may indeed be found in Article 6(2) echr, necessitates an interpretation in light of the very object and purpose of the presumption of innocence under the Convention. Dismissing the autonomous reading of this provision would have a highly compromising effect: it could essentially deprive the presumption of innocence of its power. In other words, Article 6(2) echr does not imply that a domestic law which stipulates the liability of a person may apply automatically. Rather, it can be ‒ and must be ‒ interpreted by the national court in order to convince itself of the accused’s guilt: Above all, the national legislature would be free to strip the trial court of any genuine power of assessment and deprive the presumption of innocence of its substance, if the words ‘according to law’ were construed exclusively with reference to domestic law. Such a situation could not be reconciled with the object and purpose of Article 6 (art. 6), which, by protecting the right to a fair trial and in particular the right to be presumed innocent, is intended to enshrine the fundamental principle of the rule of law (…).176 A cursory reading of this citation reveals that the ECtHR is clearly speaking about the substantive side of criminal law, although Article 6(2) echr is concerned exclusively with procedural guarantees.177 This reading is indeed correct: seeing a risk that automatic imposition of liability could render the rules on personal responsibility, ie, ‘whether or not a blameworthy state of mind should be one of the elements of the offence or whether there should be any particular defence available to the accused’. 175 ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 27. 176 ibid, 28. 177 Giuseppina Panebianco, ‘The Nulla Poena Sine Culpa Principle in European Courts Case Law. The Perspective of the Italian Criminal Law’, in: Ruggeri (ed), Human Rights in European Criminal Law: New Developments in European Legislation and Case Law after the Lisbon Treaty (Berlin: Springer, 2015), 47‒78, at 47‒48.

62 ­chapter  presumption of innocence void of substance, the Court turned to a teleological interpretation of the presumption of innocence. To strengthen the practical effect of that presumption, the Court derived substantive rules in terms of culpability from Article 6(2) echr.178 Having taken this bold step, the Court turned to the substance of the dispute:  the interrelationship between the Convention and evidentiary devices manifested as presumptions. The Convention does not view presumptions with indifference, even though its wording is silent on the matter. Nothing indicates that presumptions are as such prohibited. Yet they may not go beyond certain limits in order to remain compatible with Article 6(2) echr. Arguably, a certain proportionality test emerges from these limitations. A presumption must be construed so as to strike an appropriate balance between the rights of the defence and the general public interest at stake in the given proceedings.179 It follows that the type of criminal liability imposed on Salabiaku –​which is essentially framed as strict liability180 –​is not in itself contrary to the Convention.181 Thus, a strict liability offence will not necessarily contravene the principle of fault, also known as nulla poena sine culpa.182 However, even though domestic law may give the authorities the green light to prosecute a guiltless individual, the authorities nevertheless continue to bear the burden of proving the infringement in a manner and to a degree

1 78 Lewisch, (n 173) 294. 179 ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 28. 180 Criminal liability that arises in the absence of fault is called strict, or objective, criminal liability. For imputation of this type of liability, the defendant’s state of mind with respect to the offence, ie, whether he acted intentionally or negligently, is irrelevant. In strict liability, negligence is basically presumed by law; thus the only thing the prosecution needs to prove is that the defendant had taken the prohibited action. To invoke a very run-​of-​ the-​mill, ordinary example of strict liability in English law, a person who sells a lottery ticket to a minor under 16 years old is held criminally liable irrespective of whether he knew the age of this person or honestly thought that this person was older. For more on strict liability: Kenneth W. Simons, ‘When is Strict Liability Just?’, 87(4) Journal of Criminal Law and Criminology (1997), 1075‒1137, at 1079‒80; Jonathan Herring, Criminal Law: Text, Cases, and Materials, 213‒14; Gabriel Hallevy, The Matrix of Derivative Criminal Liability (Berlin: Springer, 2012), 221, 229. 181 Whelan, (n 13 of Chapter 1) 124. 182 No explicit mention of nulla poena sine culpa –​the principle of fault –​may be found in Art 6(2) ECHR. Nevertheless, the principle of fault, as such, remains relevant in the context of the presumption of innocence, enshrined in the Convention and in Art 48(1) cfr. More: Panebianco, (n 177) 47‒48; Opinion of AG Kokott, in: Schenker, (n 32 of Chapter 1) para 41; Scordamaglia, (n 11 of Chapter 1) 51.

Presumption of Innocence under Article 6(2) ECHR

63

required to prove the guilt of the accused.183 Thus, implicit or explicit ‘automatic’ liability must be unequivocally excluded. What this boils down to is that the Signatory States are free to define the material elements of criminal offences. In turn, this encompasses a choice to include or not to include an element of fault, or culpability, as a prerequisite for criminal liability. However, states are far from left to their own devices if they wish to define criminal liability in the form of an irrebuttable presumption.184 Quite the contrary, the accused must have a realistic possibility to defend himself, particularly by adducing proof that might demonstrate his innocence in the issue at hand. Subsequent cases have further underlined that presumptions must apply in accordance with the principle of proportionality.185 At any rate, the grounds for applying the measure must be relevant and sufficient.186 It follows from these considerations by the ECtHR that a presumption must be effectively rebuttable in order to avoid a clash with Article 6(2) echr.187 One may wonder whether the ECtHR applied these broadly framed and certainly far-​reaching conclusions to the case of Mr Salabiaku. In essence, the Court accepted the notion of strict liability based on a legal presumption in consideration of the French courts’ attempts not to apply the presumption automatically.188 Indeed, the domestic courts generally allowed the defendant to rely on mitigating circumstances, proof of force majeure, excusable error or duress in order to contest the accusations against him.189 Arguably, the conduct of the accused himself was decisive. The domestic courts had, after all, established that Salabiaku explicitly told customs officials that the parcel was his. Additionally, he did not wish to check the contents before claiming possession –​against the explicit advice of the airport staff –​and was not even surprised about the contents when the parcel was opened.190

183 Whelan, (n 13 of Chapter 1) 124; Richard Buxton, ‘The Human Rights Act and the Substantive Criminal Law’ Criminal Law Review (2000), 331‒40, at 339. 184 Lewisch, (n 173) 294; Scordamaglia, (n 11 of Chapter 1) 51. 185 ECtHR, Västerberga Taxi Aktienbolag and Vulic v. Sweden, Appl no 36985/​97, judgment 21 May 2003, para 113; ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) para 101; ECtHR, Goodwin v. United Kingdom, Appl no 17488/​90, judgment 27 March 1996, para 46. 186 ECtHR, Buzadji v. the Republic of Moldova, Appl no 23755/​07, judgment 5 July 2016. 187 Lewisch, (n 173) 294. Also: ECommHR, Austria v. Italy (Pfunders case), (n 122) 784. 188 ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 30. 189 ibid, para 29. 190 The French court of appeal noted that the accused showed no surprise when the parcel was opened and none of the food items he allegedly expected from his family were there. ECtHR, Salabiaku v. France, para 30.

64 ­chapter  Moreover, the applicant failed to adduce any evidence of force majeure or other defences, short of simply denying that the parcel was his. On these grounds, the ECtHR found that the applicant had a realistic chance to defend himself against the presumption, but had failed to produce any relevant evidence.191 However, it should be emphasised that the circumstances under which Salabiaku could have defended himself are far from obvious. One might even suggest that the ECtHR’s elaborations on the rebuttability of presumptions reveal its wish to show judicial restraint. The Court requires the Contracting States to ensure that their strict liability offences –​particularly those based on presumptions –​leave some means of defence to the accused. However, the Court is not necessarily willing to call into question the very concept of strict liability in the context of Article 6(2) echr, since the concept is firmly rooted in substantive domestic law. 3.3 Privilege against Self-​Incrimination 3.3.1 Background The privilege against self-​incrimination, also known as nemo tenetur, is a guarantee conventionally tied to the right to a fair trial under Article 6(1) echr, occupying a rather significant place among the general guarantees of a fair trial.192 However, strong indications in the case law of the ECtHR point to the relevance of this guarantee to the presumption of innocence under Article 6(2) echr as well.193 A particularly apt example of this relevance emerges from the 1996 judgment in Saunders v. United Kingdom,194 where the Strasbourg Court established a connection between this privilege and the burden of proof: The right not to incriminate oneself, in particular, presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. In this sense the right is closely linked to the presumption of innocence contained in Article 6(2) of the Convention.195

191 ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 28. 1 92 Meyer, (n 45 of Chapter 1) 173; Weigend, (n 4 of Chapter 2), 288; Whelan, (n 13 of Chapter 1) 124. 193 Dennis, (n 33 of Chapter 1) 343; 353ff; MacCulloch, (n 33 of Chapter 1) 220; Whelan, (n 13 of Chapter 1) 124. 194 ECtHR, Saunders v. United Kingdom, (n 33 of Chapter 1) paras 68‒69. 195 ibid, para 68.

Presumption of Innocence under Article 6(2) ECHR

65

Again, the 2013 judgment in Allen v.  United Kingdom epitomises the significance of this guarantee within the scope of the presumption of innocence in a broad sense: Viewed as a procedural guarantee in the context of a criminal trial itself, the presumption of innocence imposes requirements in respect of, inter alia, (…) the privilege against self-​incrimination (…)196 Parallels to these two judgments may be found also in the 2000 case of Heaney and McGuinness v. Ireland, in which the ECtHR examined a violation of the right not to incriminate oneself in light of both paragraph 2 as well as paragraph 1 of Article 6 echr, due to the close link between the rights enshrined in these provisions.197 Evidently, the litigation history before the ECtHR reveals that this privilege may be construed as belonging, inter alia, to the sphere of the presumption of innocence.198 In light of these considerations, it is clearly meaningful also to view this privilege in the context of the presumption of innocence. Protection from self-​incrimination makes no explicit appearance in Article 6 echr. Thus its roots lie exclusively in the case law of the ECtHR,199 deriving from ‘generally recognised international standards’ relating to judicial safeguards.200 Diverse rationales have been invoked to elucidate the underlying function of this privilege in criminal procedure as well as the theoretical background. One rationale construes the privilege against self-​incrimination as a right protecting the privacy, dignity and autonomy of the accused.201 The argument 196 197 1 98 199 200

201

ECtHR, Allen v. United Kingdom, (n 33 of Chapter 1) para 93. For more on the privilege against self-​incrimination: ECtHR, Saunders v. United Kingdom, paras 65, (n 33 of Chapter 1) 68‒69; ECtHR, Heaney and McGuinness v. Ireland, (n 33 of Chapter 1) para 47. ECtHR, Heaney and McGuinness v. Ireland, (n 33 of Chapter 1) para 59. Dennis, (n 33 of Chapter 1) 344; MacCulloch, (n 33 of Chapter 1) 220. More:  Andrew Ashworth, ‘Self-​Incrimination in the European Human Rights Law  –​ A Pregnant Pragmatism?’, 30(3) Cardozo Law Review (2008), 751‒74. In this regard, the Court refers to the presumption of innocence. In Saunders v. United Kingdom it explicitly referred to Art 6(2) ECHR: ‘The right not to incriminate oneself (…) presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. In this sense the right is closely linked to the presumption of innocence contained in Article 6 § 2 of the Convention’: ECtHR, Saunders v. the United Kingdom, (n 33 of Chapter 1) paras 68‒69. Dennis J. Galligan, ‘The right to silence reconsidered’, 41(1) Current Legal Problems (1988), 69‒92, at 69, 88; MacCulloch, (n 33 of Chapter 1) 215, 219; Weigend, (n 4 of Chapter 2) 288.

66 ­chapter  here is that compelling the accused to reveal his ‘self-​knowledge’202 about an alleged infringement and the ‘inner workings of the mind’203 interferes with a sphere of human life that should not be forcefully accessed by law. Similarly, some have argued that this guarantee protects the accused against inhumanely compelling the accused to self-​harm by giving self-​incriminating evidence.204 This is based on the notion that it would be cruel to compel a suspect to actively contribute to endangering his own interests at trial.205 Evidently, even a cursory look at this rationale precludes finding a clearly expressed connection with the presumption of innocence. However, another rationale that seeks to justify the existence of the privilege against self-​incrimination connects the privilege to a procedural necessity related to the presumption of innocence.206 Arguably, this privilege ought to strengthen efforts by the justice system to avoid wrongful convictions:207 coercing a suspect or accused into making an involuntary confession may be viewed critically, as it may force them into making self-​incriminating statements that are false.208 Moreover, coercion to testify against oneself can compromise the burden of proof which is carried by the prosecution. As Saunders v. United Kingdom illustrates,209 coercion arguably conflicts with the duty of the prosecution to prove the guilt of the accused.210 Moreover, the right not to incriminate oneself is closely related to the right to remain silent.211 Whereas the right not to incriminate oneself primarily protects the accused from coercion to actively contribute to a case against himself –​by answering questions and delivering evidence –​the right to remain silent simply ensures the right of the accused not to answer questions from the authorities.212 Saunders v. United Kingdom tackles both of these guarantees 202 Robert S. Gerstein, ‘Privacy and self incrimination’, 80(2) Ethics: An International Journal of Social, Political and Legal Philosophy (1970), 87‒101, at 92. 203 MacCulloch, (n 33 of Chapter 1) 215, 216. 204 R. Kent Greenawalt, ‘Silence as a moral and constitutional right’, 23(1) William & Mary Law Review (1981), 16‒71, at 39. 205 ibid. 206 Dennis, (n 33 of Chapter 1) 353ff. 207 ibid. 208 Dennis views protection from wrongful conviction separately from the presumption of innocence. However, protection from wrongful conviction is, in itself, closely tied to the presumption of innocence. Ch 2. For analysis by Dennis: (n 33 of Chapter 1) 349. 209 ECtHR, Saunders v. United Kingdom, (n 33 of Chapter 1) paras 68‒69. 210 Dennis, (n 33 of Chapter 1) 353. 211 ECtHR, Saunders v. United Kingdom, (n 33 of Chapter 1) paras 68‒69. 212 Dissenting opinion of Judge Martens, joined by Judge Kūris in Case:  ECtHR, Saunders v. the United Kingdom, (n 33 of Chapter 1), judgment 17 December 1996, 37.

Presumption of Innocence under Article 6(2) ECHR

67

as the two sides of one right,213 although Ashworth views them as related but separate immunities.214 3.3.2

Emergence of a Broad Privilege against Self-​Incrimination: Funke v. France The privilege against self-​incrimination gained recognition from the ECtHR in the 1993 judgment in Funke v. France. The dispute that sparked the proceedings in Strasbourg revolved around the extent of investigatory powers in light of Articles 6(1) and (2) echr: how much cooperation with the authorities may be required from a person suspected of an offence which is under investigation by those very authorities? Is the requirement to supply the authorities with potentially self-​incriminating information compatible with their duties in light of the Convention? Mr Funke was a German citizen residing in France. In 1980, his financial situation drew the attention of the French customs authorities. Acting on information from their German colleagues, the customs officials suspected Mr Funke of tax evasion. They had information suggesting failure by Funke to declare some real estate owned in Germany.215 They searched his house on the basis of a court warrant and seized various financial documents. However, they found no bank statements about the assets he had allegedly bought and failed to declare. Thus, the documents seized were insufficient to launch criminal proceedings against the applicant for alleged tax evasion. Seeking to press charges against him anyway, the authorities ordered Mr Funke to disclose the missing bank statements. After the applicant declined to cooperate, the customs authorities brought a case against him in court.216 The applicable law permitted the customs officers to request documents and other evidence relevant to the investigation. Thus, Funke was fined 1,200 frf and ordered to produce the requested documents. Failure to do so would result in a daily penalty of 20 frf for delay.217 Funke appealed the court’s decision, claiming, inter alia, a violation of Article 6(2) echr. However, the French court viewed the actions by the customs authorities as justified under domestic law and necessary for securing the economic interests of the state.

213 214 215 216 217

ibid. Ashworth, (n 199) 754. ECtHR, Funke v. France, paras 7‒12. ibid. ibid, para 12.

68 ­chapter  Consequently, Funke lodged a complaint with the ECtHR, asserting a violation of Article 6(1) and (2) echr.218 The French government sought a decision of inadmissibility: after all, no criminal proceedings had been launched against the applicant. Moreover, the applicant was not actually required to admit to any specific crime. However, the ECtHR found that the conviction in question was aimed solely at compelling Funke to produce particular documents: these existed, according to the suspicions of the prosecution, which was nevertheless unable or perhaps unwilling to obtain them by any other means. This situation was at odds with ‘the right of anyone “charged with a criminal offence” (…) to remain silent and not to contribute to incriminating himself’.219 The economic interests of the state could not outweigh the rights of the individual in this specific case, due to the paramount importance of the privilege in question.220 It should be emphasised that Funke draws a rather broad contour of the privilege: it is not confined to admission of an offence but encompasses any compulsion to produce potentially self-​incriminating documents.221 3.3.3 Privilege in Later Cases: Saunders v. United Kingdom The defining feature of Funke is not only the highly explicit recognition of the privilege against self-​incrimination, but also the brief, almost cursory fashion in which this privilege was recognised. Its scope or meaning remained rather vague. Subsequent cases elucidated the scope of the privilege in more detail,222 in particular the 1996 judgment in Saunders v. United Kingdom.223 The Saunders case originated from a dispute on compulsion, which was deployed in the combat against corporate fraud. Mr Saunders was a director and chief executive of the famous beverage producer Guinness. After Guinness purchased another beverage company, the British authorities appointed inspectors to investigate potentially fraudulent conduct in connection to the purchase. The inspectors interviewed Mr Saunders and passed the transcripts and documents acquired during the interviews to the police. Saunders was subsequently charged on multiple counts of unlawful share-​dealing. Although his testimony was obtained during a purely administrative investigation, the

218 ibid, para 42. 219 ibid, para 44. After finding a violation under Art 6(1) ECHR, the Court refrained from examining it in light of Art 6(2) ECHR. 220 More: Ashworth, (n 199) 753; Dennis, (n 33 of Chapter 1) 372. 221 ECtHR, Funke v. France, (n 215) para 44. 222 Ryan Goss, Criminal Fair Trial Rights:  Article 6 of the European Convention on Human Rights (London: Bloomsbury Publishing, 2014), 93; Ashworth, (n 199) 753. 223 Peretz et al, ‘Enforcement and Procedure’, (n 4) 1197.

Presumption of Innocence under Article 6(2) ECHR

69

prosecution used it against him in criminal proceedings,224 thereby opening the scope of Article 6 echr. Reiterating the expansive scope of the privilege, covering not only a direct admission of wrongdoing225 but also indirectly incriminating information and even answers to factual questions and similar seemingly non-​self-​incriminating statements,226 the Court nevertheless allowed certain documents to fall outside the privilege. Evidence which does not exist independently from the will of the suspect or accused –​such as his statements and answers –​remains firmly within the scope of the privilege. Yet, if evidence may, indeed, be obtained by other means, such as under a warrant, then the privilege will not offer immunity against that evidence.227 Perhaps the use of pre-​existing written documents obtained by compulsion228 would not ‒ as coercive actions under a warrant ‒ compromise the burden of the prosecution to prove an offence and thus does not defy the will of the accused within the meaning of this privilege.229 On a cursory look, this may have contrasted with Funke, in which the ECtHR precluded any compulsion with respect to documents. However, it should be emphasised that the French authorities sought to compel Mr Funke to deliver the evidence himself: the dispute was not about allowing a search warrant.

224 ECtHR, Saunders v. United Kingdom, (n 33 of Chapter 1) para 67. 2 25 ibid, para 71: ‘In any event, bearing in mind the concept of fairness in Article 6 (art 6), the right not to incriminate oneself cannot reasonably be confined to statements of admission of wrongdoing or to remarks which are directly incriminating’. For more: Meyer, (n 45 of Chapter 1) 174. 226 ibid, para 71: ‘Testimony obtained under compulsion which appears on its face to be of a 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. (…) It follows that what is of the essence in this context is the use to which evidence obtained under compulsion is put in the course of the criminal trial’. 227 ibid, para 69: ‘It 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 has 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’. More: Schabas, (n 22) 301. 228 Dissenting opinion of the ECtHR judges Martens and Kuris in:  ECtHR, Saunders v. the United Kingdom, (n 33 of Chapter 1), judgment 17 December 1996, 22, 40. 229 ibid, 40.

70 ­chapter  Thus, physical evidence obtained by way of a warrant does not appear to enjoy the privilege and hence may be freely used in a court against the accused.230 Moreover, if a particular situation calls for an explanation by the person concerned, protection from self-​incrimination does not preclude the authorities from drawing certain conclusions from refusal to provide an explanation.231 The boundaries of this privilege remain rather vague. The general interest cannot easily prevail over the privilege, as coercive measures cannot simply be justified as a necessary means of tackling complex offences, such as corporate fraud.232 The privilege is arguably not absolute in nature, just as the majority of rights. Nevertheless, the person concerned may not be deprived of ‘the very essence’ of this privilege.233 The question whether the fundamental contours of this right have been respected will depend on the nature and degree of compulsion and the use to which the evidence so obtained would be put.234 Moreover, the extent to which the privilege may be invoked by legal persons remains a point of contestation.235 It has been tackled exclusively with respect to complaints from natural persons –​unlike other guarantees of Article 6 echr, as demonstrated earlier. 4

Protection of Legal Persons under Article 6(2) echr

The previous sections established a broad spectrum of guarantees underpinning the presumption of innocence. The particular legal context in which these guarantees may unfold has also been defined by examining the autonomous meaning of a ‘criminal charge’. At the same time, the ECtHR case law which 230 Mike Redmayne, ‘Rethinking the Privilege Against Self-​Incrimination’, 27(2) Oxford Journal of Legal Studies (2007) 209‒32, at 214‒15. 231 ECtHR, Murray v. United Kingdom, para 49. However, a conviction may not be ‘mainly or solely’ based on the silence of the accused or his refusal to give evidence. The prosecution must still have a sufficiently strong and convincing case against the accused. Murray v. the United Kingdom, para 49; ECtHR, Telfner v. Austria, (n 3) para 17. 232 ECtHR, Saunders v. the United Kingdom (n 33 of Chapter 1) para 64. 233 ECtHR, Heaney and McGuinness v.  Ireland, (n 33 of Chapter  1) para 48; ECtHR, Jalloh v. Germany, Appl no 54810/​00, judgment 11 July 2006, para 117. 234 ECtHR, Saunders v. United Kingdom, (n 33 of Chapter  1) para 72. Also:  Meyer, (n 45 of Chapter 1) 174. 235 Whelan, (n 13 of Chapter 1) 125. For more: Wouter P.J. Wils, ‘Self-​incrimination in EC Antitrust Enforcement: A Legal and Economic Analysis’, 1‒25, available at , also published in 26(4) World Competition (2003), 567‒88.

Presumption of Innocence under Article 6(2) ECHR

71

was invoked to exemplify and illustrate the above analysis concerns natural persons, at least in the great majority of cases. Only a handful of judgments –​ mostly dealing with competition and tax law –​which were addressed earlier concerned disputes involving legal persons. Indeed, the earlier section explicitly noted doubts that, for instance, the privilege against self-​incrimination may not necessarily apply to legal persons. Therefore, exploring the extent to which the rights enshrined in Article 6 echr benefit legal persons would seem a useful and legitimate line of enquiry. After all, companies duly incorporated in the Contracting States of the echr and in the EU Member States do possess a legal personality with corresponding rights and obligations. On the other hand, it would be difficult to deny that criminal charges pressed against companies are somewhat different in nature, as exemplified by the lack of custodial sentences. This question gains relevance in connection with the subsequent analysis of EU anti-​cartel enforcement, which is aimed exclusively at undertakings.236 It is generally recognised that the right to file a complaint with the ECtHR is not confined to natural persons.237 For one thing, the echr entails no express or implicit indication excluding legal persons from its scope.238 Indeed, Article 34 echr allows any person, non-​governmental organisation or group of persons to lodge a complaint before the ECtHR if they have fallen victim to a violation of a right protected by the Convention.239 Protocol No. 1 to the Convention further recognises the property rights of legal persons.240 The extensive case law of the ECtHR on complaints by legal persons also confirms that the rights and freedoms arising from the Convention apply to

2 36 Kienapfel, (n 24 of Chapter 1) in Colombani et al, (n 50 of Chapter 1) 1251. 237 Meyer, (n 45 of Chapter 1) 149. 238 Justin Pierce, ‘Corporate Rights and EU Antitrust Law: A Compatible Incompatibility?’, in: Pierce, Persson, Sobhani, Medzmariashvili (eds), Fundamental Rights and EU Competition Law, Special Edition, Lund Student Law Review, Lund University (2012), 58‒80, at 60, available at . 239 Art 34 ECHR –​Individual Applications: ‘The Court may receive applications from any person, non-​governmental organisation or group of individuals claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the protocols thereto. The High Contracting Parties undertake not to hinder in any way the effective exercise of this right’. 240 Art 1 of Protocol No 1 to the echr: ‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law’.

72 ­chapter  private legal persons, insofar as the nature of those rights permits.241 Undoubtedly, some of the Convention guarantees, such as the right to life under Article 2 or the prohibition of torture and inhuman or degrading treatment or punishment under Article 3 are rather too far removed from the concerns of legal persons. Nevertheless, many of the Convention rights –​particularly judicial rights –​can and do apply to non-​natural persons. As Judge Rozakis argued in the 2000 case of Comingersoll SA v. Portugal, companies are ‘autonomous legal entities deserving the protection of the Convention’242 and ‘independent living organism[s]‌’ whose rights are recognised as autonomous in the context of the echr.243 There is no doubt about the numerous teleological arguments to be made for comprehensive protection of legal persons under the echr. The Convention has been created on the basis of the liberal democratic concept of freedom and autonomy of persons.244 In this context, the rights enshrined in this document have been designed as a counter-​force against excessive and arbitrary intervention by the state with the liberties of the individual.245 At the same time, there is no reason why liberty-​based considerations should not also encompass the economic sphere in which those individuals act, creating entities which possess legal personalities of their own.

241

ECommHR, Pudas v.  Sweden, Appl no 10426/​83, decision 27 October 1987; ECtHR, Comingersoll SA v.  Portugal, Appl no 35382/​97, judgment 6 April 2000; ECtHR, Société Colas Est v. France, Appl no 37971/​97, judgment 16 April 2002; ECtHR, Baroul Partner-​A v. Moldova, Appl no 39815/​07, judgment 16 July 2009; ECtHR, Paykar Yev Haghtanak Ltd v. Armenia, Appl no 21638/​03, judgment 20 December 2007; ECtHR, Senator Lines (n 70); ECtHR, Menarini Diagnostics S.R.L. v. Italy, (n 72). Public legal entities do not enjoy protection under the ECHR, however. Eg: ECtHR, Ayuntamiento de M v. Spain, Appl no 15090/​ 89, judgment 1 February 2001; ECtHR, The Municipal Section of Antilly v. France, Appl no 45129/​98, judgment 23 November 1999; ECommHR, Austrian Communes v. Austria, Appl no 5767/​72, decision 31 May 1974, 16. More on the topic: Piet Hein van Kempen, ‘The Recognition of Legal Persons in International Human Rights Instruments: Protection Against and Through Criminal Justice?’, in: Pieth, Ivory (eds), Corporate Criminal Liability. Emergence, Convergence, and Risk, Ius Gentium: Comparative Perspectives on Law and Justice 9 (Berlin: Springer, 2011), 355‒89, at 359, 373. 242 Concurring Opinion of Judge Rozakis joined by Judges Sir Nicolas Bratza, Caflisch and Vajic in: ECtHR, Comingersoll SA v. Portugal, (n 241) 9. 2 43 ibid. 244 Scordamaglia, (n 11 of Chapter 1) 11. 245 Jerome J. Shestack, ‘The Philosophic Foundations of Human Rights’ 20(2) Human Rights Quarterly (1998), 201‒34, at 201; Pierce, (n 238) 61.

Presumption of Innocence under Article 6(2) ECHR

73

If read as an instrument restricting arbitrary and excessive interference by a liberal democratic state,246 the Convention need not be seen as limited in its application exclusively to humans. Particularly in the sphere of judicial proceedings falling within the scope of Article 6 echr, the Convention embodies, for example, the principle of legal certainty and other tenets of the rule of law.247 However, the rule of law, as a sweeping multi-​dimensional principle, is not confined to the rights and interests of natural persons.248 Under this reading, economic actors in society, such as companies, should not be excluded from the scope of the Convention. Protecting them from arbitrary and excessive interference by the state serves a comparable purpose to the protection of individuals. Hence, it is only reasonable to protect the rights of legal persons, though of course with the exception of provisions with an inherently ‘human’ nature. Moreover, if we look specifically at Article 6 echr, the scope of this provision necessitates a broad interpretation in order to unfold its inherent ‘object and purpose’.249 Therefore, outright exclusion ‒ or a markedly different level of protection ‒ of legal persons should be viewed with a critical eye. The ever-​ developing and dynamic trajectory in which the case law of the ECtHR is moving also speaks for a rather expansive understanding of the addressee of the rights and freedoms enshrined in the Convention. The ECtHR case law on the right to privacy under Article 8 echr further appears to confirm that legal persons derive rights even from those echr provisions that may appear exclusively to concern individuals. To give an example, the 1992 judgment in Niemietz v. Germany explicitly recognised that the right to privacy encompassed not only private homes but also business premises.250 Similarly, the 2002 judgment in Société Colas Est v. France extended the right to privacy under Article 8 echr to a company which had contested the search and seizure of documents in its offices.

246

247 248 249 250

ECtHR, Nejdet Şahin and Perihan Şahin v. Turkey, Appl no 13279/​05, judgment 20 October 2011, paras 59‒96; ECtHR, Deweer v. Belgium, (n 45 of Chapter 2) para 44. Also: Roger A. Shiner, ‘Corporations and the Presumption of Innocence’ 8 Criminal Law and Philosophy (2014), 485‒503, at 488. Ashworth, (n 1 of Chapter 2) 249. ECtHR, Ştefănică and Others v. Romania, Appl no 38155/​02, judgment 2 February 2011, paras 31‒40. More in Ch 2. Eg: ECtHR, De Cubber v. Belgium, (n 9) para 32. ECtHR, Niemietz v. Germany, Appl no 13710/​88, judgment 12 December 1992, para 31. Note, however, that in this case the business premises were also the applicant’s private home and thus not entirely comparable to the business premises of a company, which naturally have little in common with a home.

74 ­chapter  These judgments elucidate the Court’s flexible and functional approach to the scope of the Convention. Having regard to the dynamics driving interpretation of the echr, the Court unequivocally stated in Société Scolas that it was high time 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 business ­premises’.251 At the same time, it cannot go unremarked that this judgment issued a certain caveat:  in the professional or economic sphere, the state’s power to interfere ‘might well be more far-​reaching’.252 This cautious statement by the Court may be read in the specific context of Article 8 echr, which undeniably aims to safeguard the rights of natural persons first and foremost, given the references to ‘private life’, ‘family’, and  ‘home’. Nevertheless, it may well be proposed that rights whose wording and aim are rather more neutral in this respect ‒ such as judicial rights or rights safeguarded under Article 10 echr ‒253 do not warrant such a cautious approach. Therefore, as a matter of principle, exclusion or fundamental restriction of the rights of legal persons is difficult to justify. The rights of the Convention, in particular judicial rights, are construed in a way that does not seem to preclude legal persons from invoking them. The obvious exception to this rule is rights which are generally irrelevant to legal persons, such as the prohibition of torture under Article 3 echr. Conceivably, in proceedings concerning a dispute involving a legal person, the Strasbourg Court may scrutinise interference with the rights of the applicant, having regard to the specific circumstances underlying a particular regulatory framework in the economic sphere in which the alleged violation occurred. Thus, an individualised approach –​perhaps an even less robust one –​may not be fully ruled out. However, there are no indications of a generally applied lower standard of scrutiny.

251

252 253

ECtHR, Société Colas Est v. France, (n 241) paras 41‒42: ‘The Court considers 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 business premises’. ibid, para 41. Eg: ECtHR, Markt Intern Verlag GmbH and Klaus Beermann v. Germany, Appl no 10572/​83, judgment 20 November 1989. This case does not appear to apply a restricted scope of the Convention guarantee to the applicant, although it is a legal person.

Presumption of Innocence under Article 6(2) ECHR

5

75

Concluding Remarks

The underlying objective of this Chapter was to outline the principal features of the presumption of innocence under Article 6(2) echr. Those features have been elucidated, in particular, by way of an insight into interpretation of the term ‘criminal charge’. Moreover, the specific guarantees underpinning the presumption of innocence have been scrutinised. The rather broad extent to which a legal person should generally be able to invoke the guarantees of the Convention has been considered as well. Interpreting the term ‘criminal charge’ continues to present challenges as to the true scope of guarantees under Article 6 echr in proceedings removed from traditional criminal law. These problem questions originate from the two contrasting forces in the orbit of Article 6 echr. The casuistic, expansive and flexible interpretation of a criminal charge ‒ as provided in Engel or Öztürk ‒ represents the driving force behind a very broad understanding of what proceedings must respect the conditions of Article 6 echr. In contrast, the apparent wish of the Court to apply a differentiated standard of protection to proceedings that are criminal within the meaning of Article 6 echr but fall outside traditional criminal law carries an inherent risk of arbitrary application of the safeguards enshrined in Article 6. Legal certainty as well as the pivotal importance of Article 6 echr in a liberal democratic society necessitates a cautious approach to any attempt to apply judicial guarantees in a less robust fashion. Some non-​traditional criminal charges may warrant this restrictive perspective. At the same time, numerous non-​traditional criminal cases, such as competition law, arguably entail such dramatic penalties that a lenient approach to procedural guarantees in these cases could deprive applicants of a significant portion of their rights. As far as the material guarantees of Article 6(2) echr are concerned, we have discussed the interrelationship between presumptions and the burden of proof and the principle nulla poena sine culpa. In light of Article 6(2) echr, the validity of a presumption depends on its capability not to deprive the accused of all means of defence by displaying an inherently irrebuttable nature. The guilt of the accused may not be automatic: even strict liability must nevertheless be up for consideration by the court. The prosecution further carries the burden of proof in this respect, so that the accused must be given a chance to rebut the presumption used against him.

­c hapter 4

Legal Framework of EU Anti-​Cartel Enforcement Procedure 1 Introduction The problems discussed earlier relating to the presumption of innocence under Article 6(2) echr present a number of challenges in EU anti-​cartel enforcement. Thus the next step is to provide an insight into the legal framework of enforcement. The complexity of issues of compliance with the Convention, which will be elucidated later in this work, necessitates an overview of the legal context in which they occur. With that in mind, this Chapter seeks to outline the general framework for enforcing EU competition rules. This will involve discussing the procedure before the Commission and judicial review by the EU Courts, with emphasis on the role of fundamental rights in anti-​cartel enforcement. The sweeping investigatory, prosecutorial and adjudicatory powers of the Commission in anti-​ cartel enforcement will be presented in more detail as well. 2

Framework for EU Anti-​Cartel Enforcement

2.1 Principal Provisions Article 3(1)(b) tfeu grants the EU exclusive competence in the sphere of competition law. On the basis of that competence, the principal substantive rules on free and undistorted competition in the internal market have been established in Articles 101‒109 tfeu. The competition rules lying at the heart of this work are governed by Article 101(1) tfeu. Article 101 tfeu provides the principal weaponry against cartels, prohibiting all agreements between undertakings and concerted practices that are capable of restricting competition within the EU by their very object or effect.1 Moreover, this provision embodies one of the central pillars of the EU internal market. The importance of the competition rules to the internal market corresponds to the idea that the free market necessitates protective measures, 1 For more: Frenz, (n 14 of Chapter 1) 161ff.

© Koninklijke Brill NV, Leiden, 2019 | DOI:10.1163/​9 789004384651_005

Legal Framework of EU

77

not only from trade restrictions introduced by the Member States, but also from agreements by private actors that are hostile to free and undistorted competition.2 Undoubtedly, the functioning of the internal market would be considerably impaired, if not rendered wholly ineffective, if the trade barriers of states could be replaced by barriers raised by private companies. To achieve the objective of barrier-​free trade and competition, Article 101 tfeu contains a non-​exhaustive list of prohibited agreements, in particular relating to price-​fixing, market-​sharing, limiting output, or imposing unfair trading conditions. Article 101(2) tfeu renders any provision of an agreement contrary to the first paragraph of Article 101 tfeu null and void. Article 101(3) tfeu lays down the cumulative conditions which an agreement must fulfil in order to be exempted from the prohibition laid down in the first paragraph of the Article.3 The substantive rules on cartel prohibition under Article 101 tfeu do not entail any implementing measures.4 To close the gap, Article 103 tfeu provides for adoption of necessary secondary law measures implementing the prohibitions laid down in Articles 101 and 102 tfeu.5 Council Regulation 1/​2003,6 which was adopted on the basis of Article 103 tfeu, serves as the principal instrument available to the Commission in enforcing EU law and policy against unlawful industry practices.7 The Regulation entered into force on 1 May 2004, replacing Regulation 17/​62, which had governed EU competition enforcement since the 1960s.8 Regulation 1/​2003 represents the key instrument available to the Commission in exercising its competences as the principal enforcer of EU competition rules and policy. 2 ibid. 3 These conditions relate to the positive effects of an agreement or concerted practice on the internal market that are potentially liable to offset its negative impact, such as facilitating efficient use of productive assets, contributing to technological progress, and consumer welfare. 4 Hans Henrik Lidgard, ‘Due Process in European Competition Procedure:  A Fundamental Concept or a Mere Formality?’, in: Cardonnel et al (eds), (n 3 of Chapter 1) 403‒21, at 405. 5 Thorsten Kingreen, (n 26 of Chapter 1) Art 103, in: Calliess, Ruffert (eds) (n 26 of Chapter 1) 1‒2. 6 Council Reg 773/​2004 also governs a few specific questions of implementation such as hearings, complaints and the right to access the file. Commission Reg (EC) No 773/​2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.4.2004, 18–​24. Also: Thomas Wahl, § 7 Kartellverfahren, in: Europäisches Strafrecht, 194 in: Sieber, Satzger, v. Heintschel-​Heinegg (eds), Europäisches Strafrecht (Baden-​Baden: Nomos, 2014, 2nd edn), 194; Frenz, (n 14 of Chapter 1) 795. 7 More: Lidgard, (n 4) 403. 8 Council Reg (eec) No 17/​62 First Regulation implementing Articles 85 and 86 of the Treaty, 1959‒1962, OJ Special Edition 87.

78 ­chapter  Regulation 1/​2003 sets out the rules for implementing substantive EU competition law under Articles 101 and 102 tfeu.9 It also entails a number of substantive rules, for example that Article 101(3) tfeu is directly applicable. Moreover, Article 23 of the Regulation lays down the prerequisites for imposition of fines for infringements of Articles 101 and 102 tfeu. Three principal characteristics define EU competition enforcement under Regulation 1/​2003.10 First, the Regulation provides for a ‘self-​assessment’ regime, as Article 101(3) tfeu is now directly applicable.11 This means that undertakings must independently assess the lawfulness of their agreements or practices, running the risk of fines or penalties if their assessment is wrong.12 It also means that agreements satisfying the conditions of this provision are valid and may be enforced without notifying the Commission.13 This directly applicable regime particularly well exemplifies the key difference between the current and repealed Regulations. Indeed, under repealed Regulation 17/​62, undertakings were required to notify their agreements to the Commission if they wished to invoke the exemption under what is now Article 101(3) tfeu. The Commission was the only institution competent to consider those notifications. However, since abolition of the notifications system, the Commission has been unburdened from dealing with overwhelming numbers of notifications. Most importantly, the principal enforcer of EU competition law is now free to decide which violations to prioritise. Cartels feature among its top priorities.14 The second pivotal change that came with the new Regulation is the decentralisation of EU competition enforcement.15 Articles 101 and 102 tfeu may be applied not only by the Commission, but also by national competition authorities (ncas) and national courts.16 All three actors apply EU competition rules

9 10 11 1 2 13 14

1 5 16

More: Helmuth Schröter, ‘Die Modernisierung des Kartellverfahrens’, in: Schröter, Jakob, Klotz, Mederer (eds), Europäisches Wettbewerbsrecht (Baden-Baden: Nomos, 2014, 2nd edn), 980. ibid, 980 ff. Reg 1/​2003 abolishes the prior ante post notification system under Reg 72/​62, under which the Commission was competent to grant individual exemptions pursuant to Art 101(3) tfeu. More: de Smijter & Sinclair, (n 167 of Chapter 3) 92ff. Wahl, (n 6) 196. de Smijter & Sinclair, (n 167 of Chapter 3) 92. Eg:  Commissioner Margrethe Vestager:  ‘Breaking cartels remains a top priority for the Commission, in particular when they affect important consumer goods, such as cars’: European Commission, Press release, 27 January 2016, available at ; Almunia, (n 3 of Chapter 1) 2014. Wahl, (n 6) 196. Arts 4, 5 and 6 of Reg 1/​2003 respectively.

Legal Framework of EU

79

in cooperation with one another,17 whereby ncas must inform the Commission when applying EU competition provisions.18 Although national authorities have become co-​enforcers of EU competition rules under the new Regulation,19 the Commission relieves them of their competence by initiating its own proceedings towards adoption of a decision finding an infringement of Articles 101 or 102 tfeu.20 EU competition rules prevail over national law: ncas must apply Articles 101 and 102 tfeu to any agreements, concerted practices or abuses of a dominant position that may affect trade between Member States,21 thereby catching practically every agreement or practice of larger economic significance.22 The third key aspect of the new Regulation relates to the broad investigatory, prosecutorial, and adjudicative powers it confers upon the Commission.23 These powers have been somewhat expanded in comparison to the prior enforcement regime. In particular, the Commission may now conduct unannounced inspections –​so-​called dawn raids –​not only of business, but also of private premises relating to an undertaking under investigation, such as the homes of staff members. In addition to the Regulation, the role of diverse Commission documents in shaping and clarifying enforcement of EU anti-​cartel rules should not go unnoticed. In particular, the Commission articulates the content of the substantive competition rules by virtue of ‘soft law’ instruments, such as Notices and Guidelines.24 These instruments aim to make the enforcement process more accountable, transparent, and consistent. Although these documents formally have no binding power, they serve the significant purpose of clarifying the principles guiding Commission policies. In view of their capacity to create legitimate interests among the companies concerned, these instruments may 17 1 8 19

20 2 1 22 23 24

Rudolf Geiger, Daniel-​Erasmus Khan, Markus Kotzur, European Union Treaties. Treaty on European Union. Treaty on the Functioning of the European Union. A Commentary (London: Hart Publishing, 2015), 514. Art 11(3) and (4) of Reg 1/​2003. The notification system under Reg 17/​66 meant that although national courts and national competition authorities (nca s), if authorised by law, could apply what is now Art 101 tfeu, their competence ended as soon as the company notified the Commission of the planned agreement. Each company wanting an exemption under Art 101(3) tfeu thus had to apply to the Commission directly. Art 11(6) of Reg 1/​2003. Art 3(1) of Reg 1/​2003. Wahl, (n 6) 196. ibid, 194. Eg: European Commission, Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation 1/​2003, (n 14 of Chapter 1), 2‒5. More: Wahl, (n 6) 194.

80 ­chapter  have legal effects.25 Although the Commission is bound by the principles laid down in them, the EU Courts use them only as a source of reference.26 2.2 Fundamental Rights in EU Competition Enforcement Expedient and effective enforcement procedure represents the key objective of Regulation 1/​2003.27 Arguably, guarantees of expediency and effectiveness flow from the decidedly wide investigatory, prosecutorial, and adjudicatory powers28 of the Commission. However, in the exercise of those powers, the Commission must respect EU fundamental rights. Recital 37 of Regulation 1/​2003 specifically declares a commitment to the rights stipulated in the Charter: This Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. Accordingly, this Regulation should be interpreted and applied with respect to those rights and principles.29 The need for a robust approach to due process is even more pressing in light of the Commission’s discretion to enforce substantive competition rules in accordance with its policy objectives. As AG Ruiz Jarabo Colomer has underlined, it is due to the broad powers of the Commission that ‘the rights of defence of those subject to the procedure must be recognised without reservation and respected’.30 An insight into the sources of the fundamental rights applicable in EU anti-​cartel enforcement appears immediately below. Legal protection in EU competition law is based on EU fundamental rights, including fair trial guarantees and the presumption of innocence.31 The 2 5 26 2 7 28

2 9 30 31

GC, Case T-​59/​02, Archer Daniels Midland, judgment 9 July 2003, ECLI:EU:T:2003:195, para 43. ecj, Case C-​310/​99, Italy v.  Commission, judgment 7 March 2002, ECLI:EU:C:2002:143, para 52. Lidgard, (n 4) 405. Heike Schweitzer, ‘Judicial Review in EU Competition Law’ (2012), 1‒42, at 1‒2, available at , also published in: Lianos, Geradin (eds), (n 133 of Chapter 3) 491‒539; Jones & Sufrin, (n 23 of Chapter 1) 1131; Wouter P.J. Wils, ‘The Combination of the Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis’, available at , 1‒27, also published in 27(2) World Competition (2004), 201‒24. 3. de Smijter & Sinclair, (n 167 of Chapter 3) 1139ff. Opinion of AG Ruiz Jarabo Colomer, delivered on 11 February 2003 in: ECJ, Case C-​204/​00 P, ECLI:EU:C:2003:85, para 26. Frenz, (n 14 of Chapter 1) 906; GC, Case T-​112/​98, Mannesmannröhren-​Werke v. Commission, judgment 20 February 2001, ECLI:EU:T:2001:61, para 77.

Legal Framework of EU

81

sources of EU fundamental rights are listed in Article 6 teu. Paragraph 1 of this provision expressly recognises that the Charter sees eye to eye with the Treaties in terms of its legal power.32 Proclaimed as a non-​binding catalogue of rights in 2000, the Charter entered the constitutional order of the EU with the entry into force of the Treaty of Lisbon in 2009. Article 6 teu also stipulates a profound role for the echr in the EU legal order. The second paragraph of this provision obliges the EU to accede to the echr. Following the negative Opinion 2/​13 of the ecj,33 accession is unlikely to occur in the foreseeable future. Nevertheless, the obligation remains. Thus, the issues of EU anti-​cartel enforcement examined in this work may well appear one day before the ECtHR, which will be finally competent to assess them ratione personae. Finally, Article 6(3) teu reinforces EU fundamental rights in their form as general principles of EU law. In that way, Article 6 teu essentially codifies the case law of the ecj, which developed fundamental rights as general principles of EU law in the early stages of the European Community.34 Since the Founding Treaties entailed no fundamental rights provisions other than a prohibition of discrimination,35 the Court was compelled to fill this gap through its jurisprudence, so that Article 6 teu may be seen as reflecting forty years of evolution in the sphere of EU fundamental rights, driven by the need to balance the sweeping competences of the EU with diverse rights-​based concerns.36 This evolution culminated in the Charter as the first written, legally binding catalogue of fundamental rights in the EU. This catalogue not only aims to recognise and reinforce the role of fundamental rights under EU law but also seeks to ensure the closest possible convergence between the Charter and Convention provisions, as expressed in Article 52(3) cfr.37 The Preamble to the Charter explicitly recognises its inherent ties to the echr.38

32 33 34 3 5 36 37 38

For more: Armin Hatje, EU-​Kommentar, (Baden-​Baden: Nomos, 2012, 3rd edn) 131; Thomas von Danwitz, in:  Grabenwarter (ed), Europäischer Grundrechtsschteschutz (Baden-​ Baden: Nomos, 2014, 1st edn) 267, 269. ecj, Opinion 2/​13 of the Court of 18 December 2014, ECLI:EU:C:2014:2454. ecj, Case 29/​69, Stauder v.  City of Ulm  –​Sozialamt, judgment 12 November 1969, ECLI:EU:C:1969:57, para 7; von Danwitz, (n 32) 258‒61, at 258‒59. Hatje, (n 32) 130. von Danwitz, (n 34) 258‒59. Folz, (n 27 of Chapter 1) 1178; Martin Borowsky, Art 52(3), in: Meyer (ed), Charta der Grundrechte der Europäischen Union. Kommentar (Baden-​Baden: Nomos, 2014, 4th edn), 775. Borowsky, (n 37)  792; Alexandros Kargopoulos, ‘Fundamental Rights, national identity and EU criminal law’, in: Mitsilegas, Bergström, Konstadinides (eds), Research Handbook on EU Criminal Law (Cheltenham: Edward Elgar Publishing, 2016), 125‒48, at 129.

82 ­chapter  It is true that the echr ‒ as well as the jurisprudence of the ECtHR ‒ ‘does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into European Union law’.39 However, the guarantees enshrined in the Convention must also be respected before accession, according to Article 52(3) cfr.40 This provision stipulates that to the extent the Charter lays down guarantees corresponding to Convention rights, the meaning and scope of those rights will be the same as in the echr. Therefore, the Convention represents the minimum standard of protection in the EU, which is obliged to offer equivalent guarantees to those afforded by the echr.41 Both the wording of the Convention and its Protocols and the case law of the ECtHR must be respected in this regard.42 It follows that, in applying Article 48(1) cfr to the presumption of innocence, the ecj must respect the case law of the ECtHR on the rights enshrined in Article 6(2) echr.43 Article 52(3) cfr is intended to ensure compatibility of the Charter with the echr without ‘adversely affecting the autonomy of Union law and of that of the Court of Justice of the European Union’.44 However, in light of the objectives of Article 52(3) cfr and the relation between this provision and Article 6(2) teu, the ecj may not simply disregard the case law of the ECtHR by invoking the argument of autonomy.45 Rather, it may consider the specific characteristics of EU law as a necessary justification for restricting the rights arising from the echr.46 These considerations articulate the guarantees of Article 6 echr as the benchmark for the safeguards available in EU cartel procedure.

39 4 0 41

42 43 4 4 45 46

ecj, Case C-​617/​10, Akerberg Fransson, judgment 26 February 2013, ECLI:EU:C:2013:105, para 44. Folz, (n 27 of Chapter 1) 1179. Grabenwarter & Pabel, (n 26 of Chapter 1), 27; Xavier Groussot, Eric Stavefeldt, ‘Accession of the EU to the ECHR: A Legally Complex Situation’, in Nergelius and Kristoffersson (eds), Human Rights in Contemporary European Law, Swedish Studies in European law, Vol. 6 (London: Hart Publishing, 2015), 7‒29, at 14. Folz, (n 27 of Chapter 1) 1178‒79; Explanations relating to the Charter of Fundamental Rights, 33. Explanations Relating to the Charter of Fundamental Rights, 34; Folz, (n 27 of Chapter 1) 1167‒68. Explanations relating to the Charter of Fundamental Rights, 33. Folz, (n 27 of Chapter 1) 1179. ibid.

Legal Framework of EU

3

83

Principal Features of EU Anti-​Cartel Procedure under Regulation 1/​2003

3.1 The Commission’s Role Combating cartels is the key priority in the activities of the Commission.47 Cartels are perceived as particularly heinous and harmful to the open market economy and consumer welfare.48 This combat is led by the Directorate-​ General for Competition, fronted by the Commissioner for Competition (DG comp).49 DG comp oversees cartel investigation,50 and leads a case team which performs investigatory and other actions in the course of the procedure, including drafting a final decision. In addition to shaping EU competition policy, the Commission performs a threefold function in EU competition enforcement, combining investigatory, prosecutorial, and adjudicative roles.51 Hence, this administrative body possesses wide-​reaching powers:52 it can, for example, raid business and private premises, question witnesses, impose and enforce fines.53 Since the Commission carries the burden of proving a competition infringement in accordance with Article 2 of the Regulation, these powers play a profoundly practical role in helping the Commission to discharge its burden.54 The Commission enjoys unlimited discretion to decide whether to launch an investigation based on the principle of discretionary prosecution (Opportunitätsprinzip).55 Under Article 17 of the Regulation, an investigation may be launched into particular economic sectors or types of agreement if a suspicion arises of a competition violation.56 Generally, this suspicion should be based on facts and objective circumstances, but as yet no particular precision is necessary at this stage.57 An investigation can begin of the Commission’s own initiative if it identifies a suspicious occurrence, such as an evident price 4 7 48 49 5 0 51 52 5 3 54 55 56 57

Almunia, (n 3 of Chapter 1). As elaborated by former DG Competition Mario Monti. European Commission, Mario Monti, (n 9 of Chapter 1). The current Commissioner is Margrethe Vestager (term 2014‒2019). More: . Peretz et al, ‘Enforcement and Procedure’, (n 4 of Chapter 3) 1134. ibid, 1233‒34. Craig de Búrca, EU Law:  Text, Cases, and Materials (Oxford:  oup, 2015, 6th edn), 31ff, 1050ff. Forrester, (n 28 of Chapter 1) 818; de Smijter & Sinclair, (n 167 of Chapter 3) 1136. Peretz et al, (n 4 of Chapter 3) 1193. Wahl, (n 6) 197; Frenz, (n 14 of Chapter 1) 801. Frenz, (n 14 of Chapter 1) 805‒08. ibid, 807.

84 ­chapter  increase in a particular sector. A complaint from a third party, for example a rival of a suspected cartelist, may also prompt an investigation.58 Finally, an investigation may originate from a leniency application according to the Leniency Notice.59 The following sections briefly outline the individual aspects of the cartel procedure, elucidating their decidedly robust character, dictating the need for appropriate procedural safeguards. 3.2 Investigation 3.2.1 Power to Request Information Article 18 of Regulation 1/​2003 confers upon the Commission the power to request undertakings for information60 on the subject matter of an investigation.61 This particularly broad competence represents one of the toughest investigation instruments in the Commission’s arsenal. At the same time, Regulation 1/​2003 does not permit so-​called ‘fishing expeditions’,62 so that any request must state its purpose, citing the suspected violation of Article 101 tfeu ‘with reasonable precision’.63 Under Article 18(2), the Commission can issue a so-​called simple request for information, to which an undertaking is not compelled to respond. However, if the undertaking decides to do so, it bears a duty to provide true and accurate information64 against a substantial penalty for failure.65 The Commission may also issue a formal decision under Article 18(3) requesting information.66 This is binding upon the undertaking concerned.67 58 59

60 6 1 62 63 6 4 65 6 6 67

ibid. This Notice states that the first undertaking to come forward to the Commission and provide evidence sufficient to open an investigation or find an infringement of Art 101 tfeu may be fully exempted from a fine (receive full immunity). Companies that come in second to confess their and their competitors’ unlawful conduct, and submit valuable evidence, may expect a fine reduction. Commission Notice on Immunity from fines and reduction of fines in cartel cases. The term ‘information’ covers both oral statements and written documents for the purposes of Art 18. ecj, Case C-​374/​87, Orkem (n 61 of Chapter 1) paras 34‒35. Frenz, (n 14 of Chapter 1) 814ff; Peretz et al, (n 4 of Chapter 3) 1197. GC, Case T-​135/​09 Nexans v. Commission, judgment 14 November 2012, ECLI:EU:T:2012:596 and GC, Case T-​140/​09, Prysmian v.  Commission, judgment 14 November 2012, ECLI:EU:T:2012:597. Wahl, (n 6) 200; Opinion of AG Jacobs, delivered on 15 December 1993 in: ecj, Case C-​36/​ 92 P, SEP v. Commission, ECLI:EU:C:1993:928, para 30, as confirmed by the ECJ in its judgment, para 21. Frenz, (n 14 of Chapter 1) 814. Art 24(1)(d) of Reg 1/​2003. More on the topic: Imran Aslam, Michael Ramsden, ‘EC Dawn Raids: A Human Rights Violation?’, 5(1) The Competition Law Review (2008), 61‒87, at 64. Hirsbrunner, (n 33 of Chapter 1) 1172. Art 23(1)(b) of Reg 1/​2003.

Legal Framework of EU

85

The Commission has discretion to choose which of these two instruments to deploy.68 Requests for information under Article 18 of the Regulation are addressed only to undertakings. It follows that penalties for failure to comply with Article 18 may be imposed only on company addressees.69 Both simple and formal requests must relate only to information the undertaking already has in its possession,70 and must be confined to information that is ‘necessary’ for the investigation. Requests issued by a decision are subject to judicial review by the EU Courts. This possibility reflects the obligation of the EU to guarantee effective legal protection under Article 47 cfr.71 3.2.2 Power to Take Statements Article 19 governs the Commission’s power to take statements from natural or legal persons.72 Statements may be taken from any relevant person varying from a party to the investigation to a third person.73 The purpose of this competence is to confirm the correctness of ‒ and remove any doubts about ‒ the data collected in relation to an ongoing investigation.74 Answering the questions under this provision is voluntary and does not give rise to penalties for false or misleading statements. 3.2.3 Inspections of Business and Other Premises Articles 20 and 21 of the Regulation govern the power to conduct inspections.75 Commission inspections include raids on business76 and private premises.77 On-​the-​spot unannounced inspections  –​so-​called ‘dawn raids’  –​are a frequently used tool of investigation. They also represent a source of controversy due to their potential intrusion into the private sphere of the company concerned, particularly in terms of home raids.78 6 8 69 70 71 72 73

7 4 75 76 77 78

Frenz, (n 14 of Chapter 1) 815. Wils, (n 235) 5. Eg, ecj, SEP v. Commission, (n 63 of Chapter 4). Frenz, (n 14 of Chapter 1) 828. For more: Hirsbrunner, (n 33 of Chapter 1) 1172. European Commission, ‘White Paper on Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty’, Commission Programme No. 99/​027, Brussels, 28 April 1999, OJ C 132 of 12.5.1999, at 1. Art 19(2) requires informing the nca on whose territory the interview would take place. Hirsbrunner, (n 33 of Chapter 1) 1172. Frenz, (n 14 of Chapter 1) 824; Peretz et al, (n 4 of Chapter 3) 1197. Art 20 of Reg 1/​2003. Art 21 of Reg 1/​2003. Hirsbrunner, (n 33 of Chapter 1) 1177.

86 ­chapter  To some extent, dawn raids can resemble a criminal inquiry: they are often conducted by numerous persons arriving at an undertaking’s premises without prior notice. This typically occurs in the early morning hours so as not to spoil the effect of surprise. Usually the timing of a dawn raid in one Member State is coordinated with connected raids on the premises of other suspected cartelists in other Member States.79 The Commission may carry out inspections on the basis of an authorisation80 or a decision.81 A Commission decision ordering an inspection under Article 20(4) of the Regulation is legally binding.82 Refusal to cooperate with the Commission is not only punishable by a fine, but may be regarded as an aggravating circumstance in calculating the final sanction under Article 23 of the Regulation.83 At the same time, to counter its intrusive effects, this decision must define ‘as precisely as possible, what it is looking for and the matters to which the [inspection] must relate’.84 During the inspection, Commission officials may, for example, enter any business premises; investigate, make copies, and seal all business-​related files and documents as well as record statements by staff members.85 Although the Commission is prohibited from compelling an undertaking to admit an infringement,86 the undertaking is nevertheless required to disclose all necessary information.87 In addition to inspections of business premises, Article 21 of Regulation 1/​ 2003 governs on-​site inspections of non-​business premises, which cover ‘any other premises, land and means of transport, including homes of directors, managers and other members of staff of the undertakings’.88 The owner of

7 9 80 81 82 83 84 85 86 87

88

Forrester, (n 3 of Chapter 1) 199. Art 20(3) of Reg 1/​2003. Art 20(4) of Reg 1/​2003. Hirsbrunner, (n 33 of Chapter 1) 1178. Pt 28, indent 2, of the Guidelines on the method of setting fines (n 14 of Chapter 1). ecj, Case C-​94/​00, Roquette Freres, judgment 22 October 2002, ECLI:EU:C:2002:603, para 47, as cited in: Wils, (n 235 of Chapter 1) 6. Also: Hirsbrunner, (n 33 of Chapter 1) 1178. Art 20(2) of Reg 1/​2003. More: Hirsbrunner, (n 33 of Chapter 1) 1179; Frenz, (n 14 of Chapter 1) 827. ibid, 825. ecj, Case C-​374/​87, Orkem (n 61 of Chapter 1) para 34. Also: Hirsbrunner, (n 33 of Chapter  1) 1171; Aslam & Ramsden, (n 65)  68; Jürgen Schwarze, Rainer Bechtold, Wolfgang Bosch, ‘Deficiencies in European Community Competition Law. Critical analysis of the current practice and proposal for change’, Gleiss Lutz (2008), 5‒87, at 32‒33, available at . More in Ch 7. Art 21 of Reg 1/​2003. More: Wils, (n 235 of Chapter 3) 6.

Legal Framework of EU

87

these premises is irrelevant as long as they are controlled or used by the company concerned.89 Since home raids present a considerable intrusion into the private sphere of the persons concerned, the Commission enjoys narrower powers in this regard.90 In particular, the Commission must respect Article 7 cfr.91 Any inspection of private premises must also correspond to the principle of proportionality92 and rely on a ‘reasonable suspicion’93 that documents relevant for the inspection, and relating to a ‘serious violation’ of Article 101 tfeu, may be found on the premises.94 Thus, for an inspection of home premises, an ­abstract suspicion that relevant documents may possibly be on these premises is ­insufficient.95 A formal decision ordering an inspection of non-​business premises may be adopted only after consultation with the nca96 and authorisation by a national court. However, the national court may not review the necessity for the inspection or request to see the Commission file.97 The lawfulness of the Commission decision can be reviewed solely by the ecj.98 3.2.4 Statement of Objections A Statement of Objections (SO) can reach the headquarters of an undertaking after an investigation if the Commission has sufficient grounds to adopt a final decision with regard to the undertaking. The SO is a written document that informs the undertaking concerned about all the grounds on which the Commission intends to rely in the final decision against the undertaking under Article 7 of Regulation 1/​2003.99 The SO is drafted by the case team that conducted the investigation on behalf of the Commission. The obligation to issue a SO gives 8 9 90 91 9 2 93 94 95 96

97 98 99

Hirsbrunner, (n 33 of Chapter 1) 1179. ibid; Frenz, (n 14 of Chapter 1) 843. ibid, 844. ECJ, Roquette Freres SA, (n 84) para 29. For an example of this issue in light of the ECHR: Niemietz v. Germany, (n 250 of Chapter 3) para 31. Hirsbrunner, (n 33 of Chapter 1) 1179. GC, Nexans (n 62) para 43. Art 21(1) of Reg 1/​2003. Also: Wils, (n 235 of Chapter 3) 6. Frenz, (n 14 of Chapter 1) 844. nca are required to give the Commission the assistance it needs. In particular, NCA officials must be present if the company under investigation opposes an inspection. They must ensure that the Commission inspection can be carried out effectively, in line with the procedural rights of the companies concerned. ecj, Case C-​46/​87 Hoechst v. Commission, ECLI:EU:C:1989:337, judgment 21 September 1989, paras 32‒33. ecj, Hoechst v. Commission, (n 96) para 35. ecj, Roquette Freres SA, (n 84) paras 54, 62. Jones & Sufrin, (n 23 of Chapter 1) 1071ff.

88 ­chapter  the undertaking concerned a chance to submit objections and observations to the Commission.100 In preparation for its defence, an undertaking against which the SO has been adopted has the right to access all non-​confidential parts of the Commission file, which is compiled in the course of the investigation.101 An undertaking may reply to the SO in writing or during an oral hearing, which can take place before the final decision is adopted. 3.2.5 Oral Hearing An oral hearing may be held after adoption of the SO and before adoption of the final decision. The final decision is adopted by the Commission, although it does not attend the hearing.102 Only the case team that performed the investigation is present, together with other Commission officials; officials from ncas also attend these hearings, which are not public. Moreover, they do not constitute a ‘public hearing by an independent and impartial tribunal’ for the purposes of Article 6 echr: the Commission is an administrative body and not a judicial body for the purposes of the Convention.103 An oral hearing is not obligatory: it may be organised at the request of the party to which the SO is addressed. The aim here is to allow the parties to make oral representations to the case team handling the investigation. These representations may complement the defences submitted in the written reply to the SO. New evidence can be introduced at the oral hearing only with prior 100 ibid, 1072. 101 Defendants in EU competition proceedings have a right to access the Commission file after notification of the SO. This is consistent with Art 41(2) cfr which affirms the right ‘of every person to have access to his or her file, while respecting the legitimate interests of confidentially and of professional and business secrecy’. Thus, access to the Commission file aims at securing the rights of the defence in competition proceedings. The Commission Hearing Officer must ensure that affected undertakings have access to the complete Commission file and may step in if the Commission fails to make available the non-​confidential version of the SO or fails to grant access to documents necessary to ensure the rights of defence of the undertaking concerned. Commission Regulation (EC) No 773/​2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.4.2004, 18‒24; Commission Notice on the rules for access to the Commission file in cases pursuant to Articles 81 and 82 of the EC Treaty, Arts 53, 54 and 57 of the eea Agreement and Council Regulation (EC) No 139/​2004, OJ C 325, 22.12.2005, 7–​15. 102 Wouter P.J. Wils, ‘The Increased Level of EU Antitrust Fines, Judicial Review, and the European Convention on Human Rights’, 7 available at , 33(1) World Competition (2010), 5‒29. 103 GC, Joined Cases T-​56/​09 and T-​73/​09, Saint-​Gobain Glass France SA and Others v. Commission, judgment 27 March 2014, ECLI:EU:T:2014:160, para 76. Also: Jones & Sufrin, (n 23 of Chapter 1) 1132; Wils, (n 102) 1‒32, at 18; Peretz et al, (n 4 of Chapter 3) 1238.

Legal Framework of EU

89

approval of the Hearing Officer, who conducts the hearing and ensures the confidentially of the proceedings and the right to access the file.104 As a rule, a hearing is organised as follows. The undertakings concerned bring their legal representation team and experts, such as economists, who submit arguments in favour of the defendant. A member of the case team from DG comp that handled the case summarises the facts of the case and the arguments submitted by the Commission.105 Then the addressees of the SO may present their oral arguments in support of the written evidence inherent to their reply to the SO. There is no cross-​examination of witnesses: the representatives of the defendant company may question only persons connected to itself, such as employees or hired experts.106 In essence, the purpose of the hearing is to give the undertaking the opportunity to contest the SO before the case team. However, the team is not required to present a response of their own. Therefore, this hearing displays few adversarial features. Moreover, the Commission is arguably affected by prosecutorial bias relating to the psychological phenomenon known as a confirmation bias.107 Thus, an oral hearing before the case team is highly unlikely to change the Commission’s mind about its findings against the undertaking concerned. 3.3 Decision to Impose a Sanction under Article 23 of Regulation 1/​2003 Article 7 of Regulation 1/​2003 governs adoption of a decision finding an infringement of Article 101 or 102 tfeu (or both) and requiring the undertakings concerned to terminate it.108 In this final decision, the Commission may 1 04 European Commission, ‘11th Report on Competition Policy’, 1987, pt 26. 105 Forrester, (n 28 of Chapter 1) 833. 106 Ingeborg Simonsson, Legitimacy in EU Cartel Control (London: Bloomsbury Publishing, 2010), 251. 107 Confirmation bias compels a person to interpret evidence or facts as a confirmation of their beliefs. The very same bias compels the administrative authority, which combines the powers of investigation, adjudication, and decision-​making, to interpret the evidence which it has collected in a way that would confirm its original hypothesis. In competition proceedings, the hypothesis is that the undertaking under investigation has infringed EU competition law. Further, the Commission allocates substantial financial and human resources to a cartel case. This inevitably creates an interest in bringing the case to an end by finding an infringement: finding no infringement would mean that years and substantial resources have been wasted. For more: Whelan, (n 13 of Chapter 1) 128; Schweitzer, (n 28) 1‒2; Douglas H. Ginsburg, Taylor M. Owings, ‘Due Process in Competition Proceedings’, 46; Forrester, (n 28 of Chapter 1) 817. 108 Frenz, (n 14 of Chapter 1) 866.

90 ­chapter  impose a fine upon the offending undertaking(s) under Article 23 of Regulation 1/​2003. The decision-​making process in the Commission is based on the principle of collegiality. Thus the final decision is adopted by the Commission as a whole. One of the most striking features here is that a decision deciding on the guilt or innocence of an undertaking is adopted by the 28 politicians belonging to this key executive body of the EU, not one of whom has participated in the oral hearing or actually read the SO. The Commission itself does not draft the final decision on the guilt or innocence of the undertaking concerned, as the case team is responsible for doing so. However, the Commission is consulted during the drafting process.109 Since the Commission neither reads the file nor listens to the arguments presented at the oral hearing, its decision is predominantly based on the Hearing Officer’s report and the recommendations of the case team. The final decision under Article 7 may impose a fine under Article 23 of Regulation 1/​2003.110 Competition fines represent the main instrument of punishment and deterrence in EU competition enforcement.111 To deploy the words of the General Court: The Commission’s power to impose fines on undertakings which, intentionally or negligently, commit an infringement of Article [101 tfeu] is one of the means given to it with which to carry out the task of supervision conferred on it by Community law. (…) It follows that, in assessing the gravity of an infringement for the purpose of setting the amount of the fine, the Commission must ensure that its action has the necessary deterrent effect, especially as regards those types of infringement which are particularly harmful to the attainment of the objectives of the ­Community.112 Despite their expressly stated deterrent and repressive nature, these fines are classified as non-​criminal in accordance with Article 23(5),113 embodying the lack of criminal competences of the Commission in the field of competition 1 09 Forrester, (n 28 of Chapter 1) 841. 110 Frenz, (n 14 of Chapter 1) 903. 111 Damien Geradin, David Henry, ‘The EC fining policy for violations of competition law: An empirical review of the Commission decisional practice and the Community courts’ judgments’, GCLC Working Paper 03/​05, The Global Competition Law Centre Working Papers Series (2005), 1‒59, at 1, available at . 112 GC, Archer Daniels Midland v. Commission, (n 25) para 48. 113 Peretz et al, (n 4 of Chapter 3) 1279. More in Ch 5.

Legal Framework of EU

91

law.114 Nevertheless, a decision imposing a fine must respect the rights laid down in Articles 47 to 50 cfr. A fine may further not exceed ten per cent of an undertaking’s total turnover in the preceding business year. The amount reflects the gravity and duration of the infringement in question.115 Additionally, the Commission is required to establish the culpability of the offender, taking the form of intent or negligence, or both.116 To find intent or negligence, it suffices for the Commission to prove that the cartelist ‘could not have been unaware that its conduct was aimed at restricting competition’.117 For this reason it is unnecessary to prove that the cartelist was aware of the particular prohibition enshrined in Article 101(1) tfeu: it suffices simply to establish that the cartelist sought to prevent, restrict or distort competition.118 In practice, there is no strict differentiation between intent and negligence in EU cartel procedure.119 Frequently, the Commission simply refers to an infringement committed ‘intentionally or negligently’,120 or ‘intentionally, or at least negligently’.121 Sometimes, the fault of undertakings is simply depicted as ‘deliberate’ action.122 Hence, the question of fault does not take a very precise and well-​defined form in EU cartel procedure. Imposition of fines is governed by principles that are relatively more defined. The Commission nevertheless enjoys wide discretion in fixing a competition fine under Article 23(2) of Regulation 1/​2003. References to the duration and gravity of an infringement in Article 23 of the Regulation are rather general in nature and do not contribute to the foreseeability of a potential fine.123 However, more clarity about the fining practice of the Commission is provided in the Guidelines on the method of setting fines, or the Fining Guidelines. 1 14 Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558. 115 Eg: ecj, Case C-​289/​04 P, Showa Denco v. Commission (Graphite Electrodes), judgment 29 June 2006, ECLI:EU:C:2006:431, para 36. Also: Frenz, (n 14 of Chapter 1) 921. 116 Frenz, (n 14 of Chapter 1) 903. 117 ecj, Case C-​96/​82, IAZ v.  Commission, judgment 8 November 1983, ECLI:EU:C:1983:310, para 45; GC, Case T-​ 143/​ 89, Ferriere Nord v.  Commission, judgment 6 April 1995, ECLI:EU:T:1995:64, para 41; GC, Case T-​83/​91, Tetra Pak v. Commission, judgment 6 October 1994, ECLI:EU:T:1994:246, paras 238ff. More: Frenz, (n 14 of Chapter 1) 929. 118 Whelan, (n 13 of Chapter 1) 86; Peretz et al, (n 4 of Chapter 3) 1281. 119 Peretz et al, (n 4 of Chapter 3) 1280. 120 European Commission, Decision 23 November 1972, Case IV/​26.894, Pittsburgh Corning Europe, OJ L 272, 5.12.1972, 35‒39. 121 European Commission, Decision 14 May 1997, Case IV/​34.621, 35.059/​F-​3, Irish Sugar plc, OJ L 258, 22.09.1997, 1‒34. 122 European Commission, Decision 20 December 2001, Case COMP/​E-​1/​36.212, Carbonless Paper, OJ L 115/​1, 21.04.2004. 123 Frenz, (n 14 of Chapter 1) 924.

92 ­chapter  Before the first Fining Guidelines were adopted in the late 1990s, fines were highly unpredictable due to the opaque criteria applied to calculate them. In response, the General Court called for clearer rules and more transparency in the fine-​setting process.124 Seeking to address these concerns, in 1998, the Commission adopted the first Fining Guidelines, amended in 2002 and 2006. The 2006 Fining Guidelines seek to clarify the calculations on which a competition fine is based, thereby providing some degree of predictability and ­transparency.125 Although the Guidelines formally have no legal power, the Commission is nevertheless bound by them,126 since they constitute the ‘rules of practice from which the administration may not depart in an individual case without giving reasons compatible with the principle of equal treatment’.127 In particular, the Guidelines reflect deterrence considerations in EU competition policy.128 A two-​step procedure in setting a fine for an infringement of the prohibition under Article 101 tfeu is established by the Guidelines.129 The Commission first sets the basic amount based on the gravity and duration of the violation, taking the turnover of the undertaking concerned as the starting point of reference.130 In the next step, the Commission adjusts this basic amount based on a variety of complementary circumstances, such as aggravating131 and mitigating132 factors. Despite the exceptionally severe competition fines, the Commission is not obliged to take into account any mitigating circumstances ex officio unless the undertaking itself submits proof that such circumstances exist or cooperates with the Commission throughout the proceedings against it ‘beyond its legal obligation to do so’.133

124 1 25 126 127 128 1 29 130 131 132 133

GC, Case T-​148/​89, Trefilunion v. Commission (Welded steel mesh), judgment 6 April 1995, ECLI:EU:T:1995:68, para 141. For more: Mestmäcker & Schweitzer, (n 14 of Chapter 1) 557. For more: Kienapfel, (n 24 of Chapter 1), 1225. Kienapfel, (n 24 of Chapter 1), 1225‒26; Mestmäcker & Schweitzer, (n 14 of Chapter 1). ECJ, Case C-397/ 03 P, Archer Daniels v. Commission, judgment 18 May 2006, ECLI:EU:C:2006:328, para 91. Carol Harlow, Richard Rawlings, Process and Procedure in EU Administrations (London: Bloomsbury Publishing, 2014), 216. Kienapfel, (n 24 of Chapter 1), 1226‒27. Frenz, (n 14 of Chapter 1) 925. The Commission may take into account the duration of participation in the offence, repeat offences, leadership by an undertaking in a cartel, or obstructing the investigation as aggravating factors. Pt 28 of Guidelines on the method of setting fines (n 14 of Chapter 1). Negligence may be taken into consideration by the Commission as a mitigating factor, but it is for the undertaking to prove this circumstance. More: Peretz et al, (n 4 of Chapter 3) 1294. Pt 29 of Guidelines on the method of setting fines (n 14 of Chapter 1).

Legal Framework of EU

93

The current Guidelines provide for a severe increase in the fine, depending on how many years the offending undertaking has participated in a cartel.134 The Guidelines also lay down a ‘special increase for deterrence’.135 The severity of competition fines represents an aspiration to achieve their ‘sufficiently deterrent effect’,136 which aims to dissuade the cartelist from reoffending. Moreover, the general deterrent effect counts as a desired element of these fines as well. The robust fining policy has yielded impressive results: as noted earlier, in the period between 2015 and 2016 alone, over four billion euros worth of fines were imposed on undertakings held responsible for competition offences.137 4

Judicial Review of the Cartel Procedure

4.1 Background Article 47 cfr stipulates the right of access to a court as one of the key elements of effective judicial protection in EU law. In line with this guarantee, Commission decisions in enforcement procedure are subject to judicial control via an action for annulment under Article 263 tfeu. This judicial control is exercised by the General Court in the first instance under Article 256 tfeu, whereas the ecj acts as an appeal court. Arguably, the reality of appeal proceedings is generally burdensome: an appeal is costly138 and capable of substantially prolonging uncertainty about the 134 Whereas the 1998 Guidelines set the maximum increase of the basic amount to 10 % for each year of infringement, under the new Guidelines the basic amount can be increased by up to 100 % for every year of participation in a cartel, whereas a 50 % increase is applicable to the basic amount if the duration of the participation has been less than six months. 135 Hubert de Broca, ‘The Commission Revises its Guidelines for Setting Fines in Antitrust Cases’, 3 Competition Policy Newsletter No. 1 (2006), 2, available at . 136 Pt 4 of the Guidelines on the method of setting fines (n 14 of Chapter 1). 137 European Commission, ‘Cartel Statistics’, (n 15 of Chapter 1). 138 The General Court follows the principle of ‘the losing party pays’, similarly to many jurisdictions. Interestingly, on average, only around one-​third of the costs incurred due to lawyers’ fees, travel to Brussels, etc, are recovered. Precise data on these matters is difficult to come by. However, legal practitioners share stories suggesting that in cases where lawyers’ fees amount to hundreds of thousands of euros, the Commission, as the losing party, often attempts to argue that it should pay only a fraction of the actual costs incurred. Eg, in one case, the Commission offered to pay 10,000 eur, although in reality the sum was many times larger. Stephen Kinsella, Angelene Duke, ‘Who are the real winners and losers in the General Court?’, Competition Policy International (2013), available at .

94 ­chapter  final sanction.139 Moreover, the fine can even be increased in appeal proceedings, rendering the process quite counterproductive as far as an undertaking is concerned.140 Significantly, too, most appeals are dismissed as unfounded.141 In particular, the litigation history suggests that pleas challenging the Commission’s assessment of complex economic matters and procedural inadequacies, such as issues concerning rights of defence, rarely succeed.142 Indeed, the cases tackled throughout this work serve as an apt illustration that appeals claiming, for example, violation of the presumption of innocence are hardly ever successful. This lack of success may be attributed to a number of reasons. The Commission enjoys broad discretion, particularly with regard to complex economic and technical assessments.143 Moreover, it is free to determine the level of fines in accordance with its fining policy.144 To illustrate this point more aptly,

139 A UK government report suggests that the average procedure lasts an average of 33 months. House of Lords, ‘European Union Committee Follow-​Up Report on the Workload of the Court of Justice of the European Union’, 16th Report of Session 2012–​2013, available . Other sources suggest that in some cases the General Court takes up to 50 or even 69 months to decide. Kinsella & Duke, (n 138). 140 Eg the fine was increased in:  GC, Joined Cases T-​101 and 111/​05, BASF AG and UCB SA v. Commission, judgment 12 December 2007, ECLI:EU:T:2007:380, paras 219‒23. More: Peter D.  Camesasca, Johan Ysewyn, Thomas Weck, ‘Cartel Appeals to the Court of Justice: The Song of the Sirens?’, Journal of European Competition Law & Practice (2013), 1. 141 Camesasca et al, (n 140). The authors of this article examined appeal proceedings before the EU Courts in 510 cases in the time frame of 1998‒2012. Only in 29 cases was the judgment set aside, whereas the fine was upheld or modified in over 130 cases (the remaining 310 appeals were pending at the time of writing). 142 ibid, 5. 143 GC, Case T-​240/​07, Heineken v. Commission, judgment 16 June 2011, ECLI:EU:T:2011:284, paras 308‒09; GC, Joined Cases T-​236/​01, T-​239/​01, T-​244/​01 to T-​246/​01, T-​251/​01 and T-​ 252/​01, Tokai Carbon v. Commission, judgment 29 April 2004, ECLI:EU:T:2004:118, para 371; GC, Case T-​191/​06, FMC Foret v. Commission, judgment 16 June 2011, ECLI:EU:T:2011:277, para 333. Also: Jones & Sufrin, (n 23 of Chapter 1) 1145. 144 Although Reg 1/​2003 provides some guidance in this regard, the Commission is largely unrestricted in the area of sanctioning. Art 23(3) of Reg 1/​2003 does not lay down specific rules for calculating a competition fine. It states that ‘in fixing the amount of the fine, regard shall be had both to the gravity and to the discretion of the infringement’. But the Commission is not obliged to take into consideration the two types of guilt, intention or negligence laid down in Art 23(2) of the Regulation. For more: Forrester, (n 3 of Chapter 1) 186. Also: ecj, Joined Cases 100/​80, 101/​80, 102/​80, 103/​80, SA Musique Diffusion française and others v. Commission (Pioneer), judgment 7 June 1983, ECLI:EU:C:1983:158, para 109: ‘(…) [T]‌he proper application of competition rules requires that the Commission may at any time adjust the level of the fines to the needs of [its] policy’.

Legal Framework of EU

95

the Commission enjoys broad discretion to take –​or not to take –​into consideration various mitigating and aggravating circumstances, such as the offending undertaking’s cooperation in the investigatory phase.145 In spite of the poor chances of winning a case, the dramatically high competition sanctions compel almost every sanctioned undertaking to appeal, with very few exceptions.146 Hence, a judicial review before the EU Courts is not only frequent but also a crucial necessity, given the harsh punishment to which undertakings may be exposed.147 The EU Courts perform a two-​fold role during review of EU cartel procedure. While the Commission is primarily adamant about protecting the interests of effective competition enforcement, undertakings only seek to protect their own rights. The EU Courts, on the other hand, must balance both of these aspects, striking a balance between the general interest  –​ensuring that the Commission can effectively perform its regulatory tasks –​and the thorny issue of individual rights.148 4.2 Judicial Review: Main Characteristics 4.2.1 Key Features 4.2.1.1 Burden of Proof Effectiveness of legal remedies rests on two pillars: access to a court and the right to a fair trial.149 The right to a fair trial before the EU Courts is fleshed out in Article 47 cfr, implementing the guarantees enshrined in Article 6(1) echr. Moreover, as noted earlier, Article 48(1) cfr, effectively implementing Article 6(2) and (3) echr,150 also applies to the Commission procedure which may result in the imposition of fines.151 Judicial review seeks to place the Commission and the undertakings concerned on a relatively equal footing, giving both parties a ‘reasonable opportunity to present [their] case under conditions that do not place [them] at a

145 146 147 1 48 149 1 50 151

Tanel Kerikmäe, Protecting Human Rights in the EU: Controversies and Challenges of the Charter of Fundamental Rights (Berlin: Springer Science & Business Media, 2013), 122. Eg, the companies fined in the Videotapes case did not appeal, although they were fined sums varying from 13 million to 47 million euros. European Commission, Decision 20 November 2007, COMPT/​38.432, Videotapes, 2008, OJ C 57, 1.3.2008. ECtHR, Menarini Diagnostics v. Italy, (n 72 of Chapter 3). Jones & Sufrin, (n 23 of Chapter 1) 1131. René Barents, ‘EU Procedural Law and Effective Legal Protection’, 51 CMLR (2014), 1437‒62, at 1448. Folz, (n 27 of Chapter 1) 1167‒68. GC, Saint-​Gobain Glass (n 103) paras 97‒104.

96 ­chapter  substantial disadvantage vis-​à-​vis [their] opponent’.152 Hence, the parties must have the opportunity to contest and comment on relevant matters of fact and law. Contestations by undertakings take the form of pleas.153 Pleas before the General Court may include points of fact and law, whereas the ecj reviews only points of law.154 In practice, an appeal must include the form of order sought, an enumerated brief list of pleas, and the relevant documentary evidence,155 placing ‘all the cards on the table’.156 Only in exceptional circumstances will the EU Courts accept a modification of the subject matter or additional pleas. The rigorous system of pleas puts the EU Courts in a somewhat passive position, reinforcing the overall character of objective control of legality.157 Whereas pleas define the subject matter of the appeal proceedings, the burden and the standard of proof determine the allocation of who has to prove what and to what standard.158 Judicial review before the EU Courts is not inquisitorial in nature. Thus, it is not for the General Court to determine the relevant factual circumstances of its own initiative.159 Rather, the principle ‘he who asserts must prove’160 applies, making the procedure decidedly adversarial.

152 153

1 54 155 1 56 157 1 58 159

160

GC, Case T-​36/​04, API v. Commission, judgment 12 September 2007, ECLI:EU:T:2007:258, para 79. A plea may be described as a factual and legal argument listed in the application for annulment that determines the subject matter of the appeal proceedings and the subsequent judicial decision. According to the ecj, pleas must be ‘sufficiently precise and substantiated’. ecj, Case C-​221/​97 P, Schröder v. Commission, judgment 10 December 1998, ECLI:EU:C:1998:597, para 35: ‘An appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside, and also the legal arguments specifically advanced in support of the appeal’. Jones & Sufrin, (n 23 of Chapter 1) 1147‒48. ecj, KME v. Commission, (n 39 of Chapter 1) para 102: ‘[T]‌he 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’. Barents, (n 149) 1451. In this respect, as Barents rightly puts it, strong emphasis on review of legality can preclude a thorough examination of whether the subjective rights of the application have been observed. ibid, 1452; Forrester, (n 3 of Chapter 1) 207. Jones & Sufrin, (n 23 of Chapter 1) 1139. See more Heike Schweitzer, ‘Judicial Review in EU Competition Law’, in; Lianos, Geradin (eds), Handbook on European Competition Law: Enforcement and Procedure (Cheltenham: Edward Elgar Publishing, 2013), 491‒539. The author refers to the online version of this article available at , 1–​42, at 8. Wahl, (n 6)199; Bailey, (n 125 of Chapter 3) 20; Mestmäcker & Schweitzer, (n 14 of Chapter 1) 560; de Smijter & Sinclair, (n 167 of Chapter 3) 98.

Legal Framework of EU

97

Article 2 of Regulation 1/​2003 further stipulates that the burden of proof is borne by the party alleging an infringement of Article 101(1) or 102 tfeu.161 It thereby epitomises the presumption of innocence.162 It follows that the Commission carries the burden of proving a prima facie case against the undertaking. However, it is then for the applicant to contest the Commission’s findings by adducing sufficient proof.163 An undertaking that invokes the exemption under Article 101(3) tfeu from the prohibition of 101(1) tfeu also carries the evidentiary burden of proving that the requirements of Article 101(3) tfeu are met. It has been suggested in the scholarly literature that this requirement may be problematic from the perspective of the presumption of innocence.164 Seemingly, this requirement reflects not only the decidedly adversarial nature of the appeal proceedings, but also implies that the undertaking is best placed to find the evidence necessary for exemption from the prohibition in Article 101(1) tfeu.165 A defendant wishing to avoid liability for infringing Article 101 tfeu must adduce sufficient and compelling evidence166 that its agreement fulfils the four cumulative conditions outlined in Article 101(3) tfeu:  the agreement results in increased efficiency; the consumer receives a fair share of the benefits; the restriction of competition is indispensable; and competition is not wholly eliminated.

161 In actions for damages the onus is on the claimant. For more on actions for damages for infringements of EU competition law: Christopher H. Bovis, Charles M. Clarke, ‘Private Enforcement of EU Competition Law’, 36(1) Liverpool Law Journal (2015), 49‒71. 162 ecj, Case C-​235/​92 P, Montecatini, judgment 8 July 1999, ECLI:EU:C:1999:362, para 179: ‘[I]‌t must be borne in mind that, where there is a dispute as to the existence of an infringement of the competition rules, it is incumbent on the Commission to prove the infringements found by it and to adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting an infringement’. Also: GC, Case T-​168/​01, GlaxoSmithKline Services Unlimited v. Commission, judgment 27 September 2006, EU:T:2006:265, para 55; ECJ, Joined Cases 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 and others v. Commission, judgment 20 January 1994, ECLI:EU:C:1993:120, para 176; GC, Case T-​41/​96, Bayer v. Commission, judgment 26 October 2000, ECLI:EU:T:2000:242, para 174. Also: Puffer-​Mariette, (n 24 of Chapter 1) 999‒1000; Frenz, (n 14 of Chapter 1) 906 ; Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558; de Smijter & Sinclair, (n 167 of Chapter 3) 98; Peretz et al, (n 4 of Chapter 3) 1234. 163 ecj, KME Germany (n 39 of Chapter 1) para 132. Also: Schweitzer, (n 159) 9; Puffer-​Mariette, (n 162) 1000; Frenz, (n 14 of Chapter 1) 805. 164 Frenz, (n 14 of Chapter 1) 805. 165 Wahl, (n 6) 199. 166 Eg: GC, GlaxoSmithKline Services Unlimited (n 159) para 235.

98 ­chapter  Furthermore, as soon as one party adduces proof which, according to the General Court, ‘may (…) require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been discharged’,167 the evidentiary burden shifts back to the other party. Allocation of the burden to the Commission is intended to reconcile effective competition enforcement with the rights of defence of the parties,168 having regard also to the principle of good administration.169 The principle in dubio pro reo is expressly recognised as an indispensable element in the consideration of evidence.170 4.2.1.2 Standard of Proof The standard of proof determines whether sufficient evidence has been produced in order to allow the prosecution to discharge of its burden of proof,171 indicating the required degree of persuasiveness of evidence in order to prove a claim.172 Notably, Regulation 1/​2003 entails no particular standard of proof,173 confining itself to allocation of the burden of proof.174 More generally, standard of proof, as a concept, is rarely referred to in the case law of the EU

167 1 68 169 170

1 71 172

1 73 174

GC, Case T-​120/​04, Peróxidos Orgánicos SA v. Commission, judgment 16 November 2006, ECLI:EU:T:2006:350, para 53. Rec 5 of Reg 1/​2003. ecj, Case C-​56/​64, Consten and Grundig v.  Commission, judgment 13 July 1966, ECLI:EU:C:1966:41, 347, as cited by: Waelbroeck & Vancaille, (n 1 of Chapter 1) 393. GC, Case T-​321/​05, AstraZeneca AB and AstraZeneca plc v. Commission, judgment 1 July 2010, ECLI:EU:T:2010:266, para 475:  ‘[A]‌ny doubt of the Court must benefit the undertaking to which the decision finding an infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement at issue to the requisite legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment of a decision imposing a fine’. Schweitzer, (n 159) 9; de Smijter & Sinclair, (n 167 of Chapter 3) 99. More on the standard of proof in EU competition proceedings, eg: Hellström, (n 135 of Chapter 3) 147‒57; Laura Parret, ‘Sense and nonsense of rules on proof in cartel cases’, TILEC Discussion Paper, workshop Law and Economics Policy (2007, published in 2008), available at ; Mel Marquis, ‘Rules That Govern Rules: Evidence, Proof and Judicial Control in Competition Cases’, in: Ehlermann, Marquis (eds), (n 138 of Chapter 3), xv-​2; Aindrias O Caoimh, ‘Standard of Proof, Burden of Proof, Standards of Review and Evaluation of Evidence in Antitrust and Merger Cases: Perspective of the Court of Justice of the European Union’, in: Ehlermann, Marquis (eds), (n 138 of Chapter 3) 271‒85; Philip Lowe, ‘Taking Sound Decisions on the Basis of Available Evidence’, in: Ehlermann, Marquis (eds), (n 138 of Chapter 3) 157‒75; Gippini-​ Fournier, (n 138 of Chapter 3) 295‒319. Rec 5 of Reg 1/​2003. de Smijter & Sinclair, (n 167 of Chapter 3) 99.

Legal Framework of EU

99

Courts.175 Nonetheless, an infringement of Article 101 tfeu must be proven by ‘precise and consistent evidence’.176 This evidence must be so persuasive as to enable the GC to form a ‘firm conviction’ that the disputed infringement has really been committed.177 In line with this standard, in situations where the evidence precludes the General Court from forming a firm conviction, it is consistent with the presumption of innocence to annul the disputed Commission decision.178 Similarly, all doubts must be interpreted for the benefit of the undertaking in accordance with the principle in dubio pro reo, as noted earlier.179 The existence of an infringement is not established to the requisite legal standard if the General Court still ‘entertains doubts’180 about interpretation of the evidence in a case. However, not every piece of evidence must satisfy the requirements of consistency and precision. Cartels are notoriously difficult to prove, so the Commission may not be reasonably required to produce direct evidence of collusion:181 [A]‌s anti-​competitive agreements are known to be prohibited, and are known as a result to be implemented clandestinely, the Commission cannot be required to produce documents expressly attesting to contacts ­between the traders concerned. The fragmentary and sporadic items of evidence which may be available to the Commission should, in any event, be capable of being supplemented by inferences which allow the relevant circumstances to be reconstituted. The existence of an anti-​competitive 175 For examples in which the Court does use the term ‘standard of proof’: ecj, Case C-​12/​03 P, Commission v. Tetra Laval BV, judgment 20 May 2010, ECLI:EU:C:2005:87, para 25ff; ecj, Joined Cases C-​403/​04 P and C-​405/​04 P, Sumitomo Metal Industries v. Commission, judgment 25 January 2007, ECLI:EU:C:2007:52, para 26ff; ecj, Case C-​413/​06 P, Bertelsmann and Sony v. Impala, judgment 10 July 2008, ECLI:EU:C:2008:392, paras 45‒51. 176 GC, Case T-​44/​02, Dresdner Bank v.  Commission, judgment 27 September 2006, ECLI:EU:T:2006:271, paras 59, 62; ecj, Case C-​107/​82, AEG Telefunken v. Commission, judgment 25 October 1983, ECLI:EU:C:1983:293, paras 135‒36; GC, Joined Cases T-​67/​00, T-​68/​ 00, T-​71/​00 and T-​78/​00, JFE Engineering v. Commission, judgment 8 July 2004, para 177. Also: Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558; Peretz et al, (n 4 of Chapter 3) 1235; Jones & Sufrin, (n 23 of Chapter 1) 1139; Hellström, (n 135 of Chapter 3) 148‒49. 177 GC, Case T-​110/​07, Siemens AG v. Commission, judgment 3 March 2011, ECLI:EU:T:2011:68, para 46. 178 ecj, Sumitomo Metal Industries (n 175) para 52. Also: Frenz, (n 14 of Chapter 1) 984. 179 GC, Case T-​442/​08, International Confederation of Societies of Authors and Composers (CISAC) v.  European Commission, judgment 12 April 2013, ECLI:EU:T:2013:188, para 92. For more: Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558. 180 ibid, paras 177–​78. 181 Frenz, (n 14 of Chapter 1) 984.

100 ­chapter  practice or agreement may therefore be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules.182 In line with this interpretation, a competition infringement may be proved by indirect evidence or inferences. In respect of both direct and indirect evidence, it suffices that the whole body of evidence on which the Commission relies is ‘sufficiently precise and consistent’,183 and ‘cogent’.184 Unsurprisingly, indirect evidence is easier to disprove: it suffices to offer an alternative explanation for the facts relied upon by the Commission.185 However, direct evidence may be rebutted only by demonstrating that the proof presented by the Commission is insufficient.186 The ecj does not consider this as a reversal of the burden of proof.187 As to determining the type of evidence considered most persuasive, this depends on the ‘origin, circumstances in which it was drawn up, the person to whom it is addressed and the reputed and reliable nature of its content’.188 In this respect, written evidence created in anti-​competitive meetings or statements by persons who have directly participated in anti-​competitive meetings, are highly valued. Similarly, statements that run counter to the interests of the person making them are deemed particularly reliable.189 Here, it should not go unremarked that the assessment of evidence, as such, is not a matter of law. Hence, it falls within the competence of the General Court. Therefore, it is for the General Court to determine whether the requisite standard of proof has been met: Whether or not the evidence before it is convincing is a matter to be appraised by the [General Court] alone and is not subject to review by the Court of Justice on appeal, except where the clear sense of that evidence 182 183 184

GC, Siemens AG (n 177) para 48. GC, JFE Engineering (n 176) para 179. ecj, Limburgse Vinyl (n 52 of Chapter 1) para 644. Notably, the above adjectives used by the EU Courts do not represent the standard of proof. Rather, they merely emphasise the central function of evidence: that is, to persuasively establish the merits of an argument. ecj, Commission v. Tetra Laval BV, (n 175) para 41. 185 GC, JFE Engineering (n 176) para 186. 186 Frenz, (n 14 of Chapter 1) 984. 1 87 ecj, Montecatini (n 162) para 181. Also: Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558. 1 88 GC, Siemens AG (n 177) para 54. More: Schweitzer, (n 159) 11. 189 GC, Siemens AG (n 177) para 54.

Legal Framework of EU

101

has been distorted or the substantive inaccuracy of the [GC’s] findings is apparent from the documents in the case-​file.190 However, the ecj is competent to review whether assessment by the GC is in line with ‘the general principles of law, such as the presumption of innocence and the applicable rules of evidence, such as those concerning the burden of proof’.191 Indeed, in this respect, it should be recalled that the ecj’s task in appeal proceedings is not to substitute the General Court’s assessment with its own.192 Similarly, it is not up to the General Court to replace the Commission’s evaluation with its own.193 The ecj also typically leaves it for the General Court to alter or uphold the fine imposed, but it can draw its own conclusions as to whether the General Court ‘has responded to a sufficient legal standard to all the arguments raised by the appellant with a view to having the fine abolished or reduced’.194 4.2.2 Objective Control of Legality Article 19 teu obliges the EU Courts to ensure that ‘in the interpretation and application of the Treaties the law is observed’, whereas national courts must guarantee ’effective legal protection’ in the scope of EU law. In one sense, the wording of this provision highlights the differences in priorities as between the ecj and national courts. Since the duty to protect subjective rights is emphasised with regard rather to national courts, one could claim that the primary duty of the EU Courts under Article 263 tfeu is to provide a legality review, as opposed to a judicial review on the merits, involving questions of fact and law.195 Thus, in the course of judicial review, the EU Courts largely oversee consistent interpretation of the applicable rules, examining ‒ in light of the institutional balance of the EU ‒ whether the Commission has not overstepped its competences.196

190

ecj, Case C-​ 315/​ 99 P, Ismeri Europa v.  Court of Editors, judgment 10 July 2001, ECLI:EU:C:2001:391, para 19. 191 ecj, Case C-​199/​02 P, Hüls, judgment 8 July 1999, ECLI:EU:C:1999:358, para 65. Also: O Caoimh, (n 172) at 272‒73. 192 With exceptions, eg: GC, Case T-​38/​02, Groupe Danone v. Commission, judgment 25 October 2005, ECLI:EU:T:2005:367; ecj, C-​3/​06 P, Groupe Danone v. Commission, judgment 8 February 2007, ECLI:EU:C:2007:88 (the GC decision was upheld on appeal). 193 Jones & Sufrin, (n 23 of Chapter 1) 1131. 1 94 ecj, Ferriere Nord (n 117), para 31. 195 Barents, (n 149) 1437. 196 Jones & Sufrin, (n 23 of Chapter 1) 1131.

102 ­chapter  The procedure for direct actions before the EU Courts under Article 263 tfeu is laid down in the Statute of the ecj (‘Statute’) and is further specified in the Rules of Procedure (‘RP’). Neither of the two documents clarifies the underlying nature of the procedure before the EU Courts, for example whether direct actions should be classified as constitutional appeals or administrative remedies.197 However, it is widely agreed that the EU system of legal remedies draws inspiration from French administrative law. The French school of thought is particularly imprinted in the action for annulment under Article 263 tfeu, reflecting the ultra vires action (recours pour excès de pouvoir).198 In particular, the four grounds for annulment under Article 263 tfeu199 resonate with the French model of judicial review. Against this background, legal remedies under EU law lay down primarily review of legality, as opposed to review of the full merits of the case.200 Nevertheless, questions relating to subjective rights, in particular the right to a fair trial or other fundamental rights, began to appear on the radar of the EU Courts, particularly since the late 1980s.201 Procedural rights, especially those enshrined in the echr, increasingly gained standing in EU law. For example, in Baustahlgewebe v. Commission, the ecj stressed that the general principles of EU law include the right to fair legal process based on Article 6 echr.202 As noted earlier, Article 256(1) tfeu in conjunction with Article 58(1) of the Statute stipulate that the ecj reviews (1) the legality of the procedure before the General Court, and (2) observance of the general principles of EU law and the RP on the burden of proof and fact-​finding.203 Thus, judicial review as

197 ibid, 1439. 198 For more: Jean-​Claude Bonichot, ‘French Administrative Courts and Union Law’, in: Cardonnel et al (eds), (n 3 of Chapter 1), 167‒75, at 167; Paul Craig, ‘Developing Administrative Law in Europe: Natural Convergence or Imposed Uniformity?’, Seminar ‘Developing administrative law in Europe: Natural convergence or imposed uniformity’, 29 November 2013, The Hague, available at . It might be added that the introduction of the Grand Chamber of the Court of Justice reveals the influence of the ECtHR. 199 These grounds are: lack of competence, infringement of essential procedural rules; infringement of the Treaties or any provisions relating to their application; misuse of power. 200 Jones & Sufrin, (n 23 of Chapter 1) 1135ff. 201 Barents, (n 149) 1441. 202 ecj, Case C-​185/​95 P, Baustahlgewebe v.  Commission, judgment 17 December 1998, ECLI:EU:C:1998:608, paras 20‒21. Also: ecj, Opinion 2/​94, ECLI:EU:C:1996:140, para 33. 203 ecj, Case C-​13/​99 P, TEAM v. Commission, judgment 15 June 2000, ECLI:EU:C:2000:329, para 36; ecj, Case-​264/​11 P, Kaimer and Others v.  Commission, judgment 19  July 2012, ECLI:EU:C:2012:498, para 22. Also: Frenz, (n 14 of Chapter 1) 987.

Legal Framework of EU

103

currently exercised oversees not only observance of the law but also the right to an effective remedy.204 In the context of legality control under Article 263 tfeu, the General Court examines ‘whether the relevant rules on procedure and on stating reasons have been complied with, whether the facts have been adequately stated and whether there has been any manifest error of assessment or a misuse of powers’.205 Thus, control of legality under Article 263 tfeu encompasses an extensive review of all factual and legal circumstances of the case.206 As Judge Vesterdorf has underlined in this regard, ‘[c]‌ontrol of primary facts by the [General Court] is intensive and (…) there is no margin for discretion on the part of the Commission. This is inherent in the nature of control of the accuracy of facts. Either a fact is correct or it is not’.207 The outcome of control of legality can be either annulment of the contested act or dismissal of the action,208 indicating that Article 263 tfeu provides for limited judicial review.209 4.2.3 Full Judicial Review: Unlimited Review of Fines In contrast to Article 263 tfeu, unlimited jurisdiction with regard to sanctions is articulated in Article 261 tfeu.210 This jurisdiction is reiterated in Article 31 of Regulation 1/​2003, permitting the EU Courts to reduce, cancel or increase a penalty imposed by the Commission. Accordingly, the General Court may ‘vary the contested measure, even without annulling it, by taking into account all of the factual circumstances’.211

204 Barents, (n 149) 1448. Eg: ecj, Joined Cases C-​46/​93 and 48/​93, Brasserie du Pêcheur, judgment 5 March 1996, ECLI:EU:C:1996:79, para 27: ‘[I]‌t is for the Court (…) to rule (…) in accordance with generally accepted methods of interpretation, in particular by reference to the fundamental principles of the Community legal system and, where necessary, general principles common to the legal systems of the Member States’. 205 GC, Case T-​201/​04 Microsoft v. Commission, judgment 27 June 2012, ECLI:EU:T:2007:289, paras 88‒89. 206 Schweitzer, (n 159) 12. 207 Bo Vesterdorf, ‘The CFI: Judicial Review or Judicial Control’, St Gallen International Cartel Forum, ‘Neueste Entwicklungen in europaïshen und internationalen Kartellrecht’ (2006), 21‒42, at 29. 208 ecj, Case C-​534/​07 P, Prym and Prym Consumer v. Commission, judgment 3 September 2009, ECLI:EU:C:2009:505, para 86. 209 For more on the topic, eg: Damien Geradin, Nicolas Petit, ‘Judicial Review in European Union Competition Law: A Quantitative and Qualitative Assessment’, TILEC Discussion Paper (2011), 1‒39, available at . 210 Peretz et al, (n 4 of Chapter 3) 1335; Jones & Sufrin, (n 23 of Chapter 1) 1145. 211 ecj, Prym and Prym Consumer v Commission, (n 208) para 86.

104 ­chapter  However, neither the General Court nor the ecj replace the Commission’s appraisal with their own, thus avoiding interference with matters lying in the discretion of the Commission.212 This institutional balance reflects the task of the Commission to determine and enforce competition policy. Substituting the Commission’s findings with the Courts’ own could impair this institutional balance.213 Thus the appeal procedure before the EU Courts should not be understood as an actual ‘rehearing’ of the parties.214 Rather, the primary objective of judicial review is to examine whether the Commission has remained within the boundaries of its competences in adopting the decision in question, respecting the mandatory requirements of law, such as the obligation to state reasons.215 Furthermore, the intensity of review differs with respect to the Commission’s assessment of ‘complex economic matters’.216 In this area, the EU Courts exercise restraint, leaving these matters in the discretion of the Commission, unless the latter has committed a manifest error in its assessment.217 For instance, in questions relating to determining the relevant market or calculating the costs incurred as a result of abusive price-​setting, the EU Courts will typically concede to the Commission’s conclusions. In this regard, the Commission is considered to be better placed to assess these matters.218 Hence, it is no surprise that only a manifest error of assessment can typically lead to an annulment.219 The former President of the General Court, Bo Vesterdorf, has 2 12 Jones & Sufrin, (n 23 of Chapter 1) 1131. 213 Bo Vesterdorf, ‘Judicial Review in EC Competition Law:  Reflections on the Role of the Community Courts in the EC System of Competition Law Enforcement’, 1 Global Competition Policy (2005), 3‒27, at 10 (Vesterdorf is a former President of the General Court). 214 Jones & Sufrin, (n 23 of Chapter 1) 1131. 215 Wahl, (n 6) at 226. 216 Vesterdorf, (n 213) 11. 217 Eg: GC, Case T-​111/​08, MasterCard, Inc. and Others v. Commission, judgment 24 May 2012, ECLI:EU:T:2012:260, para 82; GC, Case T-​204/​03, Haladjian Frères SA v. Commission, judgment 27 September 2006, ECLI:EU:T:2006:273, para 30; ECJ, Case 42/​84, Remia BV and Others v. Commission, judgment 11 July 1985, ECLI:EU:C:1985:327, para 34. 218 Damien Geradin, Anne Layne-​Farrar, Nicolas Petit, EU Competition Law and Economics (Oxford: oup, 2012), para 1.122. 219 ecj, Remia (n 217) para 34: ‘Although as a general rule the Court undertakes a comprehensive review of the question whether or not the conditions for the application of Article [101(1) tfeu] are met, it is clear that in determining the permissible duration of a non-​ competition clause incorporated in an agreement for the transfer of an undertaking the Commission has to appraise complex economic matters. The Court must therefore limit its review of such an appraisal to verifying whether the relevant procedural rules have been complied with, whether the statement of the reasons for the decision is adequate, whether the facts have been adequately stated and whether there has been any manifest error of appraisal or a misuse of powers’.

Legal Framework of EU

105

been candid and rather frank about the Court’s deference to the Commission’s discretion: The reality is that, almost without exception, the Court limits itself to performing a control of the legality of the fine or, rather, to verifying whether the Commission has applied the Guidelines for the calculation of the fines correctly.220 However, the Commission’s discretion does not preclude the EU Courts from reviewing the Commission’s appraisal of factual evidence, including those of an economic nature.221 Further, the EU Courts may not simply rely solely on the Commission’s findings, but rather have to draw their very own conclusions.222 Indeed, the early cases exhibit features of rigorous review,223 while many recent judgments involve a lighter review, whereby only a manifest abuse of discretion is deemed sufficiently serious for the Court to intervene.224 Also:  GC, Case T-​116/​04, Wieland-​Werke v.  Commission, judgment 6 May 2009, ECLI:EU:T:2009:140, para 32; ecj, Case C-​125/​07 P, Erste Group Bank and Others v. Commission, judgment 24 September 2009, ECLI:EU:C:2009:576, para 187; Kerikmäe, (n 145) 119. 220 Bo Vesterdorf, ‘The Court of Justice and Unlimited Jurisdiction: What Does it Mean in Practice?’, 2 Global Competition Policy (2009), 2‒7, at 2, available at . 2 21 ecj, Commission v. Tetra Laval, (n 175) para 39. Also: ecj, KME Germany (n 39 of Chapter 1) paras 94, 102, in particular: ‘Not only must the Community Courts, inter alia, establish whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it’. More: Frenz, (n 14 of Chapter 1) 982. 2 22 ecj, KME Germany (n 39 of Chapter 1) paras 94, 102. Also: ecj, Aalborg Portland (n 37 of Chapter 1) para 279; GC, Microsoft (n 205) para 87. Also: Mel Marquis, Roberto Cisotta, Litigation and Arbitration in EU Competition Law (Cheltenham: Edward Elgar Publishing, 2015), 109. 2 23 Eg: ecj, SA Musique Diffusion française and others (Pioneer), (n 144) para 124: ‘Duration of the concerted practices established by the Court will enter into the general assessment to be made by it within the framework of its powers of unlimited jurisdiction’ (also paras 131‒35 in which the circumstances relevant to particular companies are examined); GC, Case T-​43/​92, Dunlop Slazenger International Ltd. v. Commission, judgment 7 July 1994, ECLI:EU:T:1994:79, para 179 (in this case, the GC reduced the fine imposed by the Commission by 40 % after performing an assessment on the merits of the case in question and finding an error in the calculation of the duration of the infringement). 224 Eg: GC, Tokai Carbon (n 143) para 37. Also: GC, Case T-​15/​02, BASF v. Commission, judgment 12 December 2007, para 582: ‘It is possible for the Court to exercise its unlimited

106 ­chapter  The lightness of judicial review is particularly relevant in the context of Article 6 echr. The challenges inherent to judicial review by the EU Courts fall outside the scope of this work. Suffice it to note that decisions by an administrative authority which may impose penalties within the meaning of Article 6 echr225 –​such as those imposed by the Commission –​must be subject to full judicial review.226 Hence, the competent court must have ‘the power to quash in all respects, on questions of fact and of law, the challenged decision’, if they ‘disagree with the findings’ of the administrative authority in question.227 A genuinely rigorous judicial review is indispensable for correct application of the presumption of innocence in proceedings relating to imposition of a competition fine. As outlined earlier, the Commission exercises its duty to enforce anti-​ cartel rules by combining the role of investigator, prosecutor, and adjudicator at once. Thus, in the cartel procedure, the same institution gathers evidence, prosecutes suspected offenders, determines their guilt, and imposes a sanction upon them. Precisely against this background, a full judicial review on the merits is necessary to maintain the rights of the companies concerned.228 The ecj has explicitly stated that the rights of defence are sufficiently ­secured in EU anti-​cartel enforcement, as judicial review of Commission decisions complies with the principles enshrined in Article 47 cfr. However, ­implicitly reacting to the Menarini ruling of the ECtHR, the ecj held in kme v. Commission and Chalkor v. Commission:229 jurisdiction under [Art. 261 tfeu] and [Art. 31 of Regulation 1/​2003] only where it has made a finding of illegality affecting the decision, of which the undertaking concerned has complained in its action, and in order to remedy the consequences which that illegality has for determination of the amount of the fine imposed, by annulling or adjusting that fine if necessary’. 225 Ch 5 discusses the legal nature of EU competition sanctions, so it suffices here to say that for the purposes of Art 6 echr it is no longer reasonable to classify competition sanctions as non-​criminal in light of their nature and severity. Forrester, (n 3 of Chapter  1) 200; Marco Bronckers, Anne Vallery, ‘Fair and Effective Competition Policy in the EU: Which Role for Authorities and Which Role for the Courts after Menarini?’, 8(2) European Competition Journal (2012), 283‒99; Forrester, (n 28 of Chapter 1) 817‒43; Wolfgang Weiß, ‘Human Rights and EU Antitrust Enforcement: News From Lisbon’, 34(4) European Competition Law Review (2011), 186‒95. 2 26 ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) paras 81‒82; ECtHR, Menarini Diagnostics S.R.L. v. Italy, (n 72 of Chapter 3) para 59. For more: Frenz, (n 14 of Chapter 1) 981ff; Marco Bronckers, Anne Vallery, ‘Business as usual After Menarini?’, 44‒47; Peter Oliver, ‘ “Diagnostics”‒a Judgment Applying the Convention of Human Rights to the Field of Competition’, 1‒3. 2 27 ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) paras 81‒82. 228 Forrester, (n 3 of Chapter 1) 206. 2 29 ecj, Chalkor (n 38 of Chapter 1).

Legal Framework of EU

107

[The EU 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 the facts.230 On the contrary, the accuracy, reliability and consistency of the evidence submitted by the Commission must be thoroughly examined.231 The ecj nevertheless reaffirmed the Commission’s discretion with regard to assessment of complex economic matters as compatible with full judicial review, since ‘the judicial review provided for by the Treaties involves review (…) of both the law and the facts’ in a given case.232 5

Concluding Remarks

Regulation 1/​2003 entrusts the Commission with wide-​reaching investigatory, prosecutorial and adjudicatory powers in light of its obligation to ensure an effective regulatory framework for competition enforcement. The combination of these competences presupposes a need for appropriately strong procedural safeguards. Those safeguards must represent, in particular, Articles 47 and 48(1) cfr, corresponding to the guarantees enshrined in Article 6 echr. In safeguarding these guarantees, the first fiddle is played by the EU Courts in the framework of judicial review. The Commission’s aggressive approach to combating cartels, particularly the dramatically high penalties epitomising their deterrent and punitive nature, present a challenge in terms of legal classification of the EU anti-​cartel enforcement procedure. It is hard to deny the resemblance of competition penalties to those which the ECtHR unequivocally and routinely classifies as criminal within the meaning of Article 6 echr. In light of the factual incorporation of the echr and the case law of the ECtHR in the Charter pursuant to Article 52(3) cfr, we now move on to consider whether these fines warrant a requirement for the full guarantees of the criminal limb of Article 6 echr. 230 231 232

ecj, KME, (n 39 of Chapter 1) para 102. ecj, Chalkor, (n 38 of Chapter 1) para 54. ecj, Schindler, (n 41 of Chapter 1) para 38.

­c hapter 5

Classification of EU Anti-​Cartel Proceedings 1 Introduction The debate on the true nature of EU anti-​cartel enforcement revolves around two pivotal questions. The spotlight focuses in particular on the allegedly criminal character of EU anti-​cartel procedure. Indeed, there is little dispute that in light of the Engel criteria, EU competition law has a strongly expressed criminal connotation.1 At the same time, the Jussila case law may warrant asking whether this character, if indeed criminal, truly reflects hard core criminal law necessitating the complete guarantees of Article 6 echr.2 As noted earlier, the Jussila-​based distinction between peripheral and hard core criminal law is a rather troublesome concept, which may arguably work only in genuinely minor criminal administrative proceedings. Yet the danger of arbitrarily watering down procedural guarantees in cases that ‒ despite their non-​traditional criminal nature ‒ are comparable to traditional criminal proceedings compels one to argue for full judicial guarantees in those cases. In line with these considerations, in the following we will discuss whether the inherent material characteristics of EU anti-​cartel procedure may be viewed as corresponding to ‘minor’ criminal law. We will hence be considering whether these characteristics of the cartel procedure portray a procedure that inevitably necessitates a robust application of the criminal-​head guarantees under the echr. This debate will reflect the clearly dualistic character of the anti-​cartel procedure. The Commission has no criminal law competence, thus reflecting the administrative character of this procedure.3 At the same time, the effectiveness-​based argument would contend that administrative standards of protection should not be challenged, so as not to compromise effective anti-​ cartel enforcement.4 Indeed, a radical reappraisal of the legal nature of this procedure, recognising its criminal nature, would possibly imply a reassessment of numerous 1 Jones & Sufrin, (n 23 of Chapter 1) 1041. 2 ibid, 1041‒42. 3 GC, Case T-​25/​95 et  al, Cimenteries CBR v.  Commission, judgment 15 March 2000, ECLI:EU:T:2000:77, para 718. 4 ecj, Volkswagen AG (n 36 of Chapter 1), para 97. Also: Lidgard, (n 4 of Chapter 4) 407.

© Koninklijke Brill NV, Leiden, 2019 | DOI:10.1163/​9 789004384651_006

Classification of EU Anti-Cartel Proceedings

109

procedural guarantees, such as the burden and standard of proof, which inevitably correspond to more robust rules in criminal procedure. However, in spite of effectiveness-​based considerations, the obligations arising from Article 52(3) cfr unequivocally compel the EU to recognise the standard of protection dictated by the echr. 2

Classification by the EU Courts

2.1 Administrative Classification under EU Law The wording of EU law provisions on the nature of the cartel procedure is rather clear: under Article 23(5) of Regulation 1/​2003, Commission decisions pursuant to Articles 7 and 23(2)(a) are non-​criminal in nature.5 It is also understood that the Commission does not possess any criminal law competences.6 This explicit reference to the non-​criminal nature of competition sanctions has a particular historical background, reflecting the early conception of EU anti-​trust law. In particular, this reference to the administrative character of anti-​cartel measures represents the intention of the Member States to frame competition enforcement in strictly administrative terms. To provide an insight into the early workings of EU competition law, the Commission’s explanatory note to the original draft of Regulation 17/​62 proposed to regulate competition enforcement by administrative measures rather than criminal sanctions.7 Thus, the first building blocks of EU competition law were placed without criminal sanctions in mind. It is unsurprising that this proposition by the Commission was readily accepted by Member States. Their reluctance to recognise any criminal competence of the Commission in the area of competition law simply reflected general caution about conferring criminal competences on a supranational body.8 Consequently, the non-​criminal nature of competition sanctions was reflected in Article 15(4) of Regulation 17/​62.9 5 Kienapfel, (n 24 of Chapter 1) 1199‒1200; Frenz, (n 14 of Chapter 1) 905. 6 GC, Cimenteries cbr (n 3), para 718. 7 European Commission, Document IV/​COM(60) 158 final, of 28 October 1960, 18, cited in: Scordamaglia, (n 11 of Chapter 1) 14; Lorenzo Federico Pace, Katja Seidel, ‘The Drafting and the Role of Regulation 17’, in: Patel, Schweitzer (eds), The Historical Foundations of EU Competition Law (Oxford: oup, 2013), 54‒89; Barry Rodger, Angus MacCulloch, Competition Law and Policy in the EU and UK (Abingdon: Routledge, 2013), 74. 8 Waelbroeck & Vancaille, (n 1 of Chapter 1) 378. 9 Art 15 of Council Reg. No 17: First Regulation implementing Articles 85 and 86 of the Treaty, OJ 013, 21.2.1962, 204‒11.

110 ­chapter  Indeed, the Commission was envisioned quite unequivocally as an administrative, non-​judicial body that combined investigative, prosecutorial and adjudicatory functions. In the 1980s the ecj affirmed that the Commission was never planned as a tribunal in line with Article 6 echr.10 The decidedly administrative nature of Commission measures was quite evident in the first decades of its functioning. Indeed, until the 1980s, competition sanctions were relatively mild, rarely exceeding tens of thousands of euros, and may thus have resembled strict ‒ but still administrative ‒ measures.11 No particularly lively dispute about the true nature of competition sanctions unfolded at that time. However, in the 1980s, the Commission re-​examined its competition policy, embracing the objective of deterrence. Deterrence-​based motivation took centre stage in this policy, dramatically raising the amounts of fines imposed, although the maximum ten per cent cap remained unaltered.12 Over the years, sanctions underwent a radical transformation and thus are no longer comparable with their predecessors from the 1960s and 1970s. It is noteworthy that before adoption of Regulation 1/​2003, the European Parliament did not let slip concerns about the criminal character of these fines. Rather, it raised concerns about their compatibility with Article 6 echr.13 Hence, the ECtHR judicature from the 1970s and the 1980s –​Engel and Öztürk being the prime examples thereof –​evidently struck a chord within the EU. However, in the end this did not affect the wording of what is now Article 23(5) of Regulation 1/​2003. Consequently, the textual interpretation suggests unambiguously that, in the realm of EU law, the anti-​cartel procedure remains unequivocally administrative. However, as demonstrated below, the constitutionalisation of the Charter of Fundamental Rights sparked a lively debate on the application of the criminal guarantees of Article 6 echr to this procedure, particularly in the Opinions of Advocates General.

10 11 12 13

ecj, SA Musique Diffusion française and others (Pioneer), (n 144 of Chapter 4) para 7. Forrester, (n 3 of Chapter 1) 185. Michelle Cini, Lee McGowan, Competition Policy in the European Union (London:  Pallgrave Macmillan, 2008), 82. For statistics relating to fines: ‘Cartel Statistics’, (n 15 of Chapter 1). ‘The issue of the compatibility of the Community’s competition procedure as a whole with Article 6 of the echr will be particularly important if, as seems probable, the fines which can be imposed by the Commission come to be regarded as criminal penalties for the purposes of Article 6’. COM (2000) 582: Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty and amending Regulations (eec) No 1017/​68, (eec) No 2988/​74, (eec) No 4056/​86 and (eec) No 3975/​87 (‘Regulation implementing Articles 81 and 82 of the Treaty’), European Parliament position, 1st reading or single reading, OJ 2002 C 72/​236, 21.3.2002.

Classification of EU Anti-Cartel Proceedings

111

2.2 Application of Article 6 echr in the Anti-​Cartel Procedure The early case law of the ecj reveals reluctance to see parallels between EU cartel procedure and criminal law –​or even the relevance of Article 6 echr to the cartel procedure.14 For instance, in the 1970s judgment in Landewyck v.  Commission (Fedetab), the Court deemed the applicant’s arguments concerning Article 6 echr wholly irrelevant in the cartel procedure, as the Commission lacked tribunal status for the purpose of Article 6 echr. The Court simply held that the Commission was bound to respect the procedural rights enshrined in EU law, obviating any need for a Convention-​based assessment.15 In later judgments, the ecj continued in a similar vein, classifying the EU cartel procedure as administrative.16 At the same time, the ecj was eager to emphasise that the rights of defence pertaining to the general principles of EU law must be respected in the course of these proceedings.17 Nevertheless, in Volkswagen AG v. Commission of 2003 the criminal nature of competition law was expressly rejected, seeing the attempt to frame it in criminal terms as capable of ‘infring[ing] seriously on the effectiveness of [EU] competition law’.18 Thus, the ecj recognised –​albeit implicitly –​that the procedural safeguards applicable in these proceedings certainly differed from the standards typically afforded in criminal cases. Otherwise, one could claim, a change in classification would have done little to change the status quo in the anti-​cartel procedure. Reinforcing the apparent need for differing guarantees, the 2005 judgment in Dansk Rorindustri v.  Commission maintained that the ECtHR defines the scope of the rights of defence in a nuanced fashion, depending on the area of law in which they are applied, the precise content of the relevant legal norm in question, and the addressees of the norm.19 Without going into a detailed 1 4 15 16 17

18 19

Scordamaglia, (n 11 of Chapter 1) 19. ecj, Joined Cases 209 to 215 and 218/​78, Van Landewyck v. Commission (Fedetab), judgment 29 October 1980, CLI:EU:C:1980:248, paras 79‒81. Eg: ecj, Thyssen Stahl (n 37 of Chapter 1), para 30; ecj, Aalborg Portland (n 37 of Chapter 1) para 200. ecj, Thyssen Stahl (n 37 of Chapter  1) para 30. Also:  ecj, Hoffmann-​La Roche (n 37 of Chapter 1) para 9 (this case concerns abuse of a dominant position under Art 102 tfeu); ecj, Aalborg Portland (n 37 of Chapter 1) para 200; ecj, Boehringer Mannheim GmbH (n 37 of Chapter 1) para 23. ecj, Volkswagen AG (n 36 of Chapter 1), para 97. The Court does not elaborate on the point further in this judgment. Also: GC, Case T-​276/​04, Compagnie maritime belge v. Commission, judgment 1 July 2008, ECLI:EU:T:2008:237, para 66. ecj, Joined Cases C-​189/​02 P, C-​202/​02 P, C-​205/​02 P to C-​208/​02 P and C-​213/​02 P, Dansk Rørindustri and Others v. Commission, judgment 28 June 2005, ECLI:EU:C:2005:408, paras 214‒19.

112 ­chapter  assessment, the Court invoked this to reason that even though the scope of protection in EU competition law may be narrower than in criminal law, it nevertheless remains within the boundaries of the requirements of the Convention.20 The General Court reiterated an identical position in the 2008 judgment in Compagnie maritime belge v. Commission21 and the 2010 judgment in Amann & Söhne v. Commission,22 emphasising the dangers of accepting ‘the argument that competition law formed part of criminal law’.23 However, gradually the terminology –​and the rights –​relating to criminal rather than administrative law began appearing in EU case law. In particular, in the Montecatini24 and Hüls judgments of the late 1990s,25 the relevance of Article 6(2) echr was acknowledged for the very first time in clear-​as-​day terms. In Montecatini, the Commission investigation revealed that the applicant, Montecatini, and its competitors organised regular meetings to discuss and coordinate their commercial policies in the late 1970s. These conspirators were particularly determined to set minimum prices, increase prices and temporarily reduce their output, in other words encompassing the typical manifestations of a cartel. Moreover, they exchanged sensitive information on deliveries and shared the relevant markets by allocating sales targets (quotas) among themselves. Thus, a hard core competition restriction was rather difficult to deny. Quite unsurprisingly, Montecatini was fined eleven million ecu, while Hüls was fined 2,750,000 ecu for its own participation in the same cartel. In their appeals to the ecj, both companies alleged a violation of the presumption of innocence. Montecatini argued that the General Court had ­reversed the burden of proof and infringed the principle of personal responsibility. According to the applicant, the Court had agreed with the Commission that once the company’s participation in meetings with its competitors had been established, it was for Montecatini ‒ if it had wished to avoid liability ‒ to provide an alternative explanation of what was discussed at the meetings.26 However, according to the applicant, by requiring such an explanation, the Court reversed the burden of proof, thereby infringing Article 6(2) echr.27 In 20 21 22 23 24 25 26 27

ibid. GC, Compagnie maritime belge (n 18) para 66. GC, Case T-​446/​05, Amann & Söhne, Cousin Filterie v. Commission, judgment 28 April 2010, ECLI:EU:T:2010:165, para 336. More: Lidgard, (n 4 of Chapter 4) 409. GC, Amann & Söhne, Cousin Filterie (n 22 of Chapter 5) para 336. More: Lidgard, (n 4 of Chapter 4) 409. ecj, Montecatini (n 162 of Chapter 4) para 175. ecj, Hüls (n 191 of Chapter 4) para 149. ecj, Montecatini (n 162 of Chapter 4) 18. ibid, paras 172‒74.

Classification of EU Anti-Cartel Proceedings

113

response to the claims of the applicant, AG Cosmas adopted a rather cautious position rooted in administrative law considerations. He argued that it was ‘extremely doubtful’ that the reference to the echr and the presumption of innocence was at all possible in light of the nature of competition proceedings.28 Even so, this was precisely the case in which the ecj was ready to recognise the relevance of the presumption of innocence in EU anti-​cartel procedure. The Court held that the nature of competition infringements as well as the nature and severity of competition sanctions required this procedure to respect the guarantees of Article 6(2) echr:29 The presumption of innocence resulting in particular from Article 6(2) of the echr is one of the fundamental rights which (…) reaffirmed in the preamble to the Single European Act and in Article F(2) of the Treaty on European Union, are protected in the [EU] legal order. (…) [G]‌iven the nature of the infringements (…) and the nature and degree of severity of the ensuing penalties, the principle of the presumption of innocence applies to the procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines of periodic penalty payments.30 This statement may have been significant in the broader context of the anti-​ cartel procedure. Yet it did not help the applicant to argue its case. While the ecj reiterated that the Commission indeed carried the burden of proof, it added that the General Court was ‘entitled to consider that it was for Monte to provide another explanation of the tenor of those meetings’, as its participation in the meetings had been proved.31 Quite predictably, no reversal of the burden of proof had taken place, according to the ecj, but the companies were unable 28

29 30 31

Opinion of AG Cosmas, delivered on 15 July 1997 in: ecj, Montecatini (n 162 of Chapter 4), para 68, note 42. AG Cosmas in Montecatini must be read in a temporal context, however. It appeared in 1999, thus before the entry into force of the Lisbon Treaty and the Charter of Fundamental Rights. Another, even earlier AG Opinion dismissed the possibility that competition infringements could be viewed as ‘offences’ at all: Opinion of AG Gand, delivered on 10 June 1970 in: ecj, Case C-​41/​69, Chemiefarma v. Commission, ECLI:EU:C:1970:51, 722: ‘(…) [F]‌rom Article 15 (now 23(5) of Regulation 1/​2003) we know that the fines are not of a criminal nature, and even if the wording were not explicit this would have to be admitted since the Member States have not delegated to the Community any powers of a criminal law nature (…). There may be infringements of Article 85 which give raise to fines but such infringements are not offences and such fines are not penalties’. ecj, Montecatini (n 162 of Chapter 4) paras 175‒76. ibid. ibid, para 181.

114 ­chapter  to adduce a convincing alternative explanation of what was discussed at meetings with competitors. Accordingly, the ecj dismissed both appeals. Crucially, the key significance of these judgments does not lie in their particular circumstances. Rather, it lies in the outcome that these cases removed all doubt about the profound relevance of the presumption of innocence in EU cartel proceedings.32 Notwithstanding, the de facto criminal character of the proceedings was not acknowledged in these cases.33 At the same time, this recognition may be seen as implicit: citing the nature and severity of competition sanctions clearly resembled the rhetoric used by the ECtHR in the Engel judgment.34 Similarly, in the 2013 cisac judgment the General Court recognised that anti-​cartel proceedings can have a stigmatising effect, which, once again, resembled the terminology used by the ECtHR in the context of a ‘criminal charge’:35 [The principles relating to the presumption of innocence] developed where the Commission had imposed a fine, [are] applicable (…) [since] account must be taken of the non-​negligible stigma attached to a finding of involvement in an infringement of the competition rules for a natural or legal person.36 (Emphasis added.) Other judgments, for example the 2011 judgment in Fuji v. Commission,37 adopted comparable criminal-​like terminology, placing emphasis on ‘the nature of the infringements in question and the nature and degree of severity of the ensuing penalties’ as the decisive factor in applying the presumption of

32

33 34 35 36 37

The GC reiterated this interpretation in a more recent judgment CISAC and Romana Tabacchi: GC, Case T-​11/​06, Romana Tabacchi v.  Commission, judgment 5 October 2011, ECLI:EU:T:2011:560, para 129; GC, International Confederation of Societies of Authors and Composers (CISAC) (n 179 of Chapter 4) paras 93‒95. The GC also referred to the stigmatising effect of being held liable for a competition infringement: ‘[The principles relating to the presumption of innocence] developed where the Commission had imposed a fine, [are] also applicable where, as in the present case, the decision finding an infringement is ultimately not accompanied by the imposition of a fine, [since] the account must be taken of the non-​negligible stigma attached to a finding of involvement in an infringement of the competition rules for a natural or legal person’. GC, Compagnie maritime belge (n 18) para 66. ECtHR, Engel, (n 42 of Chapter 1) para 82. ECtHR, Öztürk v. Germany, (n 14 of Chapter 3) para 53. GC, International Confederation of Societies of Authors and Composers (CISAC) (n 179 of Chapter 4) paras 94‒95, as cited in: Waelbroeck & Vancaille, (n 1 of Chapter 1) 379. GC, Case T-​132/​07, Fuji Electric v. Commission, judgment 12 July 2011, ECLI:EU:T:2011:344.

Classification of EU Anti-Cartel Proceedings

115

innocence to anti-​cartel proceedings involving imposition of fines.38 Although this judgment does not refer to the case law of the ECtHR, one can hardly fail to hear the echoes of Engel and Others reverberating in the reasoning of the General Court. Remarkably, the Engel criteria also received the implicit recognition of the ECtHR in the 2009 judgment in Spector Photo Group & Van Raemdonck,39 although this was unrelated to competition law. In this case, the ecj examined the sanctions for insider trading under Belgian law. The Belgian Commission for Banking, Finance and Insurance imposed a fine of 100,000 euro upon the applicants, prompting the ecj to accept that this level of sanctions was sufficiently severe to qualify as criminal: (…) [I]‌n light of the nature of the infringements at issue and the degree of severity of the sanctions which may be imposed, such sanctions may, for the purposes of the application of the echr, be qualified as criminal sanctions.40 This wording, which again echoes that of the ECtHR in Engel, removes all doubts that the EU judiciary took note of developments in ECtHR jurisprudence. Moreover, numerous AGs have advocated the unequivocal relevance of Article 6 echr in competition procedure.41 Apt examples in this regard are the Opinion of AG Vesterdorf in the 1991 case Rhone-​Poulenc SA v. Commission and the thoughts of AG Leger in the 1998 case Baustahlgewebe v. Commission. Both of them acknowledged the criminal character of competition procedure as long ago as the 1990s.

38 39 40

41

ibid, para 89; GC, Groupe Danone (n 192 of Chapter 4) para 216, with references to Hüls and Montecatini. ecj, Case C-​45/​08, Spector Photo Group & Van Raemdonck v. Commission, judgment 23 December 2009, ECLI:EU:C:2009:806. ibid, para 42. In this paragraph, the ecj cites the ECtHR judgments Engel (n 42 of Chapter 1), Öztürk (n 14 of Chapter 3), Lutz v. Germany (Appl no 9912/​82, judgment 25 August 1987) and, next to them, its own judgments in Hüls and Montecatini. Also: Lidgard, (n 4 of Chapter 4) 410. Eg: Opinion of AG Kokott, delivered on 14 April 2011 in: ecj, Case C-​110/​10 P, Solvay SA v. Commission, ECLI:EU:C:2011:257; Opinion of AG Sharpston, delivered on 10 February 2011 in: ecj, KME (n 39 of Chapter 1); Opinion of AG Mengozzi, delivered on 25 March 2010 in: ecj, Case C-​439/​08, VEBIC, ECLI:EU:C:2010:166; Opinion of AG Mazak, delivered on 11 February 2010 in: ecj, Case C-​413/​08 P, Lafarge v. Commission, ECLI:EU:C:2010:71; Opinion of AG Bot, delivered on 26 October 2010 in: ECJ, Case C-​216/​09 P, ArcelorMittal v. Commission, ECLI:EU:C:2010:634.

116 ­chapter  AG Vesterdorf submitted that regardless of the formal classification of competition sanctions as administrative, they ‘broadly exhibit the characteristics of a criminal law case’.42 Similarly, AG Leger also proposed that competition proceedings involved a ‘criminal charge’ in light of the ECtHR judgments in Stenuit v. France and Öztürk v. Germany.43 These considerations arguably mirrored an increasing general tendency among AGs. Indeed, a couple years later, in her Opinion for the 2010 case Solvay SA v. Commission, AG Kokott stated that EU competition law fell within the realm of criminal law in light of the ECtHR judgment in Jussila v.  Finland,44 although she argued that this resulted in a lower standard of protection under Article 6 echr.45 In similar terms, in the 2011 case kme Germany, AG Sharpston articulated ‘little difficulty in concluding that the procedure whereby a fine is imposed for breach of the prohibition (…) in Article [101(1) tfeu] falls under the ‘criminal head’ of Article 6 echr’.46 Sharpston underlined, in particular, that the current cartel enforcement was based on swingeing fines. These drastic measures imposed –​or at least were liable to impose –​enormous economic and financial burdens on the companies concerned, and also their shareholders as well as employees. It followed that they amounted to ‘de facto ‘criminalisation’ of competition law’.47 However, Sharpston, too, maintained that in light of Jussila, the guarantees arising from this provision would not apply in full force.48 One may also mention the unequivocal recognition by Koen Lenaerts that the ‘two-​sided’ nature of EU cartel procedure –​administrative but increasingly ‘coloured’ by criminal law –​was no longer disputed.49 Meaningful insights into the matter of classification are also offered by a series of appeals from 2011, such as Schindler,50 kme Germany,51 and Chalkor.52 In all these cases, the applicants challenged the nature of the cartel procedure. They argued that since these proceedings had a clearly criminal character 42 4 3 44 45 46 47 48 49 50 51 52

Opinion of AG Vesterdorf, (n 25 of Chapter 1) in: Case T-​1/​89, Rhone-​Poulenc SA v. Commission, para 885. Opinion of AG Leger in: ecj, Baustahlgewebe (n 202 of Chapter 4) para 31. Opinion of AG Kokott in: ecj, Solvay SA v. Commission, (n 41) para 99. ibid, paras 99‒100. Opinion of AG Sharpston, delivered on 10 February 2011 in:  KME (n 39 of Chapter  1) para 64. ibid, para 46. ibid, 67. Koen Lenaerts, ‘Some Thoughts on Evidence and Procedure in European Community Competition Law’, 30(5) Fordham International Law Review (2006‒2007), 1463‒95, at 1494. GC, Schindler, (n 41 of Chapter 1). ecj, KME (n 39 of Chapter 1). ecj, Chalkor (n 38 of Chapter 1).

Classification of EU Anti-Cartel Proceedings

117

within the meaning of Article 6 echr, they had to satisfy the requirements enshrined in that provision accordingly. Quite predictably, these appeals represented a highly critical view of the compliance of Commission procedure with the postulates permeating Article 6 echr. A cursory look should be given to Schindler in this regard.53 The applicant challenged a Commission decision relating to an elevator and escalator cartel, penalising such major producers as Schindler, Otis, ThyssenKrupp and Kone for dividing the market in terms of sale, maintenance, modernisation and installation of elevators and escalators.54 The cartel members received fines totalling 990 million euros,55 with the Schindler group alone fined the hefty sum of 148 million euro. In its appeal before the General Court, Schindler alleged that EU competition law is criminal law. In response, the General Court emphasised that effective judicial protection was already afforded to the applicant by Article 47 cfr, thus seemingly diminishing the significance of this debate as to ­classification.56 It should be emphasised that Art. 47 cfr has wider scope than Art. 6(1) echr, as it does not limit its reach to criminal and civil proceedings. However, this fact is not such as to resolve the issues examined in the present work. For one thing, the problem of compliance with Article 6(2) echr may not be addressed by reference to Article 47 cfr, since these two provisions contain different guarantees. It is Article 48(1) cfr that corresponds to Article 6(2) echr. In that context, compliance of judicial protection under Article 47 cfr with Article 6(1) cfr should not be invoked to argue that all guarantees under Article 6 echr are respected in EU cartel procedure. A separate analysis of the 53 54 55 56

GC, Schindler, (n 41 of Chapter 1) para 52. European Commission, Decision 21 February 2007, Case COMP/​E-​1/​38.823, Elevators and Escalators, C(2007) 512 final, OJ C 75, 26.3.2008. European Commission, ‘Competition: Commission fines members of lifts and escalators cartels over €990 million’, Press release, IP/​07/​209, 21 February 2007, available at . Art 47 cfr: ‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article. Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented. Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice’. Also: ecj, Chalkor (n 38 of Chapter 1) paras 51‒52; ecj, Case C-​411/​04 P, Salzgitter Mannesmann v. Commission, judgment 25 January 2007, ECLI:EU:C:2007:54, para 40.

118 ­chapter  specific guarantees under the presumption of innocence is necessary to establish compliance with Article 6(2) echr. This necessity also emerges in light of the new EU Directive on the presumption of innocence,57 which is discussed below. As will be shown, this Directive expressly states that, for its purposes, the presumption of innocence does not apply to legal persons in the same way as to natural ones.58 The Directive stipulates that its provisions should be read without prejudice to the case law of the ECtHR on the presumption of innocence.59 Nevertheless, based on this Directive, it could be speculated that Article 48(1) cfr might also, at least to some extent, be understood by the EU Courts in a different manner in EU cartel procedure than in proceedings relating to natural persons. For this reason, possibly adequate application of Article 6(1) echr via Article 47 cfr in EU cartel procedure should not automatically be taken as an unequivocal basis for concluding that Article 48(1) cfr also implements Article 6(2) echr to a sufficient standard. Consequently, the concerns of compliance remain, and will be addressed in subsequent parts of this work. Returning to Schindler, it should not go unnoticed that the General Court addressed –​and adopted –​the distinction between hard core and peripheral criminal law proposed in the ECtHR judgment in Jussila. The Court stressed that penalties falling outside hard core criminal law, ‘such as pecuniary sanctions imposed for infringement of competition law’ must at any rate meet a less stringent standard of guarantees under Article 6 echr: [A]‌ccording to the case-​law of the [ECtHR], in order for Article 6 of the echr to apply, it is sufficient that the infringement in question (…) by its nature and degree of severity, belongs in the general criminal sphere (…). [T]he echr bodies laid the foundations for the progressive extension of the application of the criminal-​head guarantees of Article 6 to areas which do not formally fall within the traditional categories of criminal law, such as pecuniary sanctions imposed for infringement of competition law. Nevertheless, as regards the categories which do not form part of the ‘hard core’ of criminal law, the [ECtHR] has stated that the criminal-​ head guarantees will not necessarily apply with their full stringency.60 57 58 5 9 60

Dir (EU) 2016/​343 of the European Parliament and of the Council of 9 March 2016 on the strengthening of certain aspects of the presumption of innocence and of the right to be present at the trial in criminal proceedings, OJ L 65, 11.3.2016, 1–​11. Rec 13 of Dir (EU) 2016/​343. Rec 14 of Dir (EU) 2016/​343. GC, Schindler, (n 41 of Chapter 1) para 52.

Classification of EU Anti-Cartel Proceedings

119

The General Court also reiterated that, to all intents and purposes under EU law, competition law was not criminal.61 The ecj confirmed the General Court’s conclusions in this case, leaving the legal nature of the procedure outside its assessment.62 Similar arguments appeared in the 2011 judgments in Chalkor v. Commission63 and kme Germany v. Commission.64 The principle of effective judicial protection implemented in Article 47 cfr was invoked as an argument to dismiss criminal law-​related accusations.65 Taken together with the Opinions of AGs, these judgments draw a rather clear contour of classification: anti-​cartel enforcement remains non-​criminal under EU law. 2.3 Ambiguity in Classification Evidently, classification of the anti-​cartel procedure leans toward administrative law, yet it nevertheless displays a dualistic character. To make matters somewhat confusing, Schindler and the numerous AG Opinions seemingly accept that –​for the purposes of the Convention –​this procedure falls within the criminal sphere under Article 6 echr, despite its firmly administrative ‘domestic’ classification. However, only a peripheral criminal quality was attached to this procedure, as the Opinions of AGs Sharpston and Kokott explicitly stated. However, the scholarly literature on this matter suggests that even authors proposing an administrative classification call for robust procedural guarantees. Frenz, for instance, agrees that as soon as the competition fine reaches a degree of gravity comparable to a criminal penalty, the competition procedure must respect the standards applicable to criminal sanctions, despite retaining its administrative form under EU law.66 Arguing for robust procedural guarantees, Frenz does not refer to a particular lower level of protection under Article 6 echr, although it may be implied. Mestmäcker and Schweitzer, on the other hand, consider that even if competition penalties are criminal in light of Article 6 echr, this provision applies to them only in part, since these penalties do not entail arguably the most serious punishment –​custodial sentences.67 61 62 63 64

65 6 6 67

GC, Tetra Pak (n 117 of Chapter 4) para 235; GC, Cimenteries CBR (n 3) para 717; GC, Case T-​9/​ 99, HFB and Others v Commission, judgment 20 March 2002, ECLI:EU:T:2002:70, para 390. ecj, Schindler, (n 41 of Chapter 1) para 38. ecj, Chalkor (n 38 of Chapter 1). ecj, KME Germany (n 39 of Chapter  1). The applicants in Chalkor and KME Germany claimed, similarly to the applicant in Schindler, that the competition procedure was criminal in nature, but had failed to satisfy the requirements of Art 6 ECHR. ecj, Chalkor (n 38 of Chapter 1) para 50; ecj, KME Germany (n 39 of Chapter 1) para 83. ecj, Chalkor (n 38 of Chapter 1) para 51; ecj, KME Germany (n 39 of Chapter 1) paras 91‒92. Frenz, (n 14 of Chapter 1) 907. Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558.

120 ­chapter  These views reflect a rather literal interpretation of Jussila, which was critically appraised earlier. This very approach to the nature of EU cartel procedure, rooted both in its administrative origins and in Jussila case law, appears somewhat contradictory and not entirely consistent. The argument in Volkswagen above –​in brief, that a straightforward recognition of criminal-​head guarantees would compromise the effectiveness of the cartel procedure  –​implies that current guarantees do not necessarily meet the criminal standard under Article 6 echr. Yet, at the same time, applying the presumption of innocence was expressly and unreservedly recognised in Montecatini, despite the pivotal role this guarantee plays in classical criminal procedure. Nevertheless, the references to Article 47 cfr –​without recourse to Article 6 echr –​in the above appeal proceedings may raise a certain suspicion that the ecj is seeking to interpret this provision in a manner that may diverge from the ECtHR’s interpretation of Article 6 echr. Otherwise, why did it not clearly state that this procedure meets the criminal-​head guarantees of Article 6 echr, disarming any opposing opinions? The roots of this conundrum may lie in the absence of sanctions to natural persons.68 The fact that natural persons are not subject to EU cartel norms might strengthen this highly cautious approach to the classification issue. Indeed, the perception that legal persons should not be protected under EU law to the same extent as natural persons may fuel reluctance to recognise the criminal nature of EU anti-​cartel procedures. To give an example of this thinking, Wils69 and AG Ruiz-​Jarabo Colomer70 have argued that the rights enshrined in Article 6 echr should not apply to legal persons to the same extent as to natural persons. They reason that the relationship between companies and the state differs fundamentally from the relationship between individuals and the state. Hence, companies do not need the same protection from interference by the state. AG Ruiz-Jarabo Colomer71 argues, in particular, that the power relationship is vastly different between the state and colluding companies. He claims that colluding companies are far from powerless or vulnerable to repression, considering their financial, legal or political pockets of influence and power.72 Thus, in legal proceedings against a legal person –​particularly if this is not a minor firm 6 8 69 70 71 72

Whelan, (n 13 of Chapter 1) 120; Frenz, (n 14 of Chapter 1) 905. Wils, (n 65 of Chapter 1) 23. Opinion of AG Ruiz-​Jarabo Colomer in: ecj, Volkswagen (n 36 of Chapter 1), para 66. ibid. Shiner, (n 246 of Chapter 3) 498.

Classification of EU Anti-Cartel Proceedings

121

but a multi-​national corporation –​the imbalance of power is seen as arguably lower than in criminal proceedings against an individual. In particular, the AG suggested that companies accused of competition infringements should enjoy merely an ‘adapted’ set of guarantees.73 He argued in rather unequivocal terms that the procedural rights applicable in criminal proceedings could not be transferred en bloc74 to cases where the alleged perpetrator is a powerful economic actor with undeniably major financial assets and other symbols of power. According to the AG, the right to a fair trial is primarily designed to protect natural persons. An individual charged with a criminal offence ‘has as its [protagonist] the penalising State’, hence the rights of defence ‘are designed specifically to compensate for that imbalance of power’.75 Ruiz-​Jarabo Colomer passionately argues: To accord such offenders the same procedural safeguards as those accorded to the most needy individuals, apart from being a mockery, would entail, essentially, a lower degree of protection, in this case economic protection, for the individual as the main victim.76 This idea may be mirrored in the 2016 Directive on the presumption of innocence. This explicitly distinguishes legal from natural persons. For instance, Recital 13 of the Directive states:77 This Directive acknowledges the different needs and levels of protection of certain aspects of the presumption of innocence as regards natural and legal persons. As regards natural persons, such protection is reflected in well-​established case-​law of the European Court of Human Rights. The Court of Justice has, however, recognised that the rights flowing from the presumption of innocence do not accrue to legal persons in the same way as they do to natural persons.78 Recital 11 further elucidates that this Directive should not apply to legal persons or in competition proceedings. Hence, this document could be invoked

7 3 74 75 76 77 78

Opinion of AG Ruiz-​Jarabo Colomer in: ecj, Volkswagen (n 36 of Chapter 1) para 66. ibid. ibid. ibid. Also: Wils, (n 65 of Chapter 1) 21, 23. Dir (EU) 2016/​343. Furthermore, Rec. 14 of the Directive on the presumption of innocence states:  ‘At the current stage of development of national law and of case-​law at national and Union level, it is premature to legislate at Union level on the presumption of innocence with regard

122 ­chapter  as an apt illustration of the desired difference in the extent of the rights applicable to legal persons at EU level. Besides, Recital 14 of the Directive states: At the current stage of development of national law and of case-​law at national and Union level, it is premature to legislate at Union level on the presumption of innocence with regard to legal persons. Notably, however, the very same Recital underlines that the Directive should be viewed without prejudice to the application of the presumption of innocence to legal persons by the ECtHR. This new Directive should not, however, compel one to think that legal persons caught in the cartel procedure enjoy no or few rights at EU level. Indeed, no such indications may be found. After all, Recital 37 of Regulation 1/​2003, which explicitly refers to the duty to respect the Charter provisions in EU anti-​cartel enforcement, clearly recognises the rights of companies. Moreover, since the Charter does not seek to exclude legal persons from the scope of the presumption of innocence or other guarantees that may be invoked having regard to their inherent nature,79 it is hard to deny that legal persons may indeed benefit from a broad set of fundamental guarantees. The considerations presented above unambiguously lean towards a general consensus about a ‘peripheral criminal’ classification under the echr and administrative classification under EU law. In the following, we will consider, against the background of the Engel criteria, whether the true nature of EU anti-​cartel procedure carries sufficient criminal connotations to require a robust rather than cursory, ‘peripheral’ application of Article 6 echr. 3

EU Competition Law: Penalties in Light of the Engel Criteria

3.1 Domestic Classification The fines imposed under Article 23(2)(a) of Regulation 1/​2003 display a formally non-​criminal nature.80 Indeed, while the dispute continues whether, as Frenz

79

80

to legal persons. This Directive should not, therefore, apply to legal persons. This should be without prejudice to the application of the presumption of innocence as laid down, in particular, in the echr and as interpreted by the European Court of Human Rights and by the Court of Justice, to legal persons’. Armin Hatje, in: Schwarze (ed) (n 32 of Chapter 4), 134. An example of a case on the fundamental rights of a legal person:  ecj, Case C-​11/​70, Internationale Handelsgesellschaft mbH v Einfuhr-​und Vorratsstelle für Getreide und Futtermittel, judgment 17 December 1970, ECLI:EU:C:1970:114, para 4. Eg: GC, Schindler, (n 41 of Chapter 1) para 53.

Classification of EU Anti-Cartel Proceedings

123

submits, these fines are ‘substantially criminal’ –​inhaltlich ist Strafrecht gegeben,81 –​their domestic classification is not decisive in resolving the issue. The famous principle pertaining to the first Engel criterion stipulates the necessity to look beyond the formalities of domestic law.82 Therefore, the very nature of the anti-​cartel enforcement procedure warrants a substantial scrutiny. 3.2 Nature and Severity of Penalty The true power of the Engel criteria unfolds as the Strasbourg Court examines the material characteristics of the disputed proceedings, rather than their formal depiction. Here the Court looks into the nature of the offence and the nature and severity of the penalty that may be imposed.83 Although the Engel criteria cite the nature of the offence as the second criterion  –​followed by considerations on the penalty –​the third criterion is examined immediately below. This choice reflects the paramount significance of the severity of fines in sparking the debate –​or even stirring the most active controversy –​about the legal nature of EU cartel procedure.84 The ECtHR highlights two primary characteristics indicating the criminal nature of a penalty: deterrence and punishment,85 depicting these qualities as a ‘customary distinguishing feature of criminal penalties’.86 Hence, a penalty with these characteristics will in all likelihood acquire a criminal connotation for the purpose of Article 6 echr.87 In this respect, it should be mentioned that ‒ as Judge Costa suggested in a separate opinion attached to Jussila ‒ administrative penalties could equally aim to deter reoffending.88 However, the ECtHR has not addressed this potential contradiction. The relevance of deterrence and punishment with respect to EU competition penalties appear to be readily accepted as undeniable markers of the criminal nature of a penalty. The complexities pertaining to the role of deterrence in administrative law are not articulated in the ECtHR case law. The concept of deterrence is principally rooted in practical considerations. It provides that punishment may be justified only insofar as it entails a higher social 81 82 83 84 85 86 8 7 88

Frenz, (n 14 of Chapter 1) 907. Other authors lean towards denying the criminal nature –​ either formally or substantially: eg Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558. Eg, ECtHR, Öztürk (n 14 of Chapter 3) paras 50‒52. ECtHR, Engel, (n 42 of Chapter 1) para 82. Eg: Kienapfel, (n 24 of Chapter 1), 1197. ECtHR, Öztürk (n 14 of Chapter 3) para 53. Eg: ECtHR, Öztürk (n 14 of Chapter 3) para 53; ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 32; ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) para 68. Forrester, (n 28 of Chapter 1) 827. Partly dissenting opinion of Judges Costa, Cabral Barreto and Mularoni in: ECtHR, Jussila v. Finland, (n 43 of Chapter 1) point 9.

124 ­chapter  purpose, that is, prevention of future offences.89 Hence, this utilitarian concept is primarily concerned with the consequences of a particular punishment. In line with the theoretical foundations of deterrence, a punishment is only as good as its capacity to reduce subsequent offending.90 It comes in two forms: special and general deterrence. Special deterrence is aimed at the offender whose conduct is being sanctioned, seeking to dissuade the offender from relapsing into unlawful conduct. General deterrence, on the other hand, is about dissuading the general public from attempting to commit a given offence.91 However, the punitive effect of a particular penalty is less concerned with its future consequences. Punishment, as one objective of a penalty, represents an interest in holding the offender responsible for their concrete actions. Rooted in the theory of retribution,92 the punitive nature of an offence articulates the concept that breaching the social and moral code of society deserves a severe response in the form of a penalty, since everyone must be held accountable for their actions.93 EU competition fines are generally rooted in these theories,94 although the emphasis on deterrence dominates the narrative on fines.95 Indeed, these two qualities –​punishment and deterrence –​represent the key, one might even say, twin objectives of competition enforcement.96 The need for robust sanctions corresponding to these objectives may be dictated by the realities of EU anti-​cartel enforcement. In particular ‒ and unlike US antitrust law, which prescribes prison sentences for individuals responsible for antitrust offences97 ‒ EU law has no equivalent or even comparable tools in its arsenal.98

8 9 90 91 92 93 94 95 96 97

98

Whelan, (n 13 of Chapter 1) 28. ibid. ibid. ibid, 31. ibid. Kienapfel, (n 24 of Chapter 1) 1196‒1197; Frenz, (n 14 of Chapter 1) 905. Whelan, (n 13 of Chapter 1) 40. Kienapfel, (n 24 of Chapter 1) 1197. Section 2 of the 1890 Sherman Act of the US imposes on individuals criminal penalties reaching one million dollars and up to ten years of inprisonment: ‘Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court’. Act of July 2, 1890 (Sherman Anti-​Trust Act). The text of this Act is available at . For more: Colombani et al, (n 50 of Chapter 1) 1253.

Classification of EU Anti-Cartel Proceedings

125

Further, private enforcement through actions for damages plays an increasing, though not yet major, role in competition enforcement. This is due to the complexity of this type of enforcement, the difficulties of proving the occurrence of damage, and the risks for the applicants inherent in these actions.99 Thus, strict competition fines are the only means available to the Commission in its combat against cartels:100 Fines are one of the means to ensure that companies do not engage in ­anticompetitive behaviour. To that end, fines must be set at a level that ensures sufficient deterrence. This implies that fines should not only ­punish past behaviour, but also that their level will deter that particular company, or any other, from entering into illegal behaviour in the ­future.101 The EU Courts unequivocally confirm this character of competition fines. To give an example, the General Court readily agrees: Both the deterrent effect and the punitive effect of the fine are reasons why the Commission should be able to impose a fine.102 99

Bovis & Clarke, (n 161 of Chapter 4) 51; Denis Waelbroeck, Donald Slater, Gil Even-​Shoshan, ‘Study on the conditions of claims for damages in case of infringement of EC competition rules’, Comparative Report (2004), 1‒136, at 120, available at . 100 Frenz, (n 14 of Chapter 1) 922; Geradin & Henry, (n 111 of Chapter 4) 4. 1 01 European Commission, ‘Competition:  Commission revises guidelines for setting fines in antitrust EU cases’, Press Release IP/​06/​857, 28 June 2006, available at . Also, eg, European Commission, ‘Antitrust:  Commission fines suppliers of optical disc drives € 116  million for cartel’, Press release, 21 October 2015, available at ; European Commission, ‘Antitrust: Commission fines broker icap € 14.9 million for participation in several cartels in Yen interest rate derivatives sector’, Press release, 4 February 2015, available at ; Neelie Kroes, ‘Many achievements, more to do’, Speech, International Bar Association Conference, Brussels, 12 March 2009, available at . In this speech, former Commissioner Kroes emphasised that cartel penalties ‘send a signal to other would-​be cartelists and rule-​breakers’, deterring future offences and compelling corporate culture to change its stance on collusive conduct. 1 02 GC, Archer Daniels Midland (n 25 of Chapter 4) para 48. Also: GC, Case T-​39/​07, Eni SpA v. Commission, judgment 13 July 2011, ECLI:EU:T:2011:356, paras 133‒36; ecj, Stora Kopparbergs (n 55 of Chapter 1) paras 74‒76; ecj, Chalkor (n 38 of Chapter 1) para 9; GC, Solvay SA (n 41), paras 297‒98; GC, Joined Cases T-​117/​07 and T-​121/​07, Areva and Others v. Commission, judgment 3 March 2011, ECLI:EU:T:2011:69, para 318.

126 ­chapter  Moreover, even authors who classify these sanctions as administrative recognise their repressive character, which is evidently similar to that of criminal penalties.103 The two-​fold objective of competition fines is also expressly established in the Fining Guidelines, which provide that competition fines should have a ‘sufficiently deterrent effect’.104 Thus, the aim of these fines is evidently not to compensate for damage incurred through the cartel in question. One may recall in this regard that Wils considers a loose relationship between the damage incurred and the punishment imposed as a clear sign of criminal punishment: the fine does not seek to compensate the victims of the offence, but rather to unequivocally prohibit undesired behaviour.105 To reinforce and further underline the commitment to preventing reoffending, the Guidelines also stipulate that a fine may be increased for repeat offenders.106 To achieve these effects, the Commission has overhauled competition policy over recent decades. In the 1960s, no competition fines were imposed at all. The first cartel fine was imposed at the very end of the decade, penalising companies that had participated in a Quinine cartel.107 They were fined 500,000 ecu.108 Throughout the 1970s, the Commission’s sanctioning practice was rather mild as well, reaching up to 100,000 ecu.109 However, the end of the 1970s brought a new direction to Commission fining policy. In the 1979 decision in Pioneer,110 relating to a cartel in the market for consumer electronic goods, the Commission imposed on five European subsidiaries and distributors of Japanese electronics producer Pioneer a fine of seven million euros. This penalty represented up to four per cent of the companies’ global turnover, whereas in previous cases the fines had barely reached one to two per cent.111 1 03 Eg: Frenz, (n 14 of Chapter 1) 905. 104 ‘Fines should have a sufficiently deterrent effect, not only in order to sanction the undertakings concerned (specific deterrence) but also in order to deter other undertakings from engaging in, or continuing, behaviour that is contrary to Articles [101 and 102 tfeu] (general deterrence)’. Rec. 4 of Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation 1/​2003, (n 14 of Chapter 1), 2‒5. 105 Wils, (n 46 of Chapter 3) 6. 106 Pt 28 of the Guidelines on the method of setting fines (n 14 of Chapter 1). 107 European Commission, Quinine, (n 21 of Chapter 1) 5–​22. 108 More: Kienapfel, (n 24 of Chapter 1) 1197. 109 Eg: European Commission, Decision 5 October 1973, IV/​27.010, Deutsche Philips GmbH, OJ L 293, 20.10.1973, 40–​44; European Commission, Decision 12 December 1978, IV/​29.430, Kawasaki, OJ L 16/​9, 23.1.1979, 9–​16. 110 European Commission, Decision 14 December 1979, IV/​29.595, Pioneer Hi-​Fi Equipment, OJ L 60, 05.03.1980, 21–​38. 111 Opinion of AG Slynn, delivered on 8 February 1983 in: ecj, SA Musique Diffusion française and others (Pioneer), (n 144 of Chapter 4) 1946. More: Geradin & Henry, (n 111 of Chapter 4) 5.

Classification of EU Anti-Cartel Proceedings

127

Thus, Pioneer represented a new direction in Commission fining policy.112 This newly-​set direction was defined by the Commission’s focus on deterrence through more severe punishment.113 One could suggest that the infringements themselves were not significantly more serious or otherwise markedly different from those committed prior to the increase. The Commission made no secret about its wish to entirely revise fining policy, either. Rather, it explicitly underlined that these increases represented ‘a new, tougher fining policy’114 built on the foundation of deterrence.115 In the early 1990s, the Commission further expressly referred to the necessity to impose stricter sanctions in order to prevent reoffending.116 Evidently, the combat against cartels took a sharp turn from moderate measures to severe punishment. Indeed, the new direction in Commission policy displayed a substantial toughening of its approach. What followed was an increase in total fines from 41 million euros in the mid-​1980s to nearly 400 million euros a decade later. In 2004, this figure already reached 900 million. Individual fines were not far behind. To exemplify, a record fine of over a billion euros was imposed on Intel in 2009. The nearly 500  million euro fine imposed on Hoffman-​La Roche in 2001 was a hefty amount in itself but again not exceedingly unusual.117 In 2012, the Commission broke its own record –​seven producers on the cathode ray tube market received a fine representing 1.47 billion euros. In addition, in nine cases decided over the period between 2015 and 2016, the Commission imposed a total of nearly four billion euros.118 Undeniably, contemporary competition sanctions in the EU119 make it difficult to disagree that they are very substantial in absolute terms, routinely reaching millions, even tens and hundreds of millions of euros. Extraordinary severity is also evident in relative terms:  these penalties are far higher than

112 Opinion of AG Slynn, (n 111) 1946. The AG recalled that the Commission announced at the hearing of this case that ‘it is now applying a new policy in respect of fines’. 113 Geradin, (n 111 of Chapter 4) 4; Forrester, (n 3 of Chapter 1) 185; Geradin & Henry, (n 111 of Chapter 4) 5. 114 European Commission, Decision, Pioneer Hi-​Fi Equipment, (n 110) para 65. Also: Wouter Wils, The Optimal Enforcement of EC Antitrust Law:A Study in Law and Economics (Alphen aan den Rijn: Kluwer Law International, 2002), 38. 115 Forrester, (n 3 of Chapter 1) 188. 116 Karel Van Miert, ‘The role of competition policy today’, Speech, Second EU/​Japan Seminar on Competition, Brussels, 16 September 1994, available at . 117 ‘Cartel Statistics’, (n 15 of Chapter 1). 118 ibid. 119 ibid.

128 ­chapter  other fines which the ECtHR has recognized as criminal under Article 6 echr in judgments involving other branches of law.120 Moreover, it should not slip one’s mind that it is not even the absolute numbers but rather the maximum possible penalty that would in any case qualify competition fines as criminal. The ECtHR appraises the severity of a penalty by reference, first and foremost, to the maximum possible sanction prescribed by the disputed law.121 In this respect, one may recall that under Article 23(2) of Regulation 1/​2003, the maximum potential fine is up to ten per cent of the total global turnover of the undertaking concerned. In this respect, one may draw attention to the Jussila judgment, in which the ECtHR deemed a tax surcharge, which had a ceiling of ten per cent, to be sufficiently severe to fulfil the Engel criteria.122 Hence, one is hard pressed to deny the profoundly repressive character of competition fines. They are hundreds ‒ even thousands ‒ of times more severe than the penalty imposed in Jussila. Hence, it should follow that the principles permeating the Jussila judgment may not necessarily be the most apt benchmark for considering whether EU competition procedure falls within the scope of hard core offences or remains on the periphery of criminal law. Quite the contrary, if the nature of a penalty is decisive in categorising an offence as peripheral or mild, drawing parallels between Jussila and EU competition fines is hardly justified. Indeed, the sheer amounts of competition fines imposed in the course of the last decade expose the limitations of the theory that Jussila can be equally applied to all non-​traditional criminal proceedings. The divergences between a penalty of several hundred euros in Jussila and the routine fines in EU anti cartel enforcement are so large that a partial application of Article 6 echr to this enforcement on the basis of Jussila is quite difficult to comprehend. 3.3 Nature of the Offence The ECtHR determines the existence of a criminal charge not only by examining the particular penalty in question. It also looks at the very nature of the offence, searching out decisive criminal connotations.123 Wils characterises an offence as criminal particularly if it entails, for example, an element of fault and the ensuing 120 121 122 123

In Bendenoun v. France, a fine under 100,000 frf was considered to be ‘very substantial’ already. ECtHR, Bendenoun v. France, (n 37 of Chapter 3) para 47. ECtHR, Sergey Zolotukhin v. Russia, Appl no 14939/​07, judgment 10 February 2009, para 56. Also: Wils, (n 102 of Chapter 4) 18. ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 38. ECtHR, Engel, (n 42 of Chapter 1) para 82.

Classification of EU Anti-Cartel Proceedings

129

moral condemnation of the offender.124 Indeed, the existence of a stigma attached is a particularly good indicator of its strongly criminally-​coloured nature.125 Perception of prohibited conduct as immoral or inherently bad essentially conveys a message that this conduct contravenes the very values of society, hence deserving appropriate punishment.126 Consequently, the person responsible for this immoral act is likely to be exposed to public condemnation or reputational damage.127 In other words, the existence of a stigma articulates that the particular offence to which the stigma is attached is not perceived as neutral from the perspective of the social and moral values of a given society. On the contrary, the stigma signals that this particular offence is viewed as socially and/​or morally harmful. Earlier examples invoked of competition fines imposed in the usa (including custodial sentences on individuals!),128 France129 or Italy,130 not to mention fines operating at EU level, demonstrate a clearly unequivocal and widespread agreement that cartel activity is profoundly harmful to the economic sphere. At the same time, in the scholarly community there seems to be little consensus about ‒ or consistent approach to ‒ the moral and/​or social content of cartels.131 For some, anti-​cartel laws are merely focused on harm to economic life and, therefore, purely regulatory and devoid of moral content or at least rather ambiguous in this regard.132 Others perceive cartels as ‘theft by well-​dressed thieves’,133 or as an act of robbing consumers ‘of tangible blessings of competition’.134 1 24 Wils, (n 46 of Chapter 3) 6. 125 ECtHR in Öztürk (n 14 of Chapter 3) paras 8, 53. In this paragraph, the ECtHR states that even minor offences that are unlikely to cause substantial reputational damage may be seen as criminal. Conversely, it may be argued that offences that are likely to lead to reputational damage have an even more clearly expressed criminal character. Also: ECtHR, Jussila v. Finland, (n 43 of Chapter 1) para 43. 126 Wils, (n 46 of Chapter 3) 6. 127 Forrester, (n 3 of Chapter 1) 202, 204; Forrester, (n 28 of Chapter 1) 827. 128 Act of July 2, 1890 (Sherman Anti-​Trust Act). 129 ECtHR, Société Stenuit v. France (n 68 of Chapter 3). 130 ECtHR, Menarini Diagnostics S.R.L. v. Italy (n 72 of Chapter 3). 131 Whelan argues, eg, that it is not clear whether EU competition law may be viewed as socially and morally or only morally harmful. Whelan, (n 13 of Chapter 1) 38‒39. 132 Herbert Hovenkamp, The Antitrust Enterprise: Principles and Execution (Harvard University Press, 2005), 10, 54. 133 Joel I. Klein, ‘The War Against International Cartels: Lessons from the Battlefront’, Fordham Corporate Law Institute 26th Annual Conference on International Antitrust Law & Policy New  York, New  York, 14 October 1999, available at . 134 Gregory J. Werden, ‘Sanctioning Cartel Activity: Let the Punishment Fit the Crime’, 5(1) European Competition Journal (2009), 19‒36.

130 ­chapter  Green135 and Whelan136 measure the moral content of EU anti-​cartel enforcement by evaluating the socio-​ethical dimension of cartels from the three perspectives of (1) guilt, (2) social harm, and (3) moral wrongness.137 The first perspective –​guilt –​is about the state of mind of the offender towards the offence. It is concerned with the question whether the law prescribes the infringement as being committed knowingly, displaying a degree of fault.138 The second perspective –​social harm –​is about detecting whether a particular offence is perceived as substantially harmful to the common good. Finally, the third perspective –​moral wrongness –​is about the moral element of the offence: this dimension is less about identifying the impact of particular conduct on social welfare as it considers the inherent immorality of a particular offence.139 In light of these dimensions, the perception of cartels at EU level does not appear to be entirely morally or socially neutral. As regards the first perspective relating to guilt, or fault, one may claim with certainty that as a general rule EU anti-​cartel enforcement unequivocally requires some form of fault. The Commission must consider the offender’s culpability when imposing a fine under Article 23(2)(a) of Regulation 1/​2003.140 From this perspective, no particular neutrality of EU competition law may be established. The second point of reference in determining the moral content of cartels is about the harm inflicted upon the common good. It would be difficult to deny that EU competition law strives to pursue a number of interests pertaining to the common good protected by the EU. For instance, free and undistorted competition has been viewed as necessary to achieving the pivotal objectives of the internal market since the dawn of European integration.141 Moreover, in 135 The author examines white collar crime from the point of view or moral and legal theory. Stuart P. Green, Lying, Cheating, and Stealing: A Moral Theory of White-​Collar Crime (Oxford: oup, 2006). 136 Whelan, (n 13 of Chapter 1) 83ff. 137 ibid. 138 It is generally considered that intentional commission of an offence is more culpable. However, numerous jurisdictions apply strict criminal liability which requires no degree of culpability in order to punish the offender. Strict liability offences can be criticized from the point of view of retributive theory. 139 Whelan, (n 13 of Chapter 1) 83ff. 140 For more on the principle of fault in the imposition of the EU competition fines, Ch IV and: ecj, IAZ (n 117 of Chapter 4) para 45; GC, Ferriere Nord (n 117 of Chapter 4) para 41; GC, Tetra Pak (n 117 of Chapter 4) paras 238ff. More: Frenz, (n 14 of Chapter 1) 929. 141 Art 3(1)(b) tfeu and Protocol No. 27 to the Treaty of Lisbon. The dismantling of trade barriers between the Member States requires free competition:  the integration of the internal market would be ineffective if private undertakings could replace protectionist

Classification of EU Anti-Cartel Proceedings

131

the post-​Modernisation era142 of EU competition enforcement, the emphasis shifted to consumer welfare:143 one may well argue that protection of consumers articulates the social dimension of the harmfulness of cartels. Cartels reduce social welfare by virtue of a number of factors, such as the transfer of wealth from consumers to producers through price increases. Moreover, inefficient allocation of productive resources and a decrease in quality and innovation can be attributed to cartel activity.144 Although no precise numbers exist, the negative impact of cartels on social welfare is dramatic: according to estimates by the oecd, the damage inflicted by cartels amounts to billions of dollars annually.145 Similarly, in 2008, the Commission estimated that EU consumers suffered harm amounting to billions due to violations of Articles 101 and 102 tfeu.146 The Commission has engaged in forceful rhetoric about the harm done by cartels to social welfare. It has referred to cartels as ‘[striking] a killer blow at

142

143 144

145 146

measures with anti-​competitive agreements. Notably, at the turn of the century cartels had no negative image, eg in Austria or Germany. Cartels were even perceived as stimulating as well as limiting industrial concentration, thereby having a beneficial effect to the economy and even necessary to harness the unrestrained competition in the times of economic crisis (Kinder der Not). David J. Gerber, ‘The Origins of European Competition Law in Fin-​de-​Siecle Austria’, 36 American Journal of Legal History 405 (1992), 405‒40, at 419; Wilfried Feldkirchen, ‘Competition Policy in Germany’, 21(2) Business and Economic History (1992), 257‒69, at 257. The Modernisation era in EU competition law began with the Commission ‘White Paper on Modernisation’. The aim of modernisation was to facilitate a more efficient and less resource-​intensive enforcement of EU competition rules. In particular, it introduced a more economic approach to the Commission’s assessment of competition infringements. European Commission, ‘White Paper on Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty’, (n 73 of Chapter 4) 7; Christian Kirschner, ‘Goals of Antitrust and Competition Law Revisited’, in Albert, Voigt, Schmidtchen (eds), Conferences on New Political Economy (Tübingen: Mohr Siebeck, 2007), 7‒26, at 7ff; Joaquín Almunia, ‘Competition and Consumers:  the future of EU competition policy’, Speech, European Competition Day, Madrid, 12 May 2010, available at ; Viktoria Daskalova, ‘Consumer Welfare in EU Competition Law: What Is It (Not) About?’, 11(1) The Competition Law Review (2015), 133‒62, at 133. David J Gerber, ‘Two Forms of Modernization in European Competition Law’, 31(5) Fordham International Law Journal (2007), 1234‒65, at 1247. Whelan, (n 13 of Chapter 1) 90; Michael A. Utton, Cartels and Economic Collusion: The Persistence of Corporate Conspiracies (Cheltenham: Edward Elgar Publishing, 2011), 3; Hans-​ Wilhelm Krüge, Öffentliche und private Durchsetzung des Kartellverbots von Art. 81 EG: Eine rechtsökonomische Analyse (Berlin: Springer-​Verlag, 2008), 37. oecd, ‘Fighting Hard Core Cartels: Harm, Effective Sanctions and Leniency Programmes’, Report (2002), available at < https://​www.oecd.org/​competition/​cartels/​1841891.pdf>. European Commission ‘White Paper on Damages actions for breach of the EC antitrust rules’ (n 10 of Chapter 1), 14–​15.

132 ­chapter  the heart of healthy economic activity’,147 a cancer on the open market economy,148 and has emphasised that free competition is ‘a key instrument to protect and deepen’ the internal market and to ensure consumer welfare.149 Furthermore, ‘soft law’ instruments of the Commission, such as the 2001 Guidelines on horizontal agreements, also articulate the need to optimise consumer welfare by means of cartel prohibition under Article 101 tfeu.150 Hence, the socially negative content of cartels is difficult to deny. One may thus hardly suppose the socially neutral character of cartel offences. The third perspective outlined above may be instrumentalised to determine the moral or ethical content of cartels. In other words, this perspective concerns the question whether cartel activity is perceived as morally wrong in itself, regardless of its social consequences.151 One may be correct in noting that numerous legal scholars –​and the Commission itself –​compare cartels to diverse inherently immoral acts. In particular, cartels are likened to such wrongful conduct as theft, cheating, and deceit. Cartel members are further named and shamed by the Commission, accusing them of cheating consumers152 and stealing from their pockets, particularly by imposing artificially ­increased prices.153 Finally, this forceful rhetoric places an ever-​increasing emphasis on consumer protection, likening consumers to the primary victims of

147 Neelie Kroes, ‘Delivering on the crackdown: recent developments in the European Commission’s campaign against cartels’, Speech, The 10th Annual Competition Conference at the European Institute, Fiesole, Italy, 13 October 2006, available at . Also:  European Commission, Joaquín Almunia, ‘Competition –​what’s in it for consumers?’, Speech, European Competition and Consumer Day, Poznan, Poland, 24 November 2011, available at . 148 Former Commissioner Mario Monti has referred to cartels as ‘cancers on the open market economy, which forms the very basis of our Community’. European Commission, Mario Monti, (n 9 of Chapter 1). 149 European Commission, Joaquín Almunia, 2011, (n 147). 150 European Commission, Communication from the Commission ‒ Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-​operation agreements, OJ C 11, 14.1.2011, 1–​72. 151 Moral wrongness is related to the first perspective of culpability discussed earlier in this section. 152 European Commission, ‘Competition:  Commission fines members of gas insulated switchgear cartel over 750  million euros’, 2007, available at . Also: Whelan, (n 13 of Chapter 1) 96‒97. 153 Former Commissioner Neelie Kroes: ‘Cartels are always changing shape –​adapting like viruses to fight our attempts to kill them off’. European Commission, Neelie Kroes, ‘Tackling Cartels –​A Never-​Ending Task’, 2009, (n 8 of Chapter 1). Also Kroes: ‘It is for us to show that when we break up cartels, it is to stop money being stolen from customers’

Classification of EU Anti-Cartel Proceedings

133

cartel activities.154 One may be compelled to note in this regard that the term ‘victim’ is usually associated with rather severe offences. Admittedly, however, it remains disputed whether price-​fixing and other classic manifestations of cartel activity are as clear-​cut as theft. For instance, the President of the German Federal Cartel Office, Andreas Mundt, has stated: ‘A cartel violation is rarely a crystal clear matter like a theft –​the lines are often blurred’.155 Nevertheless, a comparison with theft unmistakably implies a degree of immorality of cartels. The above arguments characterise EU cartel activity as a morally non-​neutral offence. The forceful rhetoric of the Commission clearly implies that cartels are not only harmful for the underlying interests of society but also inherently immoral due to their theft-​like qualities.156 Thus, exposing undertakings to cartel sanctions –​particularly in light of the heavy publicity surrounding dramatic fines157 –​may potentially incur non-​negligible reputational damage. Hence, it is reasonable to suggest that EU cartel procedure and sanctions can have a non-​negligible stigmatising effect on offenders. By characterising cartels as worthy of condemnation, the Commission essentially recognises a rather

154

155 156

157

pockets’. Neelie Kroes, ‘Anti-​trust reform in Europe: a year in practice’, 2005, (n 7 of Chapter 1); Former Commissioner Mario Monti: ‘Cartels are like cancers on the open market economy, which forms the very basis of our Community’. European Commission, Mario Monti, (n 9 of Chapter  1). This rhetoric is shared by the oecd, which calls cartels the ‘most egregious violation of competition law’. oecd, ‘Hard Core Cartels’, Report (2000), 1‒60, at 6, available at . Further, the US Supreme Court has referred to cartels as the supreme evil of antitrust. Verizon (n 11 of Chapter 1). Indeed, in addition to public enforcement through the Commission and national authorities, consumers are encouraged to participate in private enforcement by suing the undertaking for damages incurred through the anticompetitive conduct of cartel participants. In this regard, the Commission considers it to be ‘desirable that victims of competition law violations are able to recover damages for loss suffered’. European Commission, ‘White Paper –​Damages Actions for Breach of the EC Antitrust Rules’ com (n 10 of Chapter 1) 165; Michael Hutchings, Peter Whelan, ‘Consumer Interest in Competition Law Cases’ 16(5) Consumer Policy Review (2006), 180‒88, at 185; European Commission, ‘White Paper‒Damages Actions for Breach of the EC Antitrust Rules’ (n 10 of Chapter 1) 165 final. Karin Matussek, ‘Jail for Price Fixers Too Severe: German Antitrust Chief’, Bloomberg.com, 20 November 2014, available at . Eg:  Peter Whelan, ‘Cartel Criminalisation and the Challenge of “Moral Wrongfulness”‘, 33(3) Oxford Journal of Legal Studies (2013), 535‒61, at 535. For a discussion on the moral and social dimension of cartels: Maurice E. Stucke, ‘Morality and Antitrust’, Columbia Business Law Review (2006), 444‒544; Bruce Wardhaugh, Cartels, Markets and Crime: A Normative Justification for the Criminalisation of Economic Collusion (Oxford: oup, 2014). Eg: European Commission, Joaquín Almunia, (n 3 of Chapter 1).

134 ­chapter  clearly expressed commitment to send a strong message: cartels will be publicly exposed and subjected to harsh punishment. Framed in these terms, EU competition law arguably mirrors some of the classic qualities of criminal law. 4

Concluding Remarks: Comprehensive Fulfilment of the Engel Criteria

EU cartel procedure undeniably corresponds to the Engel criteria. Competition penalties –​both potential and those actually imposed –​are unambiguously severe, amounting to –​and even exceeding –​hundreds of millions of euros. The very nature of an EU cartel offence appears to have a clearly expressed criminal connotation as well. The Commission embraces public condemnation of cartel offenders, seeking to expose them to public disgrace worthy of thieves or proverbial viruses in the economy of the internal market. Hence, competition penalties ‒ whose pronounced punitive and deterrent effect may no longer be called into question ‒ possess evident stigmatising potential. The Commission’s efforts to publicise the socially and morally negative content of cartels allow one to suggest that cartels are viewed as particularly harmful to the common good protected by the regulatory framework of EU anti-​cartel enforcement. It would be inconsistent to argue that cartel fines are devoid of criminal character, while drawing clear parallels between cartel activity and such unambiguously immoral acts as theft or cheating. Combining this forceful moral rhetoric with the vast powers of the Commission to investigate cartels and the astronomical fines imposed in the course of anti-​cartel procedure compels one to propose that, at EU level, cartel activity is de facto perceived to be as serious as many criminal offences. These very characteristics also distinguish EU cartel procedure from an ordinary regulatory framework, which was appraised in Jussila. Indeed, it follows that cartel offences manifestly differ from the tax offence examined in the Jussila v. Finland judgment.158 Hence, one may argue that even though EU anti-​cartel enforcement falls outside ‘traditional’ criminal law, it nevertheless constitutes a proper ‘criminal charge’ within the meaning of Article 6 echr. Accordingly, anti-​cartel enforcement must fully satisfy the requirements of this provision. In the following, we will examine whether parental liability may thus survive this robust scrutiny under Article 6(2) echr. 158 Forrester, (n 3 of Chapter 1) 204.

­c hapter 6

Parental Liability: Compliance with Article 6(2) echr [Presumption of decisive influence] is in fact something like the Yeti of EU antitrust law: much has been written about it; nobody has seen it in real life. stefan thomas 1

∵ 1 Introduction The presumption of innocence under Article 6(2) echr is one of the guiding principles in EU cartel procedure.2 There are, however, manifest concerns about compliance with this provision in imputing liability to parent companies for faults committed by their wholly-​owned subsidiaries.3 Joint and several liability of a parent is not laid down in Regulation 1/​2003.4 Nevertheless, the Commission uses it extensively in its fining practice. This type of liability is a successful instrument in the combat against cartels: the astronomical figures5 in the statistics of EU cartel sanctions are partly related to attribution of parental liability. The imputation of parental liability in EU competition law rests on the legal definition of an ‘undertaking’ in accordance with the single economic entity (see) doctrine. This doctrine may be characterised as follows. The prohibition of Article 101 tfeu is aimed at undertakings,6 in the same way as Article 23(2) of Regulation 1/​2003, which stipulates imposition of competition fines.7 1 Thomas, (n 54 of Chapter 1), 20. 2 ecj, Montecatini (n 162 of Chapter 4); ecj, Hüls, (n 191 of Chapter 4); ecj, Chalkor, (n 38 of Chapter 1) para 51. 3 Scordamaglia, (n 11 of Chapter 1) 37. 4 Frenz, (n 14 of Chapter 1) 904. 5 In 2016, the truck producer Daimler was fined over one billion euros for participation in a cartel. Another truck producer daf was fined 750 million euros for its role in the same cartel. European Commission, ‘Antitrust: Commission fines truck producers € 2.93 billion for participating in a cartel’, 2016, (n 18 of Chapter 1); ‘Cartel Statistics’, (n 15 of Chapter 1). 6 Kienapfel, (n 24 of Chapter 1), 1201; Colombani et al, (n 50 of Chapter 1) 1251. 7 Mestmäcker & Schweitzer, (n 14 of Chapter 1) 563.

© Koninklijke Brill NV, Leiden, 2019 | DOI:10.1163/9789004384651_007

136 ­chapter  However, the term ‘undertaking’ is not defined in written law. The ecj has therefore filled the gap by defining it as an economic entity8 ‒ or unit ‒ comprised of several distinct legal or natural persons, having regard to the economic, organisational and legal links between those persons.9 When an undertaking is comprised of several legal persons, the Commission faces a decision: which member of the undertaking should be held responsible for an infringement? In particular, should the parent company incur liability for an infringement committed by a subsidiary? According to the above interpretation of the term ‘undertaking’, companies having distinct legal personalities may constitute a single economic entity for the purpose of attributing parental liability. Hence, when a subsidiary infringes EU competition norms, the Commission may hold the parent jointly and severally liable for the infringement.10 This so-​called see doctrine, which characterises several distinct persons as one undertaking in the above context, seemingly aims to ensure deterrence: it ought to compel parent companies –​sitting at the top of the corporate ladder  –​to enforce pro-​competitive practices across their corporate group.11 Higher fines incurred when the parent is held accountable are the prime manifestation of the deterrent effect of the see doctrine. After all, the maximum potential fine under Article 23(2) of Regulation 1/​ 2003 is considerably higher if the aggregate sales of an entire corporate group determine the fine. Furthermore, a fine can be further increased if the Commission calculates group turnover when considering uplifting a fine ‘for deterrence’, which applies to undertakings with especially lucrative turnover.12 Finally, group liability increases the risk that the Commission will establish

8

9 10 11 12

The term ‘economic entity doctrine’ is applicable to other contexts of EU competition law, such as in Art 5 of the Merger Regulation. It is also applied in the context of agreements between companies belonging to the same corporate group, whereby Art 101 tfeu is deemed to be inapplicable to agreements between legal persons belonging to one corporate group. These contexts are irrelevant for the present analysis, as it explores the see doctrine as a basis for attribution of parental liability. ecj, Siemens Österreich (n 49 of Chapter 1) para 43. Also: ecj, Akzo Nobel (n 49 of Chapter 1) para 55; ecj, General Química, (n 49 of Chapter 1) para 35. Karl Hofstetter, Melanie Ludescher, ‘Fines Against Parent Companies in EU Antitrust Law  –​Setting Incentives for “Best Practice Compliance”‘, 33(1) World Competition: Law and Economics Review (2010), 55‒75, at 55. ibid, 1253. Point 30 of Guidelines on the method of setting fines (n 14 of Chapter 1). More: Colombani et al, (n 50 of Chapter 1) 1254.

Parental Liability

137

recidivism: put differently, it is likely that one of the members of this very undertaking already had encounters with the Commission.13 On this approach it would be easy to agree that imputing parental liability is an effective tool of anti-​cartel enforcement. However, it also raises concerns of compliance with the presumption of innocence. In particular, these concerns revolve around a potential conflict with the principles expressed in the ECtHR judgment Salabiaku v. France, which we examined earlier. Certain limitations of parental liability in particular emerge in light of the requirement of the ECtHR to maintain the rebuttability of presumptions so as not to compromise the principle nulla poena sine culpa. Moreover, a simmering conflict between parental liability and the principle in dubio pro reo may also be detectable. 2

Parental Liability: Background

2.1 Main Features of the Single Economic Entity Doctrine Parental liability can arise on diverse grounds that are not necessarily controversial from the perspective of fundamental rights. The most obvious reason for liability would be the parent’s direct involvement in the anti-​competitive conduct of a subsidiary.14 For instance, if a manager who took part in anti-​competitive meetings sits on the management board of both the subsidiary and the parent at the same time, it might be hard to deny the parent’s direct participation in the anti-​ competitive conduct impugned to it. The same applies when the parent company does not actively participate in the infringement but initiates or approves anti-​ competitive acts.15 Such grounds for parental liability are hardly controversial, as they simply penalise the conduct of the parent itself.16 Under the see doctrine, however, parental liability can also arise when the parent plays no part in the infringement.17 In other words, parent companies are guilty merely ‘by association’, but not due to unlawful conduct of their own.18 To exemplify some forms of this 13 1 4 15 1 6 17 18

Point 28 of Guidelines (n 14 of Chapter 1). Also: Colombani et al, (n 50 of Chapter 1) 1254; Atlee et al (n 56 of Chapter 1), 4. Scordamaglia, (n 11 of Chapter 1) 36. Schwarze et al (n 87 of Chapter 4) 6, 51, citing: ecj, Stora Kopperbergs (n 55 of Chapter 1) para 24ff; GC, Case T-​31/​99, ABB Asea Brown Boveri v. Commission, judgment 20 March 2002, ECLI:EU:T:2002:77. Kienapfel, (n 24 of Chapter 1) 1206. ibid. Volker Soyez, ‘Die Busgeldleitlinien der Kommission  –​mehr Fragen als Antworten’, 19 EuZW (2007), 596‒600, at 597. Joint and several liability also means that the Commission

138 ­chapter  ‘association’, one may underline that the see doctrine captures a wide spectrum of intra-​company relationships with varying degrees of autonomy. For instance, firms owning 50:50 joint ventures may be considered a single economic unit,19 as may companies and their sales agents, under certain circumstances.20 Further, parental liability may apply even when the parent no longer owns the offending subsidiary at the time of Commission proceedings.21 In essence, any ‘unitary organisation of personal, tangible and intangible elements’22 that has a clearly expressed long-​term economic objective and also the capacity to ‘contribute to the commission of an infringement’23 may be viewed as an undertaking. As regards the proximity of a parent and its subsidiary in the so-​called corporate chain, a parent company may be deemed to form a single economic entity even with its lowest-​tier subsidiaries.24 Against this background, even a rather distant relationship ‒ such as a corporate relationship maintained through an intermediary company25 ‒ between two distinct legal persons may lead to the Commission alleging establishment of an economic unit. Hence, it is evident that an undertaking does not equal a legal person.26 Defined by the EU Courts as a ‘functional and economic concept’,27 an undertaking remains a rather fictional unit. However, a competition sanction cannot be

19 20

21

22 23 24 25 26 27

may impose a unitary fine without indicating the individual liability of the impugned companies. Thomas, (n 54 of Chapter 1), 12. GC, T-​314/​01, Avebe v.  Commission, judgment 27 September 2006, ECLI:EU:T:2006:266, para 134. More on joint ventures and other forms of ownership below. GC, Case T-​66/​99, Minoan Lines v.  Commission, judgment 11 December 2003, ECLI:EU:T:2003:337, para 125. However, it should be noted that the liability of a principal for infringements committed by its agent can occur only under strict conditions whereby the agent assumes absolutely no risk of its own as it follows the instructions of the principal. More: Colombani et al (n 50 of Chapter 1) 1256. The material time-​frame for the attribution of joint liability is the period of the infringement in question. Therefore, the parent company can be held liable for infringements committed by a former subsidiary, ie, even if it does not own the subsidiary at the time of the competition proceedings before the Commission. ecj, Elf Aquitaine (n 57 of Chapter 1) paras 54‒57. Also: Lukas Solek, Stefan Wartinger, ‘Parental Liability: Rebutting the Presumption of Decisive Influence’, 6(2) Journal of European Competition Law & Practice (2015), 73‒84, at 76. GC, Case T-​352/​94, Mo och Domsjö v. Commission, judgment 14 May 1998, ECLI:EU:T:1998:103, para 87. ibid. ecj, General Química, (n 49 of Chapter 1) para 84ff. GC, Case T-​24/​05, Alliance One v.  Commission, judgment 27 October 2010, ECLI:EU:T:2010:453, para 132. ecj, Siemens Östereich (n 49 of Chapter 1) para 43. ecj, C-​597/​13 P, Total v. Commission, judgment 17 September 2015, ECLI:EU:C:2015:613, paras 33‒34. Also: Colombani et al (n 50 of Chapter 1); Christopher Kerse, Nicholas Khan,

Parental Liability

139

imposed on a fictional concept. Before the Commission can impose a penalty under Article 23(2)(a), it must identify a person with legal capacity that will be held individually and specifically responsible for the competition infringement in question.28 The need to address a fine to a particular legal person or persons has been confirmed by the EU Courts.29 However, the Commission enjoys discretion in deciding to which legal entities to address its decision. Thus, the Commission may decide whether to address a fine only to a subsidiary that infringed the competition rules, or to impose joint and several liability on the parent as well.30 So the question arises: in what situations are the parent and subsidiary deemed to belong to a single economic unit? A parent may constitute an economic unit with its subsidiary when the latter does not autonomously decide its conduct on the market: [A]‌legal person who is not the perpetrator of the infringement may none the less be penalised, (…) in particular when, although having a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links which tie those two legal entities.31 In this particular situation, the parent is deemed to have infringed EU competition law by virtue of being part of an undertaking to which the subsidiary also belongs.32 Here, the parent’s lack of involvement in or knowledge of the

28

29 30 31 32

EU Antitrust Procedure (London:  Sweet & Maxwell, 2012, 6th edn), para 7–​003, cited in: Schwarze et al, (n 87 of Chapter 4) 50. Kienapfel, (n 24 of Chapter 1), 1206. Also: GC, Limburgse Vinyl (n 52 of Chapter 1) para 978. Similarly, prior to adopting a final decision under Art 7 of Reg 1/​2003, the Commission addresses the statement of objections to a specific legal person and not an economic concept. ECJ, Akzo Nobel, (n 49 of Chapter 1), para 58. ibid, para 77, as cited in: Thomas, (n 54 of Chapter 1), 14. Also Colombani et al, (n 50 of Chapter 1), 1252. GC, Case T-​259/​02, Raiffeisen Zentralbank Österreich v. Commission, judgment 14 December 2006, paras 331‒32. Also: Colombani et al, (n 50 of Chapter 1) 1253; Atlee et al, (n 56 of Chapter 1), 3. ecj, General Química, (n 49 of Chapter 1) para 37; Akzo Nobel, (n 49 of Chapter 1) para 58‒60. Also: ecj, Stora Kopparbergs (n 55 of Chapter 1) para 26. Also: ecj, Imperial Chemical Industries, (n 55 of Chapter 1) paras 132‒33; ecj, Geigy, (n 55 of Chapter 1) para 44. ecj, Case C-​286/​11 P, Commission v. Tomkins, judgment 22 January 2013, paras 43, 49.

140 ­chapter  infringement is legally irrelevant:33 the subsidiary’s conduct may nevertheless be ascribed to the parent. But two cumulative elements must be present in order to apply joint and several liability to the parent.34 Firstly, the Commission must prove that the parent company is able to exercise a decisive influence over the subsidiary’s conduct, so that the subsidiary cannot independently determine its actions in the market. Secondly, the Commission must demonstrate that the parent has actually exercised its influence on the subsidiary.35 If both of these cumulative conditions are met, the parent and the subsidiary may be deemed to constitute a single undertaking. Hence, joint and several liability of the parent may arise. It should be emphasised that the term ‘decisive influence’ refers to a general influence over the commercial and other activities of the subsidiary, but not to influence over the specific anti-​competitive actions of this subsidiary.36 One should note that, as Thomas maintains, domestic company laws of the Member States do not appear to contain a general rule necessarily holding a parent company liable for the debts of its subsidiaries.37 2.2 Presumption of Decisive Influence As noted earlier, the see doctrine allows the Commission to hold a parent company jointly and severally liable for faults committed by a subsidiary only if it can prove that the subsidiary was not autonomous in the market. However, there is an exception to this rule: if the parent holds one hundred per cent of the shares in an offending subsidiary, a rebuttable presumption of decisive influence can apply: the Commission may presume that the criterion of actual exercise of decisive control is met.38 As soon as the Commission establishes that the offending subsidiary is wholly-​owned by the parent, it can presume that the parent has exercised decisive influence over the subsidiary, consequently imposing joint and several liability on the parent as well as the subsidiary. The parent may, in principle, rebut this presumption. However, it cannot do so by demonstrating that it has

33 34 35 36 3 7 38

ecj, Akzo Nobel, (n 49 of Chapter 1) para 59. Also: Mantas Stanevičius, ‘Portielje: Bar remains high for rebutting decisive influence presumption’, 5(1) Journal of European Competition Law & Practice (2014), 24‒26, at 24. ecj, Akzo Nobel (n 49 of Chapter 1) para 60. ibid; GC, Case T-​196/​06, Edison SpA v.  Commission, judgment 16 June 2011, para 28. Also: Colombani et al, (n 50 of Chapter 1) 1255. ecj, Akzo Nobel, (n 49 of Chapter 1) para 74. Also: Colombani et al, (n 50 of Chapter 1) 1256. Thomas, (n 54 of Chapter 1), 15. Kienapfel, (n 24 of Chapter 1) 1206‒1207.

Parental Liability

141

not instigated, participated in, or approved the infringement. The rebuttal must invariably show the autonomy of the subsidiary in the market.39 It is notable that, despite numerous attempts, the presumption has never been rebutted in practice. Even the Commission has recognised that a legal situation in which a subsidiary remains entirely autonomous occurs very seldom.40 Nevertheless, the Commission maintains that proving absence of exercise of decisive control can preclude parental liability.41 The ecj also expressly maintains that the presumption of decisive influence is rebuttable: [The presumption] seeks precisely to find a balance between the importance (…) of the objective of penalising conduct contrary to the competition rules, in particular Article 101 tfeu, and to prevent its repetition and, on the other, the requirements of certain general principles of European Union law, such as, in particular, the principles of the presumption of innocence, that penalties should be applied only to the offender, (…). It is particularly for that reason that [the presumption] is rebuttable.42 The ecj adds, in particular, that parent companies are best placed to find evidence of ‘lack of actual exercise of [decisive] power’, as the evidence is ‘within [their] sphere of operations’.43 Moreover, AG Kokott has argued that the presumption may be rebutted by evidence of restraint in controlling the subsidiary.44 Nevertheless, parental liability, which is based on the see doctrine, is viewed highly critically among scholars and, in particular, among practitioners, who perceive it as factually impossible to rebut.45 39 40 41

42 43 44 45

Eg: ecj, General Química, (n 49 of Chapter 1) para 50. Commission Decision, COMP/​38.638, Synthetic rubber (BR/​ESBR), OJ C 7, 12.1.2008. Also: Scordamaglia, (n 11 of Chapter 1) 39. European Commission, Decision Elevators and Escalators, (n 54 of Chapter 5). Para 605 of the Decision states: ‘[The parent should prove that] under the special circumstances of the case the [it] was not in a position to exert a decisive influence on its wholly-​owned subsidiary’s commercial policy, or that the subsidiary nonetheless determined autonomously its commercial policy (that is, the parent company, despite its controlling rights, did not actually exercise a decisive influence as regards the basic orientations of the subsidiary’s commercial strategy and operations on the market)’. ecj, Case C-​508/​11 P, Eni SpA v. Commission, judgment 8 May 2013, para 50. Also: ecj, Akzo Nobel, (n 49 of Chapter 1) para 60. For more: Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558. ecj, Portielje v. Commission, (n 57 of Chapter 1) paras 60, 71. Opinion of AG Kokott delivered on 23 April 2009 in: ecj, Akzo Nobel, (n 49 of Chapter 1), para 75. To name just a few:  Thomas, (n 54 of Chapter  1), 11‒27; John Temple Lang, ‘How Can the Problem of the Liability of a Parent Company for Price Fixing by a Wholly-​owned

142 ­chapter  Numerous parent companies have equally complained about the presumption, citing a violation of Article 6(2) echr. For instance, in the 2011 judgment Elf Aquitaine, the applicant argued: [T]‌he applicant claims that the transformation of a rebuttable presumption into an irrebuttable presumption constitutes a breach of the ­principle of the presumption of innocence. (…) [T]hat transformation constitutes a probatio diabolica, that is to say, a proof that is impossible to challenge and therefore a proof that is inadmissible in the light of the case-​law. (…) [T]he applicant asserted that such a presumption was contrary to the principle of the presumption of innocence enshrined in the [echr], as interpreted by the [ECtHR] in the Salabiaku v. France (…)46

46

Subsidiary Be Resolved?’, 37(5) Fordham International Law Journal (2014), 1483‒1524; Nils Wahl, ‘Procedural Issues in Recent Case-​Law  –​The EU Courts’, in Barry E.  Hawk (ed), International Antitrust Law & Policy: Fordham Competition Law 2013 (New St. Huntington:  Juris Publishing, 2014), 403‒25; Bronckers & Vallery, (n 225 of Chapter  4) 283‒99; Marco Bronckers, Anne Vallery, ‘No Longer Presumed Guilty? The Impact of Fundamental Rights on Certain Dogmas of EU Competition Law’, 34(4) World Competition, (2011), 535–​70; Sebastian Felix Janka, ‘Parent Company Liability and EU Competition Law: Two Worlds Apart?’, Journal of European Competition & Practice (2016), 1‒6, available at ; Pietro Merlino, ‘Edison: a glimpse of hope for parent companies seeking to rebut the parental liability presumption’, Journal of European Competition & Practice (2014), 1‒4, available ; Alexandr Svetlicinii, ‘Parental Liability for the Antitrust Infringements of Subsidiaries: A Rebuttable Presumption or Probatio Diabolica’, 10 European Law Reporter (ELR) (2011), 288‒92; Alexandr Svetlicinii, ‘Who is To Blame? Liability of «Economic Units» for Infringements of EU Competition Law’, 2 European Law Report (ELR) (2011), 52‒56; Antoine Winckler, ‘Parent’s Liability: New case extending the presumption of liability of a parent company for the conduct of its wholly owned subsidiary’, 2(3) Journal of European Competition Law & Practice (2011), 231‒33, available at ; Antoine Winkler, ‘Fines:  New Case Extending Company Liability in the Name of the “Economic Unit” Concept and Reversing Prior Case Law on Admissible Arguments’, 2(1) Journal of European Competition Law & Practice (2011), 34‒35, available at ; Erik H.  Pijnacker Hordijk, Simone LH Evans, ‘The Akzo-​case: Up a corporate tree for parental liability for competition law infringements Case C-​97/​08 P, Akzo Nobel and Others v Commission’, 1(2) Journal of European Competition Law & Practice (2010), 126‒29, available at ; Hofstetter & Ludescher, (n 10), 55‒75; Stanevičius, (n 33), 24‒26. GC, Elf Aquitaine (n 57 of Chapter 1), para 110.

Parental Liability

143

This accusation also relates, as Eni SpA v. Commission and Evonik Degussa aptly illustrate, to the claim that parental liability contravenes the principle of personal responsibility but amounts, rather, to strict liability.47 Before we proceed to analyse these claims, the emergence and the rationale of the see doctrine and the presumption of decisive influence are briefly remarked on below. 3

Parental Liability in Light of Article 6(2) echr

3.1 Stages of Development of the see Doctrine Application of parental liability based on the see doctrine can be roughly divided into three stages of development, leading to ever-​stricter treatment of parent companies. The first stage was reflected by two landmark cases of the 1970s: Continental Can48 and Commercial Solvents,49 both concerning US-​ based parent companies. In these cases, the see doctrine was seemingly applied in line with the principle of personal responsibility, as the parent companies were directly or indirectly involved in the infringement. In Continental Can, the parent had created a subsidiary solely as an instrument for conducting anti-​competitive activity in the EU. Similarly, Commercial Solvents concerned a situation in which the parent had instructed a subsidiary to engage in anti-​competitive behaviour. Clearly, these cases represent the kind of joint and several liability of the parent which is not entirely unexpected, given the parent’s own questionable conduct. In the second stage, which entered the scene a decade later, the parent’s role in the infringement was less relevant for imputation of parental liability. Rather, the see appeared to call into question the general understanding that conduct by one legal person may not automatically be attributed to another by virtue of an ownership relationship between the two.50 In seeming defiance of this principle, the prerogatives of the parent to exert decisive influence by

47 48 49 50

ecj, Eni SpA v. Commission, (n 42) paras 38‒39; ecj, Case C-​155/​14 P, Evonik Degussa and AlzChem v. Commission, judgment 16 June 2016, para 14. ecj, Case C-​6/​72, Europemballage Corporation and Continental Can Company v. Commission, judgment 21 February 1973, ECLI:EU:C:1973:22. ecj, Joined Cases C-​6/​73 and C-​7/​73, Istituto Chemioterapico Italiano and Commercial Solvents v. Commission, judgment 6 March 1974, ECLI:EU:C:1973:31. Hordijk & Evans, (n 45) 126‒29, at 129: ‘In the sphere of contractual and extra-​contractual liability it is, however, not at all evident that the behaviour of one legal entity may be attributed to another legal entity, for the mere reason that the latter legal entity owns the former’.

144 ­chapter  virtue of its shareholding took centre stage in justifying an imputation of parental liability. Nevertheless, the EU judiciary at that time suggested that the Commission could not apply parental liability by virtue of mere ownership. The cases aeg Telefunken and Stora Kopparbergs Bergslag elucidate that the presumption alone was insufficient to find that a parent and its wholly-​owned subsidiary constitute a single undertaking. On the contrary, the EU Courts held that this presumption had to be supported by evidence indicating the actual exercise of decisive influence in order to remove all doubts about the existence of economic unity between the parent and its subsidiary. Lastly, the third and final stage of this evolution was marked by the ecj judgment in Akzo Nobel. A presumption of decisive influence alone can now justify imputation of parental liability. No particular proof of actual exercise of decisive control is needed if the parent is the sole shareholder in the offending subsidiary. The presumption appears to correspond to a certain ‘risk liability’,51 creating antagonism with the principles applicable to criminal responsibility. The phenomenon of parental liability under EU competition law is construed below. 3.2 Emergence of the see Doctrine: Early Concept Looking back at the litigation history before the EU Courts, the joint and several liability of a parent company emerged, as a concept, in the 1970s judgments Commercial Solvents52 and Continental Can.53 These cases concern abuse of a dominant position under Article 102 tfeu rather than anti-​competitive agreements prohibited by Article 101 tfeu. They are nevertheless worthy of at least a cursory look, seeking to trace back the early representation of this very ­liability. The Commercial Solvent Corporation (csc) was a US-​based producer of pharmaceutical products. csc was active in the EU market through the company ici, a subsidiary and re-​seller.54 In 1970, ici declined to sell csc’s products to a former customer, pharmaceuticals company Zoja. This dispute

51 52 53 54

ibid. ecj, Commercial Solvents, (n 49) para 37. ecj, Continental Can (n 48). More on this case: Liza Lovdahl Gormsen, A Principled Approach to Abuse of Dominance in European Competition Law (Cambridge: cup, 2010), 77; Georg-​Klaus de Bronett, ‘Gesamtschuldnerische Geldbußen nach EU-​Kartellrecht für Personen, die wettbewerbswidrig handeldnden “wirtschaftlichen Einheiten” angehören’, Europäisches Wirtschafts-​und Steuerrecht, Heft 3 (2015), 123‒30, at 123.

Parental Liability

145

between former contractual partners drew the attention of the Commission, which established that ici sought to eliminate Zoja from the pharmaceuticals market, as it was planning to produce a competing product and, therefore, sought to neutralise Zoja as a competitor. As a result, Zoja was compelled to find alternative suppliers. However, this move failed to address the problem: ici’s parent company csc ordered these suppliers to stop selling their products to Zoja. A violation of Article 102 tfeu was established in the conduct of csc and its subsidiary, ici. Consequently, the Commission attributed ici’s conduct to its parent, imposing joint and several liability on both companies.55 Since the parent company, csc, had instructed its subsidiary ici to cease business relations with Zoja, the Commission held that csc had exercised a decisive influence over ici. In the particular circumstances of this case, the Commission viewed it as unjustified to distinguish between the conduct of the parent and the subsidiary as regards business dealings with Zoja.56 On appeal, the ecj upheld the Commission decision, recognising that both companies were ‘obviously united’ in their conduct.57 In line with this unitary action, they were deemed to constitute a ‘single undertaking or economic unit’.58 Somewhat comparably, the see doctrine was applied in the 1972 case Continental Can.59 This concerned acquisition of a competitor with the aim of eliminating all competition in the foodstuffs packaging market. The US-​based parent company, Continental Can, set up a subsidiary, Europemballage, to conduct operations in the European market. In reality, the sole purpose of the subsidiary was to acquire eighty per cent of the capital in a competitor of Continental Can, a company called tdv. Following the purchase of tdv, Continental Can held over ninety per cent of its capital. Subsequently, the Commission found a violation of Article 102 tfeu, attributing the violation to both companies as the subsidiary had evidently acted on its parent’s ­instructions.60 On appeal, the ecj affirmed the attribution of liability to Continental Can. The Court held that despite the distinct legal personalities of Continental Can

55 56 57 58 59 60

European Commission, Decision 14 December 1972, IV/​26911, Zoja/​CSC-​ICI, OJ L 299, 31.12.1972. ibid, Section II A. ecj, Commercial Solvents, (n 49) para 41. ibid, para 37. ecj, Continental Can (n 48). ibid, paras 14‒16, 242. More: de Bronett, (n 54) 124.

146 ­chapter  and Europemballage, the conduct of the subsidiary could nonetheless be attributed to the parent, ‘particularly where the subsidiary company does not determine its market behaviour autonomously, but in essentials follows directives of the parent company’.61 Viewed through this prism, Europemballage did not actually act autonomously in the market: the parent induced it to buy the shares of a competitor, making the necessary funds available to its subsidiary in order to facilitate the purchase.62 What is common to both cases is that in reality the parents played a major role in committing an infringement. In both cases, the parent had explicitly instructed a subsidiary to act in a manner that aimed to impair free competition. Hence, one should emphasise that the early concept of the see doctrine tied attribution of parental liability to direct or indirect involvement by the parent in a concrete infringement, taking into account the personal responsibility for its own unlawful actions.63 In fact, resorting to the see doctrine –​or any other particular device –​was not even necessary in these cases, as the Commission had clearly proved the parent’s own role in the infringements. What we witness here was an effort by the ecj to reinforce the international jurisdiction of the Community, which may have been less well-​entrenched back in the 1970s:64 both parent companies in these cases were incorporated in the US and seemingly sought to avoid eec jurisdiction by acting through their subsidiaries in Europe. The cases reviewed above concern Article 102 tfeu. However, in the period after the 1970s the see doctrine also acquired a significant role in cartel cases. Helping Article 101 tfeu to unfold its full potential, this doctrine –​via a broad interpretation of an ‘undertaking’ –​justified imputation of liability not only to the conspiring subsidiary but also to the parent by virtue of the parent’s shareholding.65 The existence of actual –​and unlawful –​conduct by the parent ceased to play a significant role: the subsidiary’s conduct could now be attributed to the parent by virtue of its organisational, economic and legal links with the offending subsidiary. The presumption of decisive influence started dominating the see doctrine.

61 62 63 64 65

ecj, Continental Can, (n 48) paras 14‒16, 242. ibid, 219. Bernardo Cortese, ‘Piercing the Corporate Veil in EU Competition Law: The Parent Subsidiary Relationship and Antitrust Liability’, in:  Cortese (ed), EU Competition Law:  Between Public and Private Enforcement (Law International, 2014), 73‒93, at 77. ibid. ibid.

Parental Liability

147

Development of the Concept of Presumption of Decisive Influence aeg Telefunken: Emphasis on the Prerogatives of the Sole Shareholder Following the 1970s cases Commercial Solvents and Continental Can, the see doctrine gradually morphed into one of the Commission’s principal weapons in breaking up cartels.66 The prerogatives of a parent to steer a subsidiary’s commercial policy prompted the Commission to hold both companies liable. One may suggest that the main motivation behind this understanding of liability represented the conviction that a shareholder –​particularly a sole shareholder –​will necessarily make use of its capabilities: 3.3 3.3.1

[A]‌parent company (…) in a similar situation to that of a sole owner, as regards its power to exercise a decisive influence over the conduct of its subsidiary, having regard to the economic, organizational and legal links which join it to that subsidiary. (…) [T]he Commission is entitled to (…) rely on the presumption that the parent company makes effective use of its power to exercise a decisive influence (…).67 The ecj judgments in aeg Telefunken68 and Stora69 strongly contributed to establishing and elaborating precisely this presumption of decisive influence, a presumption applied for the first time in the 1983 case aeg Telefunken. aeg was a German producer and retailer of consumer electronic goods. The company devised a particular selective distribution system (sds), intended to operate through aeg’s subsidiaries  –​one of which was wholly-​owned by aeg. The Commission found that this distribution system had discriminated against certain retailers by controlling the resale prices of dealers, in defiance of what is now Article 101 tfeu. The Commission also established that the subsidiaries which were implementing the sds had not operated independently in the market, but merely followed aeg’s instructions on distribution and pricing policy. There was no proof that aeg had issued explicit unlawful instructions to its subsidiaries but

66

67 68 69

Lorenzo Federico Pace, ‘The Parent-​subsidiary Relationship in EU Antitrust Law and the AEG Telefunken Presumption:  Between the Effectiveness of Competition Law and the Protection of Fundamental Rights’, 7(10) Yearbook of Antitrust Regulatory Studies (2014), 191‒207, at 193. CG, Case T-​217/​06, Arkema France and Others v.  Commission, judgment 7 June 2011, ECLI:EU:T:2011:251, para 53. ecj, AEG Telefunken (n 176 of Chapter 4). ecj, Stora Kopparbergs (n 55 of Chapter 1).

148 ­chapter  a number of indicia revealed aeg’s general influence. In particular, the parent used internal communication to compel one of the subsidiaries to accept the discriminatory sds. The parent also received reports on the implementation of the sds from another subsidiary and further determined the commercial policy of yet another subsidiary involved in the distribution system.70 Quite unsurprisingly, aeg was deemed to constitute an economic unit with these subsidiaries.71 On appeal, ascribing the subsidiaries’ conduct to the parent was contested, as aeg itself had never participated in the unlawful sds. The ecj agreed that aeg’s participation in the unlawful distribution system had not been proved.72 Nevertheless, in light of the principles laid down in Commercial Solvents, so the Court reasoned, a parent may still be held jointly responsible if it had controlled a subsidiary’s conduct in the market.73 But the capacity to exert decisive influence alone was insufficient to ascribe conduct by a subsidiary to the parent: the actual exercise of that influence had to be proved, particularly influence on the subsidiary’s commercial policy relating to pricing and distribution.74 Here the Court devised a two-​step process for determining the existence of an economic unit: the Commission had to prove, first, that the parent was able to exert decisive influence; second, that that influence was actually exerted. However, proving the exercise of decisive influence was deemed ‘superfluous’ in respect of aeg’s wholly-​owned subsidiary:  according to the ecj, the subsidiary ‘necessarily follows a policy laid down by the same bodies as, under its statutes, determine aeg’s policy’.75 Hence emerged the presumption of decisive influence. Evidently, at the time of these judgments, the see doctrine still took into consideration the personal responsibility of the parent, at least to a certain extent. Parental liability depended, in part at least, on the parent’s influence on the business activities of the subsidiary, which were inevitably related to the infringement, that is, pricing and distribution. Indeed, the distribution system that lay at the heart of aeg would necessarily have been known to a parent that exerted influence over the distribution policies of its subsidiaries. Hence, the parent could not simply brush off liability, claiming it had nothing

70 71 72 73 74 75

ecj, AEG Telefunken, (n 176 of Chapter 4) paras 50ff. More: Ariel Ezrachi, EU Competition Law: An Analytical Guide to the Leading Cases (London: Bloomsbury Publishing, 2014), 19. ecj, AEG Telefunken, (n 176 of Chapter 4) para 47. ibid, para 49. ibid, paras 49‒51. ibid para 50.

Parental Liability

149

to do with events. Indeed, a parent that controlled the commercial activities of a subsidiary that were more or less directly linked to the infringement could presumably not simply pretend it had been unaware of unlawful conduct by the subsidiary. One question remained unclear, though, after aeg Telefunken: can liability be imputed solely on the basis of the presumption? Or, on the contrary, must the Commission prove that the parent had exercised decisive influence? These remaining uncertainties prompted the ecj to return to this issue in Stora Kopparsberg v. Commission. 3.3.2 Stora Kopparsberg: Complementary Proof Needed In connection with a cartel in the carton board market, the Commission attributed joint and several liability to paper manufacturer Stora Kopparsberg and its three subsidiaries. Stora appealed the Commission decision to the General Court,76 arguing that it was not the correct addressee of the decision. Stora claimed to have had no effective control over the commercial policy of its subsidiaries at the time of the infringement. In particular, Stora argued that the Commission had incorrectly attributed parental liability, as it relied exclusively on the presumption of decisive influence by virtue of Stora’s sole shareholding. Indeed, the Commission had produced no proof of concrete exercise of decisive influence.77 The General Court was not convinced: Stora had legally represented all of the sanctioned subsidiaries in the proceedings before the Commission,78 prompting the Commission to correctly appraise this as indicia revealing economic unity between Stora and its subsidiaries. Furthermore, according to the Court, as soon as the Commission had found that Stora was the principal shareholder in its subsidiaries, the proverbial ball was in Stora’s court: the evidentiary burden shifted to it. However, since Stora had not collected evidence of its subsidiaries’ autonomy, the evidentiary burden did not shift back to the Commission. Hence the Commission did not need to support the presumption with additional evidence. On appeal, Stora contested this interpretation as a clear sign of the reversed burden of proof.79 The ecj took this case as an opportunity to clarify the conceptual framework of the presumption of decisive influence. The presumption was applicable only in cases where the parent had actually exerted decisive 76 77 78 79

GC, Stora Kopparbergs, (n 55 of Chapter 1). ecj, Stora Kopparbergs (n 55 of Chapter 1) para 22ff. ibid, para 85. ibid, paras 22, 25.

150 ­chapter  control over the commercial policy of a subsidiary. A one hundred per cent shareholding was insufficient, in itself, to establish liability: indicia of the actual exercise of decisive control were necessary to support the presumption.80 In this case, joint legal representation in the procedure before the Commission represented those indicia. What is more, Stora had produced no rebuttal in an attempt to demonstrate the autonomy of its subsidiaries.81 Two conclusions emerge from the aeg and Stora judgments. First, a one hundred per cent shareholding is in any case a strong indication of decisive influence. Nevertheless, the Commission must prove ‘something more than the extent of the shareholding’.82 Second, the presumption was deemed compatible with the burden of proof: in line with the principle ‘he who asserts must prove’, the parent was legitimately required to disprove the Commission’s conclusions drawn from the latter’s sole shareholding and other indicia.83 3.3.3 Akzo Nobel v. Commission: Clarification of the Presumption Perhaps significantly  –​and somewhat confusingly ‒ the Stora presumption has been applied in a contradictory manner. This makes it difficult for companies accused of competition law violations to understand the legal basis on which their conduct has been penalised, and the criteria based on which their conduct has been deemed unlawful. In the 2005 judgment Tokai Carbon ‒ five years after Stora ‒ the General Court held that the presumption actually did not at all require the Commission to ‘check whether the parent company in fact exercised [decisive] power’.84 However, in judgments over the next few years, in Dansk Rørindustri and  Others v. Commission85 and Avebe v. Commission,86 the Stora principle was again reinforced, asserting that a wholly-​owned subsidiary does not automatically become an economic unit with its parent merely by virtue of the sole shareholding: [T]‌he Commission cannot merely find that an undertaking ‘was able to’ exert such a decisive influence over the other undertaking, without checking whether that influence actually was exerted. (…) [It is] for the 80 81 82 83 84 85 86

ibid, 26ff. ibid, para 27. GC, Case T-​109/​02, Bollore v.  Commission, judgment 26 April 2007, ECLI:EU:T:2007:115, para 132. ecj, Stora Kopparbergs, (n 55 of Chapter 1) para 29. GC, Tokai Carbon, (n 143 of Chapter 4) para 60. ecj, Dansk Rørindustri, (n 19 of Chapter 5) para 118, cited in: Hofstetter & Ludescher, (n 10) 59. GC, Avebe, (n 19) para 136.

Parental Liability

151

Commission to demonstrate such decisive influence on the basis of factual evidence, including, in particular, any management power one of the undertakings may have over the other (…).87 However, in the 2009 judgment Akzo Nobel v. Commission, the ecj put an end to this discussion.88 Akzo Nobel was a Netherlands-​based multinational company which was active in diverse industries relating to decorative paints, coatings, and other chemical substances. In 2004, the Commission found that five wholly-​ owned subsidiaries of Akzo Nobel had participated in a choline chloride cartel.89 As established, in the early 1990s these subsidiaries, together with other companies, drafted and implemented a number of anti-​competitive agreements. Hence, the Commission ascribed the conduct of these subsidiaries to the parent company, Akzo Nobel, justifying their economic unity by virtue of the fact that Akzo was ‘in a position to exert decisive influence over the commercial policy of its subsidiaries, in which it held, directly or indirectly, all of the shares, and that it could be assumed that it in fact did so’.90 Hence, the subsidiaries had no commercial autonomy in the market, compelling the Commission to address the decision to Akzo, the parent, irrespective of its non-​existent role in the cartel.91 The parent and its subsidiaries received a joint penalty of nearly 21 million euros. Akzo contested the decision, arguing that the Commission was obliged to prove decisive influence on the specific pricing and distribution policy of the subsidiaries but had failed to do so.92 In particular, Akzo claimed to have rebutted the presumption of decisive influence by proving that its subsidiaries determined their commercial policy ‘largely on their own’, due to a separation of functions within this highly decentralised group.93 87 88 89 90 91 92

93

ibid. ecj, Akzo Nobel (n 49 of Chapter 1). Also: Hordijk & Evans, (n 50) 128. Choline chloride is a substance related to the vitamin B4 that is used as a feed additive in the animal feed industry. ecj, Akzo Nobel, (n 49 of Chapter 1) paras 6‒8. ibid, paras 14‒15. ibid, para 15. It can be assumed that the applicant based this claim on the principles laid down in AEG Telefunken, in which the ecj precisely highlighted pricing and distribution as the relevant field of a subsidiary’s activities for the purpose of determining the exercise of decisive influence. ecj, AEG Telefunken (n 176 of Chapter 4) para 50: ‘As aeg has not disputed that it was in a position to exert a decisive influence on the distribution and pricing policy of its subsidiaries, consideration must still be given to the question whether it actually made use of this power’. (Emphasis added.) The group was divided into two tiers: (1) the corporate centre (the parent) and (2) business units and sub-​units that managed the activities of the subsidiaries. Each subsidiary

152 ­chapter  However, the Commission contended that the presumption was not rebutted, as the subsidiaries were actually not autonomous at all but were evidently accountable to the management of the parent.94 Moreover, commercial autonomy was deemed to relate not only to the daily operations of the subsidiary, such as pricing and distribution, but also to strategic decisions, such as appointment of managers and control of investment and business objectives. Since Akzo clearly controlled these aspects, the fact of economic unity was established.95 The EU Courts upheld the Commission’s conclusions, establishing that the presumption alone sufficed to impute liability to the Akzo group. No additional proof of the exercise of decisive influence was necessary, unlike in the Stora case.96 Yet even here the ecj claimed that it had mentioned additional proof in Stora only to identify the elements on which the General Court had based its decision.97 Therefore, in order to impute liability it was sufficient to demonstrate that the parent held the entire capital of its subsidiary. This judgment also confirmed that decisive influence was not confined to a narrowly defined concept of commercial policy. Numerous commercial activities could indicate the existence of decisive influence, such as pricing, distribution, production, sales objectives and costs, gross margins, marketing or cash flow.98 However, this non-​exhaustive list covered only some of the business policies in which a parent could exert decisive influence.99 Hence, the absence of influence in these areas was by no means an indication that the subsidiary had acted autonomously. Quite the contrary, the conduct of a subsidiary may be ascribed to the parent if the subsidiary follows the instructions

94

95 96 97 98 99

had a separate management board determining the pricing and marketing of their products. The parent determined only general macroeconomic strategy, financial supervision of the corporate group, investments and legal affairs, and compliance with health, safety and environmental rules. GC, Akzo Nobel, (n 49 of Chapter 1) paras 38‒41. They received instructions on commercial policy from their respective business units and sub-​units. These units were accountable to the parent sitting at the top of the corporate structure, and the parent approved all investments and appointed the directors of the business units. In effect, the subsidiaries were ultimately accountable to the management of the parent. GC, Akzo Nobel, (n 49 of Chapter 1) paras 12‒13. ibid, para 51. Kienapfel, (n 24 of Chapter 1), 1207. GC, Akzo Nobel, (n 49 of Chapter 1) para 61. Eg: ecj, ICI v. Commission, (n 55 of Chapter 1), para 137; ecj, Geigy, (n 55 of Chapter 1) para 45; ecj, Commercial Solvents (n 49), paras 37, 39‒41; GC, Viho v. Commission, (n 54 of Chapter 1) para 48. GC, Akzo Nobel, (n 49 of Chapter 1) para 64.

Parental Liability

153

of the parent ‘in all material aspects’.100 Consequently, it is for the parent to adduce evidence of any ‘economic and legal organisational links between its subsidiary and itself which in its view are apt to demonstrate that they do not constitute a single economic entity’.101 Thus, no matter how decentralised a corporate group may be managed, parental liability may occur all the same. Hence, the autonomous commercial policy of a subsidiary is insufficient to rebut the presumption: any links between a parent and a subsidiary can be assessed in order to apply parental liability.102 Thus Akzo Nobel represents a mature stage of the see doctrine with regard to wholly-​owned subsidiaries. Contrary to the rulings in Stora,103 or Bollore,104 the see doctrine allowed application of the presumption without supporting evidence.105 The parent risked liability unless it could rebut the presumption, once invoked.106 Thus, Akzo Nobel has conclusively established that attribution of joint and several liability is based on a rebuttable presumption and not on definite proof collected by the Commission with a view to establishing the exercise of decisive influence.107 This landmark decision further made it clear that the exercise of decisive influence was not confined to the specific sphere of commercial policy but encompassed a wide variety of intra-​group connections between a parent and its wholly-​owned subsidiaries. Subsequent case law appears to confirm these conclusions. For example, in Eni SpA v. Commission (2013) the very capacity of the parent stood at the forefront of its liability: It is precisely the prerogatives of a parent company (…) which enables that parent company, except in exceptional circumstances, to exercise decisive influence over the conduct of its subsidiary.108 100 101

ecj, Akzo Nobel, (n 49 of Chapter 1) para 58. GC, Akzo Nobel, (n 49 of Chapter 1) para 65. More: Hordijk & Evans, (n 50) 126‒29; Colombani et al, (n 50 of Chapter 1) 1257. 102 ecj, Akzo Nobel, (n 49 of Chapter 1) para 74. 103 ecj, Stora Kopparbergs, (n 55 of Chapter 1) para 29. 104 GC, Bollore, (n 82) para 132. 105 In the 2012 judgment Alliance One v. Commission, the ecj reiterated this conclusion, stating that the Commission can ‒ but is not required to ‒ rely on additional evidence in attributing parental liability. ecj, C-​628/​10 P, Alliance One v. Commission, judgment 19 July 2012, ECLI:EU:C:2012:479, para 49. 1 06 Hordijk & Evans, (n 50), 128. 1 07 ecj, Akzo Nobel, (n 49 of Chapter 1) para 61. To that effect: ecj, Alliance One, (n 105) para 47; ecj, Elf Aquitaine, (n 57 of Chapter 1) para 57. 1 08 ecj, Eni SpA v. Commission, (n 42) para 67.

154 ­chapter  To give a further example, the 2013 judgment of the General Court in Total Raffinage Marketing v.  Commission109 illustrated that a parent company’s de facto unlimited power to steer a subsidiary’s conduct in a desired direction is deemed necessarily to imply that the parent will make use of this power, even if it does so to grant broad autonomy to a subsidiary.110 After all, the parent has ‘at its disposal all the possible means of ensuring that the subsidiary’s commercial conduct is aligned with its own’.111 In essence, the market conduct of the subsidiary is deemed never to be truly autonomous: [T]‌he unity of the market conduct of the parent company and of its subsidiary is ensured in spite of any autonomy conferred on the management of the subsidiary as regards its operational direction, which comes within the definition of the parent company’s commercial policy in the strict sense.112 The relationship of mutual confidence and shared commercial interests necessarily existing between parent and subsidiary113 was further invoked as a clear sign that the subsidiary inevitably represents and promotes ‘the only commercial interest that exists, namely the interest of the parent company’.114 Indeed, as Total Raffinage reveals, the parent is ascribed its subsidiary’s conduct, because the exercise of decisive control simply reflects the conventional relationship between a parent and its wholly-​owned subsidiary.115 It follows from this argument that if the exercise of some form of control is a typical and widespread occurrence, then it is more than legitimate to presume this to be so in legal proceedings. Nevertheless, the General Court maintained that this presumption remained rebuttable: The fact none the less remains that (…) the companies concerned have every opportunity to show that the mechanisms described (…) above, normally leading to the alignment of the commercial conduct of the

109 110 111 112 113 114 115

GC, Case T-​566/​08, Total Raffinage Marketing v.  Commission, judgment 13  September 2013, ECLI:EU:T:2013:423, paras 501‒02. More: Lang, (n 45) 1492. GC, Case T-​566/​08, Total Raffinage, (n 109) paras 501‒02. ibid, para 501. ibid, para 502. ibid. ibid. ibid, para 503.

Parental Liability

155

subsidiary with that of its parent company, did not operate in the ordinary manner, so that the economic unity of the group was severed.116 The limitations of detecting the actual opportunity to prove the subsidiary’s autonomy will be elucidated below. Presumption of Decisive Influence: Rebuttability in Light of Principles In Dubio Pro Reo and Nulla Poena Sine Culpa 3.4.1 Rebutting the Irrebuttable? Akzo made it more difficult to comprehend what arguments may be invoked to prove a subsidiary’s autonomy in the market, even though AG Kokott suggested that the ‘presumption rules are by no means unknown in competition law’.117 In line with the presumption of innocence, manifesting itself, inter alia, as the principle in dubio pro reo, the need is to ensure legal certainty as to the particular circumstances in which a parent can be held jointly and severally liable. It follows that any doubts over the existence of an economic unit between a parent and its subsidiary must be construed in favour of the parent.118 Moreover, the leading ECtHR judgment, Salabiaku v. France, established in unequivocal terms that where criminal liability is concerned, no irrebuttable presumption is permitted.119 Hence, de facto strict liability by virtue of a parent’s sole shareholding must nevertheless leave an opportunity for the parent to rebut the presumption of decisive influence.120 The EU Courts take the view that EU competition procedure does not disregard the presumption of innocence when applying the presumption, because the companies concerned are ‘at liberty to refute those conclusions’.121 They maintain that if the parent fails to rebut the presumption, the Commission is 3.4

116 ibid, para 504. 117 Opinion of AG Kokott in: ecj, Akzo Nobel, (n 49 of Chapter 1) para 72. 118 ECtHR, Barberà et al v. Spain, (n 31 of Chapter 1) para 77: ‘Paragraph 2 [of Article 6 echr] (…) requires, inter alia, that when carrying out their duties, the members of a court should not start with the preconceived idea that the accused has committed the offence charged; the burden of proof is on the prosecution, and any doubt should benefit the accused. It also follows that it is for the prosecution to inform the accused of the case that will be made against him, so that he may prepare and present his defence accordingly, and to adduce evidence sufficient to convict him’. (Emphasis added.) 119 ECtHR, Salabiaku v. France, (n 59 of Chapter 1) para 28; ECtHR, Grayson & Barnham v. The United Kingdom, Appl nos 19955/​05 and 15085/​06, judgment 23 September 2008, para 40. 120 ECtHR, Janosevic v. Sweden, (n 44 of Chapter 2) para 102. 121 GC, Joined Cases T-​141/​07, T-​142/​07, T-​145/​07 and T-​146/​07, General Technic-​Otis Sarl and Others v. Commission, judgment 13 July 2011, ECLI:EU:T:2011:363, para 73;

156 ­chapter  deemed to have unequivocally fulfilled its burden of proof.122 Numerous attempts have been made to exploit the liberty to rebut the presumption –​all of them unsuccessful. Since the circumstances which may be invoked to prove the autonomy of the parent will vary on a case-​by-​case basis, no particular clues as to a specific valid rebuttal exist in the EU case law.123 It is nevertheless meaningful to articulate diverse defences adduced by parent companies. In a myriad of diverse cases, parents have asserted, inter alia, that they had: – No role in a subsidiary’s commercial policies, other than approving major financial investments, and no common board members or management (The Commission’s response: it is insufficient to rebut the presumption, as a division of functions between the companies does not prove independence. On the contrary, strategic decisions reveal the parent’s effort to ensure unity in the corporate group).124 – No commercial activities of its own, acting merely as a holding company (The Commission’s response: the assessment of decisive influence is not confined to commercial policy, as it can take into account all aspects of control, including control over the financial policies of the subsidiary).125 – No shared departments for commercial activities, and only partially shared legal, tax and insurance departments (The Commission’s response: it is insufficient to prove autonomy, as assessment of the parent’s influence is not limited to any specific sphere of the subsidiary’s activities).126 – No supervision of the subsidiary, other than duties to the shareholders as required by applicable domestic law (The Commission’s response: this is irrelevant, as decisive influence can be exercised by virtue of diverse forms of supervision, including those prescribed by applicable domestic laws).127 – No joint and several liability for the offences of the subsidiary under national corporate law (The Commission’s response: this is irrelevant, as the concept of ‘undertaking’ for the purposes of EU competition law cannot be affected by the principles of domestic corporate law).128

122 123 124 125 126 127 128

ecj, Aalborg Portland (n 37 of Chapter 1) para 79. ecj, Akzo Nobel, (n 49 of Chapter 1) para 58; GC, Arkema, (n 67) paras 72‒3. GC, Total and Elf Aquitaine v.  Commission, judgment 30 September 2009, ECLI:EU:T:2011:378; ecj, Eni SpA v. Commission, (n 42) para 66; GC, Case T-​197/​06, FMC v. Commission, judgment 16 June 2011, para 144 ; GC, Siemens (n 177). ecj, Portielje (n 57 of Chapter 1) para 7; ecj, Eni SpA v. Commission, (n 42) para 66. GC, Case T-​185/​06, L’Air Liquide, judgment 16 June 2011, ECLI:EU:T:2011:275. ecj, Eni SpA v. Commission, (n 42) paras 64‒5. ibid.

Parental Liability

157

Evidently, none of these arguments have convinced either the Commission or the EU Courts.129 If anything, it appears that many of the rebuttals above are treated as actually confirming the exercise of decisive influence. Hence, the requirements for rebuttal are arguably rather unclear.130 It appears that no matter what argument a parent company invokes, it will be deemed irrelevant or insufficient. This difficulty is particularly reinforced by virtue of the Commission’s interpretation of ‘conduct on the market’131 by reference to circumstances unrelated to any market activities. For instance, joint legal representation in proceedings before the Commission plausibly does not reveal any unitary market conduct, yet it was invoked as an indicator of economic unity between a parent and its subsidiary.132 It follows that ‘all material aspects’133 may indicate the existence of an economic unit. This frequently used phrase is decidedly ambiguous:  does it mean that parental liability could be avoided if influence on a subsidiary was deemed to be ‘immaterial’ in a specific case? Alternatively, what if a decisive influence had been exercised only in some but not in all material aspects?134 The reference to any ‘economic, organisational and legal links’135 suggests that the phrase ‘all material aspects’ encompasses virtually every single connection between a parent and its subsidiary.136 Since the above criteria are so vague, parents may well be ‘at liberty’137 to rebut the Commission’s conclusions, but there is no ‒ at least moderately defined ‒ guidance helping them understand what a valid rebuttal might look like. However, the ecj emphasises that difficulty in rebutting the presumption is not in itself an indication of its irrebutability.138 Paradoxically, the ecj maintains that a parent is best equipped to know how to rebut the presumption of 1 29 For more on these grounds: Kienapfel, (n 24 of Chapter 1), 1207. 130 Thomas, (n 54 of Chapter 1), 19; Lang, (n 45) 1493. 131 GC, Alliance One, (n 25) para 126; ecj, General Química (n 49 of Chapter 1), para 37; ecj, ArcelorMittal Luxembourg v Commission and Commission v.  ArcelorMittal Luxembourg, (n 41 of Chapter 5), para 96. 132 ecj, Stora Kopparbergs, (n 55 of Chapter 1) para 29. 133 ibid, para 26; ecj, Akzo Nobel, (n 49 of Chapter 1), para 58. More: Colombani et al, (n 50 of Chapter 1) 1259. 134 Lang, (n 45) 1491. 135 GC, Edison (n 35), para 26. 136 Lang, (n 45) 1493. However, it might be inferred from case law that the economic links are the most important for determining the existence of a single economic unit. GC, L’Air Liquide, (n 126) paras 67‒80. 137 GC, General Technic-​Otis Sàrl (n 121) para 73. 138 Mestmäcker & Schweitzer, (n 14 of Chapter 1) 558.

158 ­chapter  decisive influence, given its access to all information on its subsidiary’s activities. Put differently, a particular form of the so-​called proof-​proximity principle is invoked to justify the difficulty of rebutting the presumption. 3.4.2 Principle of Proof Proximity The ecj states that ‘all entities against which the presumption operates are those best placed to seek that evidence within their own sphere of activity’,139 adding: (…) [I]‌t is within the sphere of operations of those entities against whom the presumption operates that evidence of the lack of actual exercise of that power to influence is generally apt to be found.140 Similarly, AG Kokott maintains141 that factual information about the influence of a parent over a subsidiary is largely in the domain of the companies concerned, enabling them to invoke that evidence in rebuttal.142 The above reasoning implicitly recalls a principle better known in civil proceedings, that is, the principle of proof proximity (Beweisnähe).143 According to this principle, the burden of adducing evidence is reversible in order to facilitate easier collection of proof. The principle of Beweisnähe essentially allocates the burden to the party which is in a better position to obtain the requisite evidence without an undue burden. This principle may be found, inter alia, in German144 and Austrian145 civil proceedings. Discrimination cases 139 ecj, Elf Aquitaine (n 57 of Chapter 1) para 70. 140 ecj, Portielje (n 57 of Chapter 1) para 71; ecj, Elf Aquitaine (n 57 of Chapter 1) paras 60, 70. 141 Opinion of AG Kokott, in: ecj, Akzo Nobel, (n 49 of Chapter 1) para 75. Also: Volpin, (n 149 of Chapter 3) 1173. 142 More: Volpin, (n 149 of Chapter 3) 1172. 143 ibid, 1173. 144 bgh, 30.6.2004, viii ZR 321/​03, NJW 2004, 3181. The Court stated: ‘While in principle the buyer has to prove the factual requirements of article 40 cisg because this article is the exception to article 39 cisg, the Federal Court stated that the Higher Regional Court had not sufficiently considered the question of which of the parties can provide evidence of the factual requirements more easily (proof proximity). The Court stated that if the production of evidence means unreasonable difficulties of proof for the buyer, the burden of proof can shift to the seller, claiming that this principle is accepted within the scope of the cisg and is taken into account by article 40 cisg’. (Emphasis added.) Translation available at . European Commission, Document IV/​COM(60) 158 final, of 28 October 1960.

European Commission, Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation 1/​2003, OJ C 210, 1.9.2006, 2-​5. European Commission, Notice on Immunity from fines and reduction of fines in cartel cases, OJ C 298, 8.12.2006, 17–​22. European Commission, Communication from the Commission  –​Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-​operation agreements, OJ C 11, 14.1.2011, 1–​72.

3

EU Legal Acts and Other Documents

Council Regulation (EEC) No. 17/​62 First Regulation implementing Articles 85 and 86 of the Treaty, OJ 13, 21.2.1962, 204–​211. 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ L 299, 31.12.1972, OJ L 299, 31.12.1972, 32–​42. COM (2000) 582: Proposal for a Council Regulation on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty and amending Regulations (EEC) No 1017/​68, (EEC) No. 2988/​74, (EEC) No 4056/​86 and (EEC) No 3975/​87 (‘Regulation implementing Articles 81 and 82 of the Treaty’), European Parliament position, 1st reading or single reading, OJ 2002 C 72/​236, 21.03.2002. 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 L 001, 4.1.2003, 1–​25. Council Regulation (EC) No. 139/​2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation), OJ L 024, 29.1.2004, 1‒22. Commission Regulation (EC) No. 773/​2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.4.2004, 18‒24. Explanations Relating to the Charter of Fundamental Rights, OJ C 303, 14.12.2007, 17–​35. Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, signed at Lisbon, 13 December 2007, OJ C 306, 17.12.2007, 1–​271.

224 Bibliography Protocol No. 27 to the Treaty of Lisbon and Articles 3(1)(b) TFEU and 3(3) TEU, OJ C 326, 26.10.2012, 1‒390. Charter of Fundamental Rights of the European Union, OJ C 326, 26.10.2012, 391–​407. Directive 2014/​104/​EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349, 5.12.2014, 1–​19. Directive (EU) 2016/​343 of the European Parliament and of the Council of 9 March 2016 on the strengthening of certain aspects of the presumption of innocence and of the right to be present at the trial in criminal proceedings, OJ L 65, 11.3.2016, 1–​11.

E

Other Cases and Legislative Acts

1 Cases Austria:

OGH 17.12.1996 4 Ob 2365/​96i.



Germany:



The United States:

BVerG, 25.10.1966, 2 BvR 506/​63, BVerfGE 20, 323. BVerG, 26.3.1987, 74 BVerfGE 358, 370. BVerG, 26.2.1997, 1 BvR 2172/​96. BGH, 30.6.2004, VIII ZR 321/​03, NJW 2004, 3181.

Coffin et al v. the United States, 156 US 432 (1895). Verizon Communications, Inc. v Law Offices of Curtis V.  Trinko, LLP, 540 US 398, 408 (2004).

2 Legislative Acts

Act of July 2, 1890 (Sherman Anti-​Trust Act). Enrolled Acts and Resolutions of Congress, 1789–​199, available at . Austrian Code of Criminal Procedure, 1975, available at . Bonner Grundgesetz of Germany, 1949, available at . Canadian Charter of Rights and Freedoms, 1982, available at . Children and Young Persons Act of 1933, available at .

Bibliography

225

Civil Code of the Russian Federation of 1996, available at . Constitution of Brazil, 1988, available at . Constitution of Italy, 1947, available at . Constitution of Russia, 1993, available at . Constitution of the United States of America, 1789, available at . Declaration of the Rights of Man and of the Citizen of France, 1789, available at . Universal Declaration on Human Rights, 1948, available at .

F

Internet Sources

Codex Justinianus, Book IV, cited in: Coffin et al v. the United States, 156 US 432 (1895) available at . Joel I. Klein, ‘The War Against International Cartels: Lessons from the Battlefront’, Fordham Corporate Law Institute 26th Annual Conference on International Antitrust Law & Policy New York, New York, 14 October 1999, available at . oecd, ‘Hard Core Cartels’, Report (2000), 1‒60, at 6, available at . oecd, ‘Fighting Hard Core Cartels:  Harm, Effective Sanctions and Leniency Programmes’, Report (2002), available at . un Security Council, Report of the Secretary-​General of the Security Council of the United Nations, ‘The rule of law and transitional justice in conflict and post-​ conflict societies’, 23 August 2004, available at . oecd, ‘3rd Report on the implementation of the 1998 Recommendation’, 15 December 2005, available at . European Commission for Democracy Through Law (Venice Commission), ‘Report on the Rule of Law’, Adopted by the Venice Commission at its 86th plenary session, Venice, 25–​26 March 2011, available at . House of Lords of the United Kingdom, ‘European Union Committee Follow-​Up Report on the Workload of the Court of Justice of the European Union’, 16th Report of

226 Bibliography Session 2012–​2013, available . Wagner-​von Papp, Florian, ‘Self-​Incrimination’, 6 June 2013, available at . The Siemens Compliance System, August 2015, available at:  . Schindler Compliance Programme (no date available), available at .

Index 1998 crisis 38 administrative procedures. See anti-​cartel procedure (classification); criminal administrative procedures  Advocate General. See opinions of Advocate Generals  aeg 147–​148 Akzo Nobel (case) 9n49, 10n54–​55, 136n9, 139n28, 140n33, 1​ 41n42, 144, 151–​153, 155–​156, 157n133, 168, 1​ 69n201, 172n217, ​173n224 Akzo Nobel (company) 151–​152 Alliance One 164 annulments 93, 96n153, 98n170, ​99, 102–​104, 165, 167, 177 anti-​cartel enforcement, private 4n20, 125, 133n154 anti-​cartel procedure 3–​4, 83–​84 and Article 6 echr 110–​113, 115–​120 decentralisation of 78–​79 intent/​negligence in 90–​91, 92n132, 94n144 investigations of 84–​89 presumption of innocence in 97, 99, 106, 112–​115, 118, 142, 155–​156, 159 provisions of 76–​79 rights in 80–​82, 93, 102, 107, 121 self-​assessment in 78 See also competition fines  anti-​cartel procedure (classification) 7–​8, 12, 108 as administrative 4–​5, 7–​8, 108–​120 criminal character of 7, 86, 107–​108, 111–​112, 114–​120, 134 debate on 4–​5, 110, 119–​120 Engel criteria on 36–​39, 108, 115, 122–​130, 134, 183 and natural/​legal persons 121–​122, 181–​183 stigma in 114, 129, 133–​134 See also under competition fines  appeal proceedings  burden of 93 in competition procedures 36, 38, 93–​97, 101–​104, 113–​114, 117

in liability cases 145, 148–​149, 163–​164, 167 in other cases 34, 41, 59–​60, 63n190, 67 on self-​incrimination 177–​178 assumptions, legal  of innocence 16–​17 of parental liability 10 Atofina 166 bid-​rigging 36 Bundesverfassungsgericht 20, 173n227, 181–​182 burden of proof 6, 11–​12, 21, 48–​50 civil/​criminal difference 48–​49 in competition procedures 96–​98, 100–​101, 112–​113 legal/​evidentiary difference 49–​50 and presumption of law 54–​55 proof proximity 158–​161 reversal of the 48–​49, 100, 112–​113, 149–​150, 153, 158, 160–​161 and self-​incrimination 64, 176, 178, 183 cartels  European Commission efforts against  1–​4, 83 harmful effects of 2–​4, 83, 129–​132, 134 moral wrongness of 130, 132–​134 Charter of Fundamental Rights (cfr) 5, 7, 80–​82, 91, 110, 122 Article 7 87 Article 47 7, 85, 93, 95, 106–​107, 117–​120 Article 48 15, 82, 95, 107, 117–​118, 173 Article 52(1) 175 Article 52(3) 81–​82, 108 choline chloride 151 code of conduct 188n9 Code of Justinian 1, 48–​49 Commercial Solvents 143–​145, 148, 152n98, 187 Commissioner for Competition 83 comparative law 13 competition enforcement. See anti-​cartel procedure 

228 Index competition fines 3–​4, 7 amount, determination of 92–​94, 101, 103, 105n223, 127 amount, maximum 91, 110, 128, 136 as compensation 39, 126 decisions as to 89–​94 deterrence effect of 3, 38–​41, 90, 92–​93, 110, 123–​127, 136 Fining Guidelines 91–​94, 126, 190 and liability 135, 175 and natural/​legal persons 120–​121, 172–​173 as (non-​)criminal penalties 4, 7–​8, 90–​91, 107, 110n13, 113n28, 114–​116, 119, 122, 127–​128, 134 punitive effect of 31, 33–​34, 38–​40, 107, 124–​125, 127, 193 for refusing cooperation 86 review of 103–​107 severity of 4, 93, 106n225, 113–​116, 119, 123–​128, 134–​135 compliance programme 188 confirmation bias 89 Continental Can 143–​146, 187 cooperate, duty to. See duty to cooperate  Council Regulations (EC)  No 1/​2003 7, 9n47, 77–​80, 83–​87, 89–​91, 94n144, 97–​98, 103, 107, 109–​110, 113n28, 122, 128, 135–​136, 177, 186, 189 No 139/​2004 10n54 No 773/​2004 77n6, 88n101 Council Regulations (eec)  No 17/​62 77–​78, 79n19, 109 criminal administrative procedures 40 criminal charges  autonomous definition of 25–​27, 42 definition of 24–​27, 29–​40, 42–​47, 75 hard core/​peripheral 42–​47, 108, 118–​119, 122, 128 stigma of 31, 34, 42, 44, 46, 129, 133–​134 weight of 32, 34–​36, 39, 41–​43, 123 See also competition fines  criminal liability 11, 58–​59, 62–​63, 171 customs authorities 58–​60, 67 daf 4, 135n5 Daimler 3, 135n5 deterrence 31, 33–​35, 38–​41, 110, 123–​127 through liability 136, 175, 188

special/​general 124 See also under competition fines  Directive (EU) 2014/​104 Damages 4n20 Directive (EU) 2016/​343 Presumption of innocence 118, 121–​122 Directorate General for Competition (dg comp) 83, 89 disciplinary proceedings 27–​31 Dona, Mr 28, 33 duty to cooperate 11–​12, 95 and Article 6(2) echr 180–​184 fines for refusing 86 incentives 189–​190 Orkem 176–​180 Elf Aquitaine (case) 11n57, 138n21, 142, 153n107, 158n139, 165–​167, 169n201, 172n216 Elf Aquitaine (company) 166 Engel (case) 8n42, 13, 24, 26n12, 27–​33, 110, 114–​115, 123, 128 Engel, Mr 27–​28 Engel criteria 8, 24, 27–​34, 40, 47 and competition procedures 36–​39, 108, 115, 122–​130, 134, 183 domestic classification 30, 38–​39, 41, 122–​123 nature and severity of penalty 32, 34–​36, 39, 41–​43, 123–​128 nature of offence 30–​31, 36, 39, 128–​134 European Commission  efforts against cartels 1–​4, 83 Notices and Guidelines 79–​80 European Commission, anti-​cartel powers 79, 83–​84, 106–​107, 110 in complex matters 94, 104–​105, 107 imposing fines 89–​94 investigatory 84–​89 prosecutorial 90–​91, 130 European Commission Decisions  Carbonless Paper 91n122 Deutsche Phillips GmbH 126n109 Elevators and Escalators 117, 141n41 Irish Sugar plc 91n121 Pioneer Hi-​Fi Equipment 126–​127 Pittsburgh Corning Europe 91n120 Quinine 4n21, 126 Synthetic rubber 141n40

Index Videotapes 95n146 Zoja 145n55 European Commission of Human Rights (ECommHR) 28–​29 Austria v. Italy (Pfunders case) 49n122, 53n141, 63n187, 160n150 M & Co v. Germany 36–​37 Pudas v. Sweden 72n241 European Convention on Human Rights (echr)  Article 3 72, 74, 76 Article 6 (see under subjects throughout this index)  Article 6(3) 34, 81 Article 8 73–​74, 182 Article 10 74 Article 19 52 Article 34 37, 71 Article 35(3) 39 European Court of Human Rights (ECtHR) cases  Allen v. United Kingdom 6n33, 11n63, 65 Allenet de Ribemont v. France 22n45, 25n6 Axen v. Germany 45n106 Ayuntamiento de M v. Spain 72n241 Barberà, Messegué and Jabardo v. Spain 6n31, 22n46, 24n3, 52–​53n141, 155n118 Baroul Partner-​A v. Moldova 72n241 Bendenoun v. France 28n120, 30n36, 35 Bernard v. France 22n44–​45, 25n6 Brandstetter v. Austria 53n147 Buzadji v. the Republic of Moldova 63n186 Campbell and Fell v. United Kingdom 32n47 Comingersoll SA v. Portugal 72 De Cubber v. Belgium 26n9, 47n114 Deweer v. Belgium 22v45, 25n6, ​26n10, ​ 27n17, 47n113 Dubus S.A. v. France 35–​36 Eckle v. Germany 27n16 EL, RL, and JO-​L v. Switzerland 20n32 Engel and Others v. The Netherlands 8n42, 13, 24, 26n12, 27–​33, 110, 114–​115, 123, 128 Ezeh and Conners v. United Kingdom 30n36, 32n47 Fayed v. United Kingdom 35n64

229 D. H. and Others v. the Czech Republic 159 Funke v. France 67–​69, 176–​177, 179–​180 G. v. United Kingdom 60n174 Goodwin v. United Kingdom 63n185 Grayson & Barnham v. The United Kingdom 155n119 Heaney and McGuinness v. Ireland 6n33, 65, 70n233 Helmers v. Sweden 45n106 Husayn (Abu Zabaydah) v. Poland 52n140 Jalloh v. Germany 70n233 Jan-​Åke Andersson v. Sweden 45n106 Janosevic v. Sweden 22n44, 24n3, ​25n6, 49n122, 63n185, 106n226–​227, 123n86, 155n120 Jussila v. Finland 7–​8, 25, 36n67, 40–​47, 108, 116, 118, 120, 123, 128, ​129n125, 134 König v. Germany 26n7 Konstas v. Greece 24n1 Lutz v. Germany 115n40 Markt Intern Verlag GmbH and Klaus Beermann v. Germany 74n253 Menarini Diagnostics S.R.L. v. Italy 36, 39, 46, 72n241, 95n147, 106, 129n130 Minelli v. Switzerland 19n28, 22n45–​46, 24n1–​25n6 The Municipal Section of Antilly v. France 72n241 Murray v. United Kingdom 70n231 Nachova and Others v. Bulgaria  52n139–​53n142 Neste v. Russia 36, 38–​39, 46 Niemietz v. Germany 73, 87n91 O’Halloran and Francis v. United Kingdom 11n63, 35 Öztürk v. Germany 26n14, 2​ 7, 30n31, ​31, 33–​ 35, 44, 110, 114n35, 115n40, 1​ 23, 129n125 Paykar Yev Haghtanak Ltd v. Armenia 72n241 Phillips v. the United Kingdom 27n16 Ringeisen v. Austria 26n7, 26n14 Salabiaku v. France 11, 20n32–​33, 56n157, 58–​64, 137, 142, 155, 171, 173n230, 175 Saunders v. the United Kingdom 6n33, 11n63, ​12n64, 35n64, 64–​66, 68–​70, 176n1, 180–​181 Senator Lines GmbH v. Austria and others 36–​37, 72n241 Sergey Zolotukhin v. Russia 128n121

230 Index European Court of Human Rights (ECtHR) cases (cont.) Socíeté Colas Est v. France 72, 74n251, 182n45–​183 Société Stenuit v. France 36–​37, 116, 129n129 Telfner v. Austria 24n3, 49n124, 70n231 Västerberga Taxi Aktienbolag and Vulic v. Sweden 63n185 European Court of Justice (ecj) cases  A. Ahlström Asakeyhtiö and others 97n162 Aalborg Portland 7n37, 105n222, 111n17, 156n122 aeg Telefunken 99n176, 144, 147–​151n92 Akerberg Fransson 82n39 Akzo Nobel 9n49, 10n54–​55, 136n9, 139n28 , 140n33, ​141n42, 144, 151–​153, 155–156, 157n133,​168, ​169n201, 172n217, ​173n224 ArcelorMittal 157n131 Archer Daniels 92n127 Baustahlgewebe 102 Bertelsmann and Sony v. Impala 99n175 Boehringer Mannheim GmbH 7n37, 111n17 Brasserie du Pêcheur 103n204 Chalkor 7, 106–​107, 116–​117n56, 119, 125n102, 135n2 Commission v. Anic Partecipazioni 57n164, 172n217 Commission v. slg Carbon AG 11n62, 176n5, 180n28, 182 Commission v. Tetra Laval BV  99n175–​100n184, 105n221 Consten and Grundig 98n169 Dansk Rørindustri and Others 111, 150 Elf Aquitaine 11n57, 138n21, 142, 153n107, 158n139, 165–​167, 169n201, 172n216 Eni SpA 141n42, 143, 153, 156n124, 161n154, 163n166, 167n197, 172n222, 183n46 Erste Group Bank and Others 105n219 eti and Others 172n217 Europemballage Corporation and Continental Can Company 143–​146, 187 Evonik Degussa and AlzChem 143, 169n204, 172n221 Ferriere Nord 101n194 Geigy 10n55, 139n31, 152n98

General Química 10n54–​55, 136n9, 138n24–​139n31, 141n39, 157n131 Group Danone 101n192 Handels-​og Kontorfunktionærernes Forbund I Danmark gegen Dansk Arbejdsgiverforening 159n146 Hoechst 87n96–​97 Hoffman-​La Roche 7n37, 111n17 Hüls 101n191, 112, 135n2 iaz 91n117, 130n140 Imperial Chemical Industries 10n55, 139n31, 152n98 Internationale Handelsgesellschaft mbH 122n79 Ismeri Europa v. Court of Editors 101n190 Istituto Chemioterapico Italiano and Commercial Solvents 143–​145, 148, 152n98, 187 Italy 80n26 Kaimer and Others 102n203 Käserei Champignon Hofmeister 172n218 kme Germany 7, 96n155, ​97n163, 105n221–222, 106–​107, 116, 119 Limburgse Vinyl Maatschappij 9n52, 11n62, 100n184 Maizena and Others 172n218 Metsä-​Serla 170n211 Montecatini 97n162, 100n187, 112–​113, 120, 135n2 Orkem 11n61–​62, 84n60, 86n87, 176–​180 Portielje 11n57, 141n43, 156n125, 158n140, 163n166 Prym and Prym Consumer 103n208, 103n211 Remia BV and Others 104n217, 104n219 Roquette Freres SA 86n84, 87n91, ​87n98 Salzgitter Mannesmann 117n56 SA Musique Diffusion française and Others 94n144, 105n223, 110n10 Schindler 107n23, 116–​119 Schröder 96n153 sep 85n70 sgl Carbon AG 176n5 Showa Denco 91n114 Siemens Österreich 9n49, 136n9, 138n26 Solvay SA 116 Spector Photo Group & Van Raemdonck 115 Stauder v. City of Ulm -​Sozialamt 81n34

Index Stora Kopparbergs Bergslag AB 10n55, 125n102, 137n15, 139n31, 144, 147, 149–​150, 152–​153, 157n132, 162n158 Sumitomo Metal Industries 99n175, 99n178 team 102n203 Thyssen Stahl 7n37, 111n16–​117 Tokai Carbon 105n224, 150 Total 138n27, 173n225 Van Landewyck 111 Viho Europe BV 10n54, 152n98 Volkswagen AG 7, 108n4, 111, 120 Europemballage 145–​146 evidence  assessment of 100, 105 circumstantial 49n118, 55–​56 complex 94, 104–​105, 107 indirect 100 inferences 53, 56, 99–​100 See also burden of proof; standard of proof  Fifth Amendment 182 fines. See competition fines  Fining Guidelines 91–​94, 126, 190 ‘fishing expeditions’ 84 fraud, corporate 68, 181 French administrative law 102 Funke (case) 67–​69, 176–​177, 179–​180 Funke, Mr 67–​69 General Court (GC)  abb Asea Brown Boveri 137n15 Alliance One 138n25, 153n105, 157n131, 163n163–​164, 172n217 Amann & Söhne, Cousin Filterie 112 Archer Daniels Midland 80n25, 90n112, 125n102, 176n236 Areva and Others 125n102 Arkema France and Others 147n67, 153n107, 156n123, 163n166, 169n201, 271n224 AstraZeneca AB and AstraZeneca plc 98n170 Avebe 138n19, 150, 169n201 basf 105n224 basf AG and ucb SA 94n140 Bayer 97n162 Bollore 150n82, 153, 170n211 Cimenteries cbr 108n3–​109n6, 119n61

231 cisac 99n179, 114 Compagnie maritime belge 111n18–​112, 114n33 The Dow Chemical Company 172n221 Dresdner Bank 99n176 Dunlop Slazenger International Ltd. 105n223 Edison SpA 140n35, 157n135, 165, 167 Eni SpA 125n102 Ferriere Nord 91n117, 130n140 fmc 156n124, 163n166 fmc Foret 94n143 Fuji 114 General Technic-​Otis Sàrl and Others 155n121, 157n137 Gigaset 163n166–​164 GlaxoSmithKline Services Unlimited 97n162 Group Danone 101n192, 115n38 Haladjian Frères SA 104n217, 165n177 Heineken 94n143 Hercules Chemicals 188n9 hfb and Others 119n61 International Confederation of Societies of Authors and Composers (cisac) 99n179, 114 jfe Engineering 99n176, 100n183,​100n185 Koninklijke Grolsch 165, 167, 171n215 L’Air Liquide 156n126–​157n136, 163n166, 165–​167 Limburgse Vinyl Maatschappij and Others 9n52, 139n28, 179n26, 180,​181n35 Mannesmannröhren-​Werke 80n31, 176n2, 179, 181n34 MasterCard, Inc. and Others 104n217, 165n177 Microsoft 103n205 Minoan Lines 138n20 Mo och Domsjö 138n22 Nexans 84n62, 87n93 Parker itr 168n199 Peróxidos Orgánicos SA 98n167 Prysmian 84n62 Raiffeisen Zentralbank Österreich 139n30 Romana Tabacchi 114n32 Saint-​Gobain Glass France SA and Others 88n103, 95n151 Schindler 7, 122n80, 188n9 Shell Petroleum 163n168

232 Index General Court (GC) (cont.) Siemens AG 99n177, 100n182, 100n188–​189, 156n124, 163n166 skw Stahl-​Metallurgie Holding 162n159 Solvay SA 125n102 Tetra Pak 91n117, 119n61, 130n140 ThyssenKrupp elevators and escalators  170–​171, 172n219, 173n223 Tokai Carbon 94n143, 150, 179, 181n34 Total and Elf Aquitaine 156n124, 161n154, 163n166 Total Raffinage Marketing 154, 163n162, 172n221, 174n231 Trefilunion 92n124 Wieland-​Werke 105n219 Grolsch 165, 167 Guinness 68

L’Air Liquide (case) 156n126–​157n136, 163n166, 165–​167 L’Air Liquide (company) 165–​166 legality control 101–​103, 105 legal persons  in Article 6 echr 71, 73, 120, 179 in Article 101 tfeu 9 in Dir (EU) 2016/​343 118, 121–​122 in the ECtHR 70–​74, 121–​122, 182–​183 See also undertakings  Leniency Notice 84, 184, 190 liability, parental. See parental liability  liberal democracies 18n16

hard core/​peripheral criminal law 42–​47, 108, 118–​119, 122, 128 Hearing Officer 88n101–​90 Hoffman-​La Roche 127 human dignity 182–​183

national competition authorities (nca s) 78–​79, 87–​88 negligence. See under anti-​cartel procedure  nemo tenetur. See self-​incrimination  nulla poena sine culpa. See principle of fault 

ici 144–​145 illegal import 59 in dubio pro reo 11, 19, 49, 52, 98–​99, 155 in liability cases 155, 165–​168 inferences 53, 56, 99–​100 information, power to request 84–​85, 189–​190 innocence, presumption of. See presumption of innocence  insider trading 68, 115 inspection of businesses 79, 83, 85–​87, 189–​190 Intel 127 intent. See under anti-​cartel procedure  internal market 2, 76–​77, 130–​132 judicial review 95–​96, 101–​107 Article 6 echr 106 of fines 103–​107 French impact on 102 of liability cases 165–​167 Jussila 7–​8, 25, 36n67, 40–​47, 108, 116, 118, 120, 123, 128, ​129n125, 134

market-​sharing 77 merger control 10n54 Montecatini 97n162, 100n187, 112–​113, 120, 135n2

opinions of Advocate Generals  Bot (ArcelorMittal) 115n41 Cosmas (Montecatini) 113 Gand (Chemiefarma) 113n28 Geelhoed (sgl Carbon) 182 Gerven (Charlton) 172n218 Jacobs (sep) 84n63 Kokott (Akzo Nobel) 141n44, 155, 158, 160n152, 162, 168n200 Kokott (Schenker) 6n32, 62n182, 172n217 Kokott (Solvay SA) 115n41–​116, 119 Kokott (T-​Mobile) 57n163, 170 Leger (Baustahlgewebe) 115–​116 Mazak (Lafarge) 115n41 Mengozzi (vebic) 115n41 Ruiz-​Jarabo Colomer (Volkswagen) 5–​6, 80, 120–​121 Sharpston (kme) 115n41–​116, 119 Slynn (SA Musique) 126n111–​127n112 Vesterdorf (Rhone-​Poulenc) 5, 115–​116, 185–​186 Warner (Commercial Solvents) 163n164

Index

233

presumption of innocence 6, 11, 15–​17, 22–​25, 48 Article 6 echr 22, 24–​25, 48, 61–​62, 113 balanced treatment 19–​20 in competition procedures 97, 99, 106, 112–​115, 118, 142, 155–​156, 159 in liability cases 11–​12, 142, 155–​156, 159 narrow/​broad 21–​23 paradox of the 16 rule of law, preservation of the 20–​21 wrongful convictions 18–​19, 66 See also under parental liability  presumption of innocence (cases)  Montecatini 112–​113, 120 Salabiaku 61–​64 presumptions 16–​17, 54–​55, 63 parental liability 9–​11, 135–​141, 143–​157 conclusive/​rebuttable 57 defences to 156, 161–​167 criminal/​civil difference 55n154 deterrence by 136, 175, 188 factual 56–​57 of financial investors 161–​166 legal 55–​57 guilt by association 137–​138, 158–​161 Salabiaku 59, 62–​64 joint and several requirements 140 price-​fixing 77 judicial review of 165–​167 principle of collegiality 90 personal responsibility 143, 148, 172–​174, principle of discretionary prosecution 83 186–​187 principle of equality 21 presumption of innocence 11–​12, 142, principle of fault 6, 11, 24, 58, 62, 189 155–​156, 159 in Article 6(2) echr 62n182, 173 proposals on 186–​189 in liability cases 171–​174 See also presumption of decisive principle of legal certainty 189 influence  penalties. See competition fines; Engel criteria  principle of personal responsibility 143, 148, 172–​174, 186–​187 Pioneer 126–​127 principle of proof proximity 158–​161 pleas 96 principle of proportionality 63, 87 polyethylene 177 privacy 65–​66, 73 presumption of decisive influence 11, 54, privilege against self-​incrimination. See self-​ 140–​161 incrimination  defences to 156, 161–​167 punitive effect of penalties 31, 33–​34, 38–​40, internal contradictions 168–​171 107, 124–​125, 193 (ir)rebuttability of 140–​142, 153–​169, 174, 188 raids 79, 83, 85–​87, 189–​190 principle of fault 171–​174 Renault 4 presumption of decisive influence (cases)  review. See judicial review; legality control  aeg 147–​151n92 right to a fair trial 22–​23, 95, 102 Akzo 151–​153, 155–​156 Article 6 echr 22–​23, 25, 102 Elf Aquitaine 166 natural/​legal persons 121–​122 L’Air Liquide 165–​167 right to remain silent 22, 66, 68, 178 Stora 149–​150, 152–​153 rule of law, preservation of the 20–​21 Tokai Carbon 150 Rules of Procedure 102 Total Raffinage Marketing 154

opinions of echr Judges  Costa et al (Jussila) 31n38, 123 Loucaides (Jussila) 8n46, 44–​45, 47 Martens (Saunders) 66n212, 69n228 Pavlovichi (O’Halloran) 11n63 Rozakis (Comingersoll) 72 oral hearings 40–​41, 43, 45 in anti-​cartel investigations 88–​89 Organisation for Economic Cooperation and Development (oscd) 21 Orkem (case) 11n61–​62, 84n60, 86n87, 176–​180 Orkem (company) 176–​178 Orkem principles 179–​180

234 Index Salabiaku (case) 11, 20n32–​33, 56n157, 58–​64, 137, 142, 155, 171, 173n230, 175 Salabiaku, Mr 58–​60 sanctions. See competition fines; Engel criteria  Saunders (case) 6n33, 11n63, ​12n64, 35n64, 64–​66, 68–​70, 176n1, 180–​181 Saunders, Mr 68–​69 Schul, Mr 28, 33 selective distribution system (sds)  147–​148 self-​assessment 78 self-​incrimination 6, 11–​12, 64–​66, 70, 176 and Article 6(2) echr 180–​184 and burden of proof 64, 176, 178, 183 and human dignity 182–​183 and natural/​legal persons 178, 181–​183 and search warrants 69–​70, 190 self-​incrimination (cases)  Funke 67–​68, 176–​177, 179–​180 Mannesmannröhren-​Werke 179 Orkem 176–​180 Saunders 68–​69, 176n1, 180–​181 Tokai Carbon 179–​180 single economic entity (see) doctrine 10, 135–​141, 162, 167, 172 application of 143–​154 smuggling 59 standard of proof 21–​22, 50–​53 civil/​criminal difference 51 in competition procedures 96, 98–​101 ECtHR on 52–​53 in liability cases 167–​168 Statement of Objections (SO) 87–​89, 177 statements, power to take 85 Statute of the Court of Justice of the European Union 102 stigma 31, 34, 42, 44, 46, 114, 129, 133–​134

Stora (case) 10n55, 125n102, 137n15, 139n31, 144, 147, 149–​150, 152–​153, 157n132, 162n158 Stora Kopparsberg (company) 149–​150 tax evasion 67 tax surcharges 35, 41–​43 tdv 145 Treaty of Lisbon 5, 81 Treaty on European Union (teu)  Article 6 5, 81–​82 Article 19 101 Treaty on the Functioning of the European Union (tfeu)  Article 3(1)(b) 2n4, 76 Article 101 2n6, 3–​4, 9, 37, 76–​79, 89–​91, 97, 99, 135, 141, 144, 146–​147, 171 Article 102 3n14, 78, 97, 144–​146 Article 103 77, 97 Article 256 93, 102 Article 261 103 Article 263 93, 101–​103 Article 296 165 undertakings 2n6, 9–​11, 71, 138–​139, 171–​173 legal definition of 135–​136 United Nations 21 Universal Declaration on Human Rights 15, 182 value-​added tax (vat) 41 Venice Commission 20 Volvo 4 Wiel, Van der, Mr 28 Wit, de, Mr 28, 33 wrongful convictions 18–​19, 66 Zoja 144–​145