Judicial Review in EU Judicial Review in EU Competition CasesCompetition Cases

Marc van der WoudeMarc van der WoudeTokyoTokyo

5 August 20145 August 2014

IntroductionIntroduction

Increased criticism of system of Increased criticism of system of administrative enforcement administrative enforcement

Higher fines in period of economic Higher fines in period of economic downturndownturn

Figures used best estimatesFigures used best estimates

IntroductionIntroductionI. System of administrative enforcement :

a brief reminder

II. The Commission’s fining policy in quantitative terms

III. The legality of that system according to Europe’s highest courts

IV. Unlimited jurisdiction

V. Final comments

I. The EU SystemI. The EU System

Treaty rules : Articles 101 & 102 TFEU

Regulation 1/2003 Powers of Commission, National Agencies

and Courts ECN system with Commission in control Procedure before Commission

I. The EU SystemI. The EU System

Commission powers Positive decisions Cease and desist orders Commitments Fines and penalties

10 % (of group turnover)

guidelines leading to amounts far above 10 % of monoline companies

no sanctions on individuals

I. The EU SystemI. The EU System

Commission procedure Collegiate decision making, but preparation

by DG COMP Initiation by complaints, leniency requests or

ex officio Inquisitive powers

requests/orders for information on the spot inspections statements

Right to be heard

I. The EU SystemI. The EU System

Judicial review of Commission decisionsBefore General Court with unlimited jurisdictionAppeal before Court of Justice on points of law

Judicial review in Member StatesAdministrative review courtsCivil courts National courts can ask questions to Court of Justice (Article 267 TFEU)

II. The Commission’s fining II. The Commission’s fining policypolicy

Increasingly higher fines

1998 => 2006 guidelines

Mechanics combination of % of relevant turnover and duration

10 % not a maximum but a cap

II. The Commission’s fining II. The Commission’s fining policypolicy

II. The Commission’s fining II. The Commission’s fining policypolicy

Cartel activity from November Cartel activity from November 2007 to July 20142007 to July 2014

Total amount of fines: 13.1 billionSettlement fines: 4,1 billionNon-settlement fines: 9 billion

Cartel activity from November Cartel activity from November 2007 to July 20142007 to July 2014

II. The Commission’s fining II. The Commission’s fining policypolicy

Total amount of fines concerned by the 38 commission decisions Total amount of fines concerned by the 38 commission decisions last 5 years last 5 years

€ € 13.1 billion (13112.988 million)13.1 billion (13112.988 million) Nationality of the undertakings finedNationality of the undertakings fined

III. The legality of the systemIII. The legality of the system

• Ever since 1962 : Commission combines role of policeman, prosecutor and judge

• Challenge of legality under Article 6 ECHR and Article 47 Charter on Fundamental rights

• Increased pressure with higher fines

• Critiscism of ‘light’ judicial review by EU Courts

III. The legality of the systemIII. The legality of the system

Menarini : European Court of Human Rights Menarini : European Court of Human Rights 27 September 201127 September 2011

€ € 6 million by Italian Competition Authority 6 million by Italian Competition Authority (AGCM) = administrative enforcement system(AGCM) = administrative enforcement system

Within scope of Article 6 ECHR: criminal Within scope of Article 6 ECHR: criminal sanctionsanction

System legal only, if review by judicial body System legal only, if review by judicial body with unlimited jurisdiction with unlimited jurisdiction

IV. Unlimited jurisdictionIV. Unlimited jurisdictionMore than legality review of administrative More than legality review of administrative decision decision Power to review all relevant factual and legal Power to review all relevant factual and legal

questions questions Power to rule on appropriateness and Power to rule on appropriateness and

proportionality of the fineproportionality of the fine

In EU : In EU : Article 31 Regulation 1/2003 : Article 31 Regulation 1/2003 : judgments of Chalkor, C-386/10 and KME,judgments of Chalkor, C-386/10 and KME,

IV. Unlimited jurisdiction IV. Unlimited jurisdiction

Review of legality: (as restated recently in Total T-566/13)Review of legality: (as restated recently in Total T-566/13)

• Burden of proof lies with EC - if doubt, undertaking Burden of proof lies with EC - if doubt, undertaking concerned should benefitconcerned should benefit

• Existence and duration of infringement (Trelleborg, T-Existence and duration of infringement (Trelleborg, T-147/09)147/09)

• Precise and consistent evidencePrecise and consistent evidence

Overall assessment to be conductedOverall assessment to be conducted

All types of evidence (statements and market All types of evidence (statements and market conduct)conduct)

• No substitution of reasonsNo substitution of reasons

IV. Unlimited jurisdictionIV. Unlimited jurisdiction

Full jurisdiction: Can also be done in the absence of illegality

or annulment (CEPSA T-497/07)

Not ex officioDanone C-3/06 P ↔ Telefonica C-295/12 P

New arguments (GALP T-462/07) Exercise by GC, limited review by CJ (E.ON

Energie C-89/11 P)

IV. Unlimited jurisdictionIV. Unlimited jurisdiction

Power to substitute: Excessive delay: Heineken C-452/11 P, ICI T-

214/06. Romana Tabbachi T-11/06.

Not always in favour of applicant – can maintain fine: Duration: Marine Hose, still same fine. Scope of participation in infringement: GALP.

V. Final CommentsV. Final Comments

Relative decline in number of incoming cartel Relative decline in number of incoming cartel cases (from 70 in 2006 to 18 in 2013)cases (from 70 in 2006 to 18 in 2013)

Loss of relative weight of competition cases in Loss of relative weight of competition cases in total number of casestotal number of cases

In 2013: 790 incoming cases In 2013: 790 incoming cases 702 outgoing 702 outgoing casescases

Total number of cases continues to increase Total number of cases continues to increase (first semester 2014: 529)(first semester 2014: 529)

V. Final CommentsV. Final Comments

  2009 2010 2011 2012 2013

State aid50,3 32,4 32,8 31,5 48,1

Competition46,2 45,7 50,5 48,4 46,4

Intellectual property

20,1 20,6 20,3 20,3 18,7

Other direct actions 23,9 23,7 22,8 22,2 24,9

Appeals16,1 16,6 18,3 16,8 13,9

V. Final CommentsV. Final Comments

Duration of proceedings has slightly diminished Duration of proceedings has slightly diminished since 2011 (47.4 months on average)since 2011 (47.4 months on average)

Gascogne, C-58/12 P, 26 November 2013Gascogne, C-58/12 P, 26 November 2013

Liability for exceeding exceeding reasonable delayLiability for exceeding exceeding reasonable delay First cases already brought before GCFirst cases already brought before GC

V. Final CommentsV. Final Comments

Amount of fines appealed at GC : Amount of fines appealed at GC : 7.9 billion 7.9 billion 60,5% of the total amount of fines imposed60,5% of the total amount of fines imposed

V. Final CommentsV. Final Comments

Amounts concerned by reduction so far : 0.936 billionAmounts concerned by reduction so far : 0.936 billion

Amount not reduced: 1,689 billionAmount not reduced: 1,689 billion

Total amount still under appeal: 5.3 billionTotal amount still under appeal: 5.3 billion

V. Final CommentsV. Final Comments

Two major challenges for GC :

Ensuring adequate judicial protection

Within reasonable time frame

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