Volume 7 - Issue 1

Whole Issue

Competition Law Review - Volume 7 Issue 1 (1.23 MB)

Editorial

Due Process and Innovation in EU Competition Law: At the Gates of Reform?

Alan Riley (100 KB)

Articles

Cartel Proof, Imputation and Sanctioning in European Competition Law: Reconciling Effective Enforcement and Adequate Protection of Procedural Guarantees
Andreas Scordamaglia (353 KB)

The paper assesses the interplay between ‘fundamental procedural guarantees’ and the need to ensure ‘effective cartel enforcement’ as reflected on the rules concerning the legal proof of cartel infringements. More specifically, in view of the new provisions of the Lisbon Treaty that accords ‘Treaty value’ to the Charter and paves the Union’s accession to the ECHR, the paper first analyses the legal framework where fundamental rights operate in Europe. After identifying the rights that are pertinent in cartel proceedings, the paper attempts a novel reading of the characterisation of the legal nature of competition proceedings. Against this general background, the article embarks upon a detailed examination of the rules dealing with the legal characterisation, attribution of liability and sanctioning of cartels. It is submitted that the extensive use of presumptions is justified in view of the ‘information asymmetry’ characterising cartel infringement and no longer constitutes a risk of abuse in view of the increased probative value of evidence obtained through Leniency. Nevertheless, possible inconsistencies with regard to the ECHR standards could arise in the future with regard to the unpredictability of the sanctioning rules and the automatic way parental liability is established. Concluding, it is submitted that the current level of protection does accommodate the issues at stake as to workably reconcile effectiveness and a reasonable protection of defence rights, as well as, the risk of opportunistic use of procedural guarantees. Moreover, speculating on the future inter-play between the Luxemburg and Strasburg courts, it is proposed that the Community enforcement system, benefiting from the Bosphorus presumption of legality and the ‘manifest deficiency’ rebuttability standard, will remain unaffected.

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Balancing Efficiency and Justice in EU Competition Law: Elements of Procedural Fairness and their Impact on the Right to a Fair Hearing
Jaime Flattery (325 KB)

This article analyzes the existence of the ‘right to be heard’ in EU Competition law and queries whether firstly, it is properly adhered to in Commission proceedings and secondly,  whether the current system is in compliance with Article 6 of the European Convention of Human Rights (ECHR). It demonstrates that although this fundamental right is deeply rooted in EU case law and has been enshrined in EU legislation such as Regulation 1/2003, the Best Practice Guidelines and the Charter of Fundamental Rights, the extent of the safeguards fall short of EU human rights standards. It discusses the right in the context of administrative law and highlights the importance of taking an objective rather than a formalistic approach to fairness. In Part II there is a practical examination of the extent of the right to be heard within the current framework. Emphasis is put on the important role, but also on the limitations of the Hearing Officer’s powers. The article then examines the rights of the complainant and the limited rights of other interested parties to participate. It highlights through case analysis, deficiencies in both the written and oral components of the hearing and suggests that the oral hearing in particular needs urgent reform. This leads to a consideration in Part III, of the impact of Article 6 ECHR. Here the article addresses the reluctance of EU Courts to accept the changing nature of competition proceedings from ‘administrative’ to ‘criminal’, despite support for the contention from the Advocate Generals and the ECtHR. The article applies the ECtHR criteria in order to conclude they are penal in nature. Amongst the recommendations, it suggests that a more adversarial process should be adopted; with a public oral hearing and cross-examination of witnesses. Thus the paper assesses the conflict between efficiency and justice in the enforcement system but recognises the first as desirable; the second as vital.

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Antitrust Fines – Seeking Justice
Abayomi Al-Ameen (243 KB)

In this paper, I propose that the methodology for assessing fines provided in the 2006 European Commission’s fining guidelines should be amended. This is because the methodology is not fair. The grounds for alleging unfairness are as follows: (i) the variable mark-up is arbitrary; (ii) the guidelines fail to treat different violations differently as object and effect-based infringements are assessed through the same methodology; (iii) the methodology itself is not methodical in the sense that it fails to separate the disgorgement/compensation goal from retribution and deterrence. Hence there is a call for fairer guidelines. The fairness that is herein proposed requires that the guidelines be better formalised. This naturally comes with the attendant effect of ensuring legal clarity. It is also likely to contain the Commission’s discretion. In addition to these typical advantages, I advocate fair fining guidelines on two grounds. The first reason is that such fair guidelines could aid in attaining optimality. I make this argument by linking fairness to legitimacy and legitimacy to constitutional economics which is then expressed in the light of Pareto. Even if I am wrong on the first ground, my second argument is that the fair guidelines should be applied because justice (as fairness) is a value worth seeking in itself. Aside from its intrinsic value, it does have a distinct benefit of bolstering a ‘more economic approach’ in antitrust fining policy. Moreover, in this specific context, the advantages of the fair guidelines far outweighs the rather (likely minimal if at all) negative welfare effect.

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Due Process: The Exchange of Information and Risk of Hindering Effective Cross-border Co-operation in Competition Cases
Julian Nowag (258 KB)

The paper investigates the different regimes for the exchange of information in cross-border competition cases. It argues that the co-operation and information exchange mechanisms in competition cases established by Regulation 1/2003 have been overtaken by the means provided by the European Evidence Warrant which was developed under the former third Pillar (Co-operation in Criminal Matters). Moreover, the paper argues that both means: those provided by Regulation 1/2003 and those provided by the European Evidence Warrant are in general available to national competition authorities. In the light of the merging of the first pillar and third pillar under the Lisbon Treaty possible solutions are put forward to address the inconsistencies created by the availability of different co-operation mechanisms.

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The Hearing Officer in EU Competition Law Proceedings: Ensuring Full Respect for the Right to Be Heard?
Nicolo Zingales (299 KB)

This article will discuss, in light of the expected accession of the European Union (EU) to the European Convention of Human Rights (ECHR), whether the current enforcement structure of competition law in the EU is consistent with the right to fair trial enshrined in Art 6 ECHR. After a brief introduction summarizing the terms of the debate on the ‘fair trial’ in EU competition law, the focus will shift to the role of the Hearing Officer and its evolution to illustrate the combination in its role of two different functions: on the one hand, ensuring respect of the right to be heard; on the other, improving the quality of the decision and minimize the risk of annulment through judicial review. To emphasize the fundamental importance of giving priority to the former if EU competition law proceedings are to avoid potential condemnations for breach of Article 6 ECHR, a paragraph will describe the intensity of the judicial control operated by the EU adjudicature over violations of due process. Following a critical analysis of procedural guarantees available in competition proceedings and the associated powers and responsibilities of the Hearing Officer, the article will conclude with two suggestions for a potentially improved respect of the right to be heard under the current mandate, and a word of optimism for a revision of the mandate and an indication of what should be the main priority of such reform.

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Criminalisation of EU Competition Law Enforcement – A possibility after Lisbon?
Gurgen Hakopian (204 KB)

The EU’s competence to criminalise competition law enforcement has been and will continue to be a subject of debate. Before the entry into force of the Treaty of Lisbon opinions were divided on the question whether the Community had the power to introduce criminal law sanctions at the level of the EU institutions and the Member States.  It can however be said that the old Treaty did not preclude the adoption of such measures, in theory at least, based on the wording of Art 83 EC and the Community’s criminal law competence. The new TFEU has introduced a specific legal basis for the adoption of substantive criminal law measures in Art 83 TFEU, thus changing the dynamics in this area. Examination of the new system of EU criminal law reveals that criminalisation of competition law at the level of the EU institutions would no longer be possible without a Treaty amendment. Subject to the conditions mentioned in Art 83(2) TFEU, the Union does have the competence to criminalise competition law enforcement at the level of the Member States through harmonisation. The European Public Prosecutor, who would have the power to prosecute certain crimes before the national courts, could play a role in this respect, as it was originally intended to include bid-rigging in his competence ratione materiae. Even though the adoption of criminal law measures is technically ‘easier’ after the entry into force of the Treaty of Lisbon, broad consensus will still be required. Any developments in criminal competition law enforcement will depend on the political will in the Union.