interactions between courts and administrative authorities ... · i abstract interactions between...

INTERACTIONSBETWEEN

COURTSANDADMINISTRATIVEAUTHORITIES

INEUCOMPETITIONLAWENFORCEMENT

KATHRYNWRIGHT

SubmittedforthedegreeofPhDinLawUniversityofEastAnglia

SchoolofLaw,FacultyofSocialSciences

October2012

©Thiscopyofthethesishasbeensuppliedonconditionthatanyonewhoconsultsitisunderstoodtorecognisethatitscopyrightrestswiththeauthorandthatuseofany

informationderivedtherefrommustbeinaccordancewithcurrentUKcopyrightlaw.Inaddition,anyquotationorextractmustincludefullattribution.

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ABSTRACTInteractionsbetweenCourtsandAdministrativeAuthoritiesinEUCompetitionLawEnforcementTheEUcompetitionlawreformsof2004decentralisedenforcementfromtheEuropean

Commissiontonationalcompetitionauthoritiesandnationalcourts,whiletheEuropean

Commissionremainscentraltothesystem.Thisthesisrespondstoaneedforresearchinto

howinstitutionsinteractinthissystemofconcurrentcompetencestoeffectivelyenforce

theEUcompetitionrules.Itexplorestheconstitutionalconsequencesofthemethodsfor

ensuringcoherentinterpretationandeffectiveapplicationoftheEUcompetitionrules,

throughcasestudiesontheinteractionbetweencourtsandadministrativeauthoritiesand

betweenthesupranationalandnationallevels.Withafocusontheroleofcourts,thethesis

drawsontheEUprincipleofinstitutionalbalanceandtheconceptofinterpretative

pluralism.Itfindsthatwhileapparentlyempowering(national)courts,thepost‐2004

regimestilllimitstheambitofjudicialcompetenceinfavourofadministrativebodies.The

EuropeanCommissioncaninfluenceinterpretationofthecompetitionrulesinnational

courtproceedingsaswellasintheEuropeanCompetitionNetworkofcompetition

authorities,inwhichtheCourtofJusticeoftheEuropeanUnionhasineffecthandedover

responsibility.Inanextensionofnationalcourts’obligationnottorulecountertoa

EuropeanCommissiondecision,forthcominglegislationproposestheyshouldbeboundby

nationalcompetitionauthoritydecisions.Thethesisarguesthatthereshouldbemore

emphasisonhorizontalrelationshipsbetweencourts,ledbyjudgesthemselves.This

wouldnotonlylenditselftocoherent–andeffective–applicationofcompetitionlaw,but

wouldallowcourtstopushbackagainsttheapparentdominanceofadministrative

authoritiesinthisarea.

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TABLEOFCONTENTS

Abstract i

Tableofcontents ii

Listoffiguresandtables vi

Listofabbreviations vi

Listofcases vii

Listoflegislativedocuments xiv

Acknowledgements xvii

Chapter1.Introductiontothethesis 1

1. Contextofthepost‐2004competitionenforcementregimeinthe

EuropeanUnion 1

2. Researchquestions 5

3. Contributionsofthethesis 6

4. Methodology 8

5. TheinterinstitutionalrelationshipsinEUcompetitionlawenforcement 9

6. Outlineofthethesis 15

Chapter2.Interinstitutionalthemes 21

1. Introduction 21

2. TheEUprincipleofinstitutionalbalance 22

3. Diagonalinstitutionalbalance?TheEUdutyofloyalcooperation 24

4. Judicialfunctionsandcoherence 28

5. Interpretative/institutionalpluralisminasystemofconcurrent

competences 34

6. Conclusions 41

Chapter3.Nationalcompetitionauthorities’(lackof)accesstothe

CourtofJusticeoftheEuropeanUnion 43

1. Introduction 43

1.1 Outlineofthechapter 44

2. Thepost‐2004landscape 45

2.1 Multipleenforcersandthechallengeofconsistentapplication 45

2.2 Multipleenforcersinaquasi‐judicialenvironment 47

2.3 Article35Regulation1/2003andchoiceofinstitutionalstructure 47

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2.4 Dualityandthesignificanceofbeing‘judicial’and/or‘administrative’:

doubleobligationsonnationalcompetitionauthorities? 51

3. TheEUconceptofacourtortribunal 55

3.1 Interpartesprocedure 57

3.2 Independence 62

3.3 Compulsoryjurisdiction 64

4. TheSyfaitcaseanditsimplications 65

4.1 Syfaitfacts 65

4.2 Independence 66

4.2.1 TheopinionofAdvocateGeneralJacobs 66

4.2.2 ThejudgmentoftheCourt 69

4.3 Compulsoryjurisdictionanda(final?)decisionofajudicialnature 71

4.4 DoesSyfaitbarallnationalcompetitionauthoritiesfrompreliminary

references? 72

5. AllowingnationalcompetitionauthoritiesaccesstotheCourtofJustice

oftheEuropeanUnion 77

5.1 Theperspectiveofnationalcompetitionauthorities 77

5.2 TheperspectiveoftheCourtofJustice 78

5.2.1 Jurisdiction 78

5.2.2 Floodgates 78

5.2.3 Consistency 80

5.2.4 Judicialeconomy 81

5.2.5 Expertise 82

5.2.6 FuturepreliminaryreferencestotheEUGeneralCourt? 83

6. Parallelproceedingsandasymmetricchannels 85

7. Conclusions 87

Chapter4.EuropeanCommissioninterventioninnationalcourt

proceedings 89

1. Introduction 89


2. RelationshipbetweentheEuropeanCommissionandnationaljudges

intheapplicationofEUantitrustrules 92

3. Article15ofRegulation1/2003asatoolforconsistentapplication

oftherules 96

4. LegalnatureoftheCommissionopinionasanEUinstrument 102

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5. Article15inpractice 108

5.1 CasesinwhichtheCommission’sopinionwassought:

Art15(1)Reg1/2003 108

5.1.1 Contentoftheopinionsandimplicationsforthepreliminary

referenceprocedure 131

5.1.2 Rightsoftheparties 137

5.2 CasesinwhichtheCommissionintervenedatitsowninitiative:

Art15(3)Reg1/2003 138

5.2.1 Reasonsforintervening 148

5.2.2 Impactoftheinterventioninthejudicialproceedings 150

5.3 ‘Invitations’fromthecourttosubmitobservations 150

6. AdmissibilityandscopeoftheEuropeanCommission’sown‐initiative

Art15(3)interventionsinnationalcompetitioncases:thepreliminary

referenceinXBV 151

6.1 ‘Effective’,‘coherent’,‘consistent’or‘uniform’application? 155

6.2 ‘Conditions’forintervention 158

7. Conclusions 161

Chapter5.Bindingthejudicialwiththeadministrative:Theproposalfor

thebindingeffectofnationalcompetitionauthoritydecisionson

nationalcourts 164

1. Introduction 164


2. Backgroundtotheruleandrelationshipwiththe2004reforms 167

3. Theproposedruleanditspurpose 171

4. Hierarchyofadministrativeoverjudicialdecisions? 173

5. Thescopeoftherule 174

5.1 ‘Sameinfringersandsamepractices’ 174

5.2 Damagesactionsonly 176

5.3 Findingsofinfringementandothertypesofdecision 176

5.4 ‘Finaldetermination’ 177

5.5 Limitingtheambitofjudicialcompetence? 179

6. Basesoftherule 185

6.1 ExtensionoftheMasterfoodsrule 185

6.2 Principleofloyalcooperation 192

6.3 AnalogywiththeBrusselsRegulationonjurisdictionandthe

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recognitionandenforcementofjudgments 193

7. AsymmetriceffectsandtheEuropeanCompetitionNetwork 198

7.1 Reverseprincipleofequivalence? 201

8. Thepossibilityofthebindingeffectproposal 203

8.1 Currentlegaleffectofnationalcompetitionauthoritydecisions 204

8.1.1 BindingeffectofforeignNCAdecisions 205

8.1.2 BindingeffectofdomesticNCA/administrativedecisions 205

8.1.3 Persuasive/evidentialvalueofdomesticNCAdecisions 208

8.1.4 Reformtoconstitutionsneeded 208

9. Thecurrentstateofplayoflegislationondamagesactions 209

10. Conclusions 213

Chapter6.Conclusionsanddirectionsforfutureresearch 216

Bibliography 225

Appendix:publishedwork 239

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LISTOFFIGURESANDTABLESFigure1.TheinstitutionalrelationshipsinEUcompetitionlawenforcementFigure2.ExampleoftheeffectsofdifferentstandardsintwoMemberStatesFigure3.Asymmetricnationalandcross‐borderbindingeffectsofnationalcompetitionauthoritydecisionsTable1.EuropeanCommissionopinionstonationalcourtsunderArticle15(1)Regulation1/2003Table2.EuropeanCommissionown‐initiativeinterventionsinnationalcourtproceedingsunderArt15(3)Regulation1/2003LISTOFABBREVIATIONSA‐G AdvocateGeneralBrusselsIRegulation CouncilRegulation(EC)No44/2001of22December2000on

jurisdictionandtherecognitionandenforcementofjudgmentsincivilandcommercialmatters

CJEU CourtofJusticeoftheEuropeanUnionCommission EuropeanCommission(oftheEuropeanUnion)DGCOMP EuropeanCommissionDirectorateGeneralforCompetitionEC EuropeanCommunity(EuropeanCommunityTreatywhenafteran

Articlenumber)ECHR EuropeanConventiononHumanRightsECtHR EuropeanCourtofHumanRightsECN EuropeanCompetitionNetworkEP EuropeanParliamentEU EuropeanUnionGC GeneralCourt(oftheEuropeanUnion)MS EuropeanUnionMemberState(s)NCA NationalcompetitionauthorityNCAs NationalcompetitionauthoritiesOFT OfficeofFairTrading,UKReg RegulationSWP (EuropeanCommission)StaffWorkingPaperTFEU TreatyontheFunctioningoftheEuropeanUnionTEU TreatyonEuropeanUnionUnion EuropeanUnion

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LISTOFCASESEU:9/56MeronivHighAuthorityoftheEuropeanCoalandSteelCommunity[1958]ECR1336/64CostavEnel[1964]ECR58556/65SociétéTechniqueMinièrevMaschinenbauUlm[1966]ECR23561/65Vaassen‐GoebbelsvBeambtenfondsvoorhetMijnbedrijf[1966]ECR26114/68WaltWilhelmvBundeskartellamt[1969]ECR122/70CommissionvCouncil(ERTA)[1971]ECR263127/73BelgischeRadioenTelevisieandSociétéBelgesdesAuteurs,CompositeursetEditeursdeMusiquevSVSABAMandNVFonior[1974]ECR51166/73Rheinmühlen‐DiisseldorfvEinfuhrundVorratsstellefurGetreideundFuttermittel[1974]ECR3333/76Rewe‐ZentralfinanzeGvLandwirtschaftskammerfürdasSaarland[1976]ECR198970/77SimmenthalvAmministrazionedelleFinanze[1978]ECR1453106/77AmministrazionedelleFinanzedelloStatovSimmenthalSpA[1978]ECR629]209/78‐215/78&218/78VanLandewyckvCommission[1980]ECR312599/79LancômevEtos[1980]ECR2511138/80BorkervConseildel’OrdredesAvocatsàlaCourdeParis[1980]ECR1975246/80Broekmeulen vHuisartsRegistratieCommissie [1981]ECR231160/81IBMvCommission[1981]ECR2639102/81NordseeDeutscheHochseefischereiGmbHvReedereiMondHochseefischereiNordsternAG&CoKG[1982]ECR1095283/81CILFITandLanificiodiGavardoSpAvMinistryofHealth[1982]ECR341542/82FrancevCommission(Italianwine)[1983]ECR1013199/82AmministrazionedelleFinanzedelloStatovSanGiorgio[1983]ECR3595319/82SociétédeVentedeCimentsetBétonsdeL’EstvKerpen&KerpenGmbH[1983]ECR4173142&156/84BritishAmericanTobacco&ReynoldsvCommission[1987]ECR4487314/85Foto‐FrostvHauptzollamtLübeck‐Ost[1987]ECR4199

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14/86PretorediSalòvPersonsunknown[1987]ECR2545C‐2/88Zwartveld[1990]ECRI‐336568/88CommissionvGreece[1989]ECR296570/88ParliamentvCouncil(Chernobyl)[1990]ECRI‐2041C‐103/88FratelliCostanzovMilano[1989]ECR1839215/88CasaFleischhandels[1989]ECR2789C‐297/88&C‐197/99DzodzivBelgium[1990]ECRI‐3673C‐322/88GrimaldivFondsdesMaladiesProfessionnelles[1989]ECR4407C‐106/89MarleasingSAvLaComercialInternacionaledeAlimentaciónSA[1990]ECRI‐4135C‐234/89DelimitisvHenningerBräu[1991]ECRI‐935C‐6/90FrancovichandOthersvItalianRepublic[1991]ECRI‐5357T‐24/90AutomecvCommission[1992]ECRII‐2223C‐76/91AsociacionEspanoladeBancaPrivadaandOthers[1992]ECRI‐4785C‐277,318&319/91LigurCarni[1993]ECRI‐6621C‐128/92HJBanks&CoLtdvBritishCoalCorporation[1994]ECRI‐1209C‐24/92CorbiauvAdministrationdesContributions[1993]ECRI‐1277T‐3/93AirFrance vCommission[1994]ECRII‐323C‐312/93PeterbroeckvBelgium[1995]ECRI‐4599C‐430/93‐C‐431/93VanSchijndel&VanVeenvStichtingPensioenfondsvoorFysiotherapeuten[1995]ECRI‐4705C‐111/94JobCentre[1995]ECRI‐3361T‐353/94PostbankvCommission[1996]ECRII‐921C‐185/95PBaustahlgewebevCommission[1998]ECRI‐8417C‐338/95WienervHauptzollamtEmmerich[1997]ECRI‐6495C‐54/96DorschConsultIngenieurgesellschaftvBundesbaugesellschaftBerlin[1997]ECRI‐4961C‐203/96ChemischeAfvalstoffenDusseldorpBVandOthersvMinistervanVolkhuisvesting,RuimtelijkeOrdeningenMilieubeheer[1998]ECRI‐4075

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C‐279‐281/96AnsaldoEnergiaSpAvAmministrazionedelleFinanzedelloStato[1998]ECRI‐5025C‐103/97KoellenspergerandAtzwanger[1999]ECRI‐551C‐126/97EcoSwissChinaTimeLtdvBenettonInternationalNV[1999]ECRI‐3055C‐134/97VictoriaFilmA/SvRiksskatteverket[1998]ECRI‐7023T‐266/97VlaamseTelevisieMaatschappijNVvCommission[1999]ECRII‐2329C‐110‐147/98GabalfrisaandOthersvAgenciaEstataldeAdministración[2000]ECRI‐1577C‐7/98KrombachvBamberski[2000]ECRI‐1935C‐174/98P&C89/98PVanderWalandtheNetherlandsvCommission[2000]ECRI‐1C‐195/98ÖsterreichisherGewerkschaftbundvAustria[2000]ECRI‐10497C‐205/98AlpeAdriaEnergiaSpAvKärntnerLandesregierung[2009]ECRI‐11525 C‐209/98EntreprenørforeningensAffalds/Miljøsektion(FFAD)vKøbenhavnsKommune[2000]ECRI‐3743C‐344/98MasterfoodsLtd(t/aMarsIreland)vHBIceCreamLtd[2000]ECRI‐11369C‐516/99Schmid[2002]ECRI‐4573C‐453/99CourageLtdvCrehan[2001]ECRI‐6297C‐17/00DeCostervCollègedesBourgmestreetEchevinsdeWatermael‐Boitsfort[2001]ECRI‐9445C‐94/00RoquetteFrèresSAvDirecteurgénéraldelaconcurrence,delaconsommationetdelarépressiondesfraudes[2002]ECR9011C‐182/00LutzGmbHandOthers[2002]ECRI‐547C‐275/00EuropeanCommunityvFirstNVandFranexNV[2002]ECRI‐10943C‐453/00Kühne&HeitzNVvProduktschapvoorPluimveeenEieren[2004]ECRI‐837C‐198/01ConsorzioIndustrieFiammiferivAutoritaGarantedellaConcorrenzaedelMercato[2003]ECRI‐8055C‐224/01KöblervAustria[2003]ECRI‐10239C‐53/03SynetairismosFarmakopionAitolias&Akarnanias(Syfait)vGlaxoSmithklinePlc[2005]ECRI‐4609T‐351/03SchneiderElectricvCommission[2007]ECRII‐2237C‐96/04StandesamtStadtNiebüll[2006]ECRI‐03561

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C‐136/04DeutschesMilch‐KontorGmbHvHauptzollamtHamburg‐Jonas[2005]ECRI‐10095C‐295/04‐C‐298/04ManfrediandOthersvLloydAdriaticoAssicurazioniSpAandOthers[2006]ECRI‐6619C‐217/05ConfederaciónEspañoladeExpresariosdeEstacionesdeServiciovCompañíaEspañoladePetróleosSA(CEEESvCEPSA)[2006]ECRI‐11987C‐222‐225/05VanderWeerdvMinistervanLandbouw,NatuurenVoedselkwaliteit[2007]ECRI‐4233C‐402&415/05PKadi&AlBarakaatInternationalFoundationvCouncil&Commission[2008]ECRI‐6351C‐468/06‐478/06SotLeloskaiSiaEEvGlaxoSmithKlineAEVEFarmakeftikonProionton,formerlyGlaxowellcomeAEVE[2008]ECRI‐7139C‐52/07Kanal5LtdandTV4ABvFöreningenSvenskaTonsättaresInternationellaMusikbyrå(STIM)upa[2008]ECRI‐9275C‐209/07BeefIndustryDevelopmentSocietyandBarryBrothers[2008]ECRI‐8637C‐429/07XBVvInspecteurBelastingdienst[2009]ECRI‐0000C‐439/08VlaamsefederatievanverenigingenvanBrood‐enBanketbakkers,IjsbereidersenChocoladebewerkers(VEBIC) vRaadvoordeMededinging,MinistervanEconomie[2010]ECRI‐0000C‐360/09PfleidererAGvBundeskartellamt[2011]ECRI‐0000C‐439/09PierreFabreDermo‐CosmétiqueSASvPrésidentdel’Autoritédelaconcurrence,Ministredel’Économie,del’Industrieetdel’Emploi[2011]ECRI‐0000C‐389/10PKMEGermanyandOthers[2011]ECRI‐0000EuropeanCourtofHumanRights:McGonnellvUK[2000]30EHRR289JanosevicvSweden[2002]38EHRR22TsfayovUK[2009]48EHRR18DubusSAvFrance,Applicationno5242/04(judgmentof11.6.2009,notyetreported)MenariniDiagnosticsSRLvItaly,Applicationno43509/08(judgmentof27.9.2011,notyetreported)

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NationalcasesBelgium:A/03/1022SPRLLustautomobilesandPaulLustv.DaimlerChryslerAGStuttgartandSADaimlerChryslerBelgiumLuxembourg,MonsCommercialCourt,23.12.20042003‐AR‐1444PowerOilSAvDDInvestSA,BrusselsCourtofAppeal,7.3.20062004‐MR‐6LaurentEmondvBrasserieHaacht,BrusselsCourtofAppeal,2.2.20052004‐MR‐7SABAMvProductionsetMarketing,BrusselsCourtofAppeal,2.2.20052004‐MR‐8WallonieExpoSAvFEBIACasbl,BrusselsCourtofAppeal,2.2.20052004‐MR‐9CompagniePétrolièreduCourtraisisSAvMauriceCoene,BrusselsCourtofAppeal,7.3.2006BVBADDBikesvBVDucatiNorthEurope,DendermondeCommercialDistrictCourt,2009France:02/01205BrasseriesKronenbourgvSARLJBEG,StrasbourgTribunaldeGrandInstance(firstinstancecivilcourt,commercialchamber),4.2.2005.08‐D‐25RG2008/23812,PierreFabreDermo‐CosmétiqueSASvPrésidentdel’Autoritédelaconcurrence,Ministredel’Économie,del’Industrieetdel’Emploi,ParisCourtofAppeal,29.10.200905/17909GarageGrémeauvDaimlerChryslerParisCourtofAppealjudgment,7.6.2007OrangeCaraïbe,FrenchSupremeCourt,31.1.2011CzechRepublic:62Ca4/2007‐115,Tupperware,BrnoRegionalCourt,1.11.2007Ireland:CompetitionAuthorityvBeefIndustryDevelopmentSocietyLtd&Anor[2006]IEHC294,27.7.2006Lithuania:2‐1068‐52/05 UAB Tew Baltija Kaunos v savivaldybyes administracijos direcktorius(Director of administration of the municipality of the city of Kaunas), Vilnius DistrictCourt,14.12.2005A502‐337/2008UABSchneidersöhneBaltijavUABLibraVitalis,LithuanianSupremeAdministrativeCourt,9.9.2008

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Netherlands:05/1452XBVvInspecteurBelastingdienst,HaarlemDistrictCourt,2.5.200602/1136PraetenZonenvVereinigenProductenorganisatievandeNederlandseMosselculturUA,‘sGravenhageAppealCourt24.4.200806/00252XBVvInspecteurBelastingdienst,AmsterdamCourtofAppeal,11.3.201010/01358XBVvInspecteurBelastingdienst,NetherlandsSupremeCourt,12.8.2011Slovakia:ŽelezničnáspoločnosťCargoSlovakia,as(ZSCargo),SlovakianSupremeCourt,27.2.2012Spain:GasonulvRepsol,ProvincialCourtofMadridno14,26.3.2004220/2003MelónSAvRepsolComercialdeproductospetrolíferosSA,ProvincialCourtofMadridno18,7.7.2004HermelavRepsol,ProvincialCourtofMadridno14,30.9.2004578/2003RutamurSAvRepsolComercialdeProductosPetrolíferosSA,ProvincialCourtofMadridno21,5.7.200548/2004ClauvCepsaEstacionesdeServicio,ProvincialCourtofGironano1,7.6.20041235/2004L'AndanayEstacionesdeServicioL'AndanavRepsol,SpanishSupremeCourt,23.12.200414/05GebevBPOilEspana,CommercialCourtno2Madrid,22.3.2005103/05InversionesCobasavBPOil,CommercialCourtno4Madrid,19.10.2005GrupoTexasvCepsa,ProvincialCourtofMadridno10,17.10.2005BrightServiceSAvREPSOLCPP,CommercialCourtno2Barcelona,24.3.2009PetrocatvCanalyFilsSL&ZeroSetsSL,CommercialCourtno5Madrid,2009DalphiMetalEspañavTRWAutomotive,CommercialCourtno1Madrid29.3.2010DalphiMetalEspañavTRWAutomotive,CommercialCourtno4Madrid,29.3.2010

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Sweden:A4/06,MD2007:26ÖvertorneåkommunmflvEkforsKraftABmfl,SwedishMarketCourt,15.11.2007T2808‐05BornholmsTrafikkenandYstadHamnLogistikAktiebolag,SwedishSupremeCourt,19.2.2008UnitedKingdom:ProvimiLtdvRocheProductsLtdetal(2003)EWHC961CrehanvInntrepreneurPubCompanyCPC[2004]EWCACiv637InntrepreneurPubCompanyandOthersvCrehan[2006]UKHL38EmersonElectricCovMorganCrucibleCoPlc(1077/5/7/07)[2008]CAT8EnglishWelsh&ScottishRailwayLtdvEnronCoalServicesLtd[2009]EWCACiv647NationalGridElectricityTransmissionPlcvABBLtdandothercompanies[2011]EWHC1717(Ch)

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LISTOFLEGISLATIVEDOCUMENTS(chronological)CouncilRegulationNo17of6February1962,FirstRegulationimplementingArticles85and86oftheTreaty[1959‐1962]OJ13,21.2.1962,204CommissionRegulation(EEC)No.1984/83of22June1983ontheapplicationofArticle85(3)[now101(3)]oftheTreatytocategoriesofexclusivepurchasingagreementsOJL173,30.6.1983CommissionNoticeoncooperationbetweennationalcourtsandtheCommissionintheStateAidfield,OJC312,23.11.1995,8CommissionnoticeondefinitionoftherelevantmarketforthepurposesofCommunitycompetitionlawOJC372,9.12.1997,1WhitePaperonModernisationoftheRulesImplementingArticles85and86oftheECTreaty,CommissionProgrammeNo99/027,Brussels,28.4.1999CommissionRegulation(EC)No.2790/1999of22December1999ontheapplicationofArticle81(3)oftheTreatytocategoriesofverticalagreementsandconcertedpracticesOJL336,29.12.1999ProposalforaCouncilRegulationontheimplementationoftherulesoncompetitionlaiddowninArticles81and82oftheTreatyandamendingRegulations(EEC)No1017/68,(EEC)No2988/74,(EEC)No4056/86and(EEC)No3975/87COM(2000)582final‐2000/0243(CNS)OJC365E,19.12.2000,28ExplanatoryMemorandumaccompanyingtheProposalforaCouncilRegulationontheimplementationoftherulesoncompetitionlaiddowninArticles81and82oftheTreatyandamendingRegulations(EEC)No1017/68,(EEC)No2988/74,(EEC)No4056/86and(EEC)No3975/87(“RegulationimplementingArticles81and82oftheTreaty”),COM(2000)582final‐2000/0243(CNS),OJC365E/284,16‐17RulesofProcedureoftheCommission,C(2000)3614,OJ2000L308,8.12.2000,26,asamendedCouncilRegulation(EC)No44/2001of22December2000onjurisdictionandtherecognitionandenforcementofjudgmentsincivilandcommercialmatters,OJL012,16.1.2001,1CommissionStaffWorkingPaper:ReformofRegulation17–Theproposalforanewimplementingregulation–Article15(3)submissionsasamicuscuriae,SEC(2001)1827,13.11.2001CommissionNoticeonagreementsofminorimportancewhichdonotappreciablyrestrictcompetitionunderArticle81(1)oftheTreatyestablishingtheEuropeanCommunity(deminimis)OJC368,22.12.2001,13‐15JointStatementofCouncilandCommissiononthefunctioningofthenetwork,Councildocumentno.15435/02ADD1CommissionStaffWorkingPaper,CommissionProposalforaCouncilRegulationImplementingArticles81and82EC,NationalCourtsinpublicenforcement(Article36)[nowArt35],SEC(2002)408,Brussels11.4.2002

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CommissionRegulation(EC)No1400/2002of31July2002ontheapplicationofArticle81(3)oftheTreatytocategoriesofverticalagreementsandconcertedpracticesinthemotorvehiclesectorOJC203,1.8.2002,30‐41CouncilRegulation(EC)No1/2003of16December2002ontheimplementationoftherulesoncompetitionlaiddowninArticles81and82oftheTreaty,OJL1,4.1.2003,1‐25CommissionRegulation(EC)No773/2004of7April2004relatingtotheconductofproceedingsbytheCommissionpursuanttoArticles81and82oftheECTreaty,OJL123,27.4.2004,18‐24CommissionNoticeoncooperationwithintheNetworkofCompetitionAuthoritiesOJC101,27.4.2004,43‐53CommissionNoticeontheco‐operationbetweentheCommissionandthecourtsoftheEUMemberStatesintheapplicationofArticles81and82EC,OJC101,27.4.2004,54‐64CommissionNoticeonthehandlingofcomplaintsbytheCommissionunderArticles81and82oftheECTreatyOJC101,27.4.2004,65‐77CommissionNoticeoninformalguidancerelatingtonovelquestionsconcerningArticles81and82oftheECTreatythatariseinindividualcases(guidanceletters)OJC101,27.4.2004,78‐80CommissionNotice‐GuidelinesontheeffectontradeconceptcontainedinArticles81and82oftheTreatyOJC101,27.4.2004,81‐96CommissionNotice‐GuidelinesontheapplicationofArticle81(3)oftheTreatyOJC101,27.4.2004,97‐118ExplanatoryMemorandumtotheDutchCompetitionAct2004ontheimplementationofRegulation1/2003:WijzigingvandeMededingingswetenvanenigeanderewetteninverbandmetdeimplementatievanEG‐verordening1/2003:MemorievanToelichting(wetvan30.6.2004,Stb.345,KamerstukkenII,vergaderjaar2003‐4,29276,nr3)GreenPaperonDamagesactionsforbreachoftheECantitrustrulesCOM(2005)672Commissionnoticeonimmunityfromfinesandreductionoffinesincartelcases.OJC298,8.12.2006,17LUISSExternalimpactstudy‘MakingAntitrustDamagesActionsMoreEffectiveintheEU:WelfareImpactandPotentialScenarios’,December2007WhitePaperonDamagesActionsforBreachoftheECantitrustrulesCOM(2008)165,2.4.2008,withStaffWorkingPaperSEC(2008)404andImpactAssessmentReportSEC(2008)405EuropeanParliamentresolutionof26March2009ontheWhitePaperondamagesactionsforbreachoftheECantitrustrules(2008/2154(INI))P6_TA(2009)0187CommissionNoticeontheenforcementofStateaidlawbynationalcourts,OJC85,9.4.2009,1

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Decision2011/695/EUofthePresidentoftheEuropeanCommissionof13October2011onthefunctionandtermsofreferenceofthehearingofficerincertaincompetitionproceedings,OJL275,20.10.2011,29EuropeanCommissionBestPracticesinproceedingsconcerningarticles101and102TFEU,OJC308,20.10.2011,6‐32AnnextotheCommunicationfromtheCommissiontotheEuropeanParliament,theCouncil,theEuropeanEconomicandSocialCommitteeandTheCommitteeOfTheRegions,CommissionWorkProgramme2012:DeliveringEuropeanRenewal,Brussels,15.11.2011COM(2011)777finalEuropeanParliamentresolutionof2February2012onEuropeanCommissionconsultation'TowardsaCoherentEuropeanApproachtoCollectiveRedress'(2011/2089(INI))P7_TA(2012)0021EuropeanCompetitionNetworkresolutiononprotectionofleniencymaterialinthecontextofcivildamagesactions,23.5.2012Pre‐legislativedocumentsoftheCouncilofMinistersontheProposalforaRegulationimplementingArticles81[101]and82[102]oftheTreaty5158/01Secretariattodelegations,11January20019999/01Secretariattodelegations,27June2001(incorporatingDocument:9999/01corrigendumSecretariattodelegations6July2001)13563/01(Belgian)PresidencytoCOREPER,20November20018383/1/02(Spanish)PresidencytoCOREPER,27May200211791/02WorkingPartytoCOREPER,9September2002(incorporatingDocument:11791/02corrigendumWorkingPartytoCOREPER,11September2002)12998/02WorkingPartytoCOREPER,11October200213451/02SecretariattoWorkingParty,28October200213983/02WorkingPartytoCOREPER,8November200214327/02preparationofpoliticalagreement,15November2002(incorporatingDocument:14327/02corrigendum(to13983/02),18November2002)14471/02politicalagreementCOREPER,21November200214815/02MinutesofmeetingofCompetitivenessCouncilheldon26November2002,5December2002

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ACKNOWLEDGEMENTSTheprocessofmyPhDtooksevenyearspart‐timefromregistrationtoviva.Iwanttothankthepeoplewhohelpedmetostart,continueandfinish.ThankstomyfriendsandcolleaguesattheUniversityofEastAngliaandattheESRCCentreforCompetitionPolicy,whereIwasaCCPResearchAssociateandatutorintheLawSchool.InparticularCatherineWaddamspersuaded/encouragedmetostartthePhDandmaderesourcesavailableasCCPDirector.ThankstomysupervisorsDrMichaelHarker,LindsayStirtonandStathisBanakas.IappreciatedMichaelHarker’sconsideredapproachandhighstandardsasacolleagueandasasupervisor.Ourconversationsespeciallyinthefinalmonthshelpedtokeepmyconfidenceup.LindsayStirtoncontinuedtoshowinterestandsupportevenafterheleftUEA.StathisBanakastookoverasmysecondsupervisorandgaveusefuladviceatmyupgradepanel.MortenHviidwasalsoasteadysupportivepresencefromthebeginningandnurturedtherobustnessofmyideasattheupgradeandonotheroccasions.IworkedwithHusseinKassimonprojectsonthe2004EUcompetitionpolicyreformsandtheEuropeanCompetitionNetwork,whichformedthebackgroundtopartsofthethesis.ThankstomyexaminersImeldaMaherofUniversityCollegeDublinandAndreasStephan,whosechallengingbutappreciativequestioningandusefuladvicemadethevivaanenjoyableexperience.Thankstofellowpanellists,discussantsandparticipantsatthevariousconferenceswhereIhonedmyideas,especiallyOanaŞtefanforsoftlawdiscussionsandfriendship.ThankstotheintervieweeswhowillinglygavetheirtimeandinsightsfortheEUcompetitionpolicyreformproject.ThefinancialsupportoftheEconomicandSocialResearchCouncilisalsogratefullyacknowledged.ThankstomymorerecentcolleaguesattheUniversityofYork,whereItookupalectureshipinOctober2010,especiallySimonHalliday.Thankstomyfriendsfortheiremotionalandpracticalsupport,humourandconfidenceinmewhenmyownwaslacking:FiratCengiz,AnupaSahdev,JacquiHale,SebastianPeyer,MariaMarínAltaba,andtheMichelNeumanns.ToMum,DadandEdfortheirunconditionalloveandbeliefinme.ToDaveConnah,partlyforhispracticalhelpinproofreadingandcreatingdiagrams,butmostlyforhisloveandpatienceespeciallythroughthetimeswhenfinishingseemedveryclosetoimpossible.

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CHAPTER1:INTRODUCTION

EuropeanUnioncompetitionlawisofcentralimportancetothefunctioningoftheinternal

market.Sincethe2004reformofEUcompetitionlawthenumberofcourts,administrative

authoritiesandquasi‐judicialbodiesinvolvedinenforcementoftherules,andthescopeof

theirfunctions,hasincreased.Thereformwasdescribedasa“legalandculturalrevolution

inproposingthefundamentalreorganizationofexistingresponsibilitiesbetweenthe

Commission,nationalauthoritiesandnationalcourts”.1Theinteractionsbetweenthese

judicialandadministrativeauthorities,andbetweenthesupranationalandnationallevels,

areimportantforeffectiveapplicationofthecompetitionrules.However,thetoolschosen

topromotethiseffectivenesshavewiderconstitutionalimplicationsfortherolesofcourts

andadministrativeauthorities.Thethesisthereforeinvestigatestheseinteractionsand

setsthemwithintheliteratureoninstitutionalbalanceandinterpretativepluralism.

Thischapterfirstsetsthecontextofthe2004reformsanddevelopmentssincethen.The

secondsectionlaysouttheresearchquestions,thethirdsectionoutlinesthecontributions

ofthethesis,andthefourthsectiondiscussesthemethodology.Thefifthsection

contextualisesthecasestudiesinthelaterchaptersofthethesisbyintroducingadiagram

toshowtheinterinstitutionalrelationshipsintheEUcompetitionenforcementsystem.

Thesixthsectiongivesanoutlineofthethesisasawhole.

1.Thecontextofthepost‐2004competitionenforcementregimeintheEuropean

Union

EUcompetitionlawenforcementhasbeensubjecttofar‐reachingreformsoverthelast

decade.Themostsignificantreformcamein2004withRegulation1/2003onthe

implementationoftherulesoncompetitionlaiddowninArticles81and82(now101and

102)oftheTreaty2anditsaccompanyingModernisationPackage.3Article101TFEU

1 C-D Ehlermann ‘The Modernization of EC Antitrust Policy: A Legal and Cultural Revolution’ (2000) 37 Common Market Law Review 537-574, 537 2 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 1, 4.1.2003,1-25 3 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, 27.04.2004, 18-24; Commission Notice on cooperation within the Network of Competition Authorities OJ C 101, 27.04.2004, 43-53; Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC OJ C 101, 27.04.2004, 54-64; Commission Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty OJ C 101, 27.04.2004, 65-77; Commission Notice on informal guidance relating to novel questions concerning

2

governsagreementsbetweenfirmsandArticle102prohibitstheabuseofadominant

position.ThesearticleshadbeenenforcedbytheEuropeanCommission’sDirectorate

GeneralforCompetition(DGIV,nowDGCOMP)sincetheearlyyearsoftheEuropean

EconomicCommunity,4partlybecauseMemberStatesdidnothavedevelopedcompetition

authorities.Whilenationalcourtsandcompetitionauthoritieswereinprincipleableto

applytherules,firmswererequiredtonotifytheiragreementsunderArticle101TFEUto

theCommissionforapproval.Havingfoundananticompetitiveagreement,onlythe

Commissionwasempoweredtograntanexemptionandapproveitunderwhatisnow

Article101(3).MemberStatecivilcourtswerenotabletoconsiderwhetheranagreement

couldbeexempted,andsowerestymiedintheirabilitytoadjudicatedisputesbetween

privatepartiesbasedontheEUcompetitionrules.

Anumberoffactorsledtoreform.Eventuallyabacklogofnotificationsaccumulatedand

theCommissionhadtoimplementasolutionof‘comfortletters’whichwereofuncertain

legalstatus.5TheCommissionwasfacedwithincreasingcriticismfromthelate1990s,6by

whichtimeanumberofMemberStateshadtheirownfunctioningcompetitionauthorities.

Thenotificationsystemwasalsoineffectiveattargetingthemostharmfulcartels,andthe

Commissionneededtofreeupresourcestodoso.FacedwithEUenlargementfrom15to

25MemberStatesin2004,withafurthertwoin2007,thecentralisedsystemlooked

increasinglyunworkable.

The2004reforms7broughtabouttwosignificantchanges,endingtheCommission’s

dominanceoverenforcement.Onewastheabolitionofthenotificationprocedure.The

Articles 81 and 82 of the EC Treaty that arise in individual cases (guidance letters) OJ C 101, 27.04.2004, 78-80; Commission Notice - Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty OJ C 101, 27.04.2004, 81-96; Commission Notice - Guidelines on the application of Article 81(3) of the Treaty OJ C 101, 27.04.2004, 97-118 4 Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty [1959-1962] OJ 13, 21.2.1962, 204 5 See e.g. B Wodz ‘Comfort Letters and Other Informal Letters in EC Competition Proceedings – Why the Story is Not Over’ (2000) 21(3) European Competition Law Review 159-169 6 See e.g. P Massey ‘Reform of EC Competition Law: Substance, Procedure, Institutions’, in B Hawk (ed) Annual Proceedings of the Fordham Corporate Law Institute 1996 (Juris Pub Inc, 1997), 91; A Pera & M Todino ‘Enforcement of EC Competition Rules: Need for a Reform?’ in the same volume, 125. M Siragusa ‘Rethinking Art 85: Problems and Challenges in the Design and Enforcement of the EC Competition Rules’ Annual Proceedings of the Fordham Corporate Law Institute 1997 (Juris Pub Inc, 1998), 271 7 For assessment of the reforms see e.g. C-D Ehlermann ‘The Modernization of EC Antitrust Policy: A Legal and Cultural Revolution’ (2000) 37 Common Market Law Review 537-574; H Kassim & K Wright ‘Bringing Regulatory Processes Back In: The Reform of EU Antitrust and Merger Control’ (2009) 32(4) West European Politics 738-755; A Riley ‘EC Antitrust Modernisation: The Commission Does Very Nicely – Thank You! Part 1: Regulation 1 and the Notification Burden’, (2003) 24 (11) European Competition Law Review 604-615; A Riley ‘EC Antitrust Modernisation: The Commission Does Very Nicely – Thank You! Part 2: Between the Idea and the Reality: Decentralisation under Regulation 1’ (2003) 24 (11) European Competition Law Review 657-672; J Venit ‘Brave New World: The

3

second,moreimportantforthesepurposes,wasthedecentralisationofenforcement,

empoweringnationalcompetitionauthoritiesandnationalcourtstoapplyArticles101

and102intheirentirety,includingassessingwhetherconductfallsundertheexempting

conditionsofArticle101(3),previouslywithintheexclusivejurisdictionoftheEuropean

Commission.Thisisnotacompletedecentralisation,astheEuropeanCommissionstill

retainsthecompetencetoapplytherulesandretainsacentralrole.Thisdiffersfromthe

generalmodelofEUlaw,whichisenforcementatthenationallevel.Asaresult,thereare

concurrentcompetencesbetweenthesupranationalandnationallevels,andbetween

courtsandadministrative(orquasi‐judicial)authorities.

Afurtheraimofthe2004reform,andsubsequentlyoftheEuropeanCommission’sWhite

Paperondamagesactions,8wastoencourageprivateenforcementofcompetitionlawby

firmsandindividualsthroughnationalcourts,withoutitcompromisingpublic

enforcementthroughnationalcompetitionauthorities.Thiswouldfreeupresourcesfor

theCommissionandcompetitionauthoritiestodetectandinvestigatethemostharmful

anticompetitiveactivityinthepublicinterest.Indecentralisingenforcementtonational

courtsaswellascompetitionauthorities,thedoorisopentoclaimantstoactasenforcers

(‘privateattorneygenerals’9)closesttoinfringements.Italsoallowsthosewhosuffer

lossesasaresultofcompetitionlawinfringementstogainindividualredress–whilethey

canimposefines,competitionauthoritiesarelesswellplacedtocompensateindividuals

whoareharmedbycompetitionlawbreaches,andtheCommissionitselfisnot

empoweredtograntdamages.

Thereisabalancetobestrucktoensurethatpublicandprivateenforcementare

complementary.10Theprincipalaimofpublicenforcementisdeterrence,through

punishmentsuchasfinesorimprisonment.Privateenforcementcanalsocontributetoa

Modernization and Decentralization of Enforcement under Articles 81 and 82 of the EC Treaty’ (2003) 40 Common Market Law Review 545-580 8 Commission White Paper on damages actions for breach of the EC antitrust rules, COM (2008) 165, Brussels 2.4.2008 9 Particularly used in the US context where private actions in competition enforcement are more prevalent. In the EU literature see e.g. A Andreangeli 'From Complainant to "Private Attorney General": the Modernisation of EU Competition Enforcement and Private Antitrust Action before National Courts' in J Peay and T Newburn (eds) Policing: Politics, Culture and Control. Essays in Honour of Robert Reiner (Hart Publishing, 2012) 229-54; K Cseres ‘Governance Design for European Private Law: Lessons from the Europeanization of Competition Law in Central and Eastern Europe’ in F Cafaggi (ed) Making European Private Law: Governance Design (Edward Elgar, 2008) 138-196, 143 10 See e.g. W Wils ‘Should Private Antitrust Enforcement Be Encouraged in Europe? (2003) 26(3) World Competition 473; C Jones ‘Private Antitrust Enforcement in Europe: A Policy Analysis and Reality Check’ (2004) 27(1) World Competition 13; A Komninos ‘Public and Private Antitrust Enforcement in Europe: Complement? Overlap?’ (2006) 3(1) Competition Law Review 5-26; W Wils ‘The Relationship Between Public Antitrust Enforcement and Private Actions for Damages’ (2009) 32(1) World Competition 3

4

deterrenteffectiffirmsareexposedtoliabilityindamages.Thisisparticularlylikelyifa

privatepartyclaimsfordamagesafteracompetitionauthorityhasfoundaninfringement

andperhapsalreadyimposedafine.However,firmsarelesslikelytocomeforwardand

admitanticompetitiveconductunderaleniencyprogrammeifthatadmissionwillthenbe

usedagainsttheminprivateactionsfordamages.11Primarilyinprivateenforcementthe

courtiscalledupontocompensateafirmorindividual.Legislationwasexpectedinlate

2012ondamagesactions,12invitinganexaminationofhowpublicandprivate

enforcement,and,institutionally,competitionauthoritiesandcourts,interact.

ThedecentralisationofenforcementofArticles101and102TFEU,andtherecent

emphasisonprivateenforcement,hasledtoanincreaseinthepowersandjurisdictionof

nationalcourtsaswellascompetitionauthorities.Decentralisedenforcementcarries

greaterrisksofdivergentapplicationofEUantitrustenforcementrules.National

competitionauthoritiesarecloselylinkedtoeachotherandtheCommissionthroughthe

cooperationmechanismsoftheEuropeanCompetitionNetwork(ECN),withitsrulesfor

caseallocationandconsistentapplicationofCommunitycompetitionlaw.13However,no

suchmechanismexistsfornationalcourts(unlesstheyarealsodesignatedascompetition

authoritiesbytheMemberState).Thisisforthepracticalreasonthattherearenumerous

judgesthroughouttheEUwhocouldhearcompetitionclaims;butalsofroma

constitutionalperspective,itwouldbeseentointerferewithprinciplesofjudicial

independenceandnationalproceduralautonomy.

Asaresult,therearecertaintoolsinRegulation1/2003,intheforthcomingdraftdirective

ondamagesactionsandinthewiderEUlegalsystemwhichaimatcoherentapplicationof

therulesbycompetitionenforcersandbridgingpublicandprivateenforcementof

competitionlaw.Thepreliminaryreferenceprocedure,inwhichnationalcourtsask

questionsoftheCourtofJusticeoftheEuropeanUnion(CJEU)ontheinterpretationofEU

law,remainsanimportantjudiciallink,but,asshowninthisthesis,islikelytoexclude

nationalcompetitionauthorities(exceptwhereanationalcourtisalsodesignateda

competitionauthority).Buildingonexistingcaselawinwhichnationalcourtsshould

followCommissiondecisions,Regulation1/2003includesthepossibilityforthe

Commissiontogiveopinionsinnationalcourtproceedingswithaninstrumentanalogous

tothepreliminaryreference,andalsotointerveneatitsowninitiative.TheWhitePaper

11 The issue in C-360/09 Pfleiderer AG v Bundeskartellamt [2011] ECR I-0000 12 Annex to the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and The Committee Of The Regions, Commission Work Programme 2012: Delivering European renewal, Brussels, 15.11.2011 COM (2011) 777 final, 3 13 Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities, OJ C 101, 27.4.2004, 43-53

5

andforthcomingdraftdirectiveondamagesactionsincludesaproposalforthedecisions

ofnationalcompetitionauthoritiestobindnationalcourtsthroughouttheEU.The

followingchaptersconsiderthesetoolsindetail.

Animportantquestionistowhatextenttheindependenceofthejudiciaryisvaluedwhen

weighedagainsttheCommission’s–andNCAs’‐potentiallossofeffectiveness.This

situationraisesbroaderquestionsaboutthepartnershipandtensionsbetweenjudicial

andadministrativebodies,administrativeinterventioninjudicialdecision‐makingandthe

roleofsoftlaw14inasysteminwhichtheCommissionhaslegislative,executive,aswellas

judicialfunctions.15WhiletheCJEUistheultimateinterpreterofEUlawgenerally,the

Commissionderivesahighdegreeofauthorityfromitshistoricalpositionasprimary

competitionenforcerintheUnion.Thiscallsintoquestiontheprincipleofinstitutional

balanceintheEuropeanUniononthesupranationallevel,and‘diagonally’between

executiveagenciesandcourtsbetweenthesupranationalandnationallevels.(Iusethe

term‘diagonal’inreferencetothediagraminsection5ofthischapter.)Thisisespecially

sogiventheconcurrentcompetencesinthepost‐2004system.

2.Researchquestions

Theoverarchingresearchquestionis:

Whataretheconstitutionalimplicationsofinteractionbetweencourtsand

administrativeauthorities,betweenthesupranationalandnationallevels,inEU

competitionlawenforcement?

Derivingfromthat,withafocusontheroleofcourts,

Whatimpactdothe2004andmorerecentcompetitionreformshaveonnational

courtsandjudicialautonomy?

14 “Rules of conduct that are laid down in instruments which have not been attributed legally binding force as such, but nevertheless may have certain (indirect) legal effects, and that are aimed at and may produce practical effects.”: L Senden, Soft Law in European Community Law (Hart, 2004), 112, developed from F Snyder, ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56(1) Modern Law Review 19-54, 32: “rules of conduct which, in principle, have no legally binding force but which nevertheless may have practical effects.” 15 See, for example, W Wils, ‘The Combination of the Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis’ (2004) 27(2) World Competition 201-224

6

HowcananddoestheEuropeanCommissionimpactonjudicialdecision‐makingat

thenationallevel?

TowhatextentdoestheEuropeanCommissionchallenge,orcomplement,the

judicialroleoftheCourtofJusticeoftheEuropeanUnion?

Takentogether,howdoestheinteractionofdifferentmechanismsforcoherent

interpretationandapplicationofEUcompetitionlawimpactontherelationship

betweenjudicialandadministrativeauthorities?

3.Contributionsofthethesis

Thisthesisrespondstoarecognisedneedforresearchintohowinstitutionsinteractinthe

post‐2004competitionenforcementsystemintheEuropeanUnion.16Itaddressesthe

constitutionalconsequencesofthemethodsforensuringcoherentinterpretationand

effectiveapplicationoftheEUcompetitionrules,throughcasestudiesontheinteraction

betweenjudicialandadministrativeauthoritiesatthesupranationalandnationallevels.

Goingfurther,itinvestigatestheimpactoftheinteractionbetweenthosetools.Givenits

institutionalfocusontherelationshipsbetweencourtsandexecutiveagencies,thethesis

hassignificanceforEUlawandgovernancemorebroadlybeyondcompetitionlaw.

Thisthesistakesforwardtheunderstandingoftherelativelynewconceptofinterpretative

pluralism17throughcasestudies.Chapter2laysoutthistheoreticalcontextbylinkingthis

withthetraditionalEUprincipleofinstitutionalbalanceandwiththeroleofjudgesin

ensuringcoherence.Interpretativepluralism–anaspectofconstitutionalpluralism–

suggeststhatthereisaheterarchyratherthanahierarchyofinterpretationsoflawinthe

EUsystem,notwithstandingthepositionoftheCJEUasultimateinterpreterofEUlaw.

Thismakessomesenseinasystemofconcurrentcompetencessuchasinthepost‐2004

competitionenforcementregime.AscoinedbyMaduro,itmeansthatcourtsdonothavea

monopolyontheinterpretationofthelawandthatnooneinstitutionneedstohavethe

lastword.Thecasestudiesinvestigatetheplausibilityofthisidea.Theyalsorespondto

16 K Cseres ‘Editorial: Ten Years of Modernized European Competition Law in Floris Vogelaar’s Landmark Notes’ (2010) 37(1) Legal Issues of Economic Integration 1-4, 4:“How institutional designs and interactions between various institutional actors enforcing competition law influence effective enforcement merits further research...Institutional actors matter, not only how they individually enforce the law but also how they are linked to each other…” 17 M Poiares Maduro, ‘Interpreting European Law: Judicial Adjudication in a Context of Constitutional Pluralism’ (2007) 1(2) European Journal of Legal Studies 1-21; J Komarek ‘The Institutional Dimension of Constitutional Pluralism’ in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011) 231-247

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Komarek’sobservationthatresearchoncourts’deferencetoadministrativeagencies’

interpretationofthelaw“seemstobeentirelymissingintheEU.”18Howeverthecase

studiesinthisthesissuggestthatthefindingsandinterpretationofcompetition

authorities(themajorityofwhichareadministrativeorquasi‐judicialauthorities19),

particularlytheEuropeanCommission,havegreaterweight.TheCommissioncan

influenceinterpretationofthecompetitionrulesinnationalcourtproceedingsaswellas

intheEuropeanCompetitionNetwork,inwhichtheCJEUhashandedoverresponsibility.

Interpretativepluralismrelatestotheconceptofinstitutionalbalance,theEU’sversionof

theseparationofpowers.Ifthereisaninstitutionalhierarchyofadministrative/executive

agenciesovercourtsthenthischallengestheinstitutionalbalanceandjudicialautonomy

atthenationallevel.Apluralityofinterpretations–andinterpreters–ofthelawsuggests

alooserconceptofunityorcoherence.However,theinterpretationofnationaljudgesis

supervised.Asthecasestudiesshow,inthedecentralisedsystem‘coherent’applicationof

therulesappearstomean‘effective’application.Whilecoherenceisacentralaspectofthe

ruleoflawasoverseenbyjudges,effectivenesscanbesupervisedbyadministrative

authorities.Traditionaljudicialindependenceconsiderationsarealsotrumpedbythe

needforeffectivenessandefficiency.

Inadditiontoitstheoreticalcontribution,thethesisinvestigatestheemergingpracticein

thepost‐2004regime.Thisisparticularlyevidentinthecontrastbetweenchapter3on

NCAs’apparentlackofaccesstotheCJEU,andchapter4onEuropeanCommission

interventioninnationalcourtproceedings.Chapter4setsoutadetailedpresentationof

howArticle15Regulation1/2003operates,trackingallcasesinwhichtheCommission

hasprovidedanopinionorintervenedinnationaljudicialproceedings.Thisshowsthe

shapeoftheCommission’sroleinthedecentralisedsystem.Inaddition,withthepotential

forprivateenforcementinnationalcourtsincreased,itisimportanttoinvestigatewhat

actuallyhappensintheMemberStates.Morebroadly,itcontributestoknowledgeonhow

EUlawisappliedinMemberStatecourts.

Thethesisisinformedbyoriginalresearchintothetravauxpréparatoiresbehind

Regulation1/2003anditsaccompanyingpackageofnoticesandguidelines,thebasisof

thereformswhichcameintoforceon1May2004.Thisresearchinvolvedconsulting

draftsanddocumentsrelatingtothenegotiationsintheCounciloftheEuropeanUnion

18 J Komarek ‘The Institutional Dimension of Constitutional Pluralism’ in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011) 231-247 19 Although some are courts acting in a public enforcement capacity – this is discussed in more detail in chapter 3.

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availablethroughtheCouncil’sdatabase.20AlthoughdeliberationsintheCouncilare

usuallysecret,itispossibletodiscoverindividualMemberStates’positionsonparticular

articlesthroughfootnoteannotationsinthesepubliclyavailabledocuments.The

documentsalsoincludeEuropeanCommissionstaffworkingpaperscommunicatedtothe

Council,whichoftengivefurtherdetailsofparticularproposals.Chapter5alsoconsiders

theconsultativeprocessbehindtheforthcomingEUdirectiveondamagesactionsthrough

considerationoftheresponsestothe2008WhitePaperondamagesactions.21

Variouspartsofthethesisalsodrawonaseriesofsemi‐structuredinterviewswithEUand

nationalofficialsontheprocessesleadingtothereforms;andonexperiencesinthefirst

fewyearsoftheEuropeanCompetitionNetwork.Theseinterviewswerecarriedoutinthe

contextofanotherprojectattheESRCCentreforCompetitionPolicy,andwereco‐

designedandco‐conductedwithProfHusseinKassim.22

Thethesisalsousesoriginaldiagramstoillustratesomeconcepts.Asaframework,the

interinstitutionalrelationshipsdiscussedinthethesisareconceptualisedintheoriginal

diagrambelowinpart5ofthisIntroduction.

4.Methodology

Thethesishasdoctrinal,theoretical,empiricalandcasestudyelements.Theprimary

approachisdoctrinalanalysisofcaselaw,decisionalpractice,legislationandpolicy

documents.Itisbasedaroundthreecasestudies.Alogicalbasisfortheselectionofthese

casestudiesisshownthroughthediagramofinteractionsbetweendifferentinstitutionsin

thecompetitionenforcementsystem.Asitstheoreticalbasisunderlyingthecasestudies,

thethesisdrawsonthemesofEUconstitutionalismthroughtheconceptofinterpretative

pluralism,whichisespeciallyrelevantinthecompetitionenforcementsystemofparallel

20 http://www.consilium.europa.eu/documents?lang=en (accessed 18.8.2006) 21 White Paper on Damages Actions for Breach of the EC Antitrust Rules COM (2008) 165, 2.4.2008. Consultation responses available at http://ec.europa.eu/competition/antitrust/actionsdamages/white_paper_comments.html (accessed 6.7.2010) 22 The interviews on the reform were carried out between July 2005 and July 2006 and included 20 interviewees. The interviews on the European Competition Network were carried out between April 2008 and May 2009 and included 15 interviews. See e.g. H Kassim & K Wright ‘Bringing Regulatory Processes Back In: The Reform of EU Antitrust and Merger Control’ (2009) 32(4) West European Politics 738-755;H Kassim and K Wright ‘The European Competition Network: a Regulatory Network with a Difference’ Paper presented at European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance, Third Biennial Conference, Dublin, 17-19 June 2010

9

competences,andtheEUprincipleofinstitutionalbalance.Thethesisalsobenefitsfrom

insightsgainedthroughempiricalresearchintheformofsemi‐structuredeliteinterviews.

RegardingtheresearchintoCommissioninterventioninnationalcourts,aswithanylegal

researchusingcaselaw,itisobviouslyeasiertouncoverthecasesinwhichthe

Commissionhasintervened,ratherthanthosewhereithasnot.Iuncovered23cases

wherethecourthadrequestedanopinionand9wheretheCommissionintervenedatits

owninitiative.ItisdifficulttogetanaccuratepictureofallcasesinvolvingtheEU

competitionrules,butthereare335casesintheCommission’snationalcourtjudgments

database.23ItisalsodifficulttoobserveandmeasuretheimpactoftheCommission’s

opinioninthenationalcourtproceedings.Nevertheless,itispossibletomakesome

findingsfromindividualcases.

5.TheinterinstitutionalrelationshipsinEUcompetitionlawenforcement

The diagram below is designed to show the interinstitutional relationships in EU

competitionlawenforcementandservesasaframeworkforthecasestudiesinchapters3,

4 and 5. The case studies relate to the diagonal links between the supranational and

national levels, between judicial and executive actors; and the horizontal link at the

national level which is affected by EU rules. While the thesis concentrates on these

interactions,theotherinterinstitutionallinksarealsobrieflydescribedbelowtogivethe

widercontext.

23 Coverage of cases here is not complete, as acknowledged in the Report on the Functioning of Regulation 1/2003 in 2009 (Communication from the Commission to the European Parliament and the Council: Report on the functioning of Regulation 1/2003, Brussels 29.4.2009, COM (2009) 206 final). However, it is the most reliable overview.

10

Fig1.TheinstitutionalsystemofEUcompetitionlawenforcement[originalincolour]

Key:

Com–EuropeanCommission

DGCOMP–EuropeanCommissionDirectorateGeneralforCompetition

GC–GeneralCourtoftheEuropeanUnion

CJEU–CourtofJusticeoftheEuropeanUnion

Prelimrefs–PreliminaryreferencesunderArticle267TFEU

Natcts–nationalcourts

NCAs–nationalcompetitionauthorities

ECN–EuropeanCompetitionNetwork

‘Masterfoods’and‘Syfait’refertocases

European Commission‐General Court/Court of Justice of the European Union:

judicialreview

The General Court of the European Union is responsible for judicial review of the

EuropeanCommission’scompetitiondecisions.UnderArticle263TFEUanaffectedfirmor

individual may apply to the General Court for annulment of a Commission decision

relatingtoArticles101or102TFEUor toRegulation1/2003.TheCourtof Justice itself

hearscasesonpointsoflawonappealfromtheGeneralCourt.Throughjudicialreviewthe

COM DG COMP

ECJ

NAT CTS NCAs

ECN

National procedural rules

Prelim refs

Masterfoods; Com opinions

xSyfait

Judicial reviewCFI

binding effect of infringement decisions?

COM DG COMP

CJEU

NAT CTS NCAs

ECN

National procedural rules

Prelim refs

Masterfoods; Com opinions

xSyfait

Judicial reviewGC

binding effect of infringement decisions?

11

EU courts imbue the Commission with the values and standards it should use in its

decision‐making, for example, the standard of proof for finding an infringement. On

appeal,theCJEU’sconcernmaybeoverallcoherenceofcompetitionlawwithEUlaw.

Thisrelationshipisaffectedbydecentralisationonlyinsofarasdecisionswhichmayhave

been takenby theCommission, subject to reviewat theCommunity level, couldnowbe

takenatthenationallevelbyanNCA,subjecttoreviewinanationalcourt.Atanasiuand

Ehlermannarguethatthisimpliesaqualitativeimpact‐ahigherstandardofreviewand

closerscrutinyofCommissiondecisions.24

Commission‐National Competition Authorities; National Competition Authorities

amongthemselves:EuropeanCompetitionNetwork

The relationships between the European Commission and NCAs and NCAs amongst

themselvesaremanagedwithintheEuropeanCompetitionNetwork.NCAsareobligedto

apply EU competition law alongside national competition law where trade between

MemberStates isaffected.Article3Regulation1/2003encapsulatesaconvergencerule:

anNCAmaynotallowapracticewhichisprohibitedbyArticle101or102.Ifpracticeis

notprohibitedunderArticle101,anNCAcannotapplystricternationalrulestoprohibitit

(butaMemberStatemaychoosetoapplystricterstandardsinrelationtoconductcovered

byArticle102).NCAscannotcontradictoroverruleanexistingCommissiondecision(Art

16(2)).OnlytheCommissioncanmakeanEU‐widefindingthatArticle101or102isnot

applicabletoapractice,whichbindsallnationalcompetitionauthorities(Art10).

Regulation1/2003andtheNetworkNotice25alsoincorporatemechanismsforconsistent

applicationoftherulesandforcaseallocationandcooperationamongstmembersofthe

Network. These include informing each other when opening an investigation or before

adopting a decision (article 11(3) and (4) respectively). The case allocation rules are

basedon thenotion of the ‘well placed to act’ competition authority.26TheCommission

retains thepower to relieveanNCAof its competenceby initiating itsownproceedings

24 I Atanasiu & C-D Ehlermann ‘The Modernisation of EC Antitrust Law: Consequences for the Future Role and Function of the EC Courts’ (2002) 23(2) European Competition Law Review 72-80, at 72-3: “…direct applicability of Article [101(3) TFEU] will oblige the European courts to switch from the self-imposed limited control exercised under the current [pre-2004] system to a normal-standard type of judicial review.” 25 Commission Notice of 27 April 2004 on cooperation within the network of competition authorities, OJ C 101, 27.04.2004, 43-53 26 Network notice [8]-[15]

12

underArticle11(6)inexceptionalcases.27Whererelevanttheserulesarediscussedinthe

casestudychapters.

Nationalcourtsamongthemselves:(potential)judicialcooperationmechanisms

Therearenoformallinksamongnationaljudgesincompetitionlawenforcement.Thereis

scopeforcooperationthroughsoftforasuchastheAssociationofEuropeanCompetition

LawJudges,28inwhichmembersmeettoexchangebestpracticeratherthantocooperate

inspecificcases.TheCommissionprovidesfundingfortrainingjudgesindevelopmentsin

EUcompetitionlawandassessingeconomicevidence.Thisthesissuggeststhathorizontal

judicialcooperation,ledbyjudgesthemselves,shouldbestrengthenedtoenhancetherole

of courts relative to competition authorities and to make EU‐wide enforcement more

effective. More broadly, the Brussels I Regulation deals with recognition of judgments

fromotherMemberStatesincivilandcommercialproceedings.29

CourtofJustice‐nationalcourts:preliminaryreferenceprocedure

ThelinkbetweentheCJEUandthenationalcourts,andtheprimarytoolfortheconsistent

interpretation of EU law throughout the Member States, is the preliminary reference

procedure.Throughthedoctrineofdirecteffect,nationalcourtsarealsoEUcourts.30The

CJEUisnotinvolvedinday‐to‐dayenforcementofEUcompetitionlaw,butistheultimate

interpreter of Articles 101 and 102 of the Treaty and related legislation. This judicial

relationship is not directly affected by the 2004 reforms. Several commentators

hypothesised that decentralised enforcement would lead to an increase in preliminary

references,31 but itmay still be too early to saywhether an increase hasmaterialised.32

27 Network notice [54] 28 http://www.aeclj.com/ (accessed 9.12.2011) 29 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 012, 16.01.2001, 1 30 A-M Slaughter, A Stone Sweet and J Weiler (eds), The European Courts and National Courts: Doctrine and Jurisprudence (Hart,1997) particularly Karen Alter’s contribution, ‘Explaining National Court Acceptance of European Court Jurisprudence: A Critical Evaluation of Theories of Legal Integration’ , 227; I Maher ‘National Courts as European Community Courts’ (1994) 14(2) Legal Studies 226-243 31 I Atanasiu & C-D Ehlermann ‘The Modernisation of EC Antitrust Law: Consequences for the Future Role and Function of the EC Courts’ (2002) 23(2) European Competition Law Review 72-80; K Lenaerts & D Gerard ‘Decentralisation of EC Competition Law Enforcement: Judges in the Frontline’ (2004) 27(3) World Competition 313-349 32 A team led by Barry Rodger carried out a multinational study of preliminary references in competition law only up until the 2004 reforms: B J Rodger (ed) Article 234 and Competition Law: An Analysis (Kluwer, 2008)

13

One potential factor in this respect is the opportunity for national judges to ask the

EuropeanCommissionforanopinion,asdiscussedinchapter4.

*Commission‐nationalcourts:obligationsincaselaw;Article15Reg1/2003

This relationship is the subject of chapter 4. Article 6 Regulation 1/2003 explicitly

providesthatnationalcourtsshallhavethepowertoapplyArticles101and102TFEUin

their entirety. Before the reforms, only the Commission was empowered to grant

exemptions under Article 101(3), making it difficult for national courts to conclusively

ruleonacase.Ifthenationaljudgetooktheviewthatindividualexemptionwaspossible

inthecase,s/hewasmeanttosuspendtheproceedingsuntiltheCommissionhadmadea

decision, whilst being free to adopt interim measures in the meantime. Where the

Commissionclosedproceedingsby ‘comfortletter’tothepartiesratherthanbyaformal

decision,thenationalcourtwasnotformallyboundbuthadtotakethatletterintoaccount

in determining whether the agreement or conduct in question infringed what is now

Article101.33TominimisedivergenceinthedecentralisedapplicationofArticles101and

102 (and especially the exempting conditions under 101(3)), the convergence rule

mentionedaboveinrelationtotheCommissionandNCAs(Art3Reg1/2003)alsoapplies

tonationalcourts.

Article15ofRegulation1/2003,providesfortheEuropeanCommission’sinterventionin

national courtproceedings.MemberStatecourtsmayask theEuropeanCommission for

information or for its opinion on questions concerning the application of the EC

competition rules (15(1)). The European Commission and national competition

authoritiesmayalsomakeown‐initiativewritteninterventions,andoralsubmissionswith

thepermissionofthejudge,inlegalproceedingsbetweenprivateparties(15(3)).Chapter

4investigateshowthistoolhasbeenusedsofar.

TheMasterfoodsCJEUjudgment,34codifiedinArticle16oftheRegulation,establishedthat

wheretheCommissionreachesadecisioninaparticularcasepriortothenationalcourt,

thecourtcannottakeadecisionrunningcountertothatoftheCommission.Thereisalsoa

dutytoavoidadoptingadecisionthatwouldconflictwithadecisioncontemplatedbythe

Commission, which goes further than NCAs’ obligations not to counter an existing

decision.ThismeansthatwheretheCommissionfindsaninfringement,itmustbetreated

33 Case 99/79 Lancôme v Etos (1980) ECR 2511 [11] 34 C-344/98 Masterfoods Ltd (t/a Mars Ireland) v HB Ice Cream Ltd [2000] ECR I-11369 [60]

14

asproofoftheexistenceoftheinfringementinnationalcourtproceedings.Anextensionof

thiseffecttoNCAdecisionsisalsodiscussedinchapter5.

*Court of Justice‐National Competition Authorities: (potential) preliminary

referenceprocedure

Thisrelationshipisthesubjectofchapter3.Asdiscussedabove,thepreliminaryreference

procedureisalinkbetweentheCJEUandnationalcourts.Article267TFEUprovidesthata

‘court or tribunal’ may address a reference to the CJEU. ‘Court or tribunal’ is an

autonomousconceptofEUlaw,anddoesnotrelyonhowanauthorityisdesignatedinthe

MemberState.Thisraisesthequestionofwhetheracompetitionauthorityasanexecutive

agencywithjudicialfunctionssuchasabilitytofindaninfringementandtoimposefines,

hasaccesstotheCJEUthroughthepreliminaryreferenceprocedure.

*NationalCompetitionAuthorities‐national courts:national law,butEUproposals

affectthisrelationship

Aspectsof this relationshiparediscussed inchapter5. It is important todistinguish the

differentcapacitiesofnationalcourtsincompetitionlawenforcement.Theymayactina

public enforcement role as a designated competition authority;35 as civil courts called

upontoapplythecompetitionrules indisputesbetweenparties inprivateenforcement;

orasappealorreviewcourts.Therelationshipbetweenanationalcompetitionauthority

and courtwithin the sameMember State is largely amatter for national law.However,

someEUobligationsdo impingeon this relationship.36Forexample,Art15Reg1/2003

confersonNCAs,aswellastheCommission,thepossibilitytointerveneintheirdomestic

jurisdictionincourtcasesbetweenprivatepartiesonissuesrelatingtotheapplicationof

Art101or102TFEU.Nationalrulesmustfacilitatethispossibility.Inaddition,theWhite

Paperondamagesactionsincludesaproposalforthecross‐borderbindingeffectofNCA

decisionsoncivilcourtsthroughouttheEU:thefocusofchapter5.

35 Under Art 35 Reg 1/2003 “Member States shall designate the competition authority or authorities responsible for the application of Articles [101] and [102] of the Treaty in such a way that the provisions of this regulation are effectively complied with…. The authorities designated may include courts.” 36 See e.g. the recent Belgian case of VEBIC, C-439/08 Vlaamse Federatie van Verenigingen van Brood- en Banketbakkers, Ijsbereiders en Chocoladebewerkers (VEBIC) v Raad voor de Mededinging, Minister van Economie [2010] ECR I-0000, in which the CJEU found that national law is contrary to EU law if it does not give an NCA the possibility to participate in review proceedings against its own competition decisions.

15

6.Outlineofthethesis

Chapter2laysthebasisforthecasestudiesinthesubsequentthreechaptersbyexploring

therelativelynewconceptofinterpretativepluralism,linkedwiththeestablishedEU

principleofinstitutionalbalance.Interpretativepluralismsuggeststhatthereisa

heterarchy,ratherthanahierarchy,ofinterpretationsoflawintheEUsystem.Thisis

relevantinasystemofconcurrentcompetencessuchasinthepost‐2004competition

enforcementregime,inwhichconsistentapplicationoftherulesisimportantforthe

effectivenessofthesystem,butvariouscourtsandadministrativeauthoritieswithquasi‐

judicialfunctionsenforcethelawandhavedifferentclaimstoauthority.Theprincipleof

institutionalbalanceistheEU’sversionoftheseparationofpowersatthesupranational

level,butthefunctionsoflegislative,executiveandjudiciaryarenotvestedinrespective

singleinstitutions.Itisquestionablewhethertherecanbea‘diagonal’institutional

balancebetweenthesupranationalandthenationallevels,whichactivatesthejudicial

autonomyofMemberStatecourts.However,thereisadutyofloyalcooperationbetween

theEUinstitutionsandauthoritiesandcourtsatthesub‐statelevel.

Chapters3‐5arethecasestudiesexploringtheeffectsoftoolsforcoherenceonthe

interactionsbetweencourtsandadministrativeauthorities.Chapter3considersthe

diagonalrelationshipbetweennationalcompetitionauthoritiesandtheCourtofJustice

throughtheir(lackof)accesstotheCourt’spreliminaryreferenceprocedureunderArt

267TFEU.Thepreliminaryreferenceprocedureisimportantastheprimarymeansfor

encouragingcoherenceofEUlawthroughtheCJEU’sinterpretation.Itfirstsetsthecontext

bysurveyingthepost‐2004landscapeofEUcompetitionlawenforcement,inparticular

multipleenforcersandthechallengeofconsistentapplicationofantitrustrulesin

decentralisedenforcement;andthequasi‐judicialnatureofcompetitionenforcement

undertakenbythesemultipleenforcers.ItgoesontoconsidertheMemberStates’

designationofinstitutionalstructuresforpublicenforcementofcompetitionlawunder

Article35Regulation1/2003andassessesthesignificanceofthesedesignationsfor

obligationsunderReg1/2003.Thenthediscussionturnsfromthedesignationofcourts

oradministrativeagenciesascompetitionauthoritiesatthenationallevel,tothecriteria

intheEU’sautonomousdefinitionofa‘courtortribunal’forthepurposesofthe

preliminaryreferenceprocedure.ItconsidershowtheCJEUincludingitsAdvocates

Generalhavedefinedanddevelopedtheconceptthroughspecific,albeitoccasionally

flexible,criteria.Thesecriteriaareimportantfordeterminingwhichnationalbodieshave

accesstotheCJEU’sadviceandinterpretationofthelaw.Ofparticularrelevancearethe

needforthereferringbodytohaveaninterpartesprocedurei.e.tobeathirdparty

16

adjudicatorbetweentheparties,tobeindependent,andtohavecompulsoryjurisdiction

leadingtoadecisionofajudicialnature.

ThechapterfocusesontheSyfaitcase37inwhichtheGreekCompetitionCommission,asa

competitionauthoritywithintegratedinvestigativeandadjudicativefunctions,addressed

areferencetotheCJEUbutwasultimatelyrefused.Thechapteranalyseswhetherthe

judgmentbarsallNCAsfromaccesstotheCJEU.TheanalysisfocusesonfirsttheCJEU’s

interpretationoftheindependencecriterionandsecondlytheCourt’sreasoningthatthe

CommissionmayalwayspotentiallyrelieveanNCAofitscompetenceunderArticle11(6)

Regulation1/2003,implyingthatproceedingsinitiatedbeforetheNCAwillnotnecessarily

culminateina‘decisionofajudicialnature’.Inpracticethislattercriterioncouldbar

referencesfromallNCAs,sincetheyareallsubjecttoArt11(6)withintheEuropean

CompetitionNetwork.ThechapterarguesthattheCJEU’sjudgmentwasflawedasthe

effectsofArt11(6)applyonlytotheprosecutingauthority,accordingtoArt35(4)

Regulation1/2003.InadditiontheCommissionhadnotinpracticeactivatedArt11(6).

However,evenifthelegalargumentcanbemadefortheCourttoacceptpreliminary

referencesfromNCAs,itisarguedthatthemessagesentinSyfaithaseffectivelyfrozen

themandtheCourthascurtaileditsownjurisdiction.

ThereiscertainlyabiastowardsdualistNCAsi.e.thosewhichseparatetheirinvestigative

anddecision‐makingfunctions.IntegratedadministrativeNCAs,themostprevalentNCA

modelintheEU,haveanextrahurdletoovercomebecausetheydonothavethestructural

separationoffunctionsrequiredtomeettheindependencerequirement.Asaresultthey

donothavethesameopportunitytoseekguidancefromtheCJEU.Aconsequenceofthis

isunevenaccesstothejudicialtoolofthepreliminaryreferenceprocedure,dependenton

institutionalstructure.

Asaresult,Chapter3findsthatthereareasymmetricavenuestothesupranationallevel

fornationalcourtsandcompetitionauthorities.FromtheCJEU’sperspective,itseems

motivatedtopreserveitsdialoguebetweencourtsonlyandtoexcludequasi‐judicialNCAs

withintegratedfunctions.Thismaybetomanageitsowncaseload.However,iftheCJEU

adoptsanarrowdefinitionofacourtortribunal,itconstrainsitsownjurisdiction.By

emphasisinginSyfaitthatNCAsarerequiredtoworkinclosecooperationwiththe

CommissioninthecontextoftheEuropeanCompetitionNetwork,theCJEUeffectively

37 C-53/03 Synetairismos Farmakopion Aitolias & Akarnanias (Syfait) v GlaxoSmithkline Plc [2005] ECR I-4609

17

passesoverresponsibilitytotheCommissionforhowNCAsshouldinterpretandapply

competitionlaw.

Meanwhile,theEuropeanCommission,asasupranationaladministrativeauthoritywith

quasi‐judicialfunctions,hasextendeditssphereofinfluencebystrengtheningitslinks

withnationalcourts.Chapter4investigatesthisotherdiagonalrelationship.Previously,

theCourtofJustice’spreliminaryreferenceprocedure,a‘dialoguebetweencourts’,was

theonlyformallinkbetweenthecourtsoftheMemberStatesandthesupranationallevel.

Chapter4showshowtheEuropeanCommissionhasaddedtothisgeneral(EUlaw)

institutionallinkthroughthespecific(tocompetitionlaw)instrumentofopinionsand

own‐initiativeinterventionstonationalcourtsincompetitioncases,underArt15Reg

1/2003.Thisisplacedwithinthecontextofthebroaderrelationshipbetweenthe

EuropeanCommissionandnationaljudgesinEUcompetitionlawthroughcaselaw,in

particulartheeffectofCommissiondecisionsandotherpronouncementsonnational

courts.InformedbyoriginalresearchintothelegislativebackgroundofArt15Reg

1/2003,itexplainshowthistoolisdesignedintheabsenceofaformaljudicialnetworkto

promoteconsistentapplicationfollowingdecentralisation.Chapter4arguesthatthis

raisesconstitutionalquestionsabouttheeffectofconcurrentcompetencesonthe

institutionalbalanceatthesupranationallevelbetweentheCommissionandtheCourtof

Justice,anddiagonallyintermsoftheeffectonnationaljudicialautonomy.

Thediscussiontakesbothatheoreticalandapracticalapproach.Throughthesoftlaw

literature,thetheoreticalelementexaminesthelegalnatureoftheCommissionopinionas

anEUinstrument.ItarguesthattheCommission’sopinioninthiscontextisaunique

instrumentandassuchitslegaleffectsareuncertain.Itdoesnotfiteasilyintothecategory

ofsoftlawinstrumentsestablishing‘rulesofconduct.’However,itcouldbecomebinding

throughthenationalcourt’sjudgment.Afterexploringthetheoreticalcontext,thechapter

contributesoriginalresearchonhowArt15worksinpractice.Itseekstotraceallofthe

opinionsandown‐initiativeinterventionstodate.Thechapterreports23opinionsunder

Art15(1)and9interventionsunderArt15(3),withvaryingdegreesofsuccessin

identifyingthepartiesandhowtheopinionwasdealtwithbythenationalcourt.The

chapterfindsadefactothirdcategorybetweenArt15(1)and15(3):casesinwhichthe

Commissionwas‘invited’tointervenebutnospecificquestionswereputtoit.Inrelation

toArt15(3),thechapterdiscussestheCommission’sreasonforintervention(wherethis

canbeobserved)andwhetherthenationaljudgefollowedtheCommission.

18

ThepreliminaryrulinginXBVisanalysedindetail,asitrelatestotheadmissibilityofArt

15(3)interventions.TheCJEU’sresponsegivestheCommissionwidescopetointervenein

anationalcourtcaserelatedtotheeffectiveapplicationofArticles101and102TFEU,

evenifthecourtisnotdirectlyapplyingthem.Chapter4findsthatthecasesuggestsan

emphasisoneffective–notonlycoherent‐applicationoftheEUrules,andthatitimplies

thataCommissioninterventioncouldextendtonationalcasesconcerning,forexample,

contractdisputes,follow‐ondamagesactions,orcriminalproceedings‐notinitially

intendedbyRegulation1/2003.

Chapter4callsfortransparencythroughthepublicationofobservations,ideallyin

differentlanguageversions.SomeinterventionsareavailableontheCommission’s

website,buttheyarenotformallypublished,forexampleintheOfficialJournal.The

Commissionhasmadeavailablemostofitsown‐initiativeobservations.Thesearethe

casesinwhichithasfeltcompelledtointervene,andsorepresentcompetitionissues

whichitfindstobemostimportantforcoherentapplication.Assuchitisinthe

Commission’sinteresttopublishthem.Bycontrast,onlyaroundaquarteroftheopinions

requestedbynationalcourtsunder15(1)havebeenpublicised.Thislackoftransparency

raisesquestionsaboutthe‘backdoor’influenceoftheseopinionsinthejudicial

proceedings.Publicationwouldcontributetolegalcertaintyandconsistentapplication

throughouttheEU,alsobypromotingawarenessamongjudgesofcasesinotherMember

States.

Art15(3)Reg1/2003alsoallowsnationalcompetitionauthoritiestointerveneinnational

judicialproceedingsintheirownMemberState.Togetherwiththeproposaldiscussedin

chapter5,thatcouldbringnationalcourtsindirectlyintotheEuropeanCompetition

Network.ThatcouldhavepositivebenefitsfortheconsistentapplicationoftheEU

competitionrules,butalsobringsjudicialautonomyintoquestion.Chapter5discussesthe

proposalintheforthcomingEUdirectiveondamagesactionstointroducethebinding

effectofnationalcompetitionauthorities’decisiononnationalcourtsthroughouttheEU.

Thechapterfirstexplainsthecontextoftherule‐toincentiviseclaimantstobringprivate

enforcementcasesincivilcourtsbyalleviatingtheirburdentoproveaninfringement–

anditsscope.Itthengoesontohighlightitsmuchbroaderconstitutionalsignificancein

termsoftheinteractionbetweenjudicialandadministrativeinstitutionsandtheir

decisions.Itarguesthattheproposedrulecreatesanapparenthierarchyofadministrative

decisionsovercourtjudgments,narrowingthefieldofcivilcourts’jurisdiction.Italso

impliesacertainburdenonjudges:thatcivilcourtsmustbeawareofallNCAinfringement

decisionsthroughoutEU‐andshowthattheyaretakenintoaccountintheirreasoning.

19

Thischapterdemonstratestheasymmetriceffectsderivingfromthestatusofcivilcourts

andnationalcompetitionauthorities.NCAdecisionswouldbebindingonnationalcourts,

buttherewouldbenosimilarhorizontalbindingeffectonfellowNCAswithinthe

EuropeanCompetitionNetwork.TheassumptionisthatahardrulebindingNCAwitheach

other’sdecisionsisnotneededgiventhecooperationruleswithintheECN,butthereisno

guaranteethattheECNwillcontinuetooperateaccordingtotheserules.Therearealso

possibleuneveneffectsconcerningMemberStates’courtsbeingboundbydecisionsofa

foreignNCAbutnotbythoseofthedomesticNCA.

Thechapterconsidersthebasisforthisrule.Explicitly,itisanextensionofMasterfoods,

whichobligesEUMemberStatecourtsnottomakearulingrunningcountertoonemade

orcontemplatedbytheEuropeanCommission.Assuchthechapterrevisitsthedifferent

understandingsofMasterfoods.Thechapterarguesthatthebindingeffectrulecouldbe

understoodasadelegation,ordevolution,oftheCommission’senforcementpowers.Butif

nationalcourtsarealsoEUcourts,inthesystemofconcurrentcompetences,national

judges’interpretationofEUlawisasvalidastheCommission’s,andbyextensionan

NCA’s.

Thechapteralsoexaminesthehorizontaldutyofloyalcooperationbetweensub‐state

bodies,andtheanalogywiththeBrusselsIRegulationonjurisdictionandrecognitionof

judgmentsbetweenMemberStates.Itarguesthatthebindingeffectruleshouldhaveat

leastthesamesafeguardsasArt34(1)BrusselsReg,whichwouldallowacivilcourtto

refusetorecogniseanauthority’sdecisionsinexceptionalcircumstances.Ifthiswerenot

thecase,decisionsofadministrativebodieswouldbeaffordedaprivilegedposition

relativetojudgmentsofcivilcourts–anotherexampleofasymmetriceffects.However,

questioningotherMemberStates’compatibilitywithfairlegalprocessstandardsmay

underminetrustcurrentlyfosteredintheECN.

Thechapterconcludeswithanassessmentofthepossibilityoftherulebeingadopted,

includingissuessurroundinglegalbaseofthedirectiveandviewsintheMemberStates.

Theproposalclearlyhasbenefitsintermsofalleviatingtheburdenofproofonclaimants

seekingredressforcompetitiondamages.However,currentlytheonlyMemberStateto

imposethebindingeffectofforeignNCAdecisionsisGermany.InanumberofMember

Statestherewouldneedtobeconstitutionalreformfortheruletobeadopted.The

chaptersuggeststhatonewayaroundthismaybeasemanticone–packagingthefinding

20

ofinfringementasan‘irrebuttablepresumption’asatleastasymbolicgestureto

independenceofthejudiciary.Inparticular,theword‘binding’shouldbeavoided.

Chapter6concludesbyarguingthatnationalcourtsshoulddeveloptheirhorizontal

relationships,bothtopromotecoherentapplicationofEUcompetitionlawandto

safeguardtheirownautonomy.Italsoidentifiesdirectionsforfutureresearch.

21

CHAPTER2:INTERINSTITUTIONALTHEMES

1.Introduction

Thischapterlaysthebasisforthecasestudiestofollow.Thethesisexploresinteraction

betweencourtsandadministrativeauthoritiesinthepost‐2004EUcompetitionlaw

enforcementregime.Thischapterthereforediscussesthesignificanceofcoherenceinthe

system,theconceptofinterpretativepluralisminasystemofconcurrentcompetences,

andhowthisrelatestotheEuropeanUnionprincipleofinstitutionalbalance.

Thethesisexplorestheseinstitutionalinteractionsbyinvestigatingtheoperationoftools

forcoherenceinthedecentralisedsystem.Consistentapplicationofthecompetitionrules

isimportantgiventhecentralityofcompetitiontotheinternalmarket.However,asystem

ofconcurrentcompetencesuggeststhatallinstitutions’interpretationsofthelaware

valid.Thechapterthereforetakesforwardtheunderstandingoftheconceptof

interpretativepluralisminthisspecificcontext.Interpretativepluralismwouldsuggesta

looserinterpretationofunityorcoherence.

Anydiscussionoftherelationshipsbetweeninstitutionsandtypesofauthorityalsoneeds

toacknowledgetheprincipleofinstitutionalbalance,theEU’sversionoftheseparationof

powers.AttheEUlevel,thelegislative,executiveandjudicialfunctionsarenotvestedin

respectivesingleinstitutions.Thethesisfocusesparticularlyonthejudicialandexecutive

functions,andjudicialfunctionscarriedoutbyexecutiveagencies.TheCourtofJusticeof

theEuropeanUnionisresponsiblefortheoverallunityofEUlaw.However,incompetition

lawtheEuropeanCommission’srolehasbeencentral.Asthethesisalsoexploresthe

diagonalrelationshipsbetweencourtsandadministrativeauthoritiesbetweenthe

supranationalandnationallevels,itmustalsobeaskedwhetheradiagonalinstitutional

balanceispossible.TheclosesttothisisthemutualdutyofloyalcooperationinEUlaw.

Thislinksbacktointerpretativepluralism,accordingtowhichinstitutionsshould

accommodateeachother.AscoinedbyMaduro,itmeansthatcourtsdonothavea

monopolyontheinterpretationofthelawandthatnooneinstitutionneedstohavethe

lastword.Thecasestudiestofollowinsubsequentchaptersinvestigatetheplausibilityof

thisidea.TheyalsorespondtoKomarek’sobservationthatresearchintocourts’deference

toadministrativeagencies’interpretationofthelaw“seemstobeentirelymissinginthe

EU.”1

1 J Komarek ‘Institutional Dimension of Constitutional Pluralism’, in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011) 231-247, 235

22

ThechapterfirstconsiderstheEUprinciplesofinstitutionalbalance,andofloyal

cooperation.Itthenconsidersthe(judicial)functionofnorminterpretationandprecedent

settinginsafeguardingdifferenttypesofcoherence,andtheCJEU’sandCommission’s

concurrentfunctions.Thisincludesaconsiderationofsoftlaw.Finallythechapter

discussesinterpretativepluralism.

2.TheEUPrincipleofInstitutionalBalance

InstitutionalbalanceisafundamentalconstitutionalprincipleasaffirmedbytheCourtof

JusticeintheChernobylcase:“Observanceoftheinstitutionalbalancemeansthateachof

theinstitutionsmustexerciseitspowerswithdueregardforthepowersoftheother

institutions.”2However,itscontentisnotentirelyclear,asLenaerts&Verhoevennote.3

ThisisbecausetheEU’sinstitutionalbalancedoesnotrestonanorganicseparationof

powerswitheachinstitutionhavingonefunctionoflegislature,executiveorjudiciary.4

Thatmeansthatdifferentinstitutionssharefunctions–suchastheCommissionandthe

Courtonthesupranationallevel.Thereisa“partialexerciseofthepowerofonebranchby

another.”5IntheEU,“theclassicconstitutionalfrontiersbetweenexecutive/legislative/

judicialpower[areblurred]”.6Discussionsofinstitutionalbalancetakeintheevolving

rolesoftheEUinstitutionsandinparticulartheEuropeanParliament,withtheCourtof

Justiceasanadjudicatorofthebalance‐butnotasaninstitutionwhosepowersshouldbe

takenintoaccountwithinit.ItisassumedthattheCourtguardstheinstitutionalbalance,7

butthatitsownjudicialroledoesnotneedtobebalancedorprotected.

Oneunderstandingisthatthisisbasedonabalancedinteractionbetweenrepresentatives

ofvariousinterests.8FirstintroducedbyPescatore,thismeansthattheEUinstitutions

eachencapsulatelegislative,executiveandjudicialfunctionsandthereforederivetheir

2 Case 70/88 Parliament v Council [1990] ECR I-2041 [21]-[22], also known as the Chernobyl case 3 K Lenaerts & A Verhoeven ‘Institutional Balance as a Guarantee for Democracy in EU Governance’ in C Joerges & R Dehousse (eds) Good Governance in Europe’s Integrated Market (OUP, 2002) 35-88, 35 4 See e.g.KLenaerts ‘Some Reflections on the Separation of Powers in the EC’ (1991) 28 Common Market Law Review 11-35; S Smismans ‘Institutional Balance as Interest Representation’ in C Joerges & R Dehousse (eds) Good Governance in Europe’s Integrated Market, 89-108, 94; Lenaerts & Verhoeven (2002), 47 5 G Conway ‘Recovering a Separation of Powers in the European Union’ (2011) 17 European Law Journal 304-322, 319 6 A Vauchez ‘Political Sociology of the European Community of Law: Elements of a Renewed Research Agenda’, EUI WP RSCAS 2007/23, 6. 7 E.g. J-P Jacqué ‘The Principle of Institutional Balance’ (2004) 41 Common Market Law Review 383-392, 385 8 Lenaerts & Verhoeven (2002) 42.

23

legitimacyfromfourtypesofinterests:thecommoninterest,theStates,judicialvaluesand

popularforces.9Thisinterests‐basedapproachallowsconsiderationofdifferentEU

governancestructures,suchasnetworks,whichmayoperateoutsidethetraditionalroles

oftheEUinstitutions.10Inthisunderstanding,checksandbalancesarecreatedby

“dividinguppowerbycreatingdifferentinstitutionswhichcontroleachothervia

necessarycooperation.”11

Inthelightofthesegovernancestructures,itcouldseemthatthetraditionalseparationof

powersisoutdated.However,itisnotclearhowthesedifferentinterestsshouldbe

mediated,orconflictsresolvedbetweenthem.Conwayarguesthattheconceptof

separationofpowersisstillimportant.Theprincipleofinstitutionalbalanceistooloosely

definedandthereisnowayofdeterminingitscorrectapplication.12Anexaminationof

institutionalbalancemeans“weighingtheexerciseoffunctionallyundefinedpowerbyone

institutionwithitsexercisebyanother.”13Thisbecomesmorecomplexwherethereare

layersofinstitutionsperformingoverlappingroles.Thisaffectsaccountability.TheCourt

ofJustice’sfirstreferencetotheprincipleofinstitutionalbalanceinMeroni14suggested

thattheprinciplewas“notonlytomaintainthedivisionsofpowersbetweenthe

institutions,butalsotoprotecttheinterestsofprivateindividuals”.15Thisisrelevantto

individualsandfirmsincompetitionlaw,ifoneinstitutiontakesoverthefunctionof

another.

9 P Pescatore ‘L’exécutif communautaire: justification du quadripartisme institutionnel’ (1978) 4 Cahiers de Droit Européen, 394, quoted in A Vauchez ‘Political Sociology of the European Community of Law: Elements of a Renewed Research Agenda’, EUI WP RSCAS 2007/23, 6. See also D Halberstam, who posits that “Different authorities make claims based on voice (representation of relevant political will), expertise (knowledge or instrumental capacity to decide upon a particular issue) and protection of rights. ‘Constitutional Heterarchy: The Centrality of Conflict in the European Union and the United States’ in J Dunoff and J Trachtman (eds), Ruling the World? Constitutionalism, International Law and Global Government (CUP, 2009), drawing from Ackerman’s identification of principles motivating the modern doctrine of separation of powers: B Ackerman ‘The New Separation of Powers’, (2000) 113 Harvard Law Review 633, 634: ‘democracy, professionalism [what could also be understood as expertise], and the protection of fundamental rights.’ 10 G De Búrca, ‘The Institutional Development of the EU: a Constitutional Analysis’, in P Craig and G de Búrca (eds), The Evolution of EU Law1st edn (OUP, 1999), at 57-60 and 73-75. 11 S Smismans ‘Institutional Balance as Interest Representation’ in C Joerges & R Dehousse (eds) Good Governance in Europe’s Integrated Market, 89-108, 94 (emphasis added) 12 G Conway ‘Recovering a Separation of Powers in the European Union’ (2011) 17 European Law Journal 304-322, 319 13 Conway (2011) 319 14 Case 9/56 Meroni v High Authority of the European Coal and Steel Community [1958] ECR 133, 152: “in the balance of powers which is characteristic of the institutional structure of the Community [inferred from Art 3 EEC is] a fundamental guarantee in particular to the undertakings and associations of undertakings to which it applies.” The Community’s objectives set out in Art 3 EEC are binding on “the institutions of the Community ... within the limits of their respective powers, in the common interest”. 15 J-P Jacqué ‘The Principle of Institutional Balance’ (2004) 41 Common Market Law Review 383-392, 385

24

Inafederalcontext,separationofpowerscanrefertoverticaldistributionofpower

betweenacentralgovernmentanditssub‐nationalgovernments.16IntheEUcontext,this

wouldbebetweenthesupranationalandMemberStatelevels.17However,thereisno

disaggregationbetweenthedifferentbranchesofStateatthosetwolevels,andthe

diagonalrelationshipsbetweenthem.Attheenforcementandimplementationlevel,the

MemberStates(andtheircomponentinstitutions,suchascourtsandcompetition

authorities)actingonbehalfofUnioninterests,throughthedutyofloyalcooperation,are

moreinvolvedintheexerciseoftheexecutiveandjudicialfunctions.Thisisacaseof

executivefederalism,allocatinglegislativepowertothesupranationallevelandexecutive

powertothenationallevels.Incompetitionlaw,thisismademorecomplicatedas

legislative/executive/judicialpowerisalsoretainedbytheCommissionatthe

supranationallevel.AsLenaertsstates,“eachpowercanfulfilitstasksinanefficientway

onlywhenatleastoneotherpowercooperatestoitseffect”.18Thisfocusonefficiencyand

cooperationispertinentinthecaseofconcurrentpowersinthecompetitionenforcement

system.Thereneedstobecommunicationbetweeninstitutions–thisisdiscussedfurther

belowinthediscussionofinterpretativepluralism.

Akeyquestionishowtheinstitutionalbalanceplaysoutwhereinstitutionswithdifferent

functionsinteractbetweenthesupranationalandnationallevelsi.e.cantherebea

‘diagonal’institutionalbalance?Theclosestthingtothisisthemutualdutyofloyal

cooperation.

3.Diagonalinstitutionalbalance?Thedutyofloyalcooperation

Thedutyofloyal,orsincere,cooperationinArt4(3)TEU(exArt10EC)19isconcentrated

ontheEUanditsMemberStatesassistingeachother.Oneaspectofthisisthevertical

16 D Halberstam ‘Comparative Federalism and the Role of the Judiciary’ in K Whittington, D Kelemen & G Caldeira (eds) The Oxford Handbook of Law and Politics (OUP, 2008) 142-164 17 J Weiler‘The Community System: the Dual Character of Supranationalism’ Yearbook of European Law (1981) 257-306 (a) normative supranationalism: relationship and hierarchy between policies and legal measures at EU and Member State level (executive dimension) (b) decisional supranationalism – institutional framework and decision-making (legislative/judicial dimension) 18 K Lenaerts ‘Some Reflections on the Separation of Powers in the EC’ (1991) 28 Common Market Law Review 11-35, 11 19 “Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties. The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union. The Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives.” The previous version in Art 10 EC focused on the obligation of the Member States towards the Union, rather than a mutual duty: “Member States shall take all appropriate measures,

25

natureoftheduty,betweentheUnioninstitutionsandtheMemberStates.However,loyal

cooperationalsoimpliesahorizontalelement‐thedutiesofMemberStatestoassisteach

otherincarryingouttaskswhichflowfromtheTreaties.

ThedutyofloyalcooperationArt4(3)TEUisthebasisofapossiblediagonalinstitutional

balance.ThisisonthebasisthatthedutyisnotonlybetweenMemberStatesthemselves

andtheEUinstitutions,butextendstosub‐statebodies20.Thedutyisnotastand‐alone

one,andmustbeusedinconjunctionwithanotherprovision.Incompetitionlawthis

wouldemanatefromArt4(3)TEUandtheTreatycompetitionrules,andRegulation

1/2003.Thiswouldsuggestaverticalrelationship(EU‐national),anddiagonalinthe

senseofthenationallevelbeingdisaggregatedintoinstitutionssuchasnationalcourts.

Verticallythiswouldrelatetotherelationshipbetweennationaladministrativeauthorities

andtheCommission,andbetweennationalcourtsandtheCJEU.Diagonallythiswould

relatetotherelationshipsbetweentheCommissionandnationalcourtsandbetweenthe

CJEUandNCAs.Thisisdiscussedmorefullyinchapters3and4.Butthedutyofloyal

cooperationcouldalsoindirectlygiverisetohorizontallinks(national‐national),for

examplebetweenNCAsandnationalcourts.Thisisdiscussedfurtherinchapter5.

First,thevertical/diagonalrelationship.Thedutyofloyalcooperationsuggeststhat

institutionshavetheirownterritoriesandcompetencesandthatthereneedstobean

acknowledgementofeachother’sfunctions.Thedutyofloyalcooperationincompetition

lawspecificallywasestablishedintheCJEU’sDelimitisjudgment.21WaltWilhelm22had

previouslyconcernedaconflictbetweennationalandCommunitysubstantivecompetition

laws,andpossibledoublejeopardyinbreachofbothsystemsoflaw;whereasDelimitis

wasacaseofpotentialinstitutional,ratherthansubstantivedivergence.Delimitis

concernedaconflictbetweennationalcourtandCommissionproceedingsbothapplying

EUcompetitionlaw,andcreatedanobligationofcooperationfornationalcourtsnotto

adoptadecisioncontrarytooneoftheEuropeanCommission,laterdevelopedin

Masterfoods23.Raisingtheseparationofpowers,EhlermannquestionswhetherDelimitis

whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community's tasks. They shall abstain from any measure which could jeopardise the attainment of the objectives of this Treaty.” 20 There is a duty on national courts and on other national authorities to disapply national rules which are incompatible with EU law – respectively, 106/77 Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] ECR 629 and C-103/88 Fratelli Costanzo v Milano [1989] ECR 1839. For a discussion of specific duties see J Temple Lang 'The Duties of National Authorities under Community Constitutional Law'. (1998) 23 European Law Review 109 21 C-234/89 Delimitis v Henninger Bräu [1991] ECR I-935

22 Case 14/68 Walt Wilhelm v Bundeskartellamt [1969] ECR 1 23 C-344/98 Masterfoods Ltd (t/a Mars Ireland) v HB Ice Cream Ltd [2000] ECR I-11369

26

deferencestillholdswheretheCommissionnolongerhasamonopolyoverArt101(3)

TFEUinthepost‐2004regime.24

Somehaveexplicitlyruledoutsucha‘diagonal’separationofpowers.25However,this

ratheronewayexpressionofthedutyofloyalcooperationinDelimitiswasexplicitly

expandedtoatwo‐way,mutual,dutyinZwartveldandlaterenhancedbyFirstFranex,

underliningthereciprocaldutyoftheEUinstitutionstocooperatewithnationalcourts.26

ThesecasesexpresstheextentoftheCommission’s,ratherthannationalauthorities’or

courts’,obligations.However,itisarguablethattheCommission’sresponsibilityisnot

necessarilybasedonitsdutyasasupranationalinstitution,butonitsexpertise.

Inanexpressionofthismutualdutyofloyalcooperation,theCommissionshouldgive

prioritytocaseswhichhavebeenstayedbynationalcourtspendingtheCommission’s

investigation.27Thislinkswiththeideaoftheinstitutionalbalanceascooperationto

performtasksinanefficientway.OnthebasisofArticle4TEU,ifanationalcourtneeds

informationthatonlytheCommissioncanprovide,theCommissionhasadutytoprovide

thatinformationassoonaspossibleifrequested.However,theCommissionmayrefuseto

transferinformationwherethereisa“needtopreservetheinterestsoftheCommunity,or

toavoidinterferencewiththeCommission’sfunctioningandindependenceinparticularby

jeopardisingtheaccomplishmentofthetasksentrustedtoit”.28Thisreflectstheinterests‐

basedapproachtoinstitutionalbalance,butalsotheorganicindependenceofthe

Commission.

Onthehorizontalnatureofthedutyofloyalcooperationincompetitionlaw,specific

horizontaldutiesbetweenNCAsaregivenexpressionthroughtheEuropeanCompetition 24 C-D Ehlermann, in ‘Panel Discussion Three: Courts and Judges’ European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Hart, 2001), 518 25 E Paulis ‘Coherent Application of EC Competition Rules in a System of Parallel Competencies’ in C-D Ehlermann, and I Atanasiu (eds) European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Hart, 2001) 399-428 – perhaps unsurprisingly as a Commission official responsible for the 2004 reforms. 26 C-2/88 Zwartveld [1990] ECR I-3365; C-275/00 European Community v First NV and Franex NV [2002] ECR I-10943; C Brown & D Hardiman ‘The Extent of the Community Institutions’ Duty to Co-operate with National Courts – Zwartveld revisited’ (2004) 25 European Competition Law Review 299-304.In First and Franex, the duty to provide information was expanded not only where the national court applied EU law, but where national liability is concerned - in that case, ascertaining liability of the Belgian authorities. First & Franex asked the Belgian Court to require the Commission to appear before an expert committee making findings on damage arising from the Belgian dioxin crisis for the purposes of quantification and compensation. The rationale for this is that there is a duty when applying national law to guarantee the effectiveness of EU law – that is, national law is the channel for EU application. 27 Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, OJ C 101, 27.4.2004, 54-64 [12] 28 Zwartveld [10]-[11], First Franex [49], T-353/94 Postbank v Commission [1996] ECR II-921 [93] - references from the Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, OJ C 101, 27.4.2004, 54-64 [26].

27

Network.Cooperationbetweennationalcompetitionauthoritiesandnationalcourtsis

primarilyamatterofnationallaw.However,therelationshipcouldbesubjecttoa

horizontaldutyofloyalcooperationwhereEUlawisapplied,andincross‐border

matters.29Thisisdiscussedfurtherinchapter5ontheeffectsofNCAdecisionsonnational

courts.Thishorizontaldutyislikelytobetestedinthecaseoffollow‐onprivatedamages

actions.30

Asnotedabove,thereisnowaytoresolveclashesofcompetenceandpreservecoherent

interpretationofthelawinthesediagonalrelationships.Thisraisestheconceptof

interpretativepluralisminasystemofconcurrentcompetences,discussedbelow.Courts

donothaveamonopolyontheinterpretationofthelaw.Thisraisesthequestionof

judicialversusexecutivepower.Incompetitionlaw,executivepowersbetweenthe

supranationalandnationallevelarewelllinkedthroughtheEuropeanCompetition

Network,asanexampleofanintegratedadministration.31However,thereareno

organisedhorizontallinksbetweencourts.TheonlyverticallinkiswiththeCJEU’s

preliminaryreferenceprocedure.Thismilitatesinfavourofexecutive,ratherthan

judicial,power.Thisismademorecomplicatedbythedifferentcapacitiesofcourtsinthe

competitionsystem.Theycanbecalledupontoapplythelawdirectlyindisputesbetween

privateparties(privateenforcementofcompetitionlaw);theycanbedesignatednational

competitionauthoritiesinapublicenforcementfunction;ortheycanactinajudicial

reviewfunction.Aswellashavingimplicationsforconsistentapplicationofrules,thislack

ofjudiciallinkstomatchthoseoftheexecutivebetweenthesupranationalandnational

levelsgivesrisetoan“’accountabilitygap’betweenthedifferentdegreesofintegrationof

thelegislative,executiveandjudicialbranches.”32Thisisallthemoreimportantina

systemwhereexecutiveagenciesalsoexercisesomejudicialfunctions.

29 J Temple Lang 'The Duties of National Authorities under Community Constitutional Law' (1998) 23 European Law Review 109; J Temple Lang ‘The Duties of Co-operation of National Authorities and Courts under Article 10EC – Two More Reflections’ (2001) 26 European Law Review 84-93 30 As demonstrated in the recent case of C-360/09 Pfleiderer AG v Bundeskartellamt [2011] ECR I-0000, where the Court of Justice ruled that information obtained during a leniency application to a competition authority is not precluded from being disclosed to a claimant in private enforcement proceedings. 31 H Hofmann & A Türk 'The Development of Integrated Administration in the EU and its Consequences' (2007) 13 (2) European Law Journal 253-271, and in H Hofmann ‘Constitutionalising Networks in EU Public Law’ (2009) University of Luxembourg Working Paper No 2009-06 32 I Maher & O Ştefan ‘Competition Law in Europe: The Challenge of a Network Constitution’ in D Oliver, T Prosser & R Rawlings (eds) The Regulatory State: Constitutional Implications, (OUP, 2010), 178-199, 199

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4.Judicialfunctionsandcoherence

Inanysystemoflaw,butparticularlyinthecontextofEUlaw,emphasisisplacedon

coherence.33Thedegreeofcoherenceisdependentuponcourts:intheEU,“systemic

coherenceandeffectivenesshavedependedonhowtheCJEUandthenationalcourtshave

negotiatedtheirrelationshipwithoneanother.”34Courtsachievethisthroughrulings35,“a

legalsystemiscoherentifitscomponentsfittogether,eitherallofthem(globalsystemic

coherence)orsomeofthem(…localsystemiccoherence)”36.Inthecontextofthisthesis,

globalcoherencewouldrelatetothebodyofEUlawasawhole,andsystemiccoherenceto

EUcompetitionlawasaparticularbranchoflaw,asubsetofEUlaw.Thereisalsothe

singlecaselevel.Incompetitionlaw,thereareconcurrentcompetencesattwolevels:ona

systemiclevelbetweentheCommissionandtheCourtofJustice;andatcaselevelbetween

theCommission,nationalauthoritiesandnationalcourts.

Onthegloballevel,theCourtofJustice’sprimaryconcernisforcoherenceintheEUlegal

orderasawhole.ThetraditionalroleoftheCJEUistosafeguarduniforminterpretation

andapplicationofEUlawthroughouttheMemberStates.TheCJEU“hasbeenconcerned

tosecurenotjustuniformityofapplicationofEUlawbutalsoaninterpretiveunity”37on

thegroundsthat“everyEUprovisionshouldbegivenauniforminterpretation,

irrespectiveofthecircumstancesinwhichitistobeapplied,inordertoforestallfuture

differencesininterpretation”.38[emphasisadded].

Thearchetypalwaytoachievethisisthroughthepreliminaryreferenceprocedure,

linkingitwithnationalcourts:“Article[267TFEU]isessentialforthepreservationofthe

CommunitycharacterofthelawestablishedbytheTreatyandhastheobjectofensuring

33 According to Moral Soriano, one approach of CJEU judges is “not [to] seek to determine what the law is according to the criterion of coherence, but, rather, they try to make the legal system (the existing law and previous decisions) a coherent unit (or whole).” (emphasis in original). L Moral Soriano ‘A Modest Notion of Coherence in Legal Reasoning: A Model for the European Court of Justice’ (2003) 16(3) Ratio Juris 296-323, 298 34 A Stone Sweet ‘The European Court of Justice and the Judicialization of EU Governance’ Living Reviews in European Governance vol 5 (2010), lreg-2010-2, 29 35 Or‘normative adjudicative coherence’. For a discussion of different types of coherence in legal philosophy and their operation in the case law of the Court of Justice, see S Bertea ‘Looking for Coherence within the European Community’ (2005) 11(2) European Law Journal 154-172; N MacCormick Legal Reasoning and Legal Theory (Clarendon, 1979); A Schiavello ‘On “Coherence” and “Law”: An Analysis of Different Models’ (2001) 14(2) Ratio Juris 233-43, 236 36 S Bertea ‘Looking for Coherence within the European Community’ (2005) 11(2) European Law Journal 154-172, 157 37 D Chalmers, G Davies & G Monti, European Union Law, 2nd edn (CUP, 2010) , 161 38 Discussed in relation to C-297/88 & C-197/99 Dzodzi v Belgium [1990] ECR I-3673

29

thatinallcircumstancesthislawisthesameinallStatesoftheCommunity.”39The

nationalcourtsinturnhavearoleincoherentapplicationofthelawinthedomestic

setting.ThisincludesreconcilingnationalprovisionswithEUlaw.Theyshoulddothisby

interpretingnationallawinlinewithEUlawasfaraspossible40andbydisapplying

nationalruleswhichareincompatiblewithEUlaw.41Thisunderlinestheroleofcourtsin

ensuringcoherence.

However,asBerteaobserves,“…thepluralistnatureoftheCommunitysitspoorlywiththe

ideaofunity”42.Thispluralistideaofunityisrelevanttointerpretativepluralism

discussedbelow.Whereasuniformitysuggestsonlyoneresult,coherenceisamatterof

degree.Onapracticallevel,itbecomesimportantwheninvestigatingtheoperationofthe

toolsincompetitionlawfor‘uniform’,‘coherent’or‘consistent’applicationoftherules,as

discussedinthelaterchapters.

Coherenceisimportantbecause“[a]nyweakening,evenifonlypotential,oftheuniform

applicationandinterpretationofCommunitylawthroughouttheUnionwouldbeliableto

giverisetodistortionsofcompetitionanddiscriminationbetweeneconomicoperators,

thusjeopardizingequalityofopportunityasbetweenthoseoperatorsandconsequently

theproperfunctioningoftheinternalmarket.”43[emphasisadded].Thereforecoherenceis

explicitlylinkedtotheeffectivenessofcompetitionattheheartoftheinternalmarket–

thelinkbetweentheglobalandthesystemlevel.44Inthecontextofcompetition

enforcement,“inasystemofparallelpowersitisthuscrucialto…designrulestoprevent

conflictsbetweencourtsofdifferentforaandbetweencourtsandcompetitionauthorities,

39 Case 166/73 Rheinmühlen-Diisseldorf v Einfuhrund Vorratsstelle fur Getreide und Futtermittel [1974] ECR 33 [2] 40 C-106/89 Marleasing SA v La Comercial Internacionale de Alimentación SA [1990] ECR I-4135 41 Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] ECR 629 42 S Bertea ‘Looking for Coherence within the European Community’ (2005) 11(2) European Law Journal 154-172, 155 43 Report of the Court of Justice on certain aspects of the application of the Treaty on European Union, Luxembourg, May 1995, europa.eu.int/en/agenda/igc-home/eu-doc/justice/cj_rep.html, point 11, cited in J Komarek, ‘Federal Elements in the Community Judicial System: Building Coherence in the Community Legal Order’ (2005) 42(1) Common Market Law Review 9-34, 9 44 As an example of the link between global and systemic coherence, the Crehan and Manfredi judgments, establishing a Community right to an effective remedy for breach of Community competition rules, can also be viewed in terms of global coherence of the system, as they echo Francovich-style wording: C-453/99 Courage Ltd v Bernard Crehan, ECR [2001] I-6297 [26]; C-295/04 Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA, ECR [2006] I-06619 [61]; C-6/90 Francovich and Others v Italian Republic [1991] ECR I-5357 [33] “The full effectiveness of Community rules would be impaired and the protection of the rights which they grant would be weakened if individuals were unable to obtain reparation when their rights are infringed by a breach of Community law “

30

aswellastodefinepreciselythedomainsofapplicationof,respectively,nationalandE[U]

competitionlaws.AndtoensurethatE[U]competitionlawsareappliedinthesameway.”45

TheCJEU’semphasisisonglobalcoherence(ofEUlawaswhole),includingsystemic

coherence(ofcompetitionlawasacentralpartofthesinglemarket).Atthesystemlevel,

theCommissionhasalegislativeroleinissuingguidelinesandnotices,butthese

instrumentsalsoserveajudicial–interpretative–function.TheCommission’sjudicial

functionatthesystemiclevelcomesaboutthroughsoftlaw,discussedbelow.Itcan

establishtherulesandelucidateitsinterpretationofEUlawthroughnoticesand

guidelines.

Withincompetitionlaw,GerberandCassinisalsorefertosystemicandsinglecaselevels,

wheresystemicconsistencyisconsistencyinoutcomesamongdifferentcaseswithinthe

systemandsinglecaseconsistencyreferstotreatmentofasinglesetoffactsbymultiple

institutions.46.Competitionenforcementischaracterisedbyagencieswithquasi‐judicial

functions.47Atthesinglecaselevel,theCommissionandcompetitionauthoritieshave

adjudicativepowers.Theycanmakeafindingof(no)infringement,anordertoterminate

certainbehaviour,orimposeafineorsanction.Aswellasactingasinvestigator,and

prosecutor,48theEuropeanCommissionis“initialjudge”(inthesenseoffirstinstance

judge)withregardtoTreatyinfringements.49However,otherelementsofthetraditionally

judicialfunctions,suchasnorminterpretationandprecedentsetting,havebeenless

explored.

45 K Lenaerts and D Gerard ‘Decentralisation of EC Competition Law: Judges in the Frontline’, (2004) 27(3) World Competition 313-349, 316 46 D Gerber & P Cassinis ‘The “Modernisation” of European Community Competition Law: Achieving Consistency in Enforcement – Part I’ (2006) 27(1) European Competition Law Review 10-18, 14 47 Appendix on the classification of functions in J Sterling, A Le Sueur, S De Smith, L Woolf, J Jowell De Smith, Woolf and Jowell’s Judicial Review of Administrative Action (Sweet & Maxwell, 1995), 831: “whether the performance of the function terminates in an order that has conclusive effect (does a decision have the force of law without needing to be confirmed or adopted by another authority?), or whether the process has certain formal or procedural attributes (has the decision-making body been endowed with the “trappings of court”: does it determine matters in cases initiated by parties? does it normally sit in public? Can it compel the attendance of witnesses? Can it impose sanctions and enforce the obedience of its own command?). Does the tribunal, in making its decision, also interpret, declare and apply the law?” 48 See, for example, W Wils, ‘The Combination of the Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis’ (2004) 27(2) World Competition 201-224 49 Craig & de Burca (P Craig and G de Burca, EU Law: Text, Cases and Materials (OUP, 3rd edn, 2002), 56) characterise this as one of the Commission’s two judicial powers: the other being to bring actions against defaulting Member States under the Art 258 TFEU infringement procedure. Arguably the latter is better understood as a prosecutor role. Whereas the Commission recommends the level of penalty, it is still the Court of Justice which formally renders judgment.

31

Onewayinwhichcoherenceisachievedisthroughprecedent.Thejudge’sroleisto

interpretanindividualcasewithintheframeworkofexistinglegaldecisionsand

constitutionalprinciples,byfollowingthedecisionsincaseswithsimilarfacts(if

necessarydistinguishingthecurrentcasefromearlierones,expandingorlimitingthe

scopeoftheearlierdecision).Inthiswaythejudgebothappliesprecedentsfromprevious

casesandcreatesprecedentsforthefuture.EUlawdoesnotformallyadheretoadoctrine

ofstaredecisisasunderstoodincommonlawsystems,inwhichprecedentsare

authoritativeandbinding.However,inpracticeitisrecognisableinEUlaw.50Precedent

canbeunderstoodmorewidely,andisnotconfinedtocourts:“staredecisis,farfrombeing

auniquesetofrulesforjudicialdecision‐making,[i]sinrealityonlyapeculiarterminology

forexpressingadecision‐makingstrategyfollowedbyallpolicy‐makers”.51

Ifotherbodiesarealsoabletosetprecedentthroughtheirdecision‐making,thiswould

meanthattheonlythingdifferentiatingthisprecedentfromthatsetbycourtsisthe

responseofthose‘bound’bytheprecedent‐setter’sdecisions.Inotherwords,the

legitimacyoftheprecedent‐settingbody(thecompetitionauthority)anditsclaimto

authority.Precedentdefinedmorebroadlygiveslegalcertainty–inparticularinthe

contextofcompetitionlaw,firmsareabletoadapttheirbehaviourinlinewiththesignals

givenbytheprecedent‐setter.Thisisparticularlytrueinthepost‐2004regimeinwhich

firmsandtheirlegaladvisorsandrequiredtomaketheirowndeterminationabout

whethertheirbehaviouriscompatiblewiththelaw,e.g.decidingwhetheranticompetitive

conductisjustifiableundertheconditionsofArt101(3).52

Authoritiesinterpretanindividualcasewithintheframeworkofexistinglegaldecisions

andCommunitylawprinciples,inturnalsolayingdownadecisiontobefollowedinthe

future,inadministrativedecision‐making.Intermsofapplyingprecedent,thatisfollowing

itsowndecisionswhichithastakeninthepast,itislogicalandefficientforanagencyto

relyonexperiencedistilledthroughitsexistingdecisions,withouthavingtobeentirely 50 T Koopmans ‘Stare Decisis in European Law’ in D O’Keeffe, H G Schermers (eds) Essays in European Law and Integration (Kluwer, 1982), 11-27; J Komarek, ‘Federal Elements in the Community Judicial System: Building Coherence in the Community Legal Order’ (2005) 42(1) Common Market Law Review 9-34, 15-16. A fuller discussion is found in another version of Komarek’s paper, ‘Creating a Quasi-Federal Judicial System of the European Communities’, (2006) Institute for European Law at Stockholm University paper series, No. 54, 32-40. See also A Arnull ‘Owning Up to Fallibility: Precedent and the Court of Justice’ (1993) 30 Common Market Law Review 247 51 M Shapiro (1965) ‘Stability and Change…: incrementalism or stare decisis’, cited in A Stone Sweet & M Shapiro On Law, Politics and Judicialization (OUP, 2002), 91 52 Forrester notes that before the 2004 reforms “the Commission mainly pursued cases which it selected as good vehicles for advancing the law. This was especially true as to exemptions, where each individual exemption was a flagship piece of rule-making, setting precedent for the future”. I Forrester ‘A Bush in Need of Pruning: the Luxuriant Growth of Light Judicial Review’ in C-D Ehlermann & M Marquis (eds) European Competition Law Annual 2009: The Evaluation of Evidence and its Judicial Review in Competition Cases (Hart, 2011), 6-7

32

novelwitheverycase.Precedent‐settingforthefuturealsosendsmessagetofirms,

contributingtothedeterrenceobjectiveofthepublicenforcementrole.Inthenarrower

sense,afindingoffactoftheCommissionisbinding.Thebinding,oratleastpersuasive,

forceofprecedentisnotonlyexertedonfirmsbutoncourtsthemselves.Itimpliesthat

Commissiondecisionsmaynotonlybebindingonnationalcourtsinthesamecasewith

thesameparties,butinothercasestoo.

Atthesinglecaselevel,precedentissetbyexemptiondecisionsthroughharderlaw,such

asblockexemptionregulations,andArt101(3)TFEU.Onthesystemiclevelsomeofthese

precedentsaresetthroughsoftlaw,throughtheCommission’sinterpretativeinstruments

andguidelines.Softlawisdefinedas“rulesofconductthatarelaiddownininstruments

whichhavenotbeenattributedlegallybindingforceassuch,butneverthelessmayhave

certain(indirect)legaleffects,andthatareaimedatandmayproducepracticaleffects.”53

Theireffectsarefeltbybecomingbindingthroughacourtjudgment,bybeingmixedwith

hardlegalprinciples.54Thisisdiscussedinmoredetailinchapter4.

InthecontextoftherolesoftheEuropeanCommissionassumingjudicialfunctions,

regardingtheEUcompetitionrules,theCommissionandtheCourtarejointtrusteesofthe

Treaty.55PaulisarguesthatboththeCommissionandtheCourtofJusticearejointly

responsibleforuniformapplicationofthecompetitionrules.56Thereareconcurrent

powersarisingoutsidetheareaofdecision‐making‐theCommission’spowertoadopt

interpretativeinstrumentsandtheCJEU’spowertointerpretUnionlaw.57Thisimplies

thattheCommissionshouldcommunicatetheCJEU’scaselaw,somehowwithoutgivingits

owninterpretationofit.SnyderpostulatesthatthecombinationofArt4TEU(thedutyof

loyalcooperation,discussedabove)andArt211EC58(thepowertoformulate

recommendationsandopinionsinordertoensureproperfunctioninganddevelopmentof

53 L Senden, Soft Law in European Community Law (Hart, 2004), 112, developed from F Snyder, ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56(1) Modern Law Review 19-54, 32: “rules of conduct which, in principle, have no legally binding force but which nevertheless may have practical effects.” 54 Ştefan explores the CJEU’s approach to the Commission’s soft law instruments and finds that it embeds competition and State aid soft law through fundamental EU legal principles. These soft law norms are then judicialised and integrated within future decision-making processes and litigation. O Ştefan ‘Hybridity Before the Court: A Hard Look at Soft Law in the EU Competition and State Aid Case Law’ (2012) 37(1) European Law Review 49-69. Snyder, 33, also suggests that a soft law act could become binding if one of the parties in private litigation invokes it. 55 A Stone Sweet ‘The European Court of Justice and the Judicialization of EU Governance’ Living Reviews in European Governance vol 5 (2010), lreg-2010-2, 25 56 E Paulis ‘Coherent Application of EC Competition Rules in a System of Parallel Competencies’ in C-D Ehlermann, and I Atanasiu (eds) European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Hart, 2001) 399-428, 421 57 L Senden, ‘Soft Law and its Implications for Institutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79-99, 93 58 No equivalent in the Lisbon Treaty

33

theUnion)“givestheCommissionboththepowerandthedutytoexplainCJEUjudgments

andspellouttheirimplicationsfornationalgovernmentsandprivateparties”59[emphasis

added].However,SnyderdoesnotexplainwhytheCommissionneedstoactasan

intermediary,andwhynationalgovernmentsandprivatepartiesthemselvescannotcome

totheirownviewoftheimplicationsofajudgment.Sucharoleasinterpreterofthelaw

betweentheMemberStatesandtheCourtofJusticegivestheCommissiontheopportunity

torestatethelawasitseesitandcouldencroachonthecompetenceoftheCJEU.

TheuseofsoftlawcanaffecttheinstitutionalbalanceintheUnion.Art19TEU60(exArt

220EC)suggeststhattheCourtofJusticehasamonopolyoverinterpretationofUnion

law–oratleastthe‘finalsay’.Buttheauthoringofsoftlawrules,whichfleshoutthe

harderTreatyobligationsofArt101and102TFEU,andtheirday‐to‐dayapplicationis

carriedoutbytheCommission.TheCommission’sauthorshipoftheseinstrumentsatthe

legislativelevelsuggestsitsinterpretativesupremacyattheenforcementlevel.61Where

thereisaclashbetweenasoftlawinstrumentandexistingcaselaw,theformerwouldbe

inbreach.62TheCommissioniscarefultostipulatethatitsopinionsaregivenwithout

prejudicetotheinterpretationoftheCJEUthroughthepossibilityorobligationofthe

courttohaverecoursetothepreliminaryreferenceprocedure.However,inapplyingand

enforcingthelawtheCommissionmayadditsown–subjective–viewsonhowa

particularcaselaworTreatyorsecondarylawprovisionshouldbeunderstood,63or

extenditsscope.Inthosecircumstances,itwouldoversteptheboundariesofitspowers

andcircumventtheroleoftheCJEU.64

59 F Snyder ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56(1) Modern Law Review 19-54, 33 60 ‘1. The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed.’ (Although only ‘the Treaties’ are mentioned, it is assumed that all law should follow the Treaties.) 61 Broberg and Fenger also suggest that in policy areas where the Commission can issue binding decisions, such as in competition and State aid, the Commission “arguably both can and should assist the national court.” M Broberg & N Fenger Preliminary References to the European Court of Justice (OUP, 2010) , 20 62 O Ştefan ‘European Competition Soft Law in European Courts: A Matter of Hard Principles?’ (2008) 14(3) European Law Journal 753-772, 764 63 L Senden, ‘Soft Law and its Implications for Institutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79-99, 93 64 Broberg and Fenger make a similar point: “…for the Commission to provide the national court with a form of assistance that the Treaty has placed in the hands of the Court of Justice could constitute a ‘détournement de procédure’.” M Broberg & N Fenger Preliminary References to the European Court of Justice (OUP, 2010), 21. Scott also points out several reasons to be concerned with this kind of interpretative or decisional guidance: “guidance may be treated as authoritative by the Member States. It may influence their attitude and behaviour, generating significant practical effects.” (p. 344) and it excludes courts “from being able to evaluate and shape the processes leading to the adoption of guidance of this kind.” (p. 346): J Scott ‘In Legal Limbo: Post-Legislative Guidance as a Challenge for European Administrative Law’ (2011) 48(2) Common Market Law Review 329-355

34

Anotherelementinthesharingoffunctionsbetweendifferentinstitutionsisthecontextof

governance,particularlymultilevelgovernance.65Inthiscontext,thetraditionalcommand

andcontrolroleofcourtsisside‐linedbycooperativeprocessesinwhicharangeofactors

participateatmultiplelevelswithinthesystem.66Thisimplieslesserimportanceofjudicial

adjudicativeprocesses,andinvitesreconsiderationofthejudicialroleandofcourtsas

institutions.Onefeatureofgovernanceistheriseofregulatoryagenciesandnetworks

betweenthem.Theriseofregulatoryagenciesand‘jurisdictionalpower’mayhave

occurredattheexpenseof‘jurisprudentialpower’.67AttheEUlevel,thiswouldsuggesta

tensionbetweentheCommissionasanexpertagencywithaparticularwide‐ranging

‘jurisdiction’incompetitionpolicy,andtheCourtofJusticelosing‘jurisprudential’power.

Itwouldalsolinkwiththedominanceofanintegratedexecutiveasdiscussedabove.

5.Interpretative/institutionalpluralisminasystemofconcurrentcompetences

“Institutionalpluralism,contrarytotheMontesquieianconceptionofseparationof

powers,wherebylegislative,executiveandjudicialfunctionsareseparated,protects

libertythroughgrantingthesameactorsthesamekindoflegalauthoritytointerpretthe

foundationalframework–theConstitution.”68Ingeneral,interpretativepluralismhas

beendefinedas“simplytheabsenceofasinglebindingorauthoritativeinterpretation”or

“opennesstomultipleinterpretations”.69IntheEUcontextinterpretativepluralismisone

aspectofconstitutionalpluralism.70Asthenamesuggests,constitutionalpluralismis

foundedonaninteractiveheterarchyratherthanhierarchy.71Thisisashiftfromthe

65 R Rhodes ‘The New Governance: Governing without Government’ (1996) 44(3) Political Studies 652-67; M Egeberg Multilevel Union Administration: The Transformation of Executive Politics in Europe (PalgraveMacmillan, 2006); C Sabel & J Zeitlin ‘Learning from Difference: the New Architecture of Experimentalist Governance in the European Union’ (2008) 14(3) European Law Journal 271-327; D Coen & M Thatcher ‘Network Governance and Multi-level Delegation: European Networks of Regulatory Agencies’(2008) 28(1) Journal of Public Policy 49-71; A Schout & A Jordan ‘Coordinated European Governance: Self-Organizing or Centrally Steered?’ (2005) 83 (1) Public Administration 201–220 66 J Scott & S Sturm ‘Courts as Catalysts: Re-Thinking the Judicial Role in New Governance’ 13 Columbia Journal of European Law (2006-7) 565-594 67 L Azoulai ‘The Judge and the Community’s Administrative Governance’ in C Joerges & R Dehousse (eds) Good Governance in Europe’s Integrated Market (OUP, 2002) 109-137, 111; L Azoulai ‘The Court of Justice and the Community’s Administrative Governance’ (2001) 7(4) European Law Journal 425-441, 428 68 M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011), 11-12 69 R Stith ‘Securing the Rule of Law through Interpretive Pluralism: an argument from Comparative Law’ book, 420 (also Jean Monnet Center for International and Regional Economic Law and Justice working paper 01/07) 70 M Poiares Maduro, ‘Interpreting European Law: Judicial Adjudication in a Context of Constitutional Pluralism’, (2007) 1(2) European Journal of Legal Studies 1-21 71 For a full analysis see M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011)

35

classicalconstitutionalconceptionofEuropeanintegration,inwhichdiversitywasseenas

anobstacletointegration.72Uniformitywastobeachievedbytheself‐evidently

hierarchicaldoctrineofsupremacy,andthefocuswasontheMemberStateasaunit.The

CourtofJusticehadtheroleofsafeguardingtheunityofEUlaw.

Theconceptofconstitutionalpluralismwasfirstusedtodenotetherelationshipbetween

theEUandnationalorders,inspiteofthetraditionaldoctrineofEUsupremacy,following

theMaastrichtTreatyjudgmentintheGermanConstitutionalCourt.73Sincethenithas

expandedtoencompassrelationshipsbetweenotherlegalordersandactorsatthe“sub‐

state,trans‐state,supra‐stateandonothernon‐statelevels”:74forexample,between

Europeanandinternationallegalorders;75betweentheCourtofJusticeoftheEuropean

UnionandtheEuropeanCourtofHumanRights;andbetweenregulatory,politicaland

judicialspheres.Particularlythislattercategoryemphasisestherelevanceoftheconcept

forthemultilevelgovernance76inEUcompetitionlaw.

Komarekexplainsthat“constitutionalpluralismobtainswhenvariousconstitutional

authoritiescompeteoverthesameterritoryandthesamelegalrelationships....these

authoritieshaveplausibleclaimstolegitimacyandauthorityasperceivedbythosewho

aresubjecttothem.”77Thisisrelevanttocompetitionenforcementgiventhecross‐border

natureofcompetitionproblemsandtheclaimsofcompetitionauthorities(andcourts)in

differentMemberStates,aswellastheEuropeanCommission,totakeaction,forexample

asmediatedthroughthecaseallocationrulesoftheEuropeanCompetitionNetwork.

TheEuropeanCommission’sDirectorateGeneralforCompetitionhadalong‐standing

monopolyovercompetitionenforcement,inadditiontoissuingrulesthroughnoticesand

guidelines.InrecentdecadesNCAshavealsobuiltupconsiderableexpertise.

Administrativeauthoritieshavethereforeenjoyedprimacybyvirtueoftheirexpertisein

competitionpolicyandenforcement.Theburgeoningroleofeconomicanalysisandthe 72 As shown in Case 166/73 Rheinmühlen-Diisseldorf v Einfuhrund Vorratsstelle fur Getreide und Futtermittel [1974] ECR 33 73 N Walker, ‘The Idea of Constitutional Pluralism’ (2001) 65 Modern Law Review 317 74 See Introduction in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011) , 3 75 Cases C-402 & 415/05P Kadi & Al Barakaat International Foundation v Council & Commission [2008] ECR I-6351 76 See e.g. M Egeberg Multilevel Union Administration. The Transformation of Executive Politics in Europe (PalgraveMacmillan, 2006); F Scharpf ‘Notes Toward a Theory of Multilevel Governing in Europe’ (2001) 24(1) Scandinavian Political Studies 1-26; G Marks, L Hooghe & K Blank (1996) ‘European Integration Since the 1980s. State-Centric versus Multi-Level Governance’ (1996) 34(3) Journal of Common Market Studies 341-378; A Jordan (2001) ‘The European Union: an Evolving System of Multi-Level Governance ... or Government?’ (2001) 29(2) Policy & Politics 193-208 77 J Komarek ‘Institutional Dimension of Constitutional Pluralism’, in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011), 231-247, 231

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moreeconomicapproachfollowingthe2004reformsincompetitionenforcement78also

demonstratesashiftfromlegalrulesandtheroleofcourts.

‘Thosewhoaresubject’tothoseauthoritieswouldmostobviouslybefirmsasaddressees

ofthesubstantivecompetitionprohibitionsinArticles101and102TFEU.Buttheycould

alsobeotherinstitutionse.g.nationalcompetitionauthoritiessubjecttojurisdictional

rulessuchasparallelapplicationofnationalandEUlawwhenthereisaneffectontrade

betweenMemberStates;anationalcourtboundbythedecisionsofcompetition

authoritiesinanotherMemberState(asdiscussedinchapter5).

Theseconcurrentcompetenceslendthemselvestotheideaofinterpretativepluralism

Fromaninstitutionalperspective,discussionsofpluralismhaveprimarilyfocusedon

relationsbetweencourts79andindifferentlegalorders‐thatis,relationsbetween

nationalcourtsandtheCJEU,orbetweeninternationalcourtssuchastheCJEUandthe

ECtHR‐ratherthanbetweencourtsandexecutiveauthorities,whichisthisthesis’sareaof

focus.Ontheinterplaybetweencourtsandotheractors,Madurowarnsthat“Courtsmust

beawarethattheydonothaveamonopolyoverrulesandthattheyoftencompetewith

otherinstitutionsintheirinterpretation.”80

AfocusonMaduro’sunderstandingofpluralismisappropriate,andinparticularhis

categoryofinterpretativepluralism,givenitsemphasisoninstitutions.Maduroidentifies

fiveexpressionsofpluralism:(1)differentconstitutionalsources;(2)pluralismof

differentjurisdictions/constitutionalsites(e.g.Kompetenz‐Kompetenz–courtdeciding

questionsofitsowncompetence);(3)interpretativepluralism/pluralismofinstitutions

(mostrelevanthere);(4)pluralismofpowers;and(5)pluralismofpolities/political

communities.

Thefourthcategory,pluralismofpowers,isalsorelevantforthepurposesofthisthesis.

Madurorecognisesthat“increasingly[thereare]newformsofpublicandprivatepower

thatchallengetraditionallegaldogmaticcategoriesandraiseconstitutionalquestions

becausetheyaffectthemechanismsofaccountabilitylinkedtothoselegalcategories.”

78 A formal legal approach replaced by an effects-based approach to competition enforcement. See e.g. L-H Roeller & O Stehmann ‘The Year 2005 at DG Competition: The Trend Towards a More Effects-Based Approach’ (2006) 29 Review of Industrial Organization 281–304 79 As observed by M Goldoni ‘Constitutional Pluralism and the Question of the European Common Good’ (2012) 18(3) European Law Journal 385-406 80 Comments of M Poiares Maduro in ‘Four Visions of Constitutional Pluralism: symposium transcript’, (2008) 2(1) European Journal of Legal Studies 325-370, 331

37

RegulatorynetworkssuchastheEuropeanCompetitionNetworkwouldfallintothis

category.

Theinstitutionalpluralisminthethirdcategoryrefersto“apluralismwhichisbasednot

onlyondifferentsourcesbutoncompetinginterpretationsofthesamesourceby

institutionsthatarenotorganisedinahierarchicalmanner.”81[emphasisadded]Itis

particularlyappositeinthecaseofcompetitionlawbecauseatthesupranationallevelthe

EuropeanCommissionhasbeencentralindevelopingthelaw,andbetweenthenational

andsupranationallevels.Rulesareorganisedinahierarchicalmannere.g.Art3Reg

1/2003.Butthereisnoformalinstitutionalhierarchy.TheCommissionisfirstamong

equalsintheECN.Regardingnationalcourts,therulesarehierarchicalduetothe

supremacyofEUlaw,apparentlynotaccordingtotheCommission’sstatus.82

Tyingtopointsmadeaboveaboutdifferentclaimstolegitimacy,Komareknotesthat“…the

complexrelationshipsbetweenconstitutionalauthoritiesalsoinvolvedifferent

institutionswhichmakeclaimstolegitimacyofadifferentkind...ItisnotjusttheUnionon

theoneside,anditsmemberstatesontheother.”Hegoesontociteinteractionsbetween

differentinstitutionswhichmaybeinoppositionwitheachotherduetothesedifferent

claimstolegitimacy,alludingtosomeofthediagonalinteractionswhicharethefocusof

thisthesis:theCourtofJustice(sometimestogetherwithdomesticcourts)versus

domesticlegislators,theCommissionversusdomesticcourts83orcourtsversusthemarket.84

Whileonthelatterpointhemakesreferencetosocialregulationversustheeconomic

fundamentalfreedoms,thiscouldequallyencompasscourts’understandingof

competitionlawinrelationtothedominanteconomiclensofconsumerwelfare.

81 Comments of M Poiares Maduro in M Avbelj & J Komarek (eds) ‘Four Visions of Constitutional Pluralism: symposium transcript’, (2008) 2(1) European Journal of Legal Studies 325-370, 331 82 Komninos argues “…primacy is not one of the Commission, as competition authority, over civil courts, but rather of the Commission, as supranational Community organ, over national courts.” (emphasis in original). Furthermore, ‘Masterfoods establishes no primacy of the Commission over national courts, but rather imposes duties on the latter to apply Community law in a consistent way under the final control of the Court of Justice…’”: A Komninos, ‘Public and Private Antitrust Enforcement in Europe: Complement? Overlap?’ (2006) 3(1) Competition Law Review 5-26, 16 83 J Komarek ‘Institutional Dimension of Constitutional Pluralism’, in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011), 231-247, 235. Here he refers to the Masterfoods duty of a court not to take a decision counter to one of the Commission, as discussed in later chapters of this thesis. Komarek argues that “Courts’ deference to administrative agencies’ interpretation of law is subject to a continuous debate in the U.S. (citing Vermeule, Judging under Uncertainty. An Institutional Theory of Legal Interpretation (Harvard University Press, Cambridge, Mass; London 2006) at 207-208), which seems to be entirely missing in the EU”. 84 J Komarek ‘Institutional Dimension of Constitutional Pluralism’, in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011), 231-247, 235 fn 32. He supports this with reference to social regulation: AG Maduro’s opinion in C-438/05 Viking Line [2007] ECR I-10779 [41]-[42]

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Aswithinstitutionalbalance,pluralismdoesnotofferanywayofresolvingconflicts.

Madurosuggeststhatinstitutionsshoulduseinstitutionalcomparison85todecidewhois

bestplacedtoact.Kummpositsthatlegalactors–courts,administrativeagencies,

legislators–understandtheiractionsaspartofwiderpractice.Assuchthereisadivision

oflabourandpowers.“Whatconstitutionalismdoessuggest…isthattheexactnatureof

eachactor’sroleandtheexactlimitsofwhataparticularactoroughttobedoingina

particularsituationgivendecisionsbyotherlegalactorsisveryrarelydetermined

exclusivelybyanauthoritativelyenactedruleregardingcompetencies.”86Constitutional

pluralismthereforeinformsthedebateonthecurrentmeaningofinstitutionalbalance

andseparationofpowers.Komarekmovesthefocusfromtheinstitutionwhichtakesthe

decisiontotheresponsesofotherinstitutions,andhowtheypositionthemselvestomake

spacefortheirowndecisions.87

GoldoniarguesMaduroisstillfocusedona‘single‐institutionalist’perspectiveofcourts

despiteMaduro’sstatementthatcourtsneedtobeawaretheydonothaveamonopoly

overrulesandtheirinterpretation.Thisisbecausethisperspectivefocusesontheneed

forcourtstoaccommodateotherinstitutions(includingothercourts),andtotake

responsibilityformediatingtheinteractionsbetweenthem,ratherthanincorporatingthe

necessarycooperationor“institutionalawareness”88ofotherinstitutionstoo.Inthisway

institutionalcommunicationisdesignedtocombineactors’competenceforamore

legitimatedecision.ThisideaofconstitutionalpluralismisalsoencapsulatedinHofmann

&Türk’sconceptofanintegratedadministration.89Theyalsosuggestthatexecutive,

parliamentary,judicial,andmutualcontroltogethershouldbeappliedtoguaranteethe

legalityandthelegitimacyofinter‐administrativecooperationand‘sharedsovereignty’.

Theproblemisthatthereisnorealspecificityabouthowtheseinteractionsshouldbe

resolvedinpractice.Thefollowingchaptersexplorehowtheseinteractionsplayout.

Oneformofinstitutionalcommunicationisthroughthepreliminaryreferenceprocedure.

Thisistraditionallyseenasaformaliseddialoguebetweencourts.Thepotentialforthe

preliminaryreferenceproceduretobeusedinthediagonalrelationshipbetweennational

85 M Poiares Maduro, ‘Interpreting European Law: Judicial Adjudication in a Context of Constitutional Pluralism’, (2007) 1(2) European Journal of Legal Studies 1-21, 18, with reference to N Komesar’s comparative institutional analysis. 86 Comments of M Kumm ‘Four Visions of Constitutional Pluralism: symposium transcript’, (2008) 2(1) European Journal of Legal Studies 325-370, 359 87 J Komarek ‘Institutional Dimension of Constitutional Pluralism’ in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011), 231-247, 232 88 M Goldoni ‘Constitutional Pluralism and the Question of the European Common Good’ (2012) 18(3) European Law Journal 385-406, 395 et seq; the role of non-judicial institutions at 400. 89 H Hofmann & A Türk 'The Development of Integrated Administration in the EU and its Consequences' (2007) 13 (2) European Law Journal 253-271

39

administrativeauthorities,specificallycompetitionauthorities,andtheCourtofJusticeis

exploredinchapter3below.InthisrespectKomarekdrawsattentiontotheCostanzo90

obligation,accordingtowhichanadministrativeauthorityistodisapplydomestic

legislativerulesifthatauthoritybelievestheyconflictwithUnionlaw.FollowingCostanzo,

administrativeauthoritieshavenoopportunitytoaskforadvicebeforedoingso.Komarek

proposesthattheCourtofJusticeshouldacceptsuchreferencesifthereisnoappealtoa

courtandfurther“if[thereferringauthority]carriesoutjudicialdutiesinaccordancewith

arulewhich,byvirtueofformorcontent,isconstitutional.”91Itisarguablethatthe

competitionrulesarecentraltotheUnion’sconstitution.

Beyondhowtheprinciplecanberealisedinpractice,theprincipalcontroversywith

constitutionalpluralismiswhetheritisevenpossibletohaveunityandcoherencewithout

oneultimateauthorityhavingthelastword.92Giventhataconstitutionisthehighest

sourceoflaw,somescholarsareunderstandablyscepticalabouttheconceptof

constitutionalpluralism.93Daviesarguesthatitisanemptyideaonthebasisthat“Where

therearemultiplesourcesofapparentlyconstitutionallawonealwaystakesprecedence

andtheotheristhennolongerconstitutional.”94Conversely,Madurobelievesthatitis

possibletohaveunityandcoherencewithoutanauthoritativedecision.95Thisraises

questionsabouttheultimateroleoftheCJEU,particularlyincompetitionlawinwhichthe

Commissionhasbeensocentral.Onewaytounderstandthiswouldbethatinterpretative

pluralismsuggestsalooserinterpretationofunityorcoherenceitself.

Initscurrentstate,itisnotclearwhetherpluralismrelatestodifferentsystemsoflaw,or

theinterpretationsofdifferentinstitutionswithinthatsystem.96InthecaseofMember

Stateauthoritiesandcourts,itcanbearguedthattheyareapplyingtwoconstitutional 90 C-103/88 Fratelli Costanzo v Milano [1989] ECR 1839. See also C-198/01 Consorzio Industrie Fiammiferi v Autorita Garante della Concorrenza e del Mercato [2003] ECR I-8055 91 J Komarek ‘Institutional Dimension of Constitutional Pluralism’, in M Avbelj & J Komarek (eds) Constitutional Pluralism in Europe and Beyond (Hart 2011), 231-247, 239 citing the AG’s opinion in C-205/08 Alpe Adria Energia [2009] ECR I-11525 [48]: AG Colomer showing his concern for the judicial role, as in De Coster, discussed in further detail in the following chapter. 92 Comments of J Baquero Cruz in M Avbelj & J Komarek (eds) of Constitutional Pluralism: symposium transcript’ (2008) 2(1) European Journal of Legal Studies 325-370, 340 93 E.g. J Weiler ‘Prologue: Global and Pluralist Constitutionalism: some doubts’ in G de Burca & J Weiler (eds) The Worlds of European Constitutionalism (CUP, 2011) “reacts against the ubiquity and vacuity of the term constitutional pluralism”, preferring ‘constitutional tolerance’. 94 G Davies ‘Constitutional Disagreement in Europe and the Search for Pluralism’ in J Komarek & M Avbelj (eds) Constitutional Pluralism in Europe and Beyond (Hart Oxford 2012), 281. See also Baquero Cruz; Avbelj in the same volume. 95 Comments of M Maduro in response to J Baquero Cruz in M Avbelj & J Komarek (eds) of Constitutional Pluralism: symposium transcript’ (2008) 2(1) European Journal of Legal Studies 325-370, 340 96 Baquero Cruz draws a distinction between pluralism within a legal order and pluralism between legal orders in M Avbelj & J Komarek (eds) of Constitutional Pluralism: symposium transcript’ (2008) 2(1) European Journal of Legal Studies 325-370, 333

40

systemsoflaw–nationallawandEUlaw,albeitthatnationallawisembeddedwithinEU

lawduetothelatter’ssupremacy.Incompetitionlaw,theconvergenceruleinArt3Reg

1/2003requiresparallelapplicationofEUandnationallaw.However,atthe

supranationallevel,theCommissionandtheCourtareinterpretingthesamesystemof–

EU‐law.Inthatsense,whereisthepluralism?Oneansweristhattheseinstitutionsmay

stillhavedifferentinterpretations.Halberstamdistinguishesbetweentwokindsof

constitutionalpluralism:interpretivepluralism(pluralismofinterpreters)andnormative

pluralism(pluralismofsources).97ThisgoessomewaytorespondingtoDavies’argument

thatconstitutionalpluralismisanemptyideaonthebasisthat“Wheretherearemultiple

sourcesofapparentlyconstitutionallawonealwaystakesprecedenceandtheotheristhen

nolongerconstitutional.”98[emphasisadded].Inthisthesistheemphasisisonpluralism

ofinterpreters–theEuropeanCommission,theCourtofJustice,nationalcompetition

authoritiesandnationalcourts‐astheyareoftendrawingonthesamesource,suchasthe

judgmentinapreviouscase,aRegulation,oranotice.

TheCommissionoftenrehearsesthatitsopinioniswithoutprejudicetotheinterpretation

oftheCourtofJustice.However,othershavefoundthattheCommissionusesbothjudicial

andlegislativechannelsofinfluence,andthattheCommissionputspressureonthe

CouncilofMinistersinlegislativemodethroughitsinterventioninthejudicialmode.99It

doesthisthroughinterveninginproceedingsintheCourtofJustice.100Theemphasishere

isonthejudiciallaw‐makingoftheCourt,andtheinfluenceoftheCourt’sjudgmentonthe

MemberStates.

However,itdoesnotacknowledgetheinfluenceofthelegalopinionoftheCommission

itselfintheCourtproceedings.HarlownotesthattheCommissionhabitofappearing

regularlyasamicuscuriaeorintervenerinpreliminaryreferencesisastrategydesigned

toenhanceitspositionnexttotheCourt.101OthershavefoundthattheCourtofJustice

alignsitsjudgmentwiththeCommission'sobservationsinthevastmajority(around90%)

97 D Halberstam ‘Constitutional Heterarchy: The Centrality of Conflict in the European Union and the United States’ in J Dunoff and J Trachtman (eds), Ruling the World? Constitutionalism, International Law and Global Government (CUP, 2009) 326-355 98 G Davies ‘Constitutional Disagreement in Europe and the Search for Pluralism’ in J Komarek & M Avbelj (eds) Constitutional Pluralism in Europe and Beyond (Hart Oxford 2012), 281 99 A Hofmann ‘Litigation Strategy and Litigation Dynamics – The European Commission Before the Court of Justice’ paper delivered at European Consortium on Political Research (ECPR) Standing Group on EU Politics conference, Sept 2008, Riga 100 This aligns with Scharpf’s supranational-hierarchical mode of policy-making: “Given the Court’s power of judicial legislation and its own enforcement powers, the Commission is then able to avail itself of t[hese] distinct legislative options”. F Scharpf ‘The Joint-DecisionTrap Revisited’ (2006) 44(4) Journal of Common Market Studies 845-864, 852 101 C Harlow ‘Three Phases in the Evolution of EU Administrative Law’ in P Craig & G de Burca (eds) The Evolution of EU law, (OUP, 2nd edn, 2011) 439-464, 449

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ofcases.Inareviewofvariousempiricalstudies,ConantreportsthattheCourtofJusticeis

“mostlikelytoagreewiththelegalanalysisoftheCommission”.102(emphasisadded).This

referencetolegalanalysisisinterestingasitemphasisesthattheCommissionalsohasa

‘judicial’viewalongsidetheCourt.TheimpactoftheCommission’sinterventiongivesan

indicationofwhatwillhappenatthenationallevelwheretheCommissionintervenesin

nationaljudicialproceedings(exploredmorefullyinchapter4).Italsohighlightsthegap

betweenverticalandhorizontalaccountabilitymechanismswhenasupranational

executiveactorintervenesinanationalcourt.

6.Conclusions

Interpretativepluralismsuggeststhatthereisaheterarchy,ratherthanahierarchy,of

validinterpretationsoflawintheEUsystem.Thisisrelevantinasystemofconcurrent

competencessuchasinthepost‐2004competitionenforcementregime.Theprincipleof

institutionalbalanceistheEU’sversionoftheseparationofpowersatthesupranational

level.However,thefunctionsoflegislative,executiveandjudiciaryarenotvestedin

respectivesingleinstitutions.AlongsidetheCJEU,theEuropeanCommissionhasjudicial

functions,evidentincompetitionlaw–inindividualcasesitcandeclareinfringementsand

imposefines;andatthesystemlevelitgivesitsinterpretationofthelawthroughnotices

andguidelines.Despitetheirsoftlawstatus,theseinterpretationshaveweightgiventhe

Commission’shistoricalcentralityinthecompetitionsystem.TheCommission’s

authorshipofsoftlawinstrumentsatthelegislativelevelsuggestsitsprimacyinthe

interpretationofthoseinstrumentsattheenforcementlevel.Theconcurrentpowersof

theCJEUandCommissionsuggestthatwheretheCommissionauthorssoftlaw

instrumentsatthelegislativelevel,ormakesaquasi‐judicialdecision(suchasimposinga

fine)regardingspecificparties,ithasprimacyoverinterpretationattheenforcement

level.Inaddition,theCommissionnowhastheabilitytointerveneinindividualcases

beforecourtswithlegalopinions.Itisquestionablewhethertherecanbea‘diagonal’

institutionalbalancebetweenthesupranationalandthenationallevels,whichactivates

thejudicialautonomyofMemberStatecourts.However,thereisadutyofloyal

cooperationbetweentheEUinstitutionsandauthoritiesandcourtsatthesub‐statelevel.

Apluralityofinterpretations–andinterpreters–ofthelawsuggestsalooserconceptof

unityorcoherence.Thefollowingchaptersconsidertheimpactofmechanismsfor

coherenceandshowhowtheseinstitutionalinteractionsplayoutinpractice:NCAsand

102 L Conant ‘Review Article: The Politics of Legal Integration’ (2007) 45 issue supplement s1 Journal of Common Market Studies 45-66. She cites various studies (e.g. Stone Sweet, Cichowski) covering preliminary references as well as direct actions.

42

theCourtofJustice;theEuropeanCommissionandnationalcourts;andnational

competitionauthoritiesandnationalcourtswhereNCAsdecisionsarebinding.

43

CHAPTER3:NATIONALCOMPETITIONAUTHORITIES’(LACKOF)ACCESSTOTHE

COURTOFJUSTICE

1.Introduction

ThischapterexploresthediagonalrelationshipbetweentheCourtofJusticeofthe

EuropeanUnion(CJEU)andnationalcompetitionauthorities(NCAs).Giventhe

relationshipofNCAswiththeEuropeanCommissionthroughtheEuropeanCompetition

Network(ECN),takentogetherwiththefollowingchapteritcontributestothequestionof

howtheCommissionchallenges,orcomplements,theroleoftheCJEU.Thechapter

investigatestheCJEU’sconceptofa‘courtortribunal’,throughtheadmissibility

requirementsofthepreliminaryreferenceprocedureunderArticle267TFEU.1Thisis

significantbecauseonlya‘courtortribunal’hasjurisdictiontoaddressaquestiontothe

CourtofJustice.Thepreliminaryreferenceprocedureisimportantastheprimarymeans

forencouragingcoherenceofEUlawthroughtheCJEU’sinterpretation.

Thischapterconsidershowanationalcompetitionauthorityasaquasi‐judicialagencyhas

attempted,unsuccessfully,tousethejudicialtoolofthepreliminaryreferenceprocedure.

Assuchitdemonstratespracticaleffectsofjudicialandadministrativeinstitutional

definitions.

In2003theHellenicCompetitionCommissionrequestedapreliminaryrulingfromthe

CJEUintheSyfaitcase2onthesubstantivequestionofparallelimportsandthepotential

abuseofadominantpositionunderArticle102TFEU.Inrulingitsrequestinadmissible,

theCourthasineffectblockedNCAswithaparticularstructurefromengagingwithit.In

termsofthediagonalrelationshipsinFigure1’sinstitutionaldiagramintheintroduction:

itisarguedthatwhiletheEuropeanCommission,asasupranationaladministrative

authority,hasstrengtheneditslinkswithnationalcourtsthroughamicuscuriae

1 The text of Article 267 TFEU reads:

“The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning: (a) the interpretation of the Treaties; [clearly this includes Articles 101 and 102] (b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union; [this includes Council Regulations and Commission Decisions] ... Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon. Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.” [emphasis added]

2 C-53/03 Synetairismos Farmakopion Aitolias & Akarnanias v GlaxoSmithkline Plc [2005] ECR I-4609

44

mechanisms,asdemonstratedinthefollowingchapter,theCourtofJusticeseems

motivatedtopreserveitsdialoguebetweencourtsonlyandtoexcludequasi‐judicial

nationalauthorities.However,iftheCJEUadoptsanarrowdefinitionofacourtortribunal,

itconstrainsitsownjurisdiction.

Nationalcourtshaveparallelavenuesofcommunicationwith,orinterventionfrom,EU

supranationalbodiesincompetitionlaw–onethroughCommissionopinions,andone

fromthepreliminaryreferenceprocedure.Forexample,thefollowingchapteruncoversa

numberofcasesparticularlyintheSpanishcourtsunderArticle101TFEUconcerning

treatmentofagencyagreementsintheservicestationsector,inwhichthecourtsasked

bothforadviceofCommissionandCourtofJustice.However,NCAswithintegrated

functionsareeffectivelybarredfromseekingapreliminaryrulingfromtheCourtofJustice

astheydonotmeetthedefinitionofacourtortribunalfollowingtheCJEU’sjudgmentin

Syfait.Themostcommon,althoughnotuniversal,institutionalmodelofcompetition

enforcementamongtheMemberStatesistheintegratedadministrativeauthority.Assuch,

NCAs’assistancewithinterpretingthelawiswiththeEuropeanCommissionthroughthe

EuropeanCompetitionNetwork(ECN).

ThishasimplicationsfortheconsistentapplicationofEUcompetitionlawfirstasbetween

typesofauthorities,sincesomemayfindpreliminaryrulingrequestsdeniedwhileothers

areadmitted,dependingontheMemberState’sinstitutionaldesignofitscompetition

enforcementregime.Secondly,NCAsinvolvedinpublicenforcementandnationalcourts

inprivateenforcementaresubjecttodifferentmechanisms.

1.1Outlineofthechapter

Thechapterisstructuredasfollows.Itfirstsetsthecontextbysurveyingthepost‐2004

landscape,inparticularmultipleenforcersandthechallengeofconsistentapplicationof

antitrustrulesindecentralisedenforcement;andthequasi‐judicialnatureofcompetition

enforcementundertakenbythesemultipleenforcers.Itgoesontoconsiderthe

implicationsofArticle35Regulation1/20033,accordingtowhichMemberStatescan

decidetheappropriateinstitutionalstructuresforpublicenforcementofcompetitionlaw.

Inthesecondpartthediscussionturnsfromthedesignationofcourtsoradministrative

3 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 1, 4.1.2003,.1-25, in force 1.5.2004. In particular, the Regulation grants national competition authorities and national courts the power to grant exemptions under Article 101(3) TFEU, previously the exclusive domain of the European Commission.

45

agenciesascompetitionauthoritiesatthenationallevel,tothecriteriaintheEUdefinition

ofa‘courtortribunal’forthepurposesofthepreliminaryreferenceprocedure.It

considershowtheCJEUincludingitsAdvocatesGeneralhavedefinedanddevelopedthe

conceptthroughspecific,albeitoccasionallyflexible,criteria.Thethirdpartfocusesonthe

Syfaitcase.WhereastheAdvocateGeneralwouldallowthereference,theCourtdeclaredit

inadmissibleinarelativelybriefjudgment.TheanalysisfocusesontheCJEU’s

interpretationoftheindependencecriterion,andthepossibilityfortheCommissionto

deprivetheHellenicCompetitionCommissionofitsjurisdictionunderArticle11(6)

Regulation1/2003.Theremainderofthechapteranalyseswhetherthejudgmentdoesbar

allNCAsfromaccesstotheCJEU;theinterestsofNCAsandtheCourt;andwider

considerationsofjudicialeconomy,thefloodgatesargument,expertise,andconsistent

applicationandinterpretationofthelaw.Thechapterconcludeswithanassessmentof

theasymmetricavenuestothesupranationallevelfornationalcourtsandcompetition

authorities.

2.Thepost‐2004landscape

2.1Multipleenforcersandthechallengeofconsistentapplication

Inpost‐2004EUcompetitionenforcement,multipleenforcerswithparallelpowers

operate.DecentralisationofenforcementofArticles101and102TFEUunderRegulation

1/2003hasledtoanincreaseinthepowersandjurisdictionofnationalcompetition

authorities(NCAs)andnationalcourts.4Nationalcourtsmaybeinvolvedincompetition

lawenforcementbyadjudicatingindisputesbetweenprivateparties;asacompetition

authority;orinajudicialreviewfunction.Giventhegreaternumberofcompetition

enforcersandthepossibilityforburdensharing,thedecentralisedregimeshouldgiverise

tomoreeffectiveenforcementandmoreefficientallocationofresources.However,

decentralisationalsoincreasestheriskofdivergentapplicationoftherules.

4 For an account of the reforms, see for example C-D Ehlermann ‘The Modernization of EC Antitrust Policy: A Legal and Cultural Revolution’ (2000) 37 Common Market Law Review 537-574; D Gerber ‘Modernising European Competition Law: A Developmental Perspective’ (2001) 22(4) European Competition Law Review 122-130; J Venit ‘Brave New World: The Modernization and Decentralization of Enforcement under Articles 81 and 82 of the EC Treaty’ (2003) 40 Common Market Law Review 545-580; H Kassim & K Wright (2007) ‘Revisiting Modernisation: the European Commission, Policy Change and the Reform of EC Competition Policy’, ESRC Centre for Competition Policy working paper 07-19; H Kassim & K Wright ‘Bringing Regulatory Processes Back In: Revisiting the Reform of EU Antitrust and Merger Control’ (2009) 32(4) West European Politics 738-755

46

Suchdivergentapplicationcouldmanifestitselfinvariousways.5First,therecouldbe

differentialapplicationofEUlawbetweenjurisdictions.Secondly,therecouldbe

inconsistencybetweenEUandnationalcompetitionlaw.Thethirdcategoryisdiagonal

divergence,inwhichtheremaybeasubstantiveclashbetweenEUcompetitionlawand

nationallawsinotherpolicyareas.6Thefinalcategoryofpotentialdivergence,most

relevanttothischapter’sdiscussion,canbecharacterisedasinstitutionaldivergence.This

relatestodifferentcategoriesofenforcers–nationalcompetitionauthoritiesaspublic

enforcers,andnationalcourtsinprivateenforcementbetweenindividualparties.NCAs

selecttheircases,whereascourtsarereactive.NCAs7arelinkedtotheadministrationand

operateaccordingtooverarchingpolicyandresourcepriorities,whereasjudges

autonomouslydecideindividualcasesonthebasisoftheissuesbroughtbeforethemby

theparties.Nationalcompetitionauthorities,bydefinitionspecialisingincompetitionlaw

onadailybasis,shouldhavemoreexpertisethangeneralistnationaljudgesdelivering

judgmentsalone.Arelatedissueisthedifferentinterpretationsofeconomicanalysisin

competitioncases.8

Morecrucially,nationalcompetitionauthoritiesinapublicenforcementfunctionare

closelylinkedhorizontallywiththeircounterpartsandverticallywiththeEuropean

Commission,specificallyDGCOMP,throughthecooperationmechanismsoftheEuropean

CompetitionNetwork(ECN),withitsrulesforcaseallocationandconsistentapplicationof

Communitycompetitionlaw.9However,thereisnosuchmechanisminvolvingnational

courts,respectingtheprinciplesofjudicialindependenceandproceduralautonomyofthe

MemberStates.

5 These categories relate to single case consistency – see e.g. D Gerber & P Cassinis ‘The “Modernisation” of European Community Competition Law: Achieving Consistency in Enforcement – Part II’ (2006) 27(2) European Competition Law Review 51-57, and on some types of divergence D Gerber & P Cassinis ‘The “Modernisation” of European Community Competition Law: Achieving Consistency in Enforcement – Part I’ (2006) 27(1) European Competition Law Review 10-18, 11; K Lenaerts and D Gerard ‘Decentralisation of EC Competition Law: Judges in the Frontline’, (2004) 27(3) World Competition 313-349, 316 6 M C Lucey 'Unforeseen Consequences of Article 3 of EU Regulation 1/2003’ (2006) 27 European Competition Law Review 558-563, 561 7 Taken as a whole without disaggregating their investigatory and adjudicatory functions 8 E.g. I Lianos ‘“Judging Economists”: Economic Expertise in Competition Litigation: a European View’ in I Lianos & I Kokkoris (eds) Towards an Optimal Competition Law System (Kluwer International, 2009) 185-320; E Barbier de la Serre & A-L Sibony ‘Expert Evidence Before the EC Courts’ (2008) Common Market Law Review 941-985 9 Commission Notice of 27 April 2004 on cooperation within the Network of Competition Authorities, OJ C 101, 27.4.2004, 43-53 (the Network Notice)

47

2.2Multipleenforcersinaquasi‐judicialenvironment

Inaddition,thesemultipleenforcersoperateinaquasi‐judicialsystemofcompetition

regulationandenforcement:‘quasi‐judicial’intermsofbothinstitutionalstructureand

function.Thisquasi‐judicialnatureencompassesseveralelements.Investigative,decision‐

makingandenforcementfunctionsmaybecarriedoutbyasingleagency.Competition

authoritieshavethecompetencetomakebindinglegaldeterminations,buttheyare

integratedintothepublicadministration.Therearedifferentconfigurationsof

administrativeandjudicialbodiesmakingandenforcingthelawandtherearedifferent

degreesofpersuasiveorbindingforceattachedtotherulestheyapplyandmake.Atthe

systemiclevelrulesareelucidatedthroughsoftlawinstrumentsaswellashardrules.

Finally,administrativeauthoritieshavebecomemorejuridifiedintermsofformality,

approachtoevidence,proceduralrightsandreportingofdecisions.10

TheEuropeanCommissionitselfhasbeencharacterisedasinvestigator,prosecutorand

judge11initsenforcementofcompetitionpolicy,andatthenationallevelthereare

differentmodelsforpublicenforcement.InsomeMemberStates,courtsareinvolvedin

publicaswellasprivateenforcementofcompetitionlaw.Wethereforeseecross‐overof

thejudicialandadministrativespheres.Thisbecomesrelevantforthedefinitionofa‘court

ortribunal’inthepreliminaryreferenceprocedure.AsAdvocateGeneralRuiz‐Jarabo

ColomerstatedinDeCoster“’exerciseof‘judicialfunctions'and'judicialbody'arenot

synonymousterms.”12

2.3Article35Regulation1/2003andchoiceofinstitutionalstructure

Article35ofRegulation1/200313allowsMemberStatestodecidetheappropriate

institutionalstructuresforpublicenforcementofcompetitionlaw,subjecttothe

10 See generally, L C Blichner and A Molander ‘Mapping Juridification’ (2008) 14(1) European Law Journal 36. In the context of competition law, I Maher ‘Juridification, Codification and Sanction in UK Competition Law’ (2000) 63(4) Modern Law Review 544-569 11 See, for example, W Wils, ‘The Combination of the Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis’ (2004) 27(2) World Competition 201-224 12 Case C-17/00 De Coster v Collège des Bourgmestre et Échevins de Watermael-Boitsfort [2001] ECR I-9445 [117] 13 “Article 35: Designation of competition authorities of Member States 1. The Member States shall designate the competition authority or authorities responsible for the application of Articles [101] and [102] of the Treaty in such a way that the provisions of this regulation are effectively complied with. The measures necessary to empower those authorities to apply those Articles shall be taken before 1 May 2004. The authorities designated may include courts.

48

principlesofeffectivenessandequivalence;thatis,thattheeffectivenessofCommunity

lawisnotimpededandthatequaltreatmentisensuredthroughouttheCommunitywith

equivalentproceedingsimplementingnationalandEUlaw.14AccordingtoCommissionv

Greece,MemberStatesmustestablishasystemofsanctionswhichareeffective,

proportionateandwhichdissuadeinfringementsofEUlaw.15MemberStatesmustalso

mutuallyrecognisethestandardsofeachother’scompetitionenforcementstructures,

regardlessofthedifferencesacrosstheEU.16

Thelackofprescriptionaboutspecificinstitutionalstructureisamanifestationofthe

MemberStates’proceduralautonomy.Article35(2)wasdraftedtoreflecttherealityof

thestatusquointheMemberStatesratherthanestablishingacommoninstitutional

model.17Butsubsequently,membershipoftheECNhashadanimpactonnational

enforcementstructures,withmostoptingforanintegratedadministrativeagency.

Threemodelsareidentified:anintegratedmoniststructurecarryingoutinvestigativeand

adjudicativefunctions,andtwobreedsofdualiststructure‐ormonist,dualist,andappeal

2. When enforcement of Community competition law is entrusted to national administrative and judicial authorities, the Member States may allocate different powers and functions to those different national authorities, whether administrative or judicial. 3. The effects of Article 11(6) apply to the authorities designated by the Member States including courts that exercise functions regarding the preparation and the adoption of the types of decisions foreseen in Article 5 [require that infringement be brought to an end; order interim measures; accept commitments or impose fines, periodic penalty payments or any other penalty provided for in their national law]. The effects of Article 11(6) do not extend to courts insofar as they act as review courts in respect of the types of decisions foreseen in Article 5. 4. Notwithstanding paragraph 3, in the Member States where, for the adoption of certain types of decisions foreseen in Article 5, an authority brings an action before a judicial authority that is separate and different from the prosecuting authority and provided that the terms of this paragraph are complied with, the effects of Article 11(6) shall be limited to the authority prosecuting the case which shall withdraw its claim before the judicial authority when the Commission opens proceedings and this withdrawal shall bring the national proceedings effectively to an end.” Recital 35 Reg 1/3002: “In order to attain a proper enforcement of Community competition law, Member States should designate and empower authorities to apply Articles [101] and [102] of the Treaty as public enforcers. They should be able to designate administrative as well as judicial authorities to carry out the various functions conferred upon competition authorities in this Regulation. This Regulation recognises the wide variation which exists in the public enforcement systems of Member States. The effects of Article 11(6) of this Regulation should apply to all competition authorities. As an exception to this general rule, where a prosecuting authority brings a case before a separate judicial authority, Article 11(6) should apply to the prosecuting authority subject to the conditions in Article 35(4) of this Regulation, where these conditions are not fulfilled, the general rule should apply. In any case, Article 11(6) should not apply to courts insofar as they are acting as review courts.” 14 Case 33/76 Rewe-Zentralfinanz v Landwirtschaftskammer für das Saarland [1976] ECR 1989 [5]; Commission Staff Working Paper, Commission Proposal for a Council Regulation Implementing Articles 81 and 82 EC, National Courts in public enforcement (Article 36) [now Art 35], SEC (2002) 408, Brussels 11.4.2002, 3 15 Case 68/99 Commission v Greece [1989] ECR 2965 [23]-[25] cited in the Network Notice, n.9 [2] 16 Joint Statement of Council and Commission on the functioning of the network, Council document no. 15435/02 ADD 1, [8] 17 Commission Staff Working Paper, Commission Proposal for a Council Regulation Implementing Articles 81 and 82 EC, National Courts in public enforcement (Article 36) [now Art 35], SEC (2002) 408, Brussels 11.4.2002, p. 3 (SWP on national courts in public enforcement)

49

structureastheyarenamedintheCommission’sstaffworkingpaperonpublic

enforcement.18

(A)anintegratedagency,competenttoinvestigateandtotakedecisions,withpotentialfor

judicialrevieworappealofthefinalagencydecisionbeforeacourt;

(B)splitfunctions,withtheinvestigationcarriedoutbyanadministrativeagency,andthe

finaldecisiononwhetherthereisaninfringementtakenbyacourtorspecifiedtribunal,

againwiththepossibilityofjudicialreviewofthefinaldecision;and

(C)anadministrativeagencyinvestigatesandmaydecidethatthereisnoinfringement,

butifitdeterminesthatthereisaninfringement,acourtmustpronounceaprohibitionor

imposesanctions,withthepossibilityofthatdecisionbeingappealedtoahighercourt.

Thesemodelsarebestseenonacontinuumratherthaninstrictlyseparatedcategories,as

therearenuanceswithineachcategory.ExamplesofintegratedNCAs(typeA)includethe

GermanBundeskartellamt,theItalianAutoritàgarantedellaconcorrenza,Dutch

NederlandseMededingingsautoriteit,Portugueseautoridadedaconcorrência,Hungarian

CompetitionAuthority,theSlovakMonopolyOffice,CzechOfficefortheProtectionof

CompetitionandtheUnitedKingdomOfficeofFairTrading(OFT).TheUKistoadoptan

‘enhancedadministrativemodel’intheplannedCompetitionandMarketsAuthority,19

mergingtogetherthecompetitionfunctionsoftheOFTandtheUKCompetition

Commission,whichisnotcurrentlyamemberoftheEuropeanCompetitionNetwork.

WithintypeA,someauthoritieshaveaninvestigatoryarmwhichmakesrecommendations

toadecision‐makingboardorcouncil,forexampletheDanishCompetitionCouncil,the

LatvianCompetitionCouncilandtheHellenicCompetitionCommission.

ExamplesofatypeBdualiststructure,wherethereisacourtmakingthefinal

determinationastoanti‐competitiveconduct,includeBelgium,whoseCompetition

Councilisanadministrativecourtinnationalconstitutionalterms.Untilrecently,France

andSpainfellintothiscategory,buthavenowoptedforanintegratedstructurealongthe

linesofDGCOMP.Estoniaisaspecialcase,wherecivilpenaltiescanbeimposedbythe

authoritybutacourtmustdealwithmisdemeanourorcriminalmatters.

Accordingtodualiststructure(C),theinvestigatingagencymustgotoacourttorequest

impositionofpenalties.Again,therearedifferenceswithinthiscategory.InIrelandonly

18 SWP on national courts in public enforcement, 4. See also Network Notice recital 2. 19 Department for Business, Innovation and Skills (BIS), ‘Growth, Competition and the Competition Regime: Government Response to Consultation’, March 2012, available at http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/g/12-512-growth-and-competition-regime-government-response.pdf (accessed 16.4.2012)

50

thecourtcanformallyfindaninfringement,aswellasimposefines.InFinlandthe

competitionauthoritymaymakethedeclarationofinfringementbutmustgotocourtto

imposethefine.InSweden,anycourtmayimposepenaltiesbuttheMarketCourt

(Marknadsdomstolen)isthefinalappealcourtincompetitioncases.20

InsomeMemberStates,thedeclarationofaninfringementitselfisviewedasapenalty.

Forexample,intheCzechRepublicTupperwarecase21BrnoRegionalCourtruledthatthe

Czechcompetitionauthority’sdeclarationofaconcurrentbreachofCzechandCommunity

competitionlawsviolatedtheprincipleofnebisinidemdespiteonejointpenaltybeing

imposed.ThiswassubsequentlyoverturnedbytheCzechSupremeAdministrativeCourt.22

Indecidingontheinstitutionaldesignoftheircompetitionregimes,andinparticularthe

role of courts, tribunals or administrative agencies, Member States must, implicitly at

least, consider the trade‐offs identified by Trebilcock and Iacobucci23:

independence/accountability; expertise/detachment; transparency/confidentiality;

administrativeefficiency/dueprocess;predictability/flexibility.AMemberStatemayneed

to designate a court as a competition authority for constitutional reasons, for example

certainpenaltiescanonlybeimposedbyacourt.

Intheconfigurationsoutlinedabove,courtsareinvolvedinapublic,asopposedtoprivate,

enforcementrole,andareviewedascompetitionauthoritiesforthepurposesof

Regulation1/2003andtheNetworkNotice.Intheirprivateenforcementcapacity,

relationsbetweenthenationalcourtsandtheCommissionarecoveredbycertain

provisionsofRegulation1/2003elaboratedbytheCourtsNotice.24

20 For more discussion of Member States’ structure see S Brammer ‘Co-operation Between National Competition Agencies in the Enforcement of EC Competition Law ‘ (Hart, 2009) at 113-122; ‘Current Developments in Member States’ (2010) 6(3) European Competition Journal 709-785; L Idot ‘A Necessary Step to Common Procedural Standards of Implementation of Articles 81 and 82 EC without the Network’ in C-D Ehlermann and I Atanasiu (eds) European Competition Law Annual 2002: constructing the EU Network of competition authorities (Hart, 2004) 211-221 and C Gauer ‘Does the Effectiveness of the EU Network of Competition Authorities Require a Certain Degree of Harmonisation of National Procedures and Sanctions?’ in the same volume, 187-201. Aspects of Idot’s analysis are now out of date. She was writing at a time when “the main choice for Member States [wa]s not between an ordinary court and an administrative body, but between a government department and an independent administrative authority.” Idot also asserts that all such authorities are courts and tribunals for purposes of Art 267 TFEU, while acknowledging that the definition is stricter for the purposes of Art 6 ECHR and Art 47 EU Charter of Fundamental Rights. 21 Case No. 62 Ca 4/2007-115, Tupperware, Brno Regional Court, 1.11.2007 22 For a fuller discussion see M Petr ‘The Ne Bis in Idem Principle in Competition Law’ (2008) 29(7) European Competition Law Review 392-400 23 M Trebilcock and E Iacobucci ‘Designing Competition Institutions: Values, Structure and Mandate’ (2002) 25 World Competition 372–80 , 361 24 Commission Notice of 27 April 2004 on the cooperation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, OJ C 101, 27.04.2004, 54-64

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2.4Dualityandthesignificanceofbeing‘judicial’and/or‘administrative’:double

obligationsonNCAs?

TheCourtsNoticeaccompanyingRegulation1/2003definesitsscopeastherelationship

betweentheEuropeanCommissionand“thosecourtsandtribunalswithinanEUMember

StatethatcanapplyArticles[101]and[102]andthatareauthorisedtoaskapreliminary

questiontotheCourtofJusticeoftheEuropean[Union]pursuanttoArticle[267TFEU]…”

(recital1).ThereforeiftheCJEUdidconsiderareferencefromanNCAtobeadmissible,it

wouldfallwithinthescopeofboththeCourtNoticeandtheNetworkNotice.Recital2of

thesameNoticeexplicitlystatesthatwhereanationalcourtisalsodesignatedasa

competitionauthoritypursuanttoArticle35(1)oftheRegulation,cooperationwiththe

CommissioniscoveredbothbytheCourtsnoticeandtheNetworkNotice–doesthisimply

dualpowersandobligations?

TherelevantobligationsarethosetoinformtheCommissionwithoutdelayafterthefirst

formalinvestigativemeasure(Art11(3)andinformingtheCommissionatleast30days

beforeadecisionistakenontheexistenceofaninfringement,oradecisiontoaccept

commitmentsortowithdrawthebenefitofablockexemptionunderArt29(art11(4)),

andthecompetenceoftheCommissiontoremoveacasefromthenationalbody’s

jurisdiction(article11(6)Regulation1/2003).

Thismeansthat,dependingonthenationaldesignation,somenationalcompetition

authoritiesengagedinpublicenforcementwillbesubjecttoonlytheNetworkNotice,

whereasotherswillbesubjecttoboththeNetworkNoticeandtheCourtsNotice.Acourt

cannotonlybecoveredbytheCourtsNoticewhenitisinvolvedinpublicenforcement.

Article5laysdownthepowersofdecisionofcompetitionauthorities:theymayrequire

thataninfringementbebroughttoanend;orderinterimmeasures;acceptcommitments;

imposefines,periodicpenaltypaymentsoranyotherpenaltyprovidedforintheir

nationallaw;ordecidethattherearenogroundsforaction.Thisnegativeclearancedoes

notaffectotherNCAs,ortheCommission’s,competencetotakeactionintheirown

jurisdictions.

TheRegulationisnotsimilarlyprescriptiveforthepowersofthenationalcourts.Article6

merelystatesthattheyshallhavethepowertoapplyArticles101and102oftheTreaty.

Anexaminationofthepre‐legislativeCouncilofMinistersdocumentsrevealsthatthe

52

emphasiswasinrecognisingcourts’powertoapplythosearticlesintheirentirety.25The

explicitdistinctionalsooriginatesfromtheCouncilnegotiations,inwhichsomeMember

Stateswishedtoclearlydifferentiatebetweencourtsascompetitionauthoritiesandcourts

decidingdisputesbetweenprivateparties.26

Article11(6)ofRegulation1/2003providesforthepossibilityoftheCommissionopening

itsowninvestigationandtakingoveracasewhereanNCAisalreadydealingwiththe

matter,incertainlimitedcircumstances.27However,theCommissionmaynottakeover

whileanappealorreviewisongoinginacourt–“TheeffectsofArticle11(6)donot

extendtocourtsinsofarastheyareactingasreviewcourts…”(Article35(3)andRecital

35oftheRegulation).Recital35oftheRegulationstatesthatwherethepublic

enforcementfunctionisseparated,asinconfigurationsBandCdescribedabove,anda

prosecutingadministrativeauthoritybringsacasebeforeaseparatejudicialauthorityfor

aninfringementdecision,prohibitionpronouncementortoimposeafine,theeffectsof

Article11(6)onlyapplytotheprosecutingauthority.Theprosecutingauthorityshould

withdrawitscasebeforethejudicialauthoritywhentheCommissionopensproceedings,

bringingthenationalproceedingstoanend.

NCAsmustnotifytheCommissionwhenaninvestigativeprocedureisopened(Art11(3)).

NCAsmustalsoinform28theCommissionofanintendeddecision30daysbeforeitis

25 The original wording in the proposal was “National courts before which the prohibition in Article 81(1) [now 101(1)] of the Treaty is invoked shall also have jurisdiction to apply Article 81(3) [now 101(3)].” Germany requested that national courts also be given full competence to apply Article 82 [102]. In addition, according to Council Document 5158/01 Secretariat to delegations, 11.1.2001, Spain had a reservation on greater involvement of national courts in the application of Community competition law; and France, Ireland and Finland requested a clear definition of the term ‘national courts’. The ultimately-adopted wording was a Swedish Presidency proposal (Council Document 9999/01 Secretariat to delegations, 27.6.2001) 26 During the negotiations in the Council of Ministers, Ireland and Finland noted the problematic division between competition authorities and courts for their respective national systems. Ireland’s competition authority is not empowered to take the decisions envisaged under Article 5. Regarding co-operation between the Commission and NCAs (Art 11), Belgium, Greece, Spain, Ireland, Portugal and Finland all requested clarification on the role of courts and other separate bodies which constitute NCAs - Council Document 5158/01 Secretariat to delegations, 11. 1.2001. Under Article 35 [36 in the original proposal], Ireland and the Netherlands requested a clear statement of the powers exercisable by an NCA - Council Document 9999/01 Secretariat to delegations, 27. 6. 2001 27 Circumstances in which Art 11(6) may be activated are listed in Network Notice at [54]: if network members envisage conflicting decisions in the same case; network members envisage a decision which is obviously in conflict with existing case law; a network member is unduly drawing out proceedings in the case; or there is a need to adopt a commission decision to develop Community competition policy to ensure effective enforcement. 28 In the original Regulation proposal, the Commission drafted that NCAs were obligation to ‘consult’ the Commission before adopting a position. Most Member States objected to this, and through Council negotiations, this was softened to “inform”. Record of the reform negotiations in Council of Ministers – Council document 5158/01 Secretariat to delegations , 11.9.2001

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formallyadopted(Art11(4))withaviewtotheCommissionmakingobservationsif

consistentapplicationoftherulesisthreatened.29

Ifthefunctionsaresplitbetweenagencies,thebodywhichstartsaninvestigationhasthe

obligationtoinformtheCommissionunderArt11(3),butthedecision‐makingauthority

hastheobligation,underArt11(4),tonotifyitsdecisionbeforeitisadopted.InMember

Stateswherethefindingofinfringement,orimpositionofapenalty,isperformedbya

courtfollowinganinvestigationbyanauthority,theauthoritywillberesponsiblefor

fulfillingtheobligationunderArt11(3)(notifyingtheCommissionofinitiationofformal

investigativemeasures)whereasthecourtwillberesponsibleunderArt11(4)(informing

theCommission30daysbeforeadoptingadecision).

Onepracticalillustrationoftheimportanceofdistinguishingbetweenthetwofunctions

oncethecourthasbeendesignatedacompetitionauthorityisthatwhereacourtgrantsan

injunctionitmayberegardedasanArticle5decisionrequiringthataninfringementbe

broughttoanend.ThiswouldtriggertheArt11(4)dutytoinformtheCommission30

daysbeforesuchadecisionisadopted,resultinginthecourthavingtopostpone

(“reserve”)judgmentwhenthedecisionisclearlywellfounded.Worse,itwouldallowthe

competitioninfringementtocontinueuntilthe30dayswereup.Followingtheletterofthe

Regulation,theresultingjudgmentwouldalsoneedtobeforwardedtotheCommission

oncedelivered,underArticle15(2),whichwouldbeanunnecessaryduplication,since

botharticlesservethesamefunctionofkeepingtheCommissionapprisedofdecisionsin

theMemberStates.30

Thereissomeconfusionaroundthisobligation.RapporteurstotheFIDECongress

reportedthatcourtshavebeennotifyingenvisageddecisionswhensupposedlytheydo

nothavetodoso.31ButthisisamisunderstandingoftheobligationinArticle11(4).Art35

Regulation1/2003doesnotsaythatcourts(aspubliccompetitionauthorities)arenot

boundby11(4),onlythattheyarenotaffectedby11(6)i.e.theCommissioncannottake

overthecasesatthatstage.

29 Incidentally, interview evidence suggests that once notified, unless an immediate problem is identified the decision tends to “sit in a drawer” for the 30 days, and the Commission officials are not overzealous about making suggestions if they agree with the substantive result, even if they disagree with the drafting (interview with DG COMP official, Brussels, 13.7.2006) 30 See in respect of Ireland, N Mackey ‘Which Hat Should I Wear Today? Reflections on the Courts as Competition Authorities: Ireland’s Implementation of Regulation 1/2003’ Paper delivered at the Irish Centre for European Law, 8.5.2004. Available at http://www.tca.ie/images/uploaded/documents/2004-05-08%20ICEL%20Noreen%20Mackey.pdf (accessed 21.1.2011) 31 Proceedings of the 2008 Fédération Internationale de Droit Européen (FIDE) Congress: J Bornkamm & R Grafunder ‘General Report’ in H Koeck & M Karollus (eds) The Modernisation of European Competition Law: First Experiences with Regulation 1/2003 (Nomos, 2008) 487-516, 498-499

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Notificationofanenvisageddecisionisalsoapointonwhichnationalcourts’obligations

differfromthoseofNCAs’.AccordingtoArt15(2)),nationalcourtjudgmentsdonothave

tobenotifiedtotheCommissionuntilaftertheyarehandeddown.Further,theobligation

tonotifyfallstotheMemberStateratherthanthecourtitself.Assuch,thereisonlyexpost

notificationofafirstinstancedecision,withtheresultthattheCommissioncouldonly

makeaninterventionifthecaseproceededtoappeal,orifitfoundoutaboutthecase

throughcommunicationswithanNCA.Thisisdiscussedinmoredetailinthefollowing

chapter.

UnderArticle29Reg1/2003,anationalcompetitionauthoritymaywithdrawthebenefit

ofablockexemptioninanindividualcase,pertainingtoitsownterritory,ifitconstitutesa

distinctgeographicmarket.Anationalcourtcannotexerciseasimilarpowerunlessacting

inapublicenforcementcapacity.

Thechoiceofmodeldeterminestheavenuesforcommunicationwhichnationalbodies

havewiththeCommissionandtheCourtofJustice.Thisisimportantforanumberof

reasons.Onereasonisthepossibilityofadvicefromasupranationalbodywhichoversees

theconsistentapplicationofEUcompetitionlaw(orofEUlawgenerally)indifferent

MemberStates.Anotheristhenatureofadvice,anditsdegreeoflegalforceorformality.A

thirdreasonresonatesagainwithinterpretativepluralism–atthesupranationallevel,is

morethanoneinstitutionqualifiedtogiveadviceontheinterpretationofthelaw?The

preliminaryreferenceprocedureunderArticle267TFEUhasbeentheclassicaltoolfor

promotingconsistentapplicationofEUlaw.32

32 K Alter, ‘Explaining National Court Acceptance of European Court Jurisprudence: A Critical Evaluation of Theories of Legal Integration’ in A-M. Slaughter, A. Stone Sweet and J.H.H. Weiler (eds), The European Courts and National Courts: Doctrine and Jurisprudence (Hart, 1997) , 227; T Tridimas ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Reference Procedure’ (2003) 40 Common Market Law Review 9

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3.TheEUconceptofacourtortribunal

Theabovediscussionhasconsideredthepotentialdualobligationsonnational

competitionauthoritiesdependingontheirdesignationof‘judicial’or‘administrative’.

Thissectiondemonstratestheimplicationsofanauthority’sdesignationforitsaccessto

theEuropeanCommissionandtheCJEU.

IfArticle267isreadliterally,onlya‘courtortribunal’hasjurisdictiontoaddressa

questiontotheEuropeanCourtofJustice.33Theconceptof‘courtortribunal’isnot

definedintheTreaty,hencetheCourt’sabilitytoformulateitsownconceptandcontrol

access.Importantlyinthecontextofthedesignationofcompetitionenforcementbodies

underArticle35Regulation1/2003,thedefinitionofa‘courtortribunal’forthepurposes

ofthepreliminaryreferenceprocedureisanautonomousEUconcept.Asaffirmedin

Broekmeulen,34

“if[courtortribunal]weretobeconstruedasareferencetonationallaw,MemberStates

wouldhaveitintheirpowertotakeawayfromcertaindecision‐makingbodieswhichhave

toapplyCommunitylawtheright,andinsomecasestheobligation,torequesta

preliminaryruling,bymakingprovisiontothateffectwithintheirsystemof

administrationofjustice.ThiswouldeventuallyleadtothefragmentationofCommunity

law,whichispreciselywhattheprocedureunderArticle[267]isdesignedtoavoid.Thusthe

lawoftheMemberStatescanberelevantonlyinsofarasthatlawisabletodetermine

whethertheminimumcharacteristicsrequiredbyCommunitylawarepresentinagiven

case.”(emphasisadded)

A‐GReischlfavouredthrowingthenetwidetoreferencestopromotecoherence.Twenty

yearslaterinDeCoster35,takingtheoppositeview,AdvocateGeneralRuiz‐JaraboColomer

usedhisOpiniontocriticiseandattempttoaddresstheuncertaintyofshifting

interpretationsofwhatconstituteda‘courtortribunal’.Attemptingaclearerformulation

andsuggestingdifferentcriteriaforjudicialandquasi‐judicialbodies,thelatterbeing

‘exceptions’,heproposedatestthat“abodythatispartofthecourtsystemofaMember

Statewhichactsindependentlytodecideacase,inaccordancewithlegalcriteria,in

33 M Broberg ‘Preliminary References by Public Administrative Bodies: When are Public Administrative Bodies competent to Make Preliminary References to the European Court of Justice’ (2009) 15(2) European Public Law 207-224;and M Broberg & N Fenger Preliminary References to the European Court of Justice (OUP, 2010) address the shifting interpretations and the width of the Court’s definition over time. 34 Case 246/80 Broekmeulen v Huisarts Registratie Commissie [1981] ECR 2311. Opinion of Advocate-General Reischl, at 2336 35 C-17/00 De Coster v Collège des Bourgmestre et Echevins de Watermael-Boitsfort [2001] ECR I-9445

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adversarialproceedings,alwaysconstitutesacourtortribunalwithinthemeaningofArt

[267].”36(emphasisadded)Theexceptiontotheruleis“wherenofurtherlegalremedy

canbepursuedandprovidedthatsafeguardsofindependenceandadversarialprocedure

areavailable.”37

Criteriaforassessingwhetherabodywasacourtoftribunalwerefirstlaiddownin

Vaassen‐Goebbels38.Initiallytheindependencerequirementwasnotoneofthecriteriafor

assessingadmissibility,despiteitbeingacorefactorinthejudicialfunction.39Thecriteria

astheynowstandwereestablishedinDorschConsult40,acaseconcerningaGerman

reviewbodyforpublicservicecontracts.InorderfortheCJEUtorespondtothe

preliminaryreference,thereferringbodymust:bepermanent;beabodyestablishedby

law;applyrulesoflaw;followaninterpartesprocedure;beindependent;andhave

compulsoryjurisdiction.Afurthercriterioniswhetherthebody’sdecisionisfinal.Some

understandthisasbeingsubsumedwithincompulsoryjurisdiction.41Thefinalityofthe

decisionwasparticularlyimportantinSyfait,andwillbediscussedbelow.

Thesecriteriaarenotabsolute,andnotallcarryequalweight.Thelastthreeinparticular

–therequirementsofindependence,interpartesprocedure,andcompulsoryjurisdiction

leadingtoadecisionofajudicialnature‐havebeendecisive.Thisislargelybecause

permanence,establishmentbylaw,andapplyingrulesoflaw,couldequallyapplyto

bodiesengagedinadministrativeratherthanstrictlyjudicialproceedings.Thefollowing

discussionwillconcentrateonthesethreeelements.Themainpointsofcontention

relatingtoNCAs,asillustratedinSyfait,areorganisationalindependenceofthereferring

bodyandcapabilityofhandingdownafinaljudicialdecision,asoneelementof

compulsoryjurisdiction.42

36 Opinion of Advocate General Ruiz-Jarabo Colomer in De Coster, [85] 37 Opinion of Advocate General Ruiz-Jarabo Colomer in De Coster, [95] 38 Case 61/65 Vaassen-Goebbels [1966] ECR 261, [273] 39 G Anagnostaras ‘Preliminary Problems and Jurisdiction Uncertainties: the Admissibility of Questions Referred by Bodies Performing Quasi-Judicial Functions’ (2005) 30(6) European Law Review 878-890, 884 40 C-54/96 Dorsch Consult Ingenieurgesellschaft v Bundesbaugesellschaft Berlin [1997] ECR I-4961, [23] 41 For example, Broberg (2009) states that one meaning of compulsory jurisdiction is that the decision must be “binding on the parties”, but he does not mention the finality of the decision. 42 Incidentally, later there was a new preliminary ruling to the CJEU referred by the Appeal Court of Athens: C-468/06 - 478/06 Sot Lelos kai Sia EE v GlaxoSmithKline AEVE Farmakeftikon Proionton, formerly Glaxowellcome AEVE [2008] ECR I-7139, in which there was no issue of admissibility and the substantive questions were answered.

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3.1Interpartesprocedure

Interpartesprocedureimpliesdueprocess–particularlythatthedefendanthastheright

tobeheard,toexaminetheevidencepresentedbytheopposingpartyandtoanswerthe

opponent’scase.Article47oftheEUCharterofFundamentalRightsreferstotherightto

be“advised,defendedandrepresented.”Whiletheprincipalparties’(thecomplainantand

defendant)opportunitytopresenttheirrespectivecasesseemuniversallyrecognised,

rightsofinterventionforotherinterestedpartiesmayvaryamongcourtsaccordingto

nationalproceduralrules–thisdoesnotnecessarilyrenderthemanyless‘court‐like’,as

affirmedbyAdvocateGeneralJacobsinSyfait.43Particularlyincompetitionproceedings,

thecomplainantwhotriggeredtheinvestigationbytheprosecutingcompetitionauthority

isnotnecessarilyrepresentedintheadjudicativeproceedings.Thecompetitionauthority

istheprincipalparty‘complainant’.

AnindividualorfirmwhohaslodgedacomplaintwiththeCommissionshallbe

“associatedcloselywiththeproceedings”(Art27Reg1/2003).Theprocedurealso

providesforthehearing(inwritingoratoralhearing)ofotherthirdpartieswhohavenot

submittedacomplaintbutwhohavesufficientinterestintheoutcome.TheCommission

shouldgivethepartiestherighttobeheardbeforetakingadecision.Accordingto

Regulation773/2004onconductofproceedingsandthehandlingofcomplaintsnotice,

onceshowingthattheyhavealegitimateinterest(Art5Reg773/2004),complainant

firmsmayparticipatebyreceivingacopyofthestatementofobjections.Thecomplainant

maymakeviewsknowninwritingwithinatimelimit,andtheHearingOfficermayallow

itsviewstobeheardatanoralhearing(Art6).However,takingtheCJEU’sjudgmentin

BATandReynolds44,thehandlingofcomplaintsnoticeat[59]explicitlyacknowledgesthat

proceedingsarenotadversarialbetweenthecomplainantononehandandpartiesonthe

other,socomplainants’proceduralrightsfallshortoftherighttoafairhearingentitledto

thecompanieswhicharethesubjectofthecomplaint.

Anindicationoftherightsspecifictocompetitionlawproceedingswhicharerelevantfor

theinterpartescriterioncanbefoundinanumberofprovisions,suchasArt27Reg

1/2003onthehearingofthedefendingparties,complainants,consumersandothers,the

RegulationonconductofproceedingsbytheCommission45andtheNoticeonhandlingof

43 At [41] 44 Case 142 & 156/84 British American Tobacco & Reynolds v Commission [1987] ECR 4487 at [19]-[20] 45 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

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complaintsbyCommission,46intheNetworkNoticeandintherecentbestpractice

guidelinesonthehearingofficer.Theseprovisionsconcernfourmainareas:most

relevantlytherighttobeheard;butalsorightsattheinvestigationstage,particularly

whentakingstatements;inhandlingofcomplaints;andaccesstothefileandtreatmentof

confidentialinformation.47

Inrespectoftherighttobeheardfordefendingparties,theRegulationonconductof

proceedingsbytheCommissionprovidesforthe‘partiesconcerned’tohavearightto

replytothestatementofobjections,tobenotifiedinwritingwithtimelimitsforviews,to

havetheopportunitytoattachdocumentaryevidence,andtoproposecorroborating

witnesses(Art10);decisionsshouldonlydealwithobjectionsonwhichpartieshavebeen

abletocomment(Art11);oralhearingtodevelopargumentsifpartiessorequest(Art12);

hearingofothers–Commissionmayinvitepartiestooralhearingifthosepartiesreceived

thestatementofobjections(Art13);conductoforalhearingsbythehearingofficer“infull

independence”(Art14).Attheinvestigationstage:whentakingstatementsthe

investigatormuststatelegalbasis,purpose,thattheyarevoluntary,andrecorded(Art3);

Art4allowsatimelimitforthefirmtorectifyexplanationsfollowingoralquestions

duringinspections.

Thefactthattheseproceduralrightsareadheredtoinadministrativeproceedingsbythe

Commissionshowsthattheseelementsofinterpartesprocedurearenotdecisiveforthe

definitionofacourtortribunal.Thesignificantissueistheinterrelationoftheinterpartes

andindependencecriteria.Theinterpartescriterion,implyingthatbothcomplainantsand

respondentsshouldbelegallyrepresentedandenjoyproceduralrights,maybeweighed

relativetotheindependenceofthebodyinquestion.48

IntheCJEU,argumentssurroundingtheinterpartesrequirementhavefocusedonathird

partyadjudicatingbetweentheprosecutoranddefendant.Inthisrespectitislinkedtothe

independencerequirement.Thisisthepointuponwhichdueprocesscriticismsofthe

EuropeanCommissionitselfarebased.49TheCommissionhasmostrecentlyattemptedto

46 Commission Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty OJ C 101, 27.04.2004, 65-77 47 see Ch 7: ‘Article 6 proofing’ EC competition proceedings?’ in A Andreangeli EU Competition Enforcement and Human Rights (E Elgar, 2008) for a full discussion of procedural rights of parties in European Commission competition proceedings. 48 Case C-54/96Dorsch Consult Ingenieurgesellschaft v Bundesbaugesellschaft Berlin [1997] ECR I-4961; Joined cases C-110-147/98 Gabalfrisa and Others [2000] ECR I-1577; Case C-17/00 De Coster v Collège des Bourgmestre et Echevins de Watermael-Boitsfort [2001] ECR I-9445. However, there was no ‘weighing’ in the more recent Case C-96/04 Standesamt Stadt Niebüll [2006] ECR I-03561 49 See e.g. I Forrester ‘Due Process in EC Competition Cases: A Distinguished Institution with Flawed Procedures’ (2009) 34(6) European Law Review 817-843; D Slater, S Thomas, D

59

addresstheseconcernsandwardofffull‐scaleinstitutionalreformbyissuingBestPractice

guidelinesontheHearingOfficer’sroleandconductofitshearings.50PlansforanewUK

CompetitionandMarketsAuthorityalsoplaceemphasisonchecksandbalancesinan

“enhancedadministrativemodel”.51InthemeantimetheOFTisconsultingonareviewof

investigationproceduresincompetitioncases52includingcollectivejudgement(rather

thanadecisionbyasingleofficer);aseniorresponsibleofficerforeachcase;enhanced

legaloversight;contactbetweenthepartiesanddecision‐makers;aProcedural

Adjudicator;and,mostimportantly,separationoftheinvestigationteamanddecision‐

makers,withseparationofindividualsauthorisingtheopeningofacaseandtheissuingof

astatementofobjectionsandthoseresponsibleformakingthedecisiononwhetherthere

hasbeenaninfringement.

TheCourtofJusticehasaffirmedthatantitrustproceedingsmustmeettherequirements

ofArticle6oftheEuropeanConventiononHumanRights(ECHR),forexamplein

Baustahlgewebe.53TheArt6(1)ECHRcaselawhasbeenbroughtintothedebatemost

frequentlyinrespectoffinesimposedforantitrustinfringements,whichtheEuropean

CourtofHumanRights(ECtHR)hasconstruedasbeingofapunitiveandtherefore

criminalnature.54Article6doesnotpreventtheadoptionofsuchsanctionsbyan

administrativebody,buttheremustbeapossibilitytobringanappealbeforeajudicial

bodythathas“fulljurisdiction”toreviewthedecision.55Inthecontextofitsdamages

actionandtheCommission’sreinvestigationaftertheannulmentoftheCommission’s

Schneider/Legrandmergerprohibitiondecision,SchneiderarguedthattheCommissionis

notanimpartialauthoritywithinthemeaningofArt6ECHR.Inlinewithpreviouscase

law,theGeneralCourtfoundthatitsownjudicialreviewremediedthislackofimpartiality.

Waelbroek ‘Competition Law Proceedings before the European Commission and the Right to a Fair Trial: No Need for Reform? (2008) Global Competition Law Center Working Paper 04/08; P Marsden 'Checks and Balances: EU Competition Law and the Rule of Law' (2009) 22(1) Loyola Consumer Law Review 51-60 50 Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings, OJ L 275, 20.10.2011, 29; Best Practices in proceedings concerning articles 101 and 102 TFEU, OJ C 308, 20.10.2011, 6-32 51 UK Government response to Department of Business, Innovation and Skills (BIS) consultation at [6.29], 9 in executive summary, 118 52 Office of Fair Trading ‘Review of the OFT’s Investigation Procedures in Competition Cases: A Consultation Document’, OFT1263con2, March 2012 available at http://www.oft.gov.uk/shared_oft/policy/OFT1263con2, (accessed 17.4.2012) 53 Case 185/95 P Baustahlgewebe v Commission [1998] ECR I-8417 – this turned on the requirement for a hearing ‘within a reasonable time’ rather than squarely on the independent and impartial tribunal requirement. 54 Article 6(1) ECHR: “In the determination of civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law” 55 E.g. Janosevic v Sweden [2002] 38 EHRR 22 concerning a tax authority investigating taxi operators.

60

TheCommissionwasnotboundtosendthesendthecasebacktoadifferentauthority,or

toadifferentlycomposedbranchwithintheCommission.56

ThiscontrastswiththeEuropeanCourtofHumanRight'sunderstandinginDubusSAv

France57concerningtheFrenchBankingCommission.TheretheECtHRruledthatthere

mustbenoprejudgmentaboutguilt,andtheauthoritymustavoideventheimpressionthat

guilthadbeenestablishedatthestartoftheprocedure.Thepracticaleffectwasthatthe

departmentmayneedtobereorganisedinordertoseparatetheinvestigativeand

adjudicativerolescurrentlyexercisedbythesamepeople.

PreviouscaselawhasfollowedatrendthatArticle6wouldnotbeviolatedwherethe

secondtierbodyreviewinganadministrativedecisionhad"fulljurisdiction".Morerecent

caselawoftheECtHRhastightenedupthis‘compensation’byasecondtiertribunal.In

TsfayovUK58theECtHRruledthatwherethereviewcourtwasconsideringafindingof

factratherthananexerciseofadministrativediscretion,judicialreviewcouldnotremedy

thelackofindependenceatfirstinstancesincethereviewcourtdidnothavethecapacity

tomakeitsownfindingsoffact.Onecanconsiderhowthismightapplyincompetition

cases.Afindingoffactcould,forinstance,beafindingofforeclosure.Whetheracourt

couldrevisitsuchafindingwasthesubjectoftheUKCrehan59case,exploredinmore

detailinthefollowingtwochapters.

ThefulljurisdictionissuearoseagainrecentlyinrespectofafineimposedbytheItalian

competitionauthorityonapharmaceuticalcompanyinMenarini.60TheECtHRruledthat

thejudicialreviewmustbeabletore‐examine,ifnotsubstitute,theadministrative

authority’sfindings–thatis,investigatethesubstantivedecisionaswellasthefine

imposed.61OnthefactstheCourtdismissedtheclaimthattheItaliansystemofjudicial

reviewwasincompatiblewithArt6ECHR.

FollowingMenarini,theCJEUisalreadycouchingitsjudgmentsdifferently.Itisrelatively

unproblematicthatArt261TFEUandArt31Regulation1/2003allowforunlimited

jurisdictionwithregardtofines.However,theCourt’sformulationofitsstandardof

reviewwithregardtofindingsoffactonwhichthosefinesarebasedhasbecomestricter.

56 T-351/03 Schneider Electric v Commission [2007] ECR II-2237 at [181]-[186], [188] 57 Dubus SA v France, Application no 5242/04, judgment of 11.6.2009 58 Tsfayo v UK [2009] 48 EHRR 18; [2006] All ER (D) 177, judgment delivered on 14.11.2006, concerning the UK Housing Benefit and Council Tax Benefit Review Board. 59 Inntrepreneur v Crehan [2006] UKHL 38 60 Menarini Diagnostics SRL v Italy, Application no 43509/08, 27.9.2011 61 Menarini [63]-[66]

61

InitsjudgmentintheKME/Chalkorappeal,62theCJEUstatedthatinareviewoflegality

“theCourtscannotusetheCommission’smarginofdiscretion…asabasisfordispensing

withtheconductofanin‐depthreviewofthelawandofthefacts.”63Despitereferringto

themanifesterrorofassessmentstandard,denotedbytheGeneralCourt’sreferencesto

‘discretion’,the‘substantialmarginofdiscretion’orthe‘widediscretion’ofthe

Commission,“suchreferencesdidnotpreventtheGeneralCourtfromcarryingoutthefull

andunrestrictedreview,inlawandinfact,requiredofit.”64[emphasisadded]

TheECtHR’scaselawhastraditionallybeenstricterthanCJEUcaselawonthequestionof

independence,sinceArt6(1)referstoanindependentandimpartialtribunal.

‘Impartiality’impliesastrongertypeofindependence,notonlystructural.InMcGonnellv

UK65,itwasnotnecessarytoprovelackofindependenceandimpartiality,onlytoshow

circumstances“castingdoubt”onimpartialityor“legitimategroundsforfearing”thatthe

courtmaybeinfluencedbywhathappenedatanearlierstageinproceedings.

TridimasarguesthatusingtheArt6ECHRcaselawisnotappropriatetodefineacourtor

tribunalforthepurposesofthepreliminaryreferenceprocedure.66First,theArt6

definitionarisesinthecontextofclaimthatArt6hasbeeninfringedandthataninjustice

hasoccurred.Inreceivingapreliminaryreference,theCJEUisnotrulingonthat.Secondly,

theCJEUwouldneedtoconsiderandpassjudgmentonnationallawsandprocedures

incidentaltothelitigation,beyonditsjurisdiction.Finally,itdoesnotnecessarilyenhance

judicialprotectiontoexcludesomebodies,particularlyifthereisnoguaranteethatan

opportunityforareferencewouldariseatsubsequentstage,forexamplefromareview

court.

IntheCJEU’scaselawtheinterpartescriterioncanbeweighedagainsttheindependence

ofthereferringbody67Forexample,ifthepartiesdonothaveextensiverightstoplead

theircase,butthedecision‐makingbodyisseparatefromtheexecutiveinvestigativebody,

itmaystillqualifyasacourtortribunal.InDeCoster,theAdvocateGeneralreferredtothe

“diminishingimportanceoftheinterpartesrequirement”68–forexample,theCJEUhad

62 C-389/10 PKME Germany and Others [2011] ECR I-0000, judgment of 8.12.2011, not yet reported 63 KME Germany [129] 64 KME Germany [136] 65 McGonnell v UK [2000] 30 EHRR 289 66 T Tridimas ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Reference Procedure’ (2003) 40 Common Market Law Review 9-50, 31-32 67 T Tridimas ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Reference Procedure’ (2003) 40 Common Market Law Review 9-50, 27; G Anagnostaras ‘Preliminary Problems and Jurisdiction Uncertainties: the Admissibility of Questions Referred by Bodies Performing Quasi-Judicial Functions’ (2005) 30(6) European Law Review 878-890 68 A-G Colomer’s opinion at [29]

62

overlookeditinDorschConsult.InGabalfrisa(1999),AdvocateGeneralSaggionotedthat

thereferringbody’slackofinterpartesprocedureisnotonitsownsufficientgroundfor

excludingitsstatusasacourtortribunal.However,wheretheinterparteselementwas

lacking(“insummaryproceedingswherethedefendantwasnotpresent”),thereference

wouldonlybeallowedwhereitwas“offsetbyahighlevelofimpartialityand

independenceintheadjudicatingbody.”69

3.2Independence

Asnotedabove,surprisinglythefeatureonemightmostassociatewiththejudicial

function–independence‐wasnotraisedasafactoruntil198770.Itwaseventually

definedinCorbiau71(1993):thebodysubmittingapreliminaryquestionshouldactasa

“thirdpartyinrelationtotheauthoritywhichadopt[s]thedecisionformingthesubject‐

matteroftheproceedings”.Thatis,wouldtheadjudicativepartoftheauthorityhave

jurisdictiontodecideacasebetweenitsownsecretariatandadefendant?Therewould

havetobenoorganisationallinkinorderforthereferringbodytoconstituteathirdparty

inrelationtothoseinvolvedinthedispute.Thisstrictviewofindependencefocuseson

perceivedandactualimpartiality–thebodyinquestionmustbeindependentandseento

beindependent.ThisviewofindependenceresonateswiththecaselawonArticle6(1)of

theEuropeanConventiononHumanRights,asdiscussedabove.Thisformalisticapproach

ismorestrictthanbeforeorsinceuntilSyfait.

Theindependencecriterionsuggestsbothstructuralandoperationalelements,inwhich

thereferringbodymustactasathirdpartytowardstheadministration.Therearetwo

elementstothequestionofindependenceofcompetitionauthorities:theindividual

independenceofadjudicativepanelmembers;andorganisationalindependence,implying

alackofstructurallinkwiththeinvestigativeadministration.

TheCourtinDorschConsultinwhichthePublicProcurementAwardsSupervisoryBoard

wasorganisationallylinkedtotheBundeskartellamtandtheMinistryforEconomic

Affairs,didnotapplythisthirdpartycriterion,statingthatthebodyshouldonlyhavethe

objectiveofcarryingoutitstask“independentlyandunderitsownresponsibility”.

ConsiderthepositionofNCAswhoonlyreporttotheirParliamentratherthanthrougha

Ministry,forexample–theywouldmeettheindependencecriterion.

69 A-G Saggio’s Opinion at [14] 70 Case 14/86 Pretore di Salò v Persons unknown [1987] ECR 2545 [7] 71 C-24/92 Corbiau [1993] ECR I-1277 [15]

63

Movingtowardsamorefunctionalapproachofoperationalindependence,theCourt

placedemphasisonlegalsafeguardsinnationallawthatguaranteedthereferringbody’s

performanceofitsdutieswithoutadministrativeinterference,eventhoughthe

compositionofthereferringauthoritywasdeterminedbyabodysubjecttoministerial

supervision.

InGabalfrisatheCJEUplacedparticularfocusontherelevantSpanishdomesticlaw

ensuringaseparateoffunctionsbetweenthedepartmentsofthetaxauthoritycharged

withrecoveryandmanagementoftaxes,andtheTribunalesrulingoncomplaintslodged

againstthedecisionsofthosedepartments.TheTribunalesEconomico‐Administrativos

wereheldtobethirdpartiesinrelationtotheStateauthorityresponsibleforvalueadded

tax.Thisimpliesthatinordertogainthestatusofa‘courtortribunal’forthepurposeof

theArticle267procedure,thereneedstobeanabsenceofhierarchicallinkswiththe

administration.InthisrespecttheCJEUdistinguisheditsjudgmentinCorbiau,wherethe

DirecteurdesContributionsDirectesetdesAccises(headoftheDirectTaxesandExcise

DutiesDirectorate)wasnotconsideredtobeathirdparty.

Onthequestionofindividualindependence,inGabalfrisatheTribunalesEconomico‐

Administrativosdidnotofficiallybelongtothejusticedepartmentbutwereincorporated

intotheMinisteriodeEconomicayHacienda.TheMinistercouldremovemembersofthe

Tribunalfromoffice,undercircumstanceswhicharenotsufficientlyclearlydefinedforthe

AdvocateGeneral.NonethelesstheCJEUallowedthereference.TheGabalfrisaapproach

wascriticisedbyAGColomerinDeCosterfornothavingdueregardtoimpartialityin

termsofindividualindependenceofitsmembers,andinSyfaittheCourtdistinguishedits

judgmentfromGabalfrisa.

Schmid72(2002)alsoconsideredtheadmissibilityofaquestionbyan(Austrian)appellate

taxauthority,focusingonwhetheritwasathirdpartyandwhetheritsprocedurewas

interpartes.Incontrast,thecourtdidnotconsiderthetribunaltobeindependentgiven

thattherewasanoverlapinmembershipbetweentheadministrativesideoftheauthority

andtheappealchamber–twoofthefivemembersoftheappealchamberbelongedtothe

taxauthority.ThePresident,himselfdirectingthetaxauthorityaswellasbeingamember

oftheappealchamber,hadthepowertonominatemembersandtherewasnolegislative

provisionpreventinghimfrommodifyingitsmembership.ThePresident,underthe

directionoftheFinanceMinistercouldalsobringanappeal/statutoryjudicialreview

72 Case C-516/99 Schmid [2002] ECR I-4573

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againstadecisionoftheappealchamber.Thedifferenceappearstobetheeffectofthe

domesticrulesonseparationoffunctions.

SubsequentlyAdvocateGeneralColomerinDeCoster73attemptedtoreasserttheearlier

understandingofindependenceas“equidistancefromthepartiestothecaseandfromthe

subjectmatterofthedispute”.Thisimpliesfreedominrelationtosuperiorsinthe

hierarchy,theexecutive‐governmentbodies,othernationalauthorities,andperhaps

moretenuously,socialpressures.Hearguedthatageneralprincipleofnon‐interferencein

theactionsofadministrativebodiesoftheStateisnotsufficienttocorroboratestatusofa

courtortribunal,andthattheremustbeclearandspecificprovisionsforwithdrawal,

rejectionanddismissalofitsmembers.

TheindependencecriterionisdiscussedinmoredetailinrelationtoSyfaitbelow.

3.3Compulsoryjurisdiction

Therecanbedifferentinterpretationsofcompulsoryjurisdiction,bothfromthe

perspectiveofthepartiesandthecourt.Itsuggeststhereisnootherjudicialforumforthe

disputeinquestion.Oneinterpretationisthatthepartieshavenootherforumunderlaw

toresolvetheirdispute.Asshownbelow,thisresonateswithAdvocateGeneralJacobs’

definitioninSyfait–sincetheHCChadsolecompetencetoimposethepenaltiesunder

Law703/77,thepartiescouldonlycomeundertheforumoftheHCC.74Thisperspective

oncompulsoryjurisdictionisalsothereasonwhypreliminaryreferencesfromarbitral

tribunalsareexcluded,sincethepartiescanchoosethatforum75

Thesecondinterpretationiswhetheritiscompulsoryonthepartoftheadjudicatingbody

totakeupacaseortogiveadecision.Iwouldarguethatthisisthedefiningfeatureofa

competitionauthorityasopposedtoacourt.Asnotedabove,competitionauthoritiesmay

prioritisetheirresourcesanddecidewhetherornottoinvestigate,whereascourtsare

constrainedbytheambitofthedisputeasbroughtbytheparties.

73 [93] et seq 74 The civil courts are not prima facie entitled to rule on the application of the provisions of Law 703/77 on the Control of Monopoly, Oligopoly and the Protection of Free Competition [national provisions equivalent to Art 101, 102 TFEU and merger regulation], but can hear follow-on actions for damages as the HCC is not empowered to award them. See e.g. Global Competition Review Getting the Deal Through: Cartel Regulation (2005) 75 Case 102/81 Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG [1982] ECR 1095

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Athirdelementofcompulsoryjurisdictioniswhetherthebodyhascompetencetomake

finallegaldeterminationsandtoimposepenalties76.Evenincompetitionauthoritieswith

adualiststructure(typesBandCabove),therequirementoffinalityisnotstraightforward

whenoneconsidersthepotentialforappealorjudicialreviewofthedecision.Thisfinal

elementinparticularwasrelevantinthecontextofSyfaitandthepossibilityforthe

EuropeanCommissiontorelieveanNCAofitscompetenceunderArticle11(6)Regulation

1/2003.

4.TheSyfaitcaseanditsimplications

4.1Syfaitfacts

Syfait77wasthefirstpreliminaryreferencefromacompetitionauthoritytocomebefore

theCourtfollowingthe2004reforms.ItthereforegivesagoodindicationofhowtheCJEU

intendstodealwithNCAs,andtheimplicationsforagenciesofdifferentdesigns.The

referenceinquestionwassubmittedbytheHellenicCompetitionCommission(Epitropi

Antagonismou)totheCJEUbeforeRegulation1/2003cameintoforce,78butjudgmentwas

givenon31May2005.

SyfaitwasanassociationofpharmacistsandpharmaceuticalwholesalersontheGreek

market,suppliedbyGlaxoSmithkline,thepharmaceuticalmanufacturer.PricesinGreece

werefixedatalowlevelbyStateintervention.Syfaitexportedaproportionofthe

productstootherMemberStates,wherepricesweresignificantlyhigher,allegedly

precipitatingashortageontheGreekmarketduetoquotarestrictionsalsoimposedbythe

Greekgovernment.GlaxoSmithKlinethereforestartedsellingdirectlytohospitalsand

pharmaciesandceasedtomeetSyfait’sordersinfull.Thequestionsreferredbythe

HellenicCompetitionCommissionconcernedpotentialabuseofadominantpositionunder

Article102TFEUandthecircumstancesinwhichadominantmanufacturercouldjustifya

supplyrestriction,giventheStateinterventiononnationalpricinglevels.

76 First established in Case 138/80 Borker [1980] ECR 1975 [4], concerning the Paris Bar Council. The Council could only give legally binding decision on its internal matters. The reference concerned one of its members being forbidden from pleading in a German court, over which the Council had no jurisdiction. This links with the Court’s jurisprudence that the preliminary reference must relate to a genuine dispute which the referring body has jurisdiction to resolve. 77 C-53/03 Synetairismos Farmakopion Aitolias & Akarnanias v GlaxoSmithkline Plc [2005] ECR I-4609 78 On 22 January 2003: Reference for a preliminary ruling by the Epitropi Antagonismou in the case of C-53/03Sinetairismos Farmakopion Aitolias & Akarnanias — Syfait and Others against Glaxowellcome Aeve (subsequently called Glaxosmithkline Aeve), C 101/30 , 26.4.2003, 18

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However,intheeventtheCJEUdidnotaddressthesubstantiveissues.AlthoughAdvocate

GeneralJacobsdecidedtheHellenicCompetitionCommissionqualifiedasa‘courtor

tribunal’,theCJEUdisagreed,declaringthereferenceinadmissibleonthegroundsthatthe

CompetitionCommissionwasnotsufficientlyindependentandthattheproceedingswere

notintendedtoleadtoadecisionofajudicialnature.

4.2Independence

4.2.1TheopinionofAdvocateGeneralJacobs

AdvocateGeneralJacobsultimatelydeclaredthereferenceadmissible,butwasnot

withoutdoubts.ThesecentredonthestructurallinksbetweentheCompetition

Commission–thatis,theadjudicatoryarmoftheHCCasawhole‐anditssecretariat.

ParticularlyimportantwastheroleoftheHCCPresidentandofMinisterialsupervision.

ThePresidentdirectedthesecretariat,whichwasresponsibleforinvestigatingcasesand

makingproposalstotheBoardoftheCommission.However,thePresidentdidnottake

partindraftingsuchproposals.ThePresidentalsohelddisciplinarypowersover

secretariatstaff,andovertheothermembersoftheBoard(anissueparticularly

emphasisedintheCJEU’sjudgment).79TheMinisterofDevelopmentappointedthe

President.

HisOpinionrestedontheindependencecriterion,anditsrelatednesswiththeinterpartes

procedure.Theotherfactors“whilstprobablynecessaryforanyjudicialauthority,would

equallyapplytoanadministrativeenforcementagency.”80Hence,theywerenecessarybut

notsufficienttosecurethestatusof‘courtortribunal’.InhisviewtheHCCappearedtobe

“situatedveryclosetotheborderlinebetweenajudicialauthorityandanadministrative

authorityhavingcertainjudicialcharacteristics.”81

79 The composition and independence of the Hellenic Competition Commission has since undergone revision. A revision of Law 703/1977 on Competition was adopted by the Greek Parliament on 12 April 2011. The President and the newly introduced post of Vice‐President are now appointed by the Parliament. Previously an HCC member who submitted a reasoned opinion following an investigation by the directorate also had the right to vote on a decision by the adjudicative branch of the HCC, and this provision has now been abolished. In addition, all members are to be exclusively employed by the HCC, rather than holding other posts simultaneously. Members are appointed for a three-year term, renewable once. Specialist chambers of the Athens Administrative Court of Appeals now have competence to review competition cases. 80 AG Jacobs’ Opinion at [21] 81 AG Jacobs’ Opinion at [31]

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WhilefindingthattheGreekCompetitionCommissionmetmostofthecriteriafora‘court

ortribunal’,AdvocateGeneralJacobsacknowledgedthattherewasafinebalanceonthe

pointoforganisationalindependence.Hetookintoaccountthreepoints:(a)inpracticethe

President’sdisciplinarypoweroverthesecretariatwouldnotbelikelytoinfluencethe

conductofanygiveninvestigation;82(b)thereweresufficientproceduralsafeguards

duringthehearingstagetoallowallpartiestopresenttheircasewhichoutweighedthe

possiblethreatofdisciplinarypowerin(a);and(c)thepersuasiveprecedentvalueofthe

referencefromtheSpanishcompetitionauthority,theTribunaldeDefensadela

CompetenciaSpanishbankscase.83.Thisunderlineshowtheinterpartesand

independencecriteriaareinterrelated.TheAGconcludedthatthereferencefromthe

GreekCompetitionCommissionwasadmissible.84

TheAdvocateGeneraltookasomewhatformalisticapproachinassessingwhetherthe

CompetitionCommissionwas“judicialinnature”byfocusingonhowmanyofitsboard

memberswerequalifiedlawyersorjudges.85Therulesstipulatedthatthereshouldbetwo

lawyersoutofatotalofninemembersontheCommission.However,twofurtherposts

weretobeheldbypeoplewithexperienceofnationalandECeconomiclawand

competitionpolicy.“…inatechnicalfieldsuchascompetitionlawthereisaneedfor

economicandcommercialexpertisealongsidelegalqualifications.”86Membersare

explicitlyrequiredtoexercisetheirauthorityinaccordancewiththelaw.Thisrelatesto

theindividualindependenceofmembersoftheboard,whoare“bound…onlybythelaw

andtheirconscience”,andshall“enjoypersonalandoperationalindependence”according

toArticle8(1)ofLaw703/77.AlthoughadmissibilityisjudgedontheCommunityconcept

ofacourt,thenationalrulesoncompositionoftheauthorityareindicative,asshownin

thepreviouscaselawoutlinedabove.

TheAdvocateGeneralshowedtheinterrelatednessofthecriteriainconsideringhowthe

possibilityforaninterparteshearingcouldoffsettheindependenceissue:“More

distinctiveofacourtortribunalisthehearingbeforetheCompetitionCommission,at

whichbothcomplainantsandrespondentsmaybelegallyrepresentedandareaccorded

proceduralrightssimilartothoseenjoyedbypartiestoordinarycourtproceedings.Such

guaranteesgosomewaytosupplyingthenecessaryinterparteselementtothe

CompetitionCommission’sdecision‐makingprocess.”87“Theissueatstakeappearstome

82 AG Jacobs’ Opinion at [34] 83 C-76/91 Asociacion Espanola de Banca Privada and Others [1992] ECR I-4785 84 AG Jacobs’ Opinion at [46] 85 AG Jacobs’ Opinion at [26] 86 AG Jacobs’ Opinion at [33] 87 AG Jacobs’ Opinion at [21]

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tobecloselyrelatedtothequestionwhethertheprocedureoftheCompetition

Commissioncanbequalifiedasinterpartesinnature.Onlyifthesecretariathasthe

necessarydegreeofseparationfromtheCompetitionCommissioncanitqualifyasathird

partyindependentofboththepartybeinginvestigatedandoftheCompetition

Commissionasjudge.”88Thecomplainantshadarguedthatinterestedpartieswerenot

abletointerveneinproceedingsbeforetheHCC,andthereforetherewereinsufficient

proceduralrightsfortheHCCtorankasacourtortribunal.89TheAdvocateGeneral

rejectedthisargumentbynotingthatthecomplainantshadbeenabletoparticipateby

lodgingtheircomplaintinthefirstplace.Moregenerally,“judicialbodiesmaylegitimately

varyinthedegreetowhichtheyallowaninterestedthirdpartytointerveneinthe

proceedingswithouttherebyjeopardisingtheirstatusasacourtortribunal”.90

IwouldsubmitthatSpanishtribunalinSpanishbankswasatypeBauthority,whereasthe

HCCwastypeA.Iftherewereaslidingscaleintermsofthethreeconfigurationsabove,

typeAwouldbeleastlikelytoqualifyandacourtintypeCmostlikelytobegranted

access.

Althoughithasnotbeenidentifiedbyothercommentators,whetheritiscompulsoryon

thepartoftheadjudicatingbodytotakeupacaseortogiveadecisionseemsthemost

obviousreasonwhyanintegratednationalcompetitionauthoritymaynothave

compulsoryjurisdiction.SuchNCAshavethediscretiontoprioritiseresourcesandto

selecttheircases.91Evenifacomplainantreportsafirm,theNCAcandecidewhetheror

nottoopenaninvestigation.Atruecourtonlyhasjurisdictionintheambitofthedispute

broughtbytheparties.92Theonlywaytheadjudicatoryarmofanintegratedauthority

couldhavecompulsoryjurisdictioninthiswaywouldbeifnationalrulesgaveitno

discretiontoactontheadviceofthesecretariat.Thentherelevantquestionwouldbe

whethertheadjudicatoryarmwassufficientlyseparatefromtheinvestigatingsecretariat,

asconsideredundertheindependencecriterion.Thisincludescourtsinapublic

enforcementcapacityindualitytypeBorCconfigurationsastheyrelyontheprosecuting

competitionauthoritytobringacase.

88 AG Jacobs’ Opinion at [29] 89 AG Jacobs’ Opinion at [30] 90 AG Jacobs’ Opinion at [41] 91 See T-24/90 Automec v Commission [1992] 5 CMLR 431 in respect of the European Commission 92 Joined Cases C–430 and 431/93 Van Schijndel ECR [1995] I–4705

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4.2.2ThejudgmentoftheCourt

Inrejectingthereference,theCourt’sjudgmentsrestedonindependence,andproceedings

leadingtoafinaldecision.TheCourtfocusedonissuesofstructureandrulesof

appointment,anddidnotconsiderproceduralrulesandthedecision‐makingprocessas

exploredbytheAdvocateGeneral.

Significantly,theCourt’sadditiontotheDorschConsultcriteriaoutlinedabovewasthata

courtcanreferonly“ifthereisacasependingbeforeit,andifitiscalledupontogive

judgmentinproceedingsintendedtoleadtoadecisionofajudicialnature”.93Thecontrast

withtheAdvocateGeneral’sunderstandingof“whetheritsfinaldecisionisjudicialin

nature”94couldbeareasonfortheirdivergingconclusions.

Inassessingtheindependenceofthenationalcompetitionauthority,threefactorswere

relevant.First,theCourtnotedthattheHCCwasunderthesupervisionofthegovernment

MinisterforDevelopment,whichtheCourtconsideredmeantthathecouldundercertain

conditionsreviewthelawfulnessoftheHCC’sdecisions.Thispointwasnotstressedinthe

AG’sOpinion.95

Secondly,theCourtconsideredthetermsofappointmentofmembersoftheCompetition

Commission.Althoughaccordingtotherelevantnationallawtheywereonlyboundby

“thelawandtheirconscience”andenjoyed“personalandoperationalindependence”,96

thiswasunderminedbythePresident’sdisciplinarypowers.Therewereinsufficient

specificeffectivesafeguardsconcerningtheirdismissalorterminationofemployment,and

thereforewas“noeffectivesafeguardagainstundueinterventionorpressurefromthe

executive”.97Inaddition,thePresidentexerciseddisciplinarycontroloverthesecretariat

personnel,98afactlinkedtothethirdfactor.

Third,concerningtheCommissionasawhole,therewasanoperationallinkbetweenthe

CompetitionCommissionasadecision‐makingbodyanditssecretariatasafact‐finding

bodyuponwhoseproposalsitadopteddecisions.ThePresidentwasresponsibleforco‐

93 Syfait judgment at [29], citing C-134/97 Victoria Film [1998] ECR I-7023, [1999] 1 CMLR 279 at [14] and C-195/98 Österreichisher Gewerkschaftbund [2000] ECR I-10497, [2002] 1 CMLR 14 at [24] in support 94 Citing Case 138/80 Borker [1980] ECR 1975, [1980] 3 CMLR 638 at [4]; C-111/94 Job Centre [1995] ECR I-3361 at [9]; and C-182/00 Lutz and Others [2002] ECR I-547 at [15]-[16] in support 95 Syfait judgment at [30] 96 Art 8(1) of Law 703/77 97 Syfait judgment at [31] citing C-103/97 Koellensperger and Atzwanger [1999] ECR I-551 at [21] in support 98 Syfait judgment at [32]

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ordinatinggeneralpolicyanddirectingthesecretariat,whichinturncarriedout

investigationsandmadeproposalstotheCommission,totheextentthattheCourtdidnot

considerittobe“aclearlydistinctthirdparty”vis‐à‐visthesecretariat.99Whereasthe

AdvocateGeneralthoughtthatthispoweroverthesecretariatdidnotmatteraslongas

thereweresafeguardsforthepartieswhichwerethesubjectoftheCommission’s

investigationatthehearingstage,theCourtdidnottakeintoaccountthistrade‐off

betweentheinterpartesandindependencerequirements.

TheCourtcharacterisedthesecretariatasa“Statebody”–presumably,partofthe

executive–“whichmaybeakintoapartyinthecourseofcompetitionproceedings.”100

Thiselementemphasisestheneedfortheadjudicatingbody’sthirdpartyequidistance

betweenthepartiestothedispute:thatis,theprosecutingauthorityandtherespondent

firm(s).ThekeypointiswhethertheCompetitionCommissionassecretariatcouldqualify

asathirdpartyindependentoftheCompetitionCommissionas‘judge’andoftheparty

whichisthesubjectofitsinvestigations.Putanotherway,itwouldnotbepossibleforthe

secretariatoftheCompetitionCommissiontoactagainsttheCommissionasajudicial

panel.

Thetribunalmustbeindependentofboththeexecutiveandthelitigants.Onthispointthe

CJEUdistinguisheditsjudgmentinGabalfrisa101,inwhichtheTribunalesEconomico‐

AdministrativosofSpainwereheldtobethirdpartiesinrelationtotheStatetaxauthority

responsibleforVAT.FortheCJEUinGabalfrisatherelevantpointwasthatthefinal

decisionsoftheTribunalescouldnotbeoverturnedormodifiedbytheAdministration

exceptincasesofautomaticnullityorspecialproceedingsforrevision.102Thislinksthe

conceptsoforganisationalindependenceandfinaljudicialdecision.

AlthoughthedefinitionofacourtortribunalforthepurposesofArticle267isan

autonomousEUconcept,103inpracticethebody’streatmentinthenationalstatutory

frameworkappearstobeastrongevidentiarybasis.TheCompetitionCommissionwasnot

amongthefiveindependentdomesticauthoritieswhosemembershipwasdefinedby

constitutionalprovisions.InSyfaittheCompetitionCommissionwasclassifiedunder

nationallawasanindependentauthority,butinpracticeitdidnotoffersufficient

protectionagainstadministrativeinterference.TheCompetitionCommissionwasnot

amongthebodiescoveredbyspecificprovisionsinGreekconstitutionallaw.

99 Syfait judgment at [33] 100 Syfait judgment at [33] 101 C-110-147/98 Gabalfrisa and Others [2000] ECR I-1577; [2002] 1 CMLR 13 at para 33 102 Syfait judgment at [28] 103 Syfait judgment at [29]

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4.3Compulsoryjurisdictionanda(final?)decisionofajudicialnature

Thequestionofindependencecouldrelatetoanyquasi‐judicialbody.ItistheCourt’s

reasoningthattheremustbeacasependingbeforeitandtheproceedingsmustbe

intendedtoleadtoadecisionofajudicialnaturethatismorespecifictocompetition

authorities.104

Asnotedabove,thiscanbeviewedasoneelementinthereferringbody’scompulsory

jurisdiction.TheAdvocateGeneraldidnotfinditnecessarytogointodetailonwhether

theHCC’sjurisdictionwascompulsoryleadingtoafinallegaldecision,simplynotingthat

ithadsolecompetencetoimposepenaltiesasprovidedforundertheGreeknational

law.105Thisresonateswiththefirstinterpretationofcompulsoryjurisdiction,thatthe

partieshavenootherforumunderlawtoresolvetheirdispute.Inhisidentificationofthe

‘courtortribunal’criteria,theissueofwhethertheentity’sfinaldecisionisjudicialin

nature106wasnotexplicitlyaddressed.

Specifically,theAdvocateGeneraldidnotaddresstheoperationofArticle11(6),which

thecourtultimatelyfounddecisive.TheCJEUheldthattheHCC’sproceedingsdidnot

leadtoadecisionofajudicialnatureastherewasthepotentialfortheEuropean

CommissiontorelievetheHCCofitsjurisdictionpursuantArticle11(6)Regulation

1/2003.107

TheCourt’sjudgmentonthispointisverybrief,butthisisthepointatwhichtheCourtof

Justiceapparentlyconstrainsitsownjurisdictionovertheinterpretationandapplication

ofEUcompetitionlaw.Assuchseveralelementsneedtobeexamined.

104 Syfait judgment at [29] 105 AG Opinion at [20], referring to Law 703/77 on the control of monopolies and oligopolies and protection of free competition. The Greek civil courts could only hear follow-on actions. 106 Citing Case 138/80 Borker [1980] ECR 1975, [1980] 3 CMLR 638 at [4]; C-111/94 Job Centre [1995] ECR I-3361 at [9]; and C-182/00 Lutz and Others [2002] ECR I-547 at [15]-[16] in support 107 Syfait judgment at [34]

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4.4DoesSyfaitbarallNCAsfrompreliminaryreferences?

SyfaitappearstolockthedooroftheCourttoallNCAs.108Anargumentinsupportofthat

viewisthatthecourtrefersto“acompetitionauthoritysuchastheEpitropi

Antagonismou”beingrequiredtoworkinclosecooperationwiththeEuropean

Commission.109SinceallcompetitionauthoritiesworkwiththeCommissionintheECN,it

appearstocoverallofthem.Analternativeinterpretationisthatitonlyrefersto

integratedagencies–thatis,thosewithastructure‘suchas’theHCC’s.110Aswillbe

shown,thishasanimpactbothontheindependencecriterion,andregardingtheeffectof

Article11(6)onanauthority’scapacitytocometoa‘finaldecisionofajudicialnature’.

ThefirstpointisthattheCourtstatesthat“WhenevertheCommissionrelievesanational

competitionauthoritysuchastheEpitropiAntagonismouofitscompetence,the

proceedingsinitiatedbeforethatauthoritywillnotleadtoadecisionofajudicial

nature.”111However,thenationalcompetitionauthoritywouldonlyberelievedofits

competenceiftheCommissionactuallydidactivateArticle11(6).TheCourt’sfindingis

thereforepredicatedonahypotheticalpossibility.Inpractice,theCommissionhasbeen

reluctanttotakeoverjurisdictioninthisway.112

Secondly,theassertionthat“thecompetitionauthoritiesoftheMemberStatesare

automaticallyrelievedoftheircompetencewheretheCommissioninitiatesitsown

proceedings”113istakenfromrecital17ofRegulation1/2003.However,theCourtdid

108 See e.g. Anagnostaras who argues that it amounts to a blanket exclusion of Member State NCAs from the Article 267 procedure: G Anagnostaras ‘Preliminary Problems and Jurisdiction Uncertainties: the Admissibility of Questions Referred by Bodies Performing Quasi-Judicial Functions’ (2005) 30(6) European Law Review 878-890 109 Syfait judgment at [34] 110 For example, all Irish civil courts are designated competition authorities for the purposes of Art 35 Regulation 1/2003 and, whilst they are subject to its rules, they are not directly involved in the fora of the ECN. 111 Syfait judgment at [36] 112 Interview material reported in H Kassim and K Wright ‘The European Competition Network: a Regulatory Network with a Difference’ Paper presented at European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance, Third Biennial Conference, Dublin, 17-19 June 2010. Commission officials have expressed reluctance about invoking Art 11(6). One interviewee remarked that: “the worst case scenario would be the Commission intervening all the time”. The use of Article 11 (6) as a “cherry picking provision” would not only generate unnecessary work, but could lead to a breakdown in trust that would jeopardize the operation of the network. One national official said that they “almost had to persuade the Commission to take over a case” where three or more Member State markets were involved. According to the 2008 FIDE report (J Bornkamm & R Grafunder ‘General Report’ in H F Koeck & M M Karollus (eds) The Modernisation of European Competition Law: First Experiences with Regulation 1/2003 (Nomos: Vienna 2008), 487-516), in at least one case, even though three NCAs were investigating, the Commission did not take over the case as might be expected according to the guideline example in the Network notice, but the NCAs coordinated the investigation amongst themselves. 113 Syfait judgment at [34], emphasis added

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notlookintootherprovisionsofRegulation1/2003,inparticularArticle35.Thatarticle

revealsmorenuancedeffects.PursuanttoArticle35(3),theeffectsofArticle11(6)do

applyfullytocourtswhich“exercisefunctionsregardingthepreparationandadoptionof

thetypesofdecisionsforeseeninArticle5”–thatis,requiringthataninfringementbe

broughttoanend;orderinginterimmeasures;acceptingcommitments;orimposing

fines,periodicpenaltypaymentsoranyotherpenaltyprovidedforintheirnationallaw.

However,Article35(4)guaranteestheindependenceofcourtsascompetition

authoritieswherethejudicialauthorityis“separateanddifferent”fromtheprosecuting

authority.UnderArticle11(6),theCommissionislimitedtotakingoveracasefroma

prosecutingauthority,whichshouldinturnwithdrawitsclaimfromthejudicial

authority.

Article11(6)furtherstatesthat“ifacompetitionauthorityofaMemberStateisalready

actingonacase,theCommissionshallonlyinitiateproceedingsafterconsultingwiththe

nationalcompetitionauthority”and,further“iftheNCA(s)concerneddonotobject”114.

GiventhelackofdisputeresolutionproceedingsregardingcaseallocationintheECN,

couldtheCommissionlegallyandpoliticallyenforcethis?Arguablyinfringement

proceedingsagainsttheMemberStateunderArt258TFEUwouldbedisproportionate,

andwouldcertainlyunderminemutualtrustwithintheECNamongcompetition

enforcers.115

This lends weight to the argument that it is the prosecuting authority’s decision to

abandon proceedings, rather than the Commission’s competence, which leads to the

termination of proceedings in the judicial branch, as Brammer argues.116 If the

prosecutingauthoritydoesnot takesuchadecision, theoretically theproceedings in the

judicialauthoritycouldcontinue.TheCommission’spowertorelieveanationalauthority

ofitscompetenceisthereforeindirect.

This is where the compulsory jurisdiction criterion meets the Court’s findings on

independence. If theHCC’s decision‐making bodywas not sufficiently separate from its

investigatingsecretariat,itwouldbedifficultforthesecretariatto“withdrawitsclaim”in

itsadvisoryroletotheHCCboard.

114 Network notice [54(e)] 115 See e.g. H Kassim & K Wright ‘Network Governance and the European Union: the Case of the European Competition Network’, paper presented at the Institute of European Law Conference, ‘After the First 50 Years: The Future of European Law and Policy’, University of Birmingham, 2-4 July 2008, based on original interview research. 116 S Brammer ‘Co-operation Between National Competition Agencies in the Enforcement of EC Competition Law’ (Hart, 2009) 96

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Thirdly,theCourtstatesthatArticle11(6)“essentiallymaintainstheruleinArt9(3)117of

Regulation17”.118WhiletheCourtseemskeentopreservecontinuityoftheformer

enforcementregime,inthepre‐2004systemunderRegulation17119therewasnosuch

distinctionbetweenprosecutingandjudicialfunctionsofanauthority.

BRTvSABAM120recognisescourtsas“authoritiesoftheMemberStates”forthepurposes

ofArt9(3)inaddressingcourts’authoritytoactunderthatprovision.However,itmakesa

distinctionbetweenthosecourtswhoseprimaryfunctionisenforcementunderArt88

EEC,thatis,asanNCAinvolvedinpublicenforcement121andthosecourtsapplyingexArts

85and86EECbyvirtueoftheirdirecteffect,orinprivateenforcement.Art9(3)refers

onlytotheformer,publicenforcers.122Interesting,thejudgmentalsorefersinthefirst

categorytoMemberStateauthoritiestaskedwithensuringthelegalityofthatapplication

bytheadministrativeauthorities–thissuggeststhatreviewcourtswouldberelievedof

theircompetence,123apointwhichBrammerdoesnotaddress.Thejurisdictionofreview

courtsisnowexplicitlyprotectedunderArt35(3)Regulation1/2003.

Courtsinvolvedinprivateenforcementretainedtheircompetencesoasnottodeprive

individualsoftheirrightsundertheTreaty,124butwereencouragedtostayproceedings

awaitingtheoutcomeoftheCommission’saction.125Importantly,“thecompetenceofsuch

acourttoreferarequestforapreliminaryrulingtotheCourtofJusticecannotbefettered

byArticle9ofRegulationno17.”126ThisseemstobethedistinctionwhichtheCourtis

adheringtoinitsSyfaitjudgmentsoastoreserveaccessto‘true’courts.

However,BRTvSABAMdoesnotdealfullywiththeconsequencesofauthoritieswith

investigating,prosecutingandadjudicatingfunctions.Inaddition,Art9(3)beginsfromthe

117 “As long as the Commission has not initiated any procedure under Articles 2 [negative clearance], 3 [requiring infringement be brought to an end] or 6 [exemption decision pursuant to 85(3)], the authorities of the Member States shall remain competent to apply Article 85 (1) and Article 86 in accordance with Article 88 of the Treaty ; they shall remain competent in this respect notwithstanding that the time limits specified in Article 5(1) and in Article 7(2) relating to notification have not expired.” 118 Judgment at [34] 119 Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty [1959-1962] OJ 13, 21.2.1962, 204/62 120 C-127/73 BRT v Sabam (No 1) (1974) ECR 51 at [14]-[19]. The case confirmed the direct effect of the Treaty’s competition provisions, meaning that rights and duties conferred by EU law can be relied upon between individuals in national courts. 121 BRT v SABAM at [18] 122 See in this respect S Brammer ‘Co-operation Between National Competition Agencies in the Enforcement of EC Competition Law’ (Hart, 2009) 124-125 123 BRT v SABAM at [19] 124 BRT v SABAM at [17], [20] 125 BRT V SABAM at [21] 126 BRT v SABAM at [23]

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startingpointthattheCommissionhadjurisdictionunderthepre‐2004regime,andthe

MemberStateauthoritieshadresidualpowertoact,ratherthanbeing‘relieved’oftheir

competence.Regulation1/2003operatesonasystemofparallelcompetences.Giventhe

notionofthe‘well‐placedtoactauthority’inArticle11Regulation1/2003andthe

NetworkNotice,DGCOMPisonlylikelytotakeoverjurisdictionifmorethanthree

MemberStatesareaffected;whereitiscloselylinkedtootherCommunityprovisions

whichmaybeexclusivelyormoreeffectivelyappliedbytheCommission;ifCommunity

interestsorequires,todevelopCommunitycompetitionpolicy,forexamplewhereanovel

issuearises;ortoensureeffectiveenforcementthroughouttheCommunity.127

ThefourthelementtobeconsideredregardingtheCourt’sstanceinSyfaitonadecision

ofajudicialnatureisthattheneedfora‘final’decisionisnotmentioned.Indeed,the

requirementoffinalityisnotstraightforwardwhenoneconsidersthepotentialfor

appealorjudicialreviewofthedecision.128Theimplicationisthatadecisionofajudicial

natureisafirstinstancedecisionwhichisbindingandcapableofimposingsanctions,

albeitsubjecttoappeal.Itcouldbearguedthatthisalsoimpliesthatadecisionofthe

EuropeanCommissionfollowinganinvestigationisadecisionofajudicialnature,

despitetheCommissionhavingaverysimilarstructuretothatofthenational

competitionauthority.However,previouscaselaw,andthedueprocessdebate

surroundingthecompatibilityofCommissionprocedureswithArt6ECHR,showthatthe

Commissionitselfdoesnotfulfilthecourtortribunalcriteria.129

Onewayofdealingwiththeissueofadecisionofajudicialnatureistofocusonwhether

thejurisdictionwasinitiallycompulsory,ratherthantheresult.Thatis,wereother

possibleforaexhaustedbeforetheproceedingsarrivedatthebodyreferringthe

preliminaryquestion?InGabalfrisa,whereastheAdvocateGeneralfocusedondecisionsof

theTribunalesbeingsubjecttoappealintheadministrativecourts,theCJEUconcentrated

ontheelementofexhaustivenessinproceedingsandallowedthereference.Decisionsof

thetaxauthoritycouldbechallengedintheadministrativecourtsonlyafterproceedings

havebeencompletedintheTribunalesEconomico‐Administrativos:nootherforum.In

thatsensetheirjurisdictionwascompulsory.Byanalogy,decisionsofintegratedNCAscan

onlybechallengedoncetheyhavebeenreached.

127 Network Notice paras 14-15 and Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities, Council document nr. 15435/02 ADD 1, para 19, available at http://ec.europa.eu/competition/ecn/joint_statement_en.pdf (last accessed 30.3.2012) 128 This is also relevant for the discussion of res judicata in the proposal for the binding effect of NCA decisions on national courts throughout the EU, as explored in chapter 5. 129 Cases 209/78 to 215/78 and 218/78 Van Landewyck v Commission [1980] ECR 3125

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Afurtherargumentforthe‘judicial’natureofNCAdecisionscanbederivedfrom

Gabalfrisa.AnindicatorofthebindingnatureofthedecisionsoftheTribunaleswasthat

itsregistrarswereresponsiblefortheenforcementofitsdecisions.EveniftheEuropean

CommissioninitiatedproceedingsrelievinganNCAofitscompetence,anditsinvestigation

subsequentlyledtoaprohibitiondecision,theNCAwouldalsoberesponsiblefor

enforcementandmonitoringcompliancewiththeCommission’sdecisioninthe

frameworkofitscooperationdutiesintheECN.

Astrongerreading,basedontheCourt’sownlanguageinSyfait,isthatattheiroutset

proceedingsbeforeNCAsarealwaysintendedtoleadtoajudicialdecision.130Thefactthat

acasemaybeterminatedbeforereachingthefinalstagedoesnotchangethenatureand

objectiveoftheproceedings.131Thisinterpretation,focusingonthebeginningratherthan

theendoftheprocedure,wouldalsogetoverthebarrierposedbytheCommission’s

theoreticalpossibilityofrelievinganNCAofitscompetenceunderArticle11(6).As

Brammerpointsout,proceedingscanalsobeterminatedinthecivilcourts,forexampleby

oneofthepartieswithdrawingtheaction132Inthatsense,thosecourts’proceedingswould

notleadtoajudicialdecisioneitherandwouldalsobebarredfromsubmitting

preliminaryreferences,whichwouldbeanillogicalresult.

Finally,iftheCJEUwantedtoexcludereferencesfromallNCAsitcoulddosoexplicitly.

TheCJEU’sintentiontoallowsomereferencesfromdomesticcompetitionauthorities

couldbeimpliedbyitswillingnesstorehearsetheargumentsattheadmissibilitystage.

TheCJEUhadpreviouslygivenarulinginresponsetoapreliminaryreferencefromaNCA

intheSpanishBanks(1992)case.Inthatcaseadmissibilitywasnotanissueanditsstatus

asacourtortribunalwasnotraisedatall.

Fromalegalperspective,itwouldthereforebepossibletoallowreferencesfromNCAs

underthepost‐2004regime.ButwhataretheinterestsofNCAs,theCourt,andthewider

competitionenforcementsystem?

130 Syfait judgment at [28] 131 G Anagnostaras ‘Preliminary Problems and Jurisdiction Uncertainties: the Admissibility of Questions Referred by Bodies Performing Quasi-Judicial Functions’ (2005) 30(6) European Law Review 878-890, 890 132 S Brammer ‘Co-operation Between National Competition Agencies in the Enforcement of EC Competition Law’ (Hart, 2009) 97

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5.AllowingNCAsaccesstotheCJEU

5.1TheperspectiveofNCAs

ThemotivationofanNCAseekingapreliminaryreferenceisinterestinginthecontextof

theECN.ItmaybenoteworthythattheHCC’sreferencewasmadein2003,beforethe

currentenforcementregimecameintoforce.Wemaynotseeanotherpreliminary

referencefromanNCAfortworeasons:becauseoftheapparentlynegativemessagesent

inSyfait,andbecauseofclosercooperationwiththeCommissionandotheragencies

withintheECN.

Nevertheless,thefoundationsoftheECNwerealreadybeingbuiltatthattime,andthere

wereinformallinkswiththeCommission133.Thereareotherpossiblereasonsfora

reference.Themostobviousisthelegalcertaintyinreceivingabindingrulingfromthe

ultimateinterpreterofEUlaw.ThissuggeststhatlessformaladvicefromtheCommission

wouldbelesssatisfactoryfromtheperspectiveoftheNCA.Art11(5)Regulation1/2003

providesthat“thecompetitionauthoritiesoftheMemberStatesmayconsultthe

CommissiononanycaseinvolvingtheapplicationofCommunitylaw”.Whilethislegal

provisionsuggestsaformalconsultationprocess,inpracticeadvicehasbeengiven

throughmoreinformalbilateralcommunicationbetweencompetitionofficialsinDG

COMPandtheNCA.134OnereasonforsubmittingareferencetotheCourtofJusticemaybe

tocircumventtheinfluenceoftheCommissionandtheNCAsdutiesasamemberofthe

EuropeanCompetitionNetwork.135

Afurtherreasonmaybethekudosofmakingcaselaw,whichistiedtothestatusofthe

competitionauthorityinitsdomesticenvironment,forexamplerelativetoitsparent

ministry,butmorepertinentlyrelativetotheappealcourts.ArulingfromtheCJEUis

likelytoprovideasafeguardagainstjudicialrevieworappealoftheNCA’sdecision.

TheseparallelchannelsofsupranationaladvicefromtheCommissionandtheCJEUhave

beenusedparticularlybytheSpanishcourts,asexploredinthefollowingchapter.These

parallelchannelscouldgiverisetointerpretativepluralismwheretheopinionsdiffer.

133 H Kassim & K Wright ‘Bringing Regulatory Processes Back In: The Reform of EU Antitrust and Merger Control’ (2009) 32(4) West European Politics 738-755; interviews with national competition official 30.1.2008; H Kassim & K Wright ‘Network Governance and the European Union: the Case of the European Competition Network’, paper presented at the Institute of European Law Conference, ‘After the First 50 Years: The Future of European Law and Policy’, University of Birmingham, 2-4 July 2008 134 Interviews on the functioning of the European Competition Network 135 Komninos also makes this point: A Komninos ‘Article 234 and National Competition Authorities in the Era of Decentralisation’ (2004) 29(1) European Competition Law Review 106-114, 112

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5.2TheperspectiveoftheCourtofJustice

5.2.1Jurisdiction

HavingexploredthemotivationsofNCAsinseekingareference,whataretheincentives

fortheCJEUinacceptingtheirrequests?Indecidingwhethertoacceptpreliminary

referencesfrombodiesfallingoutsideanarrowdefinitionof‘courtortribunal’,theCourt

ischoosingbetweentwocompetingimperatives.Oneistoextenditsjurisdictionovera

widerrangeofinstitutionsatthenationallevel.Substantivelythiswouldgiveitmore

opportunitiestoshapeandclarifythecontentof(here,competition)law.Thisincentive

resonateswiththeviewthat,asinotherinstitutions,theCourtofJusticeandthejudges

andpersonnelwithinitareself‐interestedactorsconcernedwithenhancingtheirown

statusandjurisdiction.136

IftheCJEUadoptsanarrowdefinitionofacourtortribunal,itconstrainsitsown

jurisdiction.AppraisingtheearlycasesinwhichtheCJEUadoptedagenerousapproachto

theindependencecriterion,Tridimasasserts:“Theoverridingconcernistomakethe

preliminaryreferenceprocedureavailableaswidelyaspossible,thusensuringthe

uniforminterpretationofCommunitylawandtheavailabilityofaremedyforthe

protectionofCommunityrights.TheCourt,behaving,ineffectasarationaldecision‐

maker,widensthefranchiseofCommunitylaw:bymakingthepreliminaryreference

procedureavailabletoaswideacategoryofbodiesaspossible,itupholdsCommunityrights

atthelowerlevelandincreasestheirimmediacyandresonance.”137

5.2.2Floodgates

However,thiswasbeforethe2004enlargement,coincidingwiththeentryintoforceofthe

decentralisationreforms.TheCourt’ssecond,competing,incentiveistocontrolitsown

workload.Thepossibilityofreferencesfromasignificantlywiderconstituencyofnational

authorities,manyofwhichhadnoexperienceofapplyingEUlaw,broughtimplicationsfor

theCourt’scaseload.ItseemslikelythattheCourtwasconcernedaboutopeningthe

floodgatestoanabundanceofquasi‐judicialbodiesmoregenerally,notonlyNCAs,whenit

136 A-M Burley and W Mattli ‘Europe Before the Court: A political Theory of Legal Integration’ (1993) 47(1) International Organization 41-76, 60. This is countered by Karen Alter in ‘Jurist Advocacy Movements in Europe: The Role of Euro-Law Associations in European Integration (1953-1975) in The European Court’s Political Power (Oxford OUP 2009) 63-91, 64 137 T Tridimas ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Reference Procedure’ (2003) 40 Common Market Law Review 9-50, 30 (emphasis added)

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formulateditsstrictdefinitioninSyfait.AnagnostarasnotesthatSyfaitdepartsfromthe

“ratherliberalwayinwhichthecriteriafordeterminingthestatusofthereferring

authoritieshavebeenappliedinthepastpossiblyimplyingtheintentiontomovetowards

morerigorousstandardsinthefuture”.138

InarguingthatpreliminaryreferencesshouldbeacceptedfromNCAs,Komninosdoesnot

properlyaddressthisfloodgatesargument,andAnagnostarasstatesthat“judgmentdoes

notseemtohavebeeninfluencedbyeffectivenessandpracticalityconcerns”139.However,

Syfaitwasthefirstantitrustpreliminaryrulingcasefollowingtheentryintoforceofthe

ModernisationRegulation.

Ehlermann&Atanasiumakeanumberofpredictionsaboutthepossibleeffectsof

modernisationontheCourtofJusticeanditscaseload.140Oneargumentwasthat

preliminaryreferencesfromnationalcourtswouldincreasefollowingdecentralised

enforcementofArticle101(3).Komninosalsovoicedthisexpectation.141Onereasoncould

beamodestlevelofprivateenforcement.Nonetheless,atthetimeoftheSyfaitreference

fromtheHellenicCompetitionCommission,thejudgesoftheCourtofJusticemayhave

beenwaryofopeningthefloodgatestoreferencesfromnationalcompetitionauthorities,

andnon‐judicialbodiesmorebroadlyinpolicyareasbeyondcompetition,inadditiontoa

possibleincreaseinreferencesfromnationalcourtstraditionallydefined.

Thepredictedincreasedoesnotappeartohavematerialised.Inits2009reportonthe

functioningofRegulation1/2003,142theCommissionvoicedconcernsthatnationaljudges

wereapplyingArticle101(3)inconsistently.Thissuggeststhatjudgesdidnotfeeltheneed

torequestareferencefromtheCourtofJustice.Iftheforthcomingdraftdirectiveon

damagesactionsinsuccessfulinitsgoalofincreasingprivateenforcement,more

referencesmaybeexpectedfromnationalcourtsastheybecomeinvolvedinprivate

enforcement,especiallyinArticle101(3)caseswheretheyhavejurisdictionforthefirst

time.Manyofthesearegeneralcivilcourtswithlittlespecificcompetitionenforcement

experience.PutinthecontextoftheCommission’sparallelavenueforadvice,theCJEUis

138 G Anagnostaras ‘Preliminary Problems and Jurisdiction Uncertainties: the Admissibility of Questions Referred by Bodies Performing Quasi-Judicial Functions’ (2005) 30(6) European Law Review 878-890, 878 139 G Anagnostaras ‘Preliminary Problems and Jurisdiction Uncertainties: the Admissibility of Questions Referred by Bodies Performing Quasi-Judicial Functions’ (2005) 30(6) European Law Review 878-890, 887 140 I Atanasiu & C-D Ehlermann ‘The Modernisation of EC Antitrust Law: Consequences for the Future Role and Function of the EC Courts’ (2002) 23(2) European Competition Law Review 72-80 141 A Komninos ‘Article 234 and National Competition Authorities in the Era of Decentralisation’ (2004) 29(1) European Competition Law Review 106-114, 106 142 Communication from the Commission to the European Parliament and the Council: Report on the functioning of Regulation 1/2003, COM (2009) 206 final

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constrainedbythewiderimpactonEUlawasawhole,whereastheCommissiontoolof

amicuscuriaeandopinionsisacompetition‐specificsuigenerisinstrument.

5.2.3Consistency

AdvocateGeneralJacobswasinfavourofallowingNCAsreferences“toprovidesome

additionalsafeguardoftheuniformityofCommunitylaw”.143Thiswouldminimise

institutionaldivergencedescribedinthefirstpartofthischapter.Theadditionalsafeguard

isparticularlyimportantgiventhatNCAshaveadutytodisapplynationallawwhichis

incompatiblewithEUcompetitionlaw,accordingtoConsorzioFiammiferi.144“That

possibilitymight...commendagenerousapproachtowardsreferencesfromsuch

authorities,soastoensurethatanyuncertaintiesastotheapplicableCommunityrulesare

clarifiedbeforenationallegislationisdisapplied.”145

PreliminaryreferencesfromNCAswouldironoutuncertainty,inconsistenciesand

potentialdivergenceearlyinthecase.TheseareargumentsalsousedintheCommission

staffworkingpaperonamicuscuriaebriefsandthesubsequentlydraftedprovisionson

requestingguidancefromtheCommission.146

ApreliminaryreferencewouldstrengthentheECNmorethantheCommissionrelievingan

NCAofitsjurisdiction.EventhoughtheCommissionwillnotdothiswithoutconsultingan

NCA,‘seizing’thecasecouldbeperceivednegativelyandantagonistically,whereasa

preliminaryreferenceismorecooperativeandapositiveactioninbuildingthelaw.A

furtherpointistherelativeprecedentvalue,andattendantbenefitsofconsistent

applicationofEUlaw,ofaCommissiondecisionandapreliminaryrulingfromtheCourt.

TherearehoweverlevelsbelowtheArt11(6)proceduremorecommonlyusedtoensure

consistency,suchasnotifyingothermembersafteropeningproceedingsunderArt11(3),

andofanenvisageddecisionunderArt11(4).Thisargumentisfurtherstrengthenedby

thefactthatArticle11(6)hasneverbeenactivatedsofar.

143 A-G Jacobs’ Opinion at [45] 144 A Kaczorowska ‘The Power of a National Competition Authority to Disapply National Law Incompatible with EC Law – and its Practical Consequences’ (2004) 25(9) European Competition Law Review 591-599, 598; Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] ECR 629; Case C-198/01 Consorzio Industrie Fiammiferi v Autorita Garante della Concorrenza e del Mercato [2003] ECR I-8055 145 A-G Jacobs’ Opinion at [45] 146 Commission staff working paper: Reform of Regulation 17 – The proposal for a new implementing regulation – Article 15(3) submissions as amicus curiae, SEC (2001) 1827 Brussels, 13.11.2001

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5.2.4Judicialeconomy

OneargumentforallowingreferencesfromNCAs,isjudicialeconomy–itmaybedesirable

toallowquestionsfromNCAstodealwithdivergences,inconsistenciesandproblematic

applicationoftherulesasearlyaspossibleinacase,whichmayinturnreducetheneed

forjudicialreviewwhereuponthereviewcourtmayinturnreferaquestiontotheCJEU.147

ThisreasoningwaspreviouslysupportedbytheCourtinDeCoster.TheCJEUdidnottake

upAGRuizJaraboColomer’sproposedtesttolimitpreliminaryreferencesbecause“ifthe

CJEUweretodeclinejurisdiction,thereferringcourtwouldhavetoresolvetheissueof

Communitylawitselfandthereisnoguaranteethattheopportunityformakinga

referencewouldariseatasubsequentstage”.148Itcouldevenbeamoreefficientuseof

resources,althoughthisisaweakerargumentgiventheamountoftimeapreliminary

rulingtakes,andtheinterruptionofthenationalproceedings.

Theinterpartes/adversarialprocedurerequirementmayalsobeunderstoodasanaspect

ofjudicialeconomy,andthetimingofapreliminaryreference,ratherthanpurelyan

elementinthedefinitionofacourtortribunal.Judicialeconomydictatesthatallissues

shouldberaisedasearlyaspossibleintheproceedings.Intheinterestsofjustice”a

questionshouldbereferredforpreliminaryrulingonlyafterbothsideshavebeenheard,

astheCJEUitselfstatesinitsinformationnoteonreferencesfromnationalcourts.149

ThesepracticalconsiderationsaddweighttotheAdvocateGeneral’sdecisiontoadmitthe

referral.Asimilarargumentwasusedtoadmitapreliminaryreferencefromanapparently

non‐judicialauthorityintheBroekmeulencase150–butinthatcasetherewasnorightof

judicialreviewandtheissuescouldnotberaisedlater.

AdvocateGeneralJacobslinksjudicialeconomywiththeexpertiseofcompetition

authoritiesinSyfait:“Itisatleastarguablethataspecialisedcompetitionauthorityhaving

judicialcharacteristicsmightbebetterplacedtoidentifytherelevantissuesofCommunity

147 Komninos (writing before the Syfait judgment and before Regulation 1/2003 came into force and the significant 2004 EU enlargement) and Gerber and Cassinis advocate allowing preliminary references from NCAs so the CJEU may intervene at an earlier point. 148 Syfait judgment at [32] 149 Information Note on references from national courts for a preliminary ruling 2011 C 160/01 [19]; Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] ECR 629; C-277, 318 & 319/91 Ligur Carni [1993] ECR I-6621 150 C-246/80 Broekmeulen v Huisarts Registratie Commissie [1981] ECR 2311. Professional body of Dutch doctors against whose decisions there was no right of judicial review.

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competitionlawthanageneralistcourtchargedwithreviewingthedecisionsofthe

formerbodyatasubsequentstage”151

5.2.5Expertise

TheuseoftheArticle267procedurebyaquasi‐judicialagencyallowstheparticipationof

domesticauthoritieswithessentiallyadministrativecharacteristicsinadialoguethatthe

lawintendedclearlytotakeplaceexclusivelybetweenjudges.152IntheSyfaitcase,the

AdvocateGeneral’sstartingpointwastoexaminehowmanymembersoftheCompetition

Commissionwererequiredtohavelegaltraining,notingthatonlytwooutofnine

memberswererequiredtobetrainedlawyers.However,heacknowledgedthatin

competitionlawenforcementthereisalsotheneedforeconomicandcommercial

expertise.Anargumentusedinthepreviouscaselaw(DeCoster)fornotallowinga

referenceifthereferringbodycouldnotbecharacterisedaspurelyjudicialwasthatan

administrativeagencywouldnothaveadequateknowledgeandexpertisetoframethe

questionintherightway.Thisisnotanargumentthatholdstruewithnational

competitionauthoritiesastheprimarypublicenforcersofcompetitionlaw.

InDeCoster153,oneoftheargumentsproposedfornotadmittingthereferencewasthat

authoritieswhicharenotstrictlyjudicialarenotproperlyqualifiedtounderstandcomplex

legalproblemsandframerelevantquestionsforthepurposesofthereference.The

AdvocateGeneralcriticised“theunsettlingeffectoftheinterventionofanadministrative

bodyinadialoguebetweencourts”.154“Article[267]introducesaninstrumentforjudicial

cooperation,atechnicaldialoguebycourtsandbetweencourts.”155Previouslyreferences

wereallowedfromnon‐judicialbodiestocementaunifiedsystemoflaw,butitisno

longerneededasCommunitylawisan“acceptedreality”.156EUlawappearstohave

becomeavictimofitsownsuccess.Thisistheothersidetothejudicialeconomy

argument:ifthefirstinstancebodyhasalreadysubmittedapreliminaryreference,a

reviewcourtwouldbereluctanttosendanotherone.Hence“theconnectionbetweenthe

CJEUandnationalcourtsisseriouslyhinderedbyanadministrativebody...well‐

intentionedbutlackinginindependence...[hold]ingupthewholeprocedure.”157The

151 A-G Jacobs’ Opinion at [45] 152 A-G Colomer in De Coster at [79] 153 De Coster v Collège des Bourgmestre et Echevins de Watermael-Boitsfort (C-17/00) [2001] ECR I-9445 154 At [75] et seq 155 At [76] 156 At [75] 157 A-G Colomer in De Coster at [79]

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AdvocateGeneralwantstoguardthejudicialrole.AGColomerreturnedtohisthememore

recentlyinAlpeAdriaEnergia:Art267wasdraftedto“strengthentheinstitutionalvoiceof

anauthorityoftheMemberStates:thejudiciary”.158Hecriticisedthefactthatalthoughthe

referencewasdeclaredinadmissibleinSyfait,“thereisnoindication…thattheCourtacted

intheinterestsoftheinstitutionalbalancerequiredbyArticle[267TFEU]”159(emphasis

added).Ironically,thedeficientexpertiseargumenthasbeenlevelledatnationaljudgesin

civilcourtswhentheyarerequiredtoengagewitheconomicanalysis,unfavourably

comparedtothetechnicalknowledgeofnationalcompetitionauthorities.

Oneofthelimitationsofpreliminaryrulings,asnotedbyAtanasiuandEhlermann,isthat

theyonlygiveanswersontheinterpretationofthelaw,whichareoftenveryabstract,

leavingconcreteapplicationtothenationaljudge.160Thisiscompoundedbylimitedpre‐

reformprecedentsontheapplicationofArt101(3)fromtheCommission.Theyarguethat

the‘advisory’natureoftheinstrumentmakesit“insufficienttoguaranteetheconsistent

applicationofArticle[101].”ItisinterestingthatAtanasiuandEhlermanndonotseemto

considerpreliminaryrulingstobesufficientlyspecific,orevensufficientlybinding.This

canbecomparedwiththeCommission’snon‐bindingopinionstonationalcourts,which

canencompassfactualandeconomic,aswellaslegal,matters.Nevertheless,resolutionon

thefactsoftheindividualcaseisstilldowntothenationaljudge.

5.2.6FuturepreliminaryreferencestotheGeneralCourt?

Asaresponsetothefloodgatesargument,thepotentialfuturejurisdictionoftheGeneral

Courtinpreliminaryrulingswouldgivescopetobroadenthecourtortribunaldefinition

again.Art225(3)TreatyofNice,activatedbydecisionoftheCouncilofMinisters,allows

fortheCourtofFirstInstance(nowGeneralCourt)tohearpreliminaryreferencesin

specificEUpolicyareasincludingcompetition,whereitalreadyhasawealthofexperience

158 C-205/08 Alpe Adria Energia [2009] ECR I-11525 AG Colomer returning to his De Coster arguments at [29]. See also [3], [24]-[53] in particular: “It is unnecessary to emphasise the strategic role of the national courts in the enforcement of Community law. By drafting Article [267 TFEU] and keeping it unaltered for more than half a century, the founding fathers of the European Union and their successors were committed to strengthening the institutional voice of an authority of the Member States: the judiciary. That is not an innocent choice, as history demonstrates. The European Union has been described as an integration of law, through the law, attesting to the crucial role of the courts at European Union constitutional level.The reference for a preliminary ruling is procedural confirmation of that truism. Given that it embodies an authority founded on independence, on its relationship with the law and on the resolution of disputes, the judiciary has a singular voice which is isolated from the political sphere and linked only to the will of the law.” 159 Alpe Adria Energia at [33] 160 I Atanasiu & C-D Ehlermann ‘The Modernisation of EC Antitrust Law: Consequences for the Future Role and Function of the EC Courts’ (2002) 23(2) European Competition Law Review 72-80, 76

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inappealcasesandindividual/undertakingcasesagainsttheEuropeanCommission.As

formerGeneralCourtPresidentVesterdorfhasstated,theGeneralCourtisadefacto

specialisttribunal.161AtanasiuandEhlermannalsoadvocategivingtheGeneralCourt

preliminaryrulingjurisdictionincasesconcerningArticle101and102,butclaimthat

specialisedchambersarenotnecessarygiventheexistingcompetitionexpertiseinthe

GeneralCourt.162

TheAdvocateGeneralinDeCosterpositedtheTreatyofNiceprovisionasastrong

argumentforaclearerdefinition,inordertogiveguidelinestotheGeneralCourt,

otherwise”thehesitancyofthefirstbodywillbematchedbythatofthesecond.”163

ItissomewhatparadoxicalthatwhileDGCOMPhasfacedrenewedcriticismconcerning

thesustainabilityofitscurrentstructure,164thereisaconcurrenttrendtowardsnational

competitionregimesemulatingthatstructure.Thisdueprocesscriticismandthecoming

intoforceofLisbontreatyandtheCharteronFundamentalRightsmakesaneventualthird

levelcompetitiontribunalmorelikely.InlightofMenarinithiscouldmeanfullreviewof

Commissiondecisions,includinganabilitytorevisitthefacts,asasecondlevelof

adjudication.Morerelevantforthepurposesofthischapter,apreliminaryreference

functionforthattribunal,orfortheGeneralCourt.

Lenaertsassertsthatpreliminaryrulingisan“indivisiblejurisdiction”165andthat“the

keyto[its]successhaslaininthecentralisationoftheinterpretativefunction,which

promotesuniformity.Ifotherbodiesareinvitedtoparticipatethereisariskthattheunity

willbedestroyed”.Thiscentralisationofinterpretationisarguablythreatenedinthe

contextoftheCommission’sown‘preliminaryreferenceprocedure’throughArticle15Reg

1/2003asexploredinthefollowingchapter.

161 B Vesterdorf, ‘Judicial Review in EC Competition Law: Reflections on the Role of the Community Courts in the EC System of Competition Law Enforcement’ (2005) 1(2) Competition Policy International 3-27, 15-16. 162 I Atanasiu & C-D Ehlermann ‘The Modernisation of EC Antitrust Law: Consequences for the Future Role and Function of the EC Courts’ (2002) 23(2) European Competition Law Review 72-80, 79-80 163 AG Opinion in De Coster at [70] 164 See e.g. I Forrester ‘Due Process in EC Competition Cases: A Distinguished Institution with Flawed Procedures’ (2009) 34(6) European Law Review 817-843; Editorial comments ‘Towards a More Judicial Approach? EU Antitrust Fines under the Scrutiny of Fundamental Rights’ (2011) 48(5) Common Market Law Review 1405-1416; Contra e.g. E Gippini Fournier ‘The Elusive Standard of Proof in EU Competition Cases’ in C-D Ehlermann & M Marquis (eds) European Competition Law Annual 2009: The Evaluation of Evidence and its Judicial Review in Competition Cases (Hart, 2011) 295-318 165 K Lenaerts ‘The Unity Of European Law And The Overload Of The ECJ – The System Of Preliminary Rulings Revisited’ in I Pernice, J Kokott & C Saunders (eds) The Future of the European Judicial System in a Comparative Perspective (Nomos, 2006) , 230-231 Proceedings of the European Constitutional Law Network conference, Berlin 2005: http://www.ecln.net/elements/conferences/book_berlin/lenaerts.pdf (accessed 19.1.2007)

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Atthesameconference,Baudenbachersuggestedthatthe2004competitionreformwould

resultina“majorshiftfromthedirectactiontothepreliminaryreferenceprocedure”.166

ThismeansaweakeningoftheCJEU’s/GeneralCourt’sjudicialreviewinpublic

enforcement,becausebefore,itwouldhavebeenreviewingtheCommission,andonly

courtsnotpartieshaveasayinpreliminaryreferences.TheGeneralCourthasahigh

degreeofspecialistknowledge,whichcouldassistnationalcourts.Thecharacterofthe

preliminaryreferenceprocedurecouldchangeintheGeneralCourtassafeguardinglegal

unitywouldbeitssecondarytask.AccordingtoBaudenbacher,insteaditwouldresolve

thecasewitha“strongfocusontheprotectionofindividuals,andoncompetitionasa

system.Thismayleadtogreatergenerosityindefiningwhetheranentityconstitutesa

courtentitledtomakeareference,byincluding,forinstance,arbitrationtribunals.”

ArbitraltribunalsnotonlyfalloutsidetheCourt’spreliminaryreferenceprocedure,but

alsooutsidetheremitofRegulation1/2003andtheEuropeanCompetitionNetwork.

AlthoughtherehasbeenaproposalfortheEuropeanCommissiontoactas‘amicuscuriae’

toarbitraltribunals167inananalogouswaytothemechanisminArticle15,asexploredin

thenextchapter.

6.Parallelproceedingsandasymmetricchannels

Komninosarguesthat,legallyspeaking,oncethecompetenceofthenationalauthority

ceasesbytheCommissiontakingoverthecase,theCourtofJusticewouldnolongerhave

jurisdictiontodeliverapreliminaryruling.Thereferencewouldbedevoidofpurpose,and

nolongerdirectedtowardssettlingalegaldispute.168Inthisway,theCommissionwould

indirectlydeprivetheCourtofJusticeofitsjurisdiction.Thecontrastingargumentisthat

politicallyandpractically,theCommissionwouldbehighlyunlikelytotaketheArticle

11(6)courseofactioniftheCourthadreceivedapreliminaryreferenceandhadyettorule

onit.169Anagnostaras’sfurtherinterpretationisthat“thereisnolongerjurisdictionto

answerpreliminaryquestionsalreadyreferredforarulingafterparallelproceedingshave

166 C Baudenbacher ‘Concentration of Preliminary References at the ECJ or Transfer to the High Court/CFI: Some Remarks on Competition Law’ (2005) in I Pernice, J Kokott & C Saunders (eds) The Future of the European Judicial System in a Comparative Perspective (Nomos, 2006) 167 C Nisser & G Blanke 'ICC Draft Best Practice Note on the European Commission Acting as Amicus Curiae in International Arbitration Proceedings – An Explanatory Note' (2008) 19(1) European Business Law Review 193–197 and 'ICC Draft Best Practice Note on the European Commission Acting as Amicus Curiae in International Arbitration Proceedings – The Text' (2008) 19(1) European Business Law Review 198–218 168 See e.g. Case 138/80 Borker v Conseil de l’Ordre des Avocats à la Cour de Paris [1980] ECR 1975 169 A Komninos ‘Article 234 EC and National Competition Authorities in the Era of Decentralisation’ (2004) 29(1) European Law Review 106-114, 112

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beeninstitutedatCommunitylevel,i.e.bytheCommission.”Ineffectthiscontributesto

the‘hierarchy’oftheCommissionovertheCourt.

However,asalreadyasserted,theCommissioncannotlegallyforcetheprosecutingbodyof

anNCAtodropitsinvestigation,oritsjudicialauthoritytowithdrawapreliminary

reference.

IfweacceptthattheCourt’sargumentsontheoperationofArt11(6)Reg1/2003were

flawed,SyfaitdoesnotconstituteatotalbartoallNCAs.However,atbest,theoutcomeof

SyfaitamountstodiscriminationtowardsMemberStateswhosecompetitionregimeis

organisedalongsingleinstitutionallines,asopposedtothosewithstructurallyseparate

administrativeandadjudicativebodies,astheydonothavethesameopportunitiestoseek

guidancefromtheCJEU.Thereisabiasinfavourofdualistnationalcompetitionregimes

oftypesBandC.Thishasimplicationsfortheuniformapplicationoflaw.Forexample,

contrasttheinadmissibilityoftheHCC(typeA)inSyfaitwiththeacceptabilityofthe

referencefromtheSwedishMarketCourt(typeC)intheKanal5andTV4case.170

MorepracticallythemessageinSyfaitislikelytodeterNCAsfromsubmittinga

preliminaryreferenceinthefirstplace.ByemphasisinginitsjudgmentthatNCAsare

requiredtoworkinclosecooperationwiththeCommission(Syfaitat[34]),theCJEU

effectivelypassesoverresponsibilitytotheCommissionforhowNCAsshouldinterpret

andapplycompetitionlaw.

MaherandStefandoseeasilverlininginthejudgment.171Abenefitofthejudgmentis

clearerjurisdictionalrelationships–theCommissionandNCAs;andtheCourtofJustice

andnationalcourts.However,thisisatrade‐offbetweenlegalcertainty‐knowingthe

narrowdefinitionofcourtforArt267purposes‐anduniformapplication–thesame

systemforallcompetitionenforcementagents.Mostimportantly,inpracticethe

jurisdictionalrelationshipsarenotsoclearlydefinedifonealsotakesintoaccountthe

othercommunicationchannelsintheEUcompetitionenforcementframework.The

CommissionisnotleavingnationalcourtstocommunicatewiththeCJEU,butiscultivating

isowninteractionwiththem,asshowninthefollowingchapter.Thereareasymmetric

dualchannelsinterpretingEUlaw.

170 C-52/07 Kanal 5 Ltd and TV 4 AB v Föreningen Svenska Tonsättares Internationella Musikbyrå (STIM) upa [2008] ECR I-9275 on copyright management by collecting societies 171 I Maher & O Ştefan ‘Competition Law in Europe: The Challenge of a Network Constitution’ in D Oliver, T Prosser & R Rawlings (eds) The Regulatory State: Constitutional Implications (OUP, 2010), 178-199, 193

87

7.Conclusions

ThischapterhasconsideredthediagonalrelationshipbetweentheCourtofJusticeofthe

EuropeanUnionandnationalcompetitionauthorities.Itconsideredthecontextofthe

post‐2004system,inparticularmultipleenforcersinbothpublicandprivateenforcement;

thechallengeofconsistentapplicationofantitrustrulesindecentralisedenforcement;and

thequasi‐judicialnatureofcompetitionenforcementundertakenbythesemultiple

enforcers.UnderArticle35Regulation1/2003,MemberStatescandecidetheappropriate

institutionalstructuresforpublicenforcementofcompetitionlaw.Thechapterexplored

MemberStates’institutionalchoicesandtheconsequencesofbeingdesignatedacourtor

anagencywithrespecttoobligationsunderReg1/2003.

Thenthediscussionturnedfromthedesignationofcourtsoradministrativeagenciesas

competitionauthoritiesatthenationallevel,tothecriteriaintheEU’sautonomous

definitionofa‘courtortribunal’forthepurposesofthepreliminaryreferenceprocedure.

Thesecriteriaareimportantfordeterminingwhichnationalbodieshaveaccesstothe

CJEU’sadviceandinterpretationofthelaw.Ofparticularrelevancearetheneedforthe

referringbodytohaveaninterpartesprocedurei.e.tobeathirdpartyadjudicator

betweentheparties,tobeindependent,andtohavecompulsoryjurisdictionleadingtoa

decisionofajudicialnature.

ThechapteranalysedtheSyfaitcaseinwhichtheHellenicCompetitionCommission,asa


areferencetotheCJEUbutwasultimatelyrefused.TheanalysisfocusedontheCJEU’s

interpretationoftheindependencecriterionandontheCourt’sreasoningthatthe

CommissioncanalwayspotentiallytakeacaseawayfromtheNCAunderArticle11(6)

Regulation1/2003,sothatitsproceedingsmaynotleadtoafinaldecisionofjudicial

decision.InpracticethiscouldbarreferencesfromallNCAssincetheyareallsubjectto

Art11(6)withintheEuropeanCompetitionNetwork.ThechapterarguedthatArt11(6)

shouldnotbarNCAs,sincetheirproceedingsarealwaysinitiallyintendedtoleadtoafinal

decisionofajudicialnature.TheCommissionhasneveractivatedArt11(6).Inaddition,

accordingtoArt35(4)Regulation1/2003,theeffectsofArt11(6)onlyextendtothe

prosecutingauthority.However,eveniflegallywecanarguefortheCourtaccepting

preliminaryreferencesfromNCAs,themessagesentinSyfaithaseffectivelyfrozenthem

andtheCourthascurtaileditsownjurisdiction.

88


anddecision‐makingfunctions.IntegratedmonistNCAshaveanextrahurdletoovercome

becausetheydonothavethestructuralseparationoffunctionsrequiredtomeetthe

independencerequirement.Asaresulttheydonothavethesameopportunitytoseek

guidancefromtheCJEU.

ItisunderstandablethattheCourtusesthedefinitionofacourtoftribunalasan

instrumentforcontrollingitsownworkload.IftheGeneralCourt,oradedicated

competitiontribunal,iseventuallygrantedjurisdictiontohearpreliminaryreferences,this

maybeanopportunityforlooseningtheadmissibilityrequirements.Whilethismaylead

toamorecoherentsystemforcompetitionlaw,thereareimplicationsforthewider

coherenceofEUlawasawhole.ThisraisesthebroaderquestionofwhethertheCJEU’s

preliminaryrulingjurisdictionisdivisible.

Inrefusingtoallowtheparticipationofdomesticauthoritieswithessentially

administrativecharacteristicsinadialoguethatthelawintendedclearlytotakeplace

exclusivelybetweenjudges(DeCoster),theCourtisrestrictingitsowninfluenceinthe

interpretationofEUcompetitionlaw.WhiletheCJEUpreservesitsdialoguewithcourts,it

excludesNCAswithintegratedfunctions.Responsibilityforinterpretationfallstothe

CommissioninthecontextoftheEuropeanCompetitionNetwork.Meanwhile,the

EuropeanCommissionisextendingitssphereofinfluencebystrengtheningitslinkswith

nationalcourts.Thisincludesinterveninginnationalcourtproceedingstoelucidateits

interpretationofthelaw,asseeninthefollowingchapter.

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CHAPTER4:EUROPEANCOMMISSIONINTERVENTIONINNATIONALCOURT

PROCEEDINGS1

1.Introduction

ThepreviouschapterexploredthediagonalrelationshipbetweentheCourtofJusticeof

theEuropeanUnionandadministrativeauthoritiesdesignatedasnationalcompetition

authorities.ItfoundthattheCourtofJusticelimitsitsownjurisdictionandinfluenceinthe

interpretationofEUcompetitionlawbyexcludingnationalcompetitionauthoritiesfrom

accesstothepreliminaryreferenceprocedure.InitsSyfaitjudgmentontheadmissibility

oftheHellenicCompetitionCommission’sreference,theCourteffectivelyhandedover

responsibilityforinterpretationofthelawtotheEuropeanCommissioninthecontextof

theEuropeanCompetitionNetwork.InthiswaytheCJEUpreservesthepreliminary

referenceprocedureasadialoguebetweencourts,notwithstandingthequasi‐judicial

functionsofnationalcompetitionauthorities.

ThischapternowcontraststhatdiagonalrelationshipwiththeonebetweentheEuropean

Commission,asadministrativesupranationalauthoritywithquasi‐judicialfunctions,and

nationalcourts.WhiletheCJEUhasrestricteditsownjurisdiction,meanwhilesincethe

2004reformstheEuropeanCommissionhasextendeditssphereofinfluenceby

strengtheningitslinkswithnationalcourts.Thisincludesinterveninginnationalcourt

proceedingstoelucidateitsinterpretationofthelaw.Assuch,thereareasymmetricdual

channelsforopinionsontheinterpretationofEUlaw.TheCommissionisnotleaving

nationalcourtstocommunicatewiththeCJEU,butiscultivatingitsowninteractionwith

them,asshowninthischapter.

Previously,theCourtofJustice’sgeneralpreliminaryreferenceprocedurewastheonly

formalmechanismtoaddresspotentialdivergentapplicationofEUlawamongthe

nationalcourtsoftheMemberStates.ThischapteraddresseshowtheEuropean

1 A version of this chapter was published asK Wright ‘The European Commission’s Own ‘Preliminary Reference Procedure’ in Competition Cases?’ (2010) 16(6) European Law Journal 736-759. An earlier version of the ideas and the case table appeared in K Wright ‘European Commission Opinions to National Courts in Antitrust Cases: Consistent Application and the Judicial-Administrative Relationship’ (2008) ESRC Centre for Competition Policy working paper 08-24. A more detailed version of the section on admissibility of European Commission interventions in national court proceedings was published as K Wright ‘European Commission Interventions as Amicus Curiae in National Competition Cases: the Preliminary Reference in X BV’ (2009) 30(7) European Competition Law Review 309-313. Between the submission of the thesis and the viva voce examination two further cases of Art 15(3) interventions came to light: 161/2012 Tessenderlo Chemie v Belgische Staat in the Belgian Constitutional Court on 20.12.2012 on tax deductibility of fines, with similar issues and outcome to the X BV case, and a Slovak case concerning a fine for abuse of a dominant position in the Supreme Court (see ECN Brief 05/2012, pp. 56-57).

90

Commissionhasaddedtothisgeneralinstitutionallinkthroughthespecificamicuscuriae

instrumentofopinionsandown‐initiativeinterventionstonationalcourtsincompetition

cases,underArt15Reg1/2003.Giventhatnationalcivilcourtsarenotinvolvedinthe

EuropeanCompetitionNetwork(exceptwheredesignatedcompetitionauthoritiesforthe

purposesofpublicenforcement),Art15isdesignedasatooltominimisedivergent

applicationofthecompetitionrulesfollowingdecentralisationofenforcement.Under

Article15(1),EUMemberStatecourtsmayasktheEuropeanCommissionforitsopinion

onquestionsrelatingtotheapplicationoftheEUantitrustrules.Thiscouldthereforebe

describedastheEuropeanCommission’sown‘preliminaryreferenceprocedure’.There

aredualchannelsforadvicefornationalcourtsincompetitionlawcases–throughthe

Commission,andthroughtheCJEU.2

UnderArticle15(3),theEuropeanCommissionandnationalcompetitionauthoritiesmay

alsomakeown‐initiativewritteninterventions,andoralsubmissionswiththepermission

ofthejudge,inlegalproceedingsbetweenprivateparties.Art15(3)allowstheEuropean

CommissiontointerveneonissuesrelatingtoArticles101or102TFEU“wherethe

coherentapplicationofArticle[101]or[102TFEU]sorequires”.3Inthissecondcase,the

Commission’sclearpurposeistoinfluencejudicialproceedings,whetherattherequestof

thecourtornot.4Thissituationcallsintoquestiontheinstitutionalbalanceatthe

supranationallevelintermsoftherespectiverolesoftheCommissionandtheCourtof


TheCommission’sadviceisformallynon‐binding.Inanumberofcases,theCommission

drawsattentiontoitsownsoftlawinstrumentssuchasnoticesandguidelines.The

Commission’sauthorshipofsoftlawinstrumentsatthelegislativelevelsuggestsits

primacyoverinterpretationofthoseinstrumentsattheenforcementlevel,andcouldlend

weighttoitsintervention.Theopinionitselfisasoftlawinstrument.Drawingfrom

Senden’s5categorisationofsuchinstruments,theCommission’sopinionperformsa‘post‐

law’function,interpretingandelucidatingexistinglaw.However,theCommission’s

2 Even in C-234/89 Delimitis v Henninger Bräu [1991] ECR I-935, the CJEU had stated that “on the one hand” a court could request a preliminary ruling” and “on the other” could contact the Commission. (Summary judgment at [5])

3 Under the same provision national competition authorities may also intervene in their own Member State courts “on issues relating to the application of Article [101] or [102 TFEU]”. 4 At the supranational level, Harlow asserts that the Commission appearing as amicus curiae to the CJEU in preliminary reference proceedings is “a strategy designed to enhance its position next to the Court”. C Harlow ‘Three Phases in the Evolution of EU Administrative Law’ in P Craig & G de Burca (eds) The Evolution of EU law, 2nd edn (OUP, 2011) 439-464, 449 5 L Senden, ‘Soft Law and its Implications for Institutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79-99, 82

91

opinioncanalsobecomebindingthroughthenationalcourt’sjudgmentifthenational

judgeineffecttransposestheCommission’sadvice.

Theattitudeandreceptivenessofthejudgeisanotherimportantfactorintheimpactof

theCommission’sopinion.Clearlythejudgeislikelytobemorereceptivewheres/hehas

requestedtheopinion,comparedtowhentheCommissionintervenesatitsowninitiative.

ThereforethischapterseekstoinvestigatetheincidenceoftheCommission’s

interventions,and,wherepossible,theimpactonnationaljudicialdecision‐making,

againstthistheoreticalbackgroundandinpractice.Itsetsoutadetailedpresentationof

thepracticethatisemerginginthepost‐2004regimebyseekingtotraceallthecasesin

whichtheEuropeanCommissionhasprovidedobservations,eitherattherequestofthe

nationaljudgeorattheCommission’sowninitiative.Thisinformationiscurrently

incompleteandscatteredacrossanumberofsources.Thischapter’scontributionis

thereforetopresentamorecoherentandup‐to‐dateaccountofthepracticeemerging

underArt15,aswellasplacingitwithinthewidertheoreticalcontext.Thisshouldmake

theCommission’sinterventionsmoretransparent.Transparencyisdesirablefor

legitimacy,legalcertainty,andifCommissionopinionsaretohavethemostimpactfor

promotingconvergentapplicationofEUantitrustrulesamongnationaljudges.

ThemechanismofArt15isalsoaconcretetestoftheoperationofinterpretativepluralism

introducedinChapter2.TheCommission’slegaladvicetocourtsisstatedtobe“without

prejudicetotheinterpretationoftheCourtofJustice”,whichistheultimateinterpreterof

EUlaw.Thetwosupranationalinstitutionsinterpretthesamebodyof(EU)law.However,

thereisroomfortheCommissiontogiveitsowninterpretationoftheCJEU’scaselawas

wellasitsownsoftlawinstruments.TowhatextentdoestheCommissionchallenge,or

complement,theroleoftheCourtofJustice?


Thechapterisstructuredasfollows.Firstitsetsthecontextofthebroaderrelationship

betweentheEuropeanCommissionandnationaljudgesinEUcompetitionlaw,before

describingtherelevantprovisionsofRegulation1/2003anditsaccompanyingNoticeon

cooperationbetweentheCommissionandnationalcourts(theCourtsNotice).6Secondly

itintroducesArt15Reg1/2003asatoolforconsistentapplicationofthecompetition

6 Commission Notice of 27 April 2004 on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, OJ C 101, 27.4.2004, 54-64 (‘Courts Notice’)

92

rulesfollowingdecentralisedenforcement.Thisdrawsonoriginalresearchonthepre‐

legislativehistoryonArt15.Thethirdsectioninvestigatesthelegalnatureofthe

CommissionopinionasanEUinstrument,drawingonthesoftlawliterature.Having

exploredthistheoreticalcontext,thefourthsectionlooksathowArt15worksinpractice.

UsingDGCompetitionandnationalcompetitionauthorityAnnualReportsandDG

Competitionandnationalcourtdatabases,Iseektoidentifyandtracethedecisionsin

whichtheCommissionhasdeliveredopinions(Art15(1)).IneachcaseIaimtodiscoverin

whatcircumstancesnationaljudgesusethistool;whatquestionswereaskedofthe

Commission;thecontentandnatureoftheCommission’sadvice,forexamplepurely

factual,economicorlegal;andtheimpactoftheCommission’sopiniononthejudge–how

closelys/hefollowsit.Thiswillfeedintoadiscussionontherelationshipwithand

implicationsforthejudicialpreliminaryreferenceprocedure.

ItheninvestigatecaseswheretheCommissionhasintervenedatitsowninitiativeas

amicuscuriaeunderArt15(3),itsreasonsfordoingso,andhowthenationalcourtdealt

withtheCommission’sobservations.ThecaseofXBVwarrantsparticularattention,in

whichanationalcourtrequestedapreliminaryrulingfromtheCJEUquestioningthe

admissibilityoftheCommission’sArt15(3)intervention.TheCJEU’sresponsegivesthe

Commissionscopetointerveneinanationalcourtcaserelatedtotheeffectiveapplication

ofArticles101and102TFEU,evenifthecourtisnotdirectlyapplyingthem.Ittherefore

affectstraditionalnotionsofjudicialindependenceandproceduralautonomy(bothstated

asrationalesfortheimpossibilityofanetworkofnationalcourts).First,thecasesuggests

anemphasisoneffective–notonlycoherent‐applicationoftheCommunityrules,over

judicialindependence.Second,itimpliesthataCommissioninterventioncouldextendto

nationalcasesconcerning,forexample,contractdisputes,follow‐ondamagesactions,or

criminalproceedings‐interventionnotinitiallyintendedbyRegulation1/2003.

Ifind23opinionsunderArt15(1)and9interventionsunderArt15(3),withvarying

degreesofsuccessinidentifyingthepartiesandhowtheopinionwasdealtwithbythe

nationalcourt.

2.RelationshipbetweentheEuropeanCommissionandnationaljudgesinthe

applicationofEUantitrustrules

Regulation1/2003decentralisedtheenforcementofEUantitrustrulesaslaiddownin

Articles101and102TFEU.Nationalcourtsandcompetitionauthoritiescandirectlyapply

93

theseprovisions,includingthepossibilitytoassesswhetherconductfallsunderthe

exemptingconditionsofArticle101(3),previouslywithintheexclusivejurisdictionofthe

EuropeanCommission.Theabsenceofanetworkwithformalrulesforjudicial

cooperation7emphasisestheimportanceoftheprovisionsintheCourtsNoticeandofthe

existingcaselawoftheUnionCourts.

FollowingthegeneralprincipleofprimacyofUnionlawfamouslyestablishedintheCosta

vENELcase8,inthecompetitionpolicyfieldWaltWilhelm9confirmedtheprecedenceof

Europeancompetitionlawwheretherewasaconflictwithnationalcompetitionlaw.It

requiredanationalauthoritytotake“properaccount”ofaCommissiondecisionortotake

“appropriatemeasures”whiletheCommission’sinvestigationwasstillinprogress.This

obligationwasstrengthenedinlatercaselaw,asoutlinedbelow.BRTvSABAM10

establishedthedirectapplicabilityofArticle101TFEU(and102TFEUbyanalogy)in

individualcases,implyingthattheyconferrightsonindividualswhichnationalcourts

mustprotect.TheCJEUreaffirmedthismorerecentlyandconcretelyinCouragev

Crehan11,byrecognisingtherighttodamagestocompensatelossasaresultofbreachof

theUnioncompetitionrules.Fromaproceduralperspective,VanSchijndelconcernswhen

nationalcourtsshouldraisepointsoftheirownmotionwhichhavenotbeenraisedbythe

partiestothecase.Ifdomesticlawconfersonnationalcourtsadiscretiontoapplyoftheir

ownmotionbindingrulesoflaw,theymustalsoapplytheEUcompetitionrules,even

whenthepartywithaninterestinapplicationofthoseprovisionshasnotreliedonthem.

However,“Unionlawdoesnotrequirenationalcourtstoraiseoftheirownmotionan

issueconcerningthebreachofprovisionsofUnionlawwhereexaminationofthatissue

wouldobligethemtoabandonthepassiveroleassignedtothembygoingbeyondthe

ambitofthedisputedefinedbythepartiesthemselves.”12

IntheinterestsofconsistentenforcementofEUcompetitionlawthroughouttheUnion,

andoftheeffectiveprotectionofUnionrights,Article3ofRegulation1/2003encapsulates

aconvergencerule,meaningthatnationalcompetitionrulesmaynotleadtoadifferent

7 There are fora such as the Association of European Competition Law Judges and the European Judicial Training Network. The Commission provides funding for training judges in developments in EU competition law and assessing economic evidence – see http://ec.europa.eu/competition/court/training.html (accessed 3.8.2010). 8 Case 6/64 Costa v Enel [1964] ECR 585 9 Case C-14/68 Walt Wilhelm v Bundeskartellamt [1969] ECR 1 10 Case C-127/73 Belgische Radio en Televisie and Société Belges des Auteurs, Compositeurs et Editeurs de Musique v SV SABAM and NV Fonior [1974] ECR 51 11 Case C-453/99 Courage Ltd v Crehan [2001] ECR I-6297. Since Regulation 1.2003 came into force, the CJEU followed up in joined Cases C-295/04-C-298/04 Manfredi and Others v Lloyd Adriatico Assicurazioni SpA and Others [2006] ECR I-6619 12 Courts Notice, [3] citing joined cases C-430/93 & C-431/93 Van Schijndel [1995] ECR I-4705, at 13-15, 22

94

outcomethanthatofEUcompetitionlawwherethereisaneffectontradebetween

MemberStates.Italsobuildsontheprincipleofparallelapplicationalreadyestablishedin

WaltWilhelm.Whereanationalcourtappliesnationalcompetitionlawstopractices

withinthemeaningofArticle101and102whichmayaffecttradebetweenMember

States,itmustalsoapplyArticle101and102.Ifanagreement,decisionorpracticeisnot

prohibitedunderArticle101,thecourtcannotapplystricternationalrulestoprohibitit

(butitmayapplystricterrulesthanArticle102onunilateralconduct),anditmaynot

allowapracticewhichisprohibitedbyArticle101or102.InthiswayReg1/2003partly

codifiesexistingcaselaw.

Delimitishadruledthat“conflictingdecisions[bynationalcourtsagainstthoseenvisaged

bytheCommission]wouldbecontrarytothegeneralprincipleoflegalcertaintyandmust,

therefore,beavoided.’”13InlinewiththatrulingandwithMasterfoods,14Article16(1)Reg

1/2003statesthatinsituationsofconsecutiveapplicationofthecompetitionrulesby

codifyingthatwherenationalcourtsruleonagreements,decisionsorpracticesunder

Article101or102oftheTreatywhicharealreadythesubjectofaCommissiondecision,

theycannottakedecisionsrunningcountertothatadopteddecision.15Incasesof

concurrentapplication,thatis,iftheCommissioniscontemplatingadecisionanda

nationalcourtisalsodealingwiththematter,thenationalcourtmust‘avoid’adoptinga

decisionthatwouldconflictwiththeCommission’s.16NCAshavealesserobligation,as

theyareonlyboundbyexisting,notenvisageddecisions(Article16(2)),likelybecause

theyaresubjecttoclosercoordinationwiththeCommissionthroughtheEuropean

CompetitionNetwork.

AccordingtoAdvocateGeneralCosmasinMasterfoods,thereisnoriskofconflictwhere

theproceedingsdealtwithbytheCommissionandthenationalcourtarenot‘completely

identical.’17FollowingtheCJEU’sCouragevCrehanjudgmentmentionedabove,Crehan

assertedhisrighttodamagesintheEnglishcourts.InInntrepreneurvCrehan,18theHouse

ofLordsinterpretedtheAdvocateGeneral’sMasterfoodsstatementasmeaningthatthere

13 Case C-234/89 Delimitis v Henninger Bräu [1991] ECR I-935 [47] 14 Case C-344/98 Masterfoods Ltd v HB Ice Cream Ltd [2000] ECR I-11369 [60] 15 The original proposal said “Member States shall use every effort to avoid any decision that conflicts with decisions adopted by the Commission.” (emphasis added). In the drafting negotiations, one Member State requested the insertion of ‘insofar as the facts of the case are the same’ – see Council document 5158/01 of 11 January 2001, interinstitutional file 2000/0243 (CNS): Note from the General Secretariat of the Council of Ministers to national delegations. 16 See A Komninos, ‘Effect of Commission Decisions on Private Antitrust Litigation: Setting the Story Straight’ (2007) 44 Common Market Law Review 1387-1428 for discussion of the impact of a Commission decision on national proceedings in various scenarios. 17 Opinion of Advocate General Cosmas delivered on 16 May 2000 in Masterfoods, at [16]

18 Inntrepreneur Pub Company and Others v Crehan [2006] UKHL 38

95

wasarequirementtoacceptthefactualbasisofadecisionreachedbyaUnioninstitution

onlywhenthespecificagreement,decisionorpracticebeforethenationalcourthasalso

beenthesubjectofaCommissiondecision,involvingthesameparties.19InCrehan,Lord

Hoffmansuggestedthat‘thedecisionoftheCommissionissimplyevidenceproperly

admissiblebeforetheEnglishcourtwhich,giventheexpertiseoftheCommission,may

wellberegardedbythatcourtashighlypersuasive.’20(emphasisadded).Thiscouldbe

readasthehighestnationalcourt’sreluctancetodefertoanadministrativeagency.Onthe

otherhand,theexpertiseoftheCommissionwasnoted.LordHoffman,rebuffingtheCourt

ofAppeal’sreasoning,explicitlystatedthat‘deference’wasnotanappropriateconceptfor

acourtexercisingconcurrentjurisdictionwiththeCommissioninthepost‐2004system.

TherearealsoconflictingattitudesinotherMemberStates.21InRutamur,22theMadrid

AudienciaProvincial(appealcourt)ruledthatthecriterialaiddownbyDGCOMPfor

determiningagencyagreementswerenotbindingonnationalcourtsincivildisputes.

Similarly,norwerethedeterminationsoftheTribunaldeDefensadelaCompetencia(part

oftheSpanishNCA)asitisnotarealTribunal,butamereadministrativebody.23

Converselyinanothercase,afirstinstancecourtreferredtoandfollowedMasterfoods,

andevenreferredtoaCommissionopiniongiveninadifferentcase.24Aswillbeseen

19 That case concerned the Commission’s finding of fact (foreclosed market) in previous decisions involving beer ties in the same market. According to Art 288 TFEU “A decision which specifies those to whom it is addressed shall be binding only on them.” One of the difficulties with the Inntrepreneur v Crehan case was precisely that the Commission had never taken a final decision on whether or not Crehan’s specific agreement infringed Article [101(1)]. Once the European Commission noted that Crehan’s damages claim was pending in the English courts, it suspended its concurrent investigation and in effect referred the case to the domestic courts. There was no Community interest in the Commission continuing its proceedings, and as such the national judge was in fact respecting the Commission by making his own ruling on the matter. Additionally, the House of Lords judgment determined that there was no obligation to stay the proceedings or adopt interim measures, for example suspending national proceedings to seek a preliminary reference from the European Court of Justice – it was only “well advised” – Advocate General Van Gerven in C-128/92 H J Banks & Co Ltd v British Coal Corporation [1994] ECR I-1209, at [61]. 20 Inntrepreneur v Crehan at [69] 21 E.g. Case 1235/2004 L'Andana y Estaciones de Servicio L'Andana v REPSOL, Spanish Supreme Court, 23.12.2004, reported in H Brokelmann‘Enforcement of Articles 81 and 82 EC under Regulation 1/2003: The Case of Spain and Portugal’ (2006) 29(4) World Competition 535-554, 552 22 Judgment No. 368/05 of 5 July 2005 handed down by Audiencia Provincial of Madrid Section 21º. Rutamur SA/Repsol Comercial de Productos Petrolíferos SA 23 P Ibáñez Colomo ‘A Spanish Court considers a distribution contract to be a “genuine” agency agreement therefore not caught by Art. 81.1 EC (Rutamur / Repsol)’ 5.7.2005, e-Competitions, N°326, www.concurrences.com. See also H Brokelmann‘Enforcement of Articles 81 and 82 EC under Regulation 1/2003: The Case of Spain and Portugal’ (2006) 29(4) World Competition 535-554, 552: “Some courts even expressly declare that they are not bound by precedents of the [Tribunal de Defensa de la Competencia] or the Commission…arguing that these are mere administrative bodies whose decisions are subject to judicial review. Others declare that they are not bound by judgments of courts of other branches that their civil branch and not even by rulings of the ECJ…” 24 Judgment No. 14/05 of 22 March 2005 handed down by Juzgado de lo Mercantil No. 2 of Madrid Gebe/ BP Oil España, reported in P Ibáñez Colomo, ‘A Spanish Tribunal finds that a distribution agreement may not be a 'genuine' agency agreement and thus may fall within the scope of Art. 81.1 EC (Gebe / BP Oil España)’, 22 March 2005, e-Competitions, N°23, www.concurrences.com

96

below,therehavebeenanumberofrequestsforanopinionfromSpainonnullityof

agreementsbetweenservicestationsandtheiroilcompanysuppliers.Theremaybeso

manyrequestsbecauseoftheuncertaintyordisagreementsaboutthepreciseobligationto

followCommissionfindingsordecisions.25

IntheTreaty,theonlydirectinstitutionallinkbetweenthenationalcourtsandthe

EuropeaninstitutionsistheirrelationshipwiththeCourtofJusticeoftheEuropeanUnion

throughthepreliminaryreferenceprocedureunderArticle267TFEU,whereacourtasks

forarulingontheinterpretationoftheTreatyorotherlegislativeacts.TheCommission,

historicallytheprimaryenforcerofcompetitionlawintheEU,hasthereforeattemptedto

complementtheformaljudiciallinkofthepreliminaryreferenceprocedurewithaparallel

strengtheningofitsownrelationswiththenationalcourts.26Thesecooperation

instrumentsarebasedontheprincipleofloyalcooperationbetweentheEuropean

institutionsandtheMemberStatesinachievingtheobjectivesoftheTreaty,derivingfrom

Article10EC(nowArticle4(3)TEU)andgivingrisetoanobligationofmutualassistance.

Thisisacknowledgedinparagraph15oftheCourtsNotice:‘…Article10EC…impliesthat

theCommissionmustassistnationalcourtswhentheyapplyCommunitylaw[Delimitis].

Equally,nationalcourtsmaybeobligedtoassisttheCommissioninthefulfilmentofits

tasks[RoquetteFreres27].’DelimitishadalreadyrecognisedtheCommission’sdutyto

loyallycooperatewithMemberStatesunderArticle10ECbyprovidingrequested

“economicandlegal”informationtothem,inaforerunnertoArt15(1)Reg1/2003.28

3.Article15ofRegulation1/2003asatoolforconsistentapplicationoftherules

UnderRegulation1/2003,theCommissionmaybecomeinvolvedinanationalcourtcase

inanumberofways:bytransmittinginformation;bygivinganopinion(bothunderArticle

15(1));orbysubmittingwrittenororalobservationsatitsowninitiative(15(3)).The

possibilityofaskingforaCommissionopinionhadbeenincludedinthesuperseded1993

25 C-344/98 Masterfoods Ltd (t/a Mars Ireland) v HB Ice Cream Ltd [2000] ECR I-11369 [60] – discussed in greater length in chapter 5 26 Recital 21 of Regulation 1/2003 recognises that: “Consistency in the application of the competition rules …requires that arrangements be established for cooperation between the courts of the Member States and the Commission. This is relevant for all courts of the Member States that apply Articles [101] and [102] of the Treaty, whether applying these rules in lawsuits between private parties, acting as public enforcers or as review courts...” 27 Case C-94/00 Roquette Frères SA v Directeur général de la concurrence, de la consommation et de la répression des fraudes [2002] ECR 9011 [31] 28 Delimitis [53]; see also Case C-2/88 Zwartveld [1990] ECR I-3365, [18]

97

CourtsNotice,whereitwascharacterisedasan‘interimopinion’giving‘usefulguidance’.29

Theown‐initiativeintervention,whichthecommissioncallsan‘amicuscuriae’

intervention,isanoveldevelopment.

Article15(1)providesthat‘InproceedingsfortheapplicationofArticle101orArticle102

oftheTreaty,courtsoftheMemberStatesmayasktheCommissiontotransmittothem

informationinitspossessionoritsopiniononquestionsconcerningtheapplicationofthe

Communitycompetitionrules.’Paragraphs27‐30ofthecurrentCourtsNoticeelaborate

ontheprinciplesandproceduretobefollowed.Inthespiritoftheindependenceofthe

courts,theCommissionshouldnotconsiderthemeritsofcasebeforethenationalcourt.It

shouldassistthecourtinaneutralmanner‐itisnotinvolvedintheinterparteselementof

thecaseandmaynotconsultthepartiesbeforeformulatingitsopinion.30Inapparently

safeguardingtheindependenceoftheCourtbynothearingtheparties,thismayleavethe

nationalcourt’sdecision,ortheCommissionopinionitself,opentochallenge.Thisis

relevantattwostages:first,whenthejudgedecideswhethertorequestanopinionand

howthatrequestisdrafted,andsecondly,afterthenationaljudgereceivesthe

Commission’sintervention.Astheprocessmaynotbeinfrontoftheparties,thenational

courtmayrelyontheCommission’sopinionwithoutcross‐examination.Assuch,the

rightsofthedefendanttoafairtrialcouldbeundulyrestricted.31Ajudgemightconsider

theCommission’sopinioninchambersratherthaninopencourt.Thepartiesmaynot

haveanopportunitytochallengethefactswhichthenationalcourtpresentstothe

CommissioninitsrequestorthecircumstancesuponwhichtheCommissionbasesits

opinion.Whetherthiswouldraiseconcernsfortheparties’rightswoulddependuponhow

theCommission’sopinionisdealtwithinthenationalproceedings,thatishowmuch

weightthenationaljudgeaccordstoit,andwhethertherearesufficientprocedural

safeguards.GiventhattheRegulationdoesnotprovideforaproceduralframework,courts

mustdealwiththeCommission'sopinioninaccordancewiththerelevantnational

proceduralrules,whilerespectingthegeneralprinciplesofUnionlaw,inparticularthe

principlesofeffectivenessandequivalence,invokedinparagraph35oftheCourtsnotice.

Applyingtheprincipleofequivalence,inMemberStateswherethepartieshaverightsto

beheardontheinterventionsofNCAs,theyshouldalsohavetherighttorespondto

29 Commission Notice of 13 February 1993 on cooperation between national courts and the Commission in applying Articles 85 and 86 of the EC Treaty, OJ C 39, 6. 30 If the Commission has been “contacted by any of the parties in the case pending before the court on issues which are raised before the national court, it will inform the national court thereof, independent of whether these contacts took place before or after the national court’s request for cooperation.” Courts Notice [19] 31 B Francis, ‘Subsidiarity and Antitrust: the Enforcement of European Competition Law in the National Courts of Member States’, (1995) 27 Law and Policy of International Business 247-276, 272. Although this article relates to the superseded 1993 Courts Notice, the author’s observation still holds.

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submissionsoftheCommission.32Forexample,inFrancewhereacourtrequestsan

opinionfromtheCompetitionAuthorityitmayonlygivethatopinionafterhearingthe

parties(ArticleL462‐3CodeduCommerce).SimilarlyintheNetherlands,thepartieshavea

righttorespondtosubmissionsofcompetitionauthorities.

Closelylinkedisthequestionoftheopinion’sevidentiarystatusintherelevantnational

procedurallaw.IthasbeensuggestedthatundersomeMemberStates’procedurallawit

couldbedeemedhearsayorinadmissibleopinion.33Alternatively,itcouldhavethestatus

ofexpertevidencesubjecttocross‐examinationbytheparties.VanderWalstatesthat

wheretheCommission‘…actsasalegaloreconomicadvisertothenationalcourt…

documentsdraftedintheexerciseofthatfunctionmustbesubjecttonationalprocedural

rulesinthesamewayasanyotherexpertreport.’34

Intermsofprocedure,theopinionisdraftedbytheEuropeanCompetitionNetworkunit,

A‐4,intheDirectorate‐GeneralforCompetition(DGCOMP)unlessarelatedinvestigation

ison‐goingelsewhere,whenitwillbereferredtotherelevantdepartment.Theunit

formallyconsultstheEuropeanCommissionLegalServicebeforegivingtheopinion.35The

CourtsNoticesetstheCommissionatargetdeadlineoffourmonthsinwhichtoprovide

theopinion.Fortransparency,theCommissionstatedthatitintendedtopostitsopinions

onDGCOMP’swebsiteonceithadreceivedacopyofthefinalnationalcourtjudgmentin

thecaseasrequiredunderArticle15(2)ofRegulation1/2003,aslongastherewasno

legalimpedimentpresentedbynationalproceduralrules.36However,todateithasposted

onlyfiveopinions–threetotheBrusselsCourtofAppeal,onetotheSwedishSupreme

32 National positions are available in the ECN convergence survey as at 14 April 2008: ‘ECN Working Group on Cooperation Issues - Results of the questionnaire on the reform of Member States’ national competition laws after EC Regulation No. 1/2003.’ In response to question 13 – ‘Does (or will) your national law include provisions to facilitate the use of Art 15.3?’- five Member States (Belgium, Bulgaria, Italy, Malta, Luxembourg) stated they were not intending to voluntarily introduce national law to facilitate amicus curiae interventions by NCAs and the Commission. Amendments were under consideration in Portugal and Slovenia, and the others had provisions through intervention of the NCA. In some cases, present rules were deemed sufficient (eg Austria), in Cyprus the Supreme Court would issue a Procedural Order, in the Czech Republic there were no specific rules but amicus interventions were possible according to the code of civil procedure. Denmark, Finland and Spain confirmed that there was no specific rule on the operation of Article 15(3), but there was no legal obstacle to its application. 33 B Francis, ‘Subsidiarity and Antitrust: the Enforcement of European Competition Law in the National Courts of Member States’, (1995) 27 Law and Policy of International Business 247-276, 272 34 Joined cases C-174/98P & C89/98P Van der Wal and the Netherlands v Commission [2000] ECRI-1, at [45] 35 Interview with a DG COMP official on the European Competition Network, 13.7.2006, Brussels 36 European Commission Annual Report on Competition Policy 2005, SEC(2006)761 final, 15.6.2006, 74, para 221. Available at http://ec.europa.eu/competition/publications/annual_report/2005/en.pdf (accessed 2.8.2010)

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CourtandonetotheSupremeAdministrativeCourtofLithuania.37Theseandothercases

inwhichopinionswereissuesareconsideredinmoredetailbelow.

TofacilitatethemonitoringoftheapplicationofEUantitrustrulesthroughoutthe

Community,Article15(2)requiresMemberStatestoforwardtotheCommissionacopyof

anywrittenjudgmentofnationalCourtsdecidingontheapplicationofArticles101or102

TFEU,“withoutdelay”afterthedecisionhasbeencommunicatedtotheparties.38Itshould

benotedthattheobligationfallsontheMemberStatetotransmitacopyofajudgmentto

theCommission,ratherthanonthecourtgivingjudgment.39Inpracticeitisusuallythe

NCAthatinformstheCommissionofacase,althoughthisisamatterfornationallawand

procedure.40IntheUK,transmissionofjudgmentsisprovidedforintheCivilProcedures

RulesEUCompetitionLawPracticeDirection(2004),point6.Point5.2placesadutyon

thepartiestoproceedingsandtheUKcompetitionauthoritiestonotifythecourtatany

stageoftheproceedingsiftheyareawarethattheEuropeanCommissionhasadoptedoris

contemplatingadecisioninrelationtotheproceedingsandwhichwouldhavelegal

effects.41InotherMemberStates,thenationalprovisionshavealsoundergonereform

clarifyingthelegalchannelforcommunicationofcourtjudgments.42

Itshouldalsobenotedthattheobligationtonotifydoesnotextendtodecisionsby

nationalcourtsnottoapplyArticles101and102afterdeliberation,orfailingtoconsider

37 Opinion of the European Commission to Lietuvos vyriausiasis administracinis teismas, administrative case number A502-337/2008 UAB Schneidersöhne Baltija/UAB Libra Vitalis of 9.9.2008; Opinion of the European Commission to the Högsta domstolen, case number T 2808-05 Danska Staten genom BornholmsTrafiken vYstad Hamn Logistik Aktiebola; Avis de la Commission européenne suite à la demande de la Cour d’appel de Bruxelles dans l’affaire 2004-MR-6 Laurent Emond contre Brasserie Haacht; Avis de la Commission européenne suite à la demande de la Cour d’appel de Bruxelles dans l’affaire 2004-MR-7 SABAM contre « Productions et Marketing » ; Avis de la Commission européenne suite à la demande de la Cour d’appel de Bruxelles dans l’affaire 2004-MR-8 Wallonie Expo SA/FEBIAC asbl, D000554, 2.2.2005, available at http://ec.europa.eu/competition/court/antitrust_requests.html (last accessed 7.9.2012) 38 See national court judgments database at http://ec.europa.eu/comm/competition/elojade/antitrust/nationalcourts/index.cfm (accessed 2.8.2010) 39 Such an obligation on courts was mooted in the drafting of Regulation 1/2003 – see Council document 5158/01 of 11 January 2001, interinstitutional file 2000/0243 (CNS): Note from the General Secretariat of the Council of Ministers to national delegations. 40 This channel of communication was partly modelled on the German system, section 90 of the Act Against Restraints on Competition (ARC), with the important difference that the ARC imposes a duty on the national court hearing a case between private parties which impacts on competition to inform the Federal Cartel Office. Section 90a ARC (7th amendment 2005) incorporates the provisions of Article 15 Regulation 1/2003 itself into the German law. 41 Practice Direction available at http://www.justice.gov.uk/civil/procrules_fin/contents/practice_directions/competitionlaw_pd.htm (accessed 2.8.2010) 42 Supplement to European Commission Annual Report on Competition Policy 2005: Application of the EC competition rules by national courts, 100. Available at http://ec.europa.eu/competition/publications/annual_report/2005/report_supplement_20061113.pdf (accessed 2.8.2010)

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thepossibilityofeffectontradebetweenMemberStatesaltogetherandonlyapplying

nationalcompetitionrules.

ThenationaljudgeshouldascertainwhethertheCommissionhasinitiatedaprocedurein

aninvestigationinvolvingthesamepartiesorwhetherithasalreadytakenadecision,to

conformwithitsobligationnottoadoptadecisioncountertooneoftheCommission.In

practice,thismayinvolvetheNCAinthatMemberState.Inaddition,theremaybefollow‐

oncasesfordamagesinnationalcourtsresultingfromthefindingofaninfringementatEU

level.Toaccountforthis,Article15(1)alsoallowsfornationalcourtstorequest

documentsorinformationheldbytheCommissiononacase.Theindicativedeadlinefor

transmissionofinformationisonemonth,shorterthanthefourmonthsforeseenforan

opinion.Anyexchangeofinformationissubjecttoprofessionalsecrecysafeguardsunder

Article339TFEUandArticle28Regulation1/2003.Thenationalcourtmustguaranteethe

protectionofconfidentialinformation–ifitisnotabletomakethisguarantee,the

Commissionisnotobligedtohandoverinformationordocuments:seePostbank,43which

affirmedthatcooperationbetweentheCommissionandMemberStatescourtsmustnot

undermineEUguaranteesoftheprotectionofbusinesssecrets.

Forthepurposesofthetrade‐offbetweeneffectiveenforcementofEUcompetitionlaw

andjudicialautonomy,thenoveldevelopmentofArticle15(3),elaboratedbyparagraphs

32‐35oftheCourtsNotice,ismoreinteresting.ThatprovisionallowstheCommissionthe

possibilityofmakingsubmissionsonitsowninitiativeincasesinnationalcourtseither

orallyorinwriting“wherethecoherentapplicationofArticle[101or102]oftheTreaty

sorequires.’”AnNCAmayalsosubmitobservationsbeforeitsnationalcourts“onissues

relatingtotheapplicationofArticle[101or102TFEU]”.TheCommissionisfreetosubmit

awrittenamicusbrieftothenationalcourt,butitisatthejudge’sdiscretiontoadmitoral

submissionsintheproceedings.Bythesametoken,anNCAmaysubmitobservations

beforeitsnationalcourts.Thereisadutyforinterventiontobefacilitatedbynational

rules:Courtsnoticepoint34:“Sincetheregulationdoesnotprovideforaprocedural

frameworkwithinwhichtheobservationsaretobesubmitted,MemberStates'procedural

rulesandpracticesdeterminetherelevantproceduralframework.WhereaMemberState

hasnotyetestablishedtherelevantproceduralframework,thenationalcourthasto

determinewhichproceduralrulesareappropriateforthesubmissionofobservationsin

thecasependingbeforeit.”However,theRegulationdoesnotprescribethepreciserules

bywhichMemberStatesshouldimplementArticle15.InsomeMemberStates,theamicus

curiaeconceptisnotknownatall.

43 Case T-353/94 Postbank v Commission [1996] ECR II-921

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Intheinterestsofconsistentapplicationofthecompetitionrulesandtoavoidconflicting

opinionsinthesamecase,theCourtsNoticestatesthattheCommissionandanational

competitionauthorityshouldinformeachotherwheneithersubmitsobservationsinthe

formofanamicuscuriaebrieftoanationalcourt.Althoughthereisnospecificmeasurefor

this,presumablyitwouldbedonethroughtheECN.Again,thereisnonotification

obligationonthenationalcourtitself.

Ididoriginalresearchintothepre‐legislativehistoryofArticle15todiscoverthe

motivationforincludingtheamicuscuriaeprovision.TheCommissionstaffworkingpaper

onamicuscuriaebriefs44characterisesprivatepartiesas“privateenforcersofthepublic

interest”whentheybringaclaimbeforeanationalcourtunderArticles101and102.The

Commissionintendsmakingsubmissionsinalimitednumberofcases,anditenvisages

NCAs,whichareclosertothenationalcourtsandoftenalsoclosertothefactsofthecase,

takingaleadingroleinsubmissionstocourts.45Thestaffworkingpapernotesthatco‐

ordinationoravoidanceofconflictingdecisionsismuchbetterachievedthroughtheECN

(inwhichnationalcourtcaseswouldonlybecomeindirectlyinvolvedthroughNCAs).In

thenegotiationsonthedraftingofArticle15oftheRegulation,someMemberStateshad

proposedthattheirnationalcompetitionauthoritiesactasintermediariesbetweenthe

courtsandtheCommission.46However,theCommissionforeseesinterveningwithamicus

briefs“wheretheproperinterpretationofCommissionnoticesorguidelinesisindispute

orwheretheCommissionbringsininformationonsimilarissuesbeingdealtwithbyitself

orbyMemberStates”.47

Inthestaffworkingpaper,amicuscuriaebriefsareexplicitlystatedtobeacomplementto

preliminaryreferencesunderArticle267TFEU,asameansofalertingnationaljudgesto

decisionsinotherMemberStatecourtsortodealwithnewpointsoflaw.48The

Commissionviewsamicuscuriaesubmissionsasameansofsafeguardingthepublic

interest.PresumablyitwouldbecomeawareofacaseeitherthroughtheECN–an

44 Commission Staff Working Paper: Reform of Regulation 17 – The proposal for a new implementing regulation – Article 15(3) submissions as amicus curiae, SEC (2001) 1827, 13.11.2001 (submitted to the Council working group) 45 ibid, [8] 46 Document: 5158/01 Secretariat to delegations, 11 January 2001 (for: Germany, Denmark, Luxembourg, Austria, Sweden – but Denmark requests that in normal circumstances NCAs should represent the Commission in national court proceedings. Conversely Germany requests that NCAs submit observations independently and not as the representative of the Commission. Document: 8383/1/02 [Spanish] Presidency to COREPER, 27 May 2002: France requests that the Commission be authorised to make written observations to the national court only via the national competition authority. 47 Commission Staff Working Paper: Reform of Regulation 17 – The proposal for a new implementing regulation – Article 15(3) submissions as amicus curiae, SEC (2001) 1827, 13.11.2001, 4, fn 4 48 ibid, [10]

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exampleoftheNCAbeingclosertothefacts,asmentionedabove‐orwheretheMember

Statehassubmittedacopyofthefirstinstancedecisiontoit,asrequiredtodounder

Article15(2)ofRegulation1/2003.Unlikenationalcompetitionauthorityenvisaged

decisions,nationalcourtjudgmentsdonothavetobenotifiedbytheMemberStateuntil

aftertheyarehandeddown.TheCommissionhasstatedthatitwouldtendtomakeamicus

submissionsatappealstage,49wheretheimpactonconsistencyislikelytobethegreatest.

Under15(3),whileitisatacourt’sdiscretiontorequestanopinionfromtheCommission

ortopermitoralsubmissionsinacase,thecourtshouldacceptwrittensubmissionsas

amicuscuriaefromtheCommissionorfromitsnationalcompetitionauthority.

Nevertheless,thenationaljudgealone,subjecttotheconstraintsofnationalprocedural

law,maydecidehowmuchweighttogivetothatsubmissionas,likeaCommission

opinion,itisnotformallybinding.UnderArt15(1),sincethenationalcourtinitiatesthe

request,onthefaceofitthereislittleconcernaboutjudicialautonomy.However,ifthe

judgebasicallytransposestheCommission’sopinion,theCommissionmayindirectly

influencethecase.50

ThenextsectionexaminesthelegalnatureandpossiblelegaleffectsofCommission

opinionsmoregenerally.

4.LegalnatureoftheCommissionopinionasanEUinstrument

IngeneralEUlaw,therewaswidediscretionfortheCommissiontoissueopinionsand

recommendationsunderArticle211(2)EC:‘Inordertoensuretheproperfunctioningand

developmentofthecommonmarket,theCommissionshall…formulaterecommendations

ordeliveropinionsonmattersdealtwithinthisTreaty,ifitexpresslysoprovidesorifthe

Commissionconsidersitnecessary.’(emphasisadded)Thereisnoequivalentmeasurein

theLisbonTreaty.Article288TFEUlaysdownthehierarchyoflegislativeacts,andstates

thatrecommendationsandopinionsshallhavenobindingforce.Inprinciple,itis

thereforeuptoMemberStatecourtstodecidewhethertotakeaccountofthemin

interpretingCommunityandrelatednationallegislation.However,theCJEU’sjudgmentin

Grimaldigoesfurther,atleastinitstreatmentofrecommendations:“Recommendations

49 ibid, [22] 50 See e.g. Comments of A Winckler in C-D Ehlermann & I Atanasiu (eds) European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law, European University Institute (Hart, 2003), 18: “French judges, for example, tend to take on board the Commission’s advice as if it were the very word of law.”

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arenotintendedtoproducebindingeffects,andthereforetheycannotcreaterightsupon

whichindividualsmayrelybeforeanationalcourt.However,thenationalcourtsarebound

totakethemintoconsiderationinordertodecidedisputessubmittedtothem,inparticular

wheretheycastlightontheinterpretationofnationalmeasuresadoptedinorderto

implementthemorwheretheyaredesignedtosupplementbindingCommunity

provisions.”51(emphasisadded)

TheCJEUthereforerecognisesthatwhileaninstrumentmaynothavebindingforce,it

maystillhavelegalsignificance.Inthiscontext,‘bindingCommunityprovisions’would

clearlyincludeArticles101and102oftheTreaty,andtheprovisionsofRegulation

1/2003.WhereastheCommissionhadnon‐specific,implicitpowerstoissueopinions

underArt211EC(nowrepealed)“whenevernecessary”,ithasbeengrantedexplicit

powerstodeliveropinionsthroughRegulation1/2003.Butwhatisthestatusofthose

opinions?

Fromapurelytextualapproachthereisanargumentthatthebindingforceofopinionsis

analogoustothatofrecommendations,astheyarementionedinthesameclauseofArticle

288TFEU.However,theyhavebeendistinguishedbasedontheirorigin,addressee,and

content.Whereasrecommendationsaremadeontheinstitutions’owninitiative,opinions

areusuallyadoptedinresponsetoanotherparty’sinitiative‐asinArticle15(1),atthe

requestofthecourt.52However,thenationalcourtdoesnothaveaspecificrighttoareply,

andtheCommissionhasacertaindiscretionovertheinformationoradviceitimparts–

governedbyFirstandFranex:“ifanationalcourtneedsinformationthatonlythe

Commissioncanprovide,theprincipleofloyalcooperation…will,inprinciple,requirethe

Commission…toprovidethatinformationassoonaspossible,unlessrefusaltoprovide

suchinformationisjustifiedbyoverridingreasonsrelatingtotheneedtoavoidany

interferencewiththefunctioningandindependenceoftheCommunityortosafeguardits

interests.”53(emphasisadded)Intermsofcontent,“recommendationsareinvitationsto

takecertainmeasures,sometimesaccompaniedbyadditionalprovisionsofaprocedural

nature,”whereasopinionsare“expressionsofopinionfromtheCommissionortheCouncil

onacertainfactualorlegalsituation.”54Unlikearecommendation,anopiniondoesnot

functionasanalternativetolegislation,55buttendstoapplytoaspecificcase.

51 Case C-322/88 Grimaldi v Fonds des Maladies Professionnelles [1989] ECR 4407, at [19] 52 B Beutler and R Bieber, Die Europäische Union: Rechtsordnung und Politik (Nomos, 1993) 192-3, 199, cited in L Senden, Soft Law in European Community Law (Hart, 2004), 161 53 Case C-275/00 European Community v First NV and Franex NV [2002] ECR I-10943, at [49] 54 H Smit and P Herzog, The Law of the European Community: A Commentary on the EEC Treaty, Volume 5, (Matthew Bender & Co, 2002), 629, cited in Senden (2004) 161-162 55 Senden (2004), 161-162

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Ifopinionshavenobindingforce,butneverthelesscourtsarerequiredtotaketheminto

consideration,theycanbecharacterisedassoftlawinstruments.Softlawisdefinedas

“rulesofconductthatarelaiddownininstrumentswhichhavenotbeenattributedlegally

bindingforceassuch,butneverthelessmayhavecertain(indirect)legaleffects,andthat

areaimedatandmayproducepracticaleffects.”56Sendencontendsthatindividualsoft

lawactsmaybecapableofhaving“incidental”bindingforce,byvirtueofanotherdecision

orinstrument.57Asmentionedabove,theCourtsnotice(paragraph27)statesthat

CommissionopinionscanbesoughtwhereRegulations,decisions,notices,andguidelines

(thelattertwothemselvessoftlawinstruments)donotoffersufficientguidance.Inthis

way,anysoftbindingforceisnotnecessarilydependentononeoftheseCommunity

instruments.Forexample,theadvicemaybecomebindingthroughthenationaljudgment

byvirtueofthewayinwhichthenationaljudgeusesitforinterpretationofother

obligationsorinstruments.Snyderalsosuggeststhatasoftlawactcouldbecomebinding

ifoneofthepartiesinprivatelitigationinvokesit.58Inpractice,asdiscussedbelow,ina

numberofopinionstheCommissionhasindicateditsexistingnoticesandguidelines,

previousdecisionalpractice,andCJEUcaselaw.Inthosecases,itappearsnottobe

establishing‘rulesofconduct’inaconstitutivewaybutclarifyingandsummarisingthemin

adeclaratorymanner.

AsBastnotes,“non‐bindinginstrumentsdonothaveobligatoryforce,althoughtheycan

indirectlypossesssuchaforceinconjunctionwithotherlegalnorms,inparticularthe

principleoftheprotectionoflegitimateexpectations.”59Partiestothedisputebeforethe

courtthathasreceivedaCommissionopinionmayhavelegitimateexpectations

concerningthecontentoftheopinion.AlthoughtheCommissionisinprinciplenottogo

intothemeritsofthecase,itgivesstrongindicationsofthefactorstobeconsideredand

thedecisionalprecedentstobeapplied‐includingsoftlawinstrumentslikenoticesand

guidelines,whichcouldthemselvesbecomebindingthroughthenationalcourt’s

judgment.

ThequestionariseswhetheropinionstonationalcourtsunderRegulation1/2003are

reallyopinionsasunderstoodbyArticle288TFEU.Beyonditsnoticeoncooperationwith

56 L Senden, Soft Law in European Community Law (Hart, 2004), 112, developed from F Snyder, ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56(1) Modern Law Review 19-54, 32: “rules of conduct which, in principle, have no legally binding force but which nevertheless may have practical effects.” 57 Senden (2004), 236 58 Snyder (1993), 33 59 J Bast, ‘Legal Instruments’, in A. Von Bogdandy and J. Bast, (eds), Principles of European Constitutional Law (Hart, 2006), 373-418, 409

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nationalcourtsintheStateaidfield,60thereappearstobenootherpolicyareawherethe

Commissionoffersanopinioninnationaljudicialproceedings.Theopiniontoanational

courtappearstobeasuigenerisinstrument.Theonlyothercircumstancesinwhich

opinionsareusedbytheCommissionasaCommunitylegalinstrumentarebefore

adoptionofnationallegislation;asareasonedopiniononownorthirdpartyinitiative,

usuallytoMemberStatesbeforeinfringementproceedingsunderArticle258TFEU;and

forinternalpurposesinthelegislativedecision‐makingprocess,especiallyundertheco‐

decisionprocedure.61

Tomyknowledge,noneoftheopinionstonationalcourtsidentifiedbelowhavebeen

publishedintheOfficialJournal,asEUinstrumentsarerequiredtobeundertheRulesof

theProcedureoftheCommission.62Thisshowsalackoftransparency,andcontrastswith

theavailabilityofthepreliminaryrulingsoftheCourtofJustice.Ifopinionsarecapableof

influencingtheoutcomeofcasesinnationalcourts,thereisanargumentforcloser

scrutiny.Scottnotesthat“…existingcaselawoperatestosuccessfullyguardagainstthe

dangerthattheCommissionmightseektosmuggleinnewlegalobligations[inpost‐

legislativeguidance]bydisguisingtheminnon‐bindingform.”63Thetestforwhetheran

actischallengeableinEUlawisthatithasbindinglegaleffectsregardlessofform,64

bringingaboutadistinctchangeinapplicant’slegalposition.65AstheCommissionopinion

inthiscontextisexplicitlystatedtobenon‐binding,itmightbehardtoshowthatan

opinionitselfhadsuchbindingeffectsseparatefromthenationalcourtjudgment.Thefact

thatDGCOMPformallyconsultstheCommissionLegalServicebeforegivingitsopinion

doeshoweverimplyitssensitivitytothepossibilityoflegalconsequencesarising.

60 Commission Notice on the enforcement of State aid law by national courts, OJ C 85, 9.4.2009, (especially Part 3), superseding Commission Notice on cooperation between national courts and the Commission in the State Aid field, O J C 312, 23.11.1995, 8. 61 L Senden, Soft Law in European Community Law (Hart, 2004), 186-7; Craig and de Burca also discuss Commission opinions only in relation to comitology procedures, and to Member State infringement proceedings: P Craig and G de Burca, EU Law: Text, Cases and Materials (OUP, 3rd edn, 2002) 397 et seq 62 Rules of Procedure of the Commission, C (2000) 3614, OJ 2000 L 308, 8.12.2000, 26, as amended. Articles 17 [Secretary General] and 18 [Authentication of Commission instruments]: The Secretary General must ensure that all Community instruments mentioned in Article 249 EC [now 288 TFEU] are notified to those concerned and published in the Official Journal. 63 J Scott ‘In Legal Limbo: Post-Legislative Guidance as a Challenge for European Administrative Law’ (2011) 48(2) Common Market Law Review 329-355, 344 64 22/70 Commission v Council (ERTA ) [1971] ECR 263; T-3/93 Air France v Commission [1994] ECR II-323 65 60/81 IBM v Commission [1981] ECR 2639

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IfwecategoriseEUsoftlawinstrumentsaccordingtotheirfunction‐preparatoryand

informative;interpretativeanddecisional;andsteeringinstruments66‐Commission

opinionsfitmostcomfortablyintothesecondcategory.AsSendennotes,theCommission

adoptsinterpretativenoticesandcommunicationsofgeneralapplicationgivingthe

Commission’sopiniononhowEUlawshouldbeinterpreted,oftensummarisingthe

Europeancourts’caselaw.Inthisway,theyhavea‘post‐law’function.67Commission

opinionsdonotcorrespondeasilywiththedefinitionofasoftlawinstrumentestablishing

rulesofconductinSnyder’sandSenden’sformulations.Inaddition,theyapplyinspecific

judicialproceedings.

Thisinterpretativeordecisionalinstrumentisanimportantinstanceoftheconcurrent

powersoftheCommissionandtheCourtofJustice.Sendencharacterisesas“concurrent

powers”arisingoutsidetheareaofdecision‐making,theCommission’spowertoadopt

interpretativeinstrumentsandtheCJEU’spowertointerpretUnionlaw.68Thisimplies

thattheCommissionshouldcommunicatetheCJEU’scaselaw,somehowwithoutgivingits

owninterpretationofit.SnyderremarksthatthecombinationofArticle211EC(the

powertoissuerecommendationsandopinions)andthedutyofloyalcooperationunder

Article10EC(now4(3)TEU)givestheCommission“boththepowerandthedutyto

explainECJjudgmentsandspellouttheirimplicationsfornationalgovernmentsand

privateparties.”69(emphasisadded).

TheuseofsoftlawcanaffecttheinstitutionalbalanceintheUnion.Art19TEU70(exArt

220EC)suggeststhattheCourtofJusticehasamonopolyoverinterpretationofUnion

law–oratleastthe‘finalsay’asultimatearbiter.Buttheauthoringofsoftlawrulesand

theirday‐to‐dayapplicationiscarriedoutbytheCommission.TheCommission’s

66 L Senden, ‘Soft Law and its Implications for Institutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79-99, 81 67 L Senden, ‘Soft Law and its Implications for Institutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79-99, 82. Joanne Scott also adopts Senden’s terminology in J Scott ‘In Legal Limbo: Post-Legislative Guidance as a Challenge for European Administrative Law’ (2011) 48(2) Common Market Law Review 329-355, 329. She separates ‘interpretative’ and ‘decisional’ instruments: “Whereas the former merely interpret EU law, the latter are said to indicate the manner in which an EU institution intends to exercise its discretion… Post-legislative guidance of this kind may be thought of as instruments of ‘hybridity’ within the language of ‘new governance’ scholarship in that they represent soft law elaborations of hard law norms.”In fact in her case study (on climate change), Scott considers decisional guidelines, rather than guidance in an interpretative instrument which may be presented on a case by case basis. 68 Senden (2005), 93 69 F Snyder, ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56(1) Modern Law Review 19-54, 33 70 ‘1. The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed.’ (Although only ‘the Treaties’ are mentioned, it is assumed that all law should follow the Treaties.)

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authorshipofsoftlawinstrumentsatthelegislativelevelsuggestsitsinterpretative

supremacyattheenforcementlevel.71Wherethereisaclashbetweenasoftlaw

instrumentandexistingcaselaw,theformerwouldbeinbreach.72TheCommissionis

carefultostipulatethatitsopinionsaregivenwithoutprejudicetotheinterpretationof

theCJEUthroughthepossibilityorobligationofthecourttohaverecoursetothe

preliminaryreferenceprocedure.However,inapplyingandenforcingthelawthe

Commissionmayadditsown–subjective–viewsonhowaparticularcaselaworTreaty

orsecondarylawprovisionshouldbeunderstood,73orextendingitscope.Inthose

circumstances,Isubmitthatitwouldoversteptheboundariesofitspowersand

circumventtheroleoftheCJEU.74

DespitethevaryingdegreesofpersuasiveforceofCommissioninstrumentsandguidance,

ifitsopinionsaresoughtinagreaternumberofcases,itispossiblethatprecedentswill

accumulate,creatingabodyofsoftlaw.Asidefromthenormativequestions,thepractical

impactmaydependontheextenttowhichsuchopinionsonlysummariseexistinglaw,or

becomemorenovelandinterventionist.Asnotedabove,Commissionopinionscould

becomebindingindirectlythroughthenationalcourt’sjudgment,particularlyifit

essentiallytransposestheCommission’sadvice.Thejudgmentwouldbeeffectivebetween

theparties,butauniversalbindingeffectcouldresultifaprincipleexpressedina

Commissionopinionistreatedasaprecedentinthenationalcaselaw.Thereisalready

evidenceforthisintheSpanishcaselaw(GebeOil,mentionedabove).

TheopinionreferredtoinArticle15(1)Regulation1/2003isdependentonarequestfrom

anationaljudge.However,theamicuscuriaeinterventionenvisagedinArticle15(3)isat

theCommission’sowninitiative.TheargumentsforhowCommissionopinionsmay

becomebindingholdequallyforamicuscuriaeinterventions.Buthere,thejudgemaybea

71 Broberg and Fenger also suggest that in policy areas where the Commission can issue binding decisions, such as in competition and State aid, the Commission “arguably both can and should assist the national court.” M Broberg & N Fenger Preliminary References to the European Court of Justice (OUP, 2010) 20 72 O Ştefan ‘European Competition Soft Law in European Courts: A Matter of Hard Principles?’ (2008) 14(3) European Law Journal 753-772, 764 73 L Senden, ‘Soft Law and its Implications for Institutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79-99, 93 74 Broberg and Fenger make a similar point: “…for the Commission to provide the national court with a form of assistance that the Treaty has placed in the hands of the Court of Justice could constitute a ‘détournement de procedure’.” M Broberg & N Fenger Preliminary References to the European Court of Justice (OUP, 2010), 21. Scott also points out several reasons to be concerned with this kind of interpretative or decisional guidance: “guidance may be treated as authoritative by the Member States. It may influence their attitude and behaviour, generating significant practical effects.” (p. 344) and it excludes courts “from being able to evaluate and shape the processes leading to the adoption of guidance of this kind.” (p. 346) J Scott ‘In Legal Limbo: Post-Legislative Guidance as a Challenge for European Administrative Law’ (2011) 48(2) Common Market Law Review 329-355

108

lesswillingrecipientoftheCommission’sadvice.Theclearpurposeistoinfluencejudicial

proceedingsbylodgingobservations,whetherattherequestofthecourtornot.Inthe

UnitedStatesliteratureonimpactofamicuscuriaebriefsintheUSSupremeCourt,

KearneyandMerrilldiscussthreemodelsofjudging:75thelegalmodel,wherejudgesseek

toresolvecasesinaccordancewithrequirementsoflaw‐amicuscuriaebriefswould

thereforebeassumedtohaveanimpactinsofarastheyaddnewinformationnotbrought

bytheparties;theattitudinalmodel,wherejudgeshavefixedideologicalpreferences,case

outcomesarethesumofthesepreferences,andlegalnormssimplyrationalisethose

outcomesafterthefact–amicusbriefsarethereforeexpectedtohavenoimpact;andthe

interestgroupmodel,wherejudgesare‘emptyvessels’,decidingcasessoastoreach

resultssupportedbythemostinfluentialgroupsinsociety.Theyfindgreatestsupportfor

the‘legal’model,alsofindingthatbriefsfiledbyinstitutionallitigantsweremost

successfulininfluencingtheoutcomeofcases.IntheEU,theimpactislikelytodependon

differentjudicialpreferencesintheMemberStates.Theclosestcomparatorwouldbethe

attitudesofjudgestopreliminaryrulings,butmoreresearchwouldneedtobecarried

out.76

5.Article15inpractice

5.1 CasesinwhichtheCommission’sopinionwassought:Art15(1)Reg1/2003

Ideally,casesinwhichtheCommissionhasgivenopinionsneedtobeconsideredinthe

contextofthelargersetofjudgmentsinwhichnationalcourtshaveappliedEU

competitionrules(eitherinprivateenforcement,orinareviewfunction).Itisdifficultto

getanaccurateEU‐widepictureofallthesecases.ThemostobvioussourceisDGCOMP’s

nationalcourtcasesdatabase,giventheobligationontheMemberStatestonotifyallsuch

casesunderArt15(2).Todate,since1May2004Regulation1/2003cameintoforce,the

Commissionhasincluded335nationalcourtjudgmentsinitsdatabase77.Themajorityof

thosejudgmentsarosefromprivateenforcementcases,primarilyseekingannulmentof

75 J Kearney and T Merrill, ‘Influence of Amicus Curiae Briefs on the Supreme Court’ (1999-2000) 148 University of Pennsylvania Law Review 743-856. There are of course limitations in applying these findings to the EU. Many EU Member States’ judicial systems are inquisitorial rather than adversarial, and in the US amici may act rather as interested advocates for the parties than friends of the court. According to Kearney & Merrill, amicus briefs are used in the vast majority, around 85%, of the US Supreme Court’s argued cases. It should also be noted that this literature considers the effects on the Supreme Court rather than lower courts. 76 B Rodger (ed) Article 234 and Competition Law: An Analysis (Kluwer, 2008) concerning preliminary references in competition cases before the reforms came into force on 1 May 2004. 77 National court judgments database http://ec.europa.eu/competition/elojade/antitrust/nationalcourts/ (last accessed 7.9.2012). Spain has the highest number of reported cases, numbering 101.

109

obligationsunderanagreementorcontractonthegroundsofincompatibilitywith

Articles101.Anumberofthejudgmentswerejudicialreviewsofadministrativedecisions.

Intermsofsubjectmatter,carsalesanddistribution,retailsaleofautomotivefuel,beer

distribution,telecommunications,energy,andconstructionsectorsfeaturefrequently.

However,theCommission’sfive‐yearreportonthefunctioningofRegulation1/2003

acknowledgesthatArt15(2)isnotworkingsufficientlyeffectively.78Itishighlylikelythat

therearehiddencasesinMemberStatejurisdictionswhichhavenotyetbeennotifiedto

theCommissionorwherethedatabasehasnotbeenupdated.Therearesome

inconsistenciesbetweenthedatabaseandtheCommission’sAnnualReportson

CompetitionPolicy.Theremaybeanumberofreasonsforthis.Insomeinstances

proceedingswereon‐goingbyappealinahighercourt.IntheorytheCommissionshould

benotifiedofallfirstinstancejudgments,butthismaynothavehappened.Inothercases

thecourtwasinvolvedinapublicenforcementcapacity.Forexample,inSwedenthe

competitionauthorityisnotcompetenttomakeadecisiononfines,andmustrefertothe

Marknadsdomstolen(MarketCourt).Insomecountriesthereisgreaterenforcement

throughthenationalcompetitionauthorityratherthanthecourts.Takenatfacevalue,the

figuresinthedatabaseshownocasesatallapplyingECantitrustrulesintenofthe

MemberStates.79

AsfarasCommissionopinionsareconcerned,accordingtoamemberoftheCommission’s

LegalServicewritinginapersonalcapacity,uptothemiddleof200819opinionshad

beenrequestedfromnationalcourtsandtheCommissionhaddeliveredinallofthem.80

TheCommission’s2009communicationtotheCouncilandEuropeanParliamentonthe

78 Communication from the Commission to the European Parliament and the Council: Report on the functioning of Regulation 1/2003, COM (2009) 206 final, and accompanying Commission staff working paper SEC(2009)574, Brussels 29.4.2009, 79 79 Bulgaria, Cyprus, Czech Republic (although there have been a number of cases – see e.g. Case No. 62 Ca 4/2007-115, Tupperware, Brno Regional Court, 1.11.2007), Estonia, Greece, Luxembourg, Malta, Romania, Slovakia, Slovenia. 80 E. Gippini Fournier, ‘Institutional Report: The Modernisation of European Competition Law: First Experiences with Regulation 1/2003’, in H.F. Koeck and M.M. Karollus (eds), The Modernisation of European Competition Law: Initial Experiences with Regulation 1/2003, FIDE XXIII Congress Linz 2008 (Nomos, 2008) 375-483, 467. Subsequently, the European Commission Annual Report on Competition Policy 2009, COM (2010) 282 final, 117-119, reports that in 2009 the Commission issued five opinions - one to a Belgian court, one to a Lithuanian court, and three to Spanish courts. The 2010 annual report states that the Commission responded to two requests – one from Spain and one from Belgium (para 146), with some further details in the accompanying Staff Working Paper – see table 1. European Competition Annual Report on Competition Policy 2010, COM (2011) 328 final; accompanying Commission staff working paper {SEC (2011) 690 final}. No Art 15(1) opinions are mentioned in the 2011 annual report, European Commission Annual Report on Competition Policy 2011, COM (2012) 253 final

110

functioningofRegulation1/2003reports18opinionsasat31March2009.81Ihavebeen

abletolocate18casestothatdate,withvaryingdegreesofsuccessinidentifyingthe

partiesandintracingtheproceedingsinthenationaljurisdictions.Itisnotpossibleto

confirmwhethersomehavebeendoublecountedbecauseofunknowncasenamesand

details.OnlyfivecasesarenowreportedonDGCOMP’swebsite.82Thisinitself

demonstratesalackoftransparency.Itisalsonotablethatgenerallythereismuchmore

detailonthecasesintheEuropeanCommission’sAnnualReportspre‐2004.Ihavebeen

abletolocateafurtherfivecasessincethedateoftheCommission’s2009report,bringing

thecurrenttotalto23.Table1belowsummarisesthecases.

GiventhattheCommissionhasnotyetmadepublicitsopinionsinmostindividualcases,it

isadifficulttasktomatchupthecaseswheretheCommissionhasdeliveredanopinion

withthecorrespondingnationaljudgmentsapplyingEUantitrustrules,especiallywhere

thepartiesarenotdisclosedinDGCOMP’snationalcourtjudgmentsdatabasefor

confidentialityreasonsorbecausethedatabasehasnotbeenupdated.However,matching

ispossiblethroughsomeNCAs’annualreports,EuropeanCommissionAnnualReportson

CompetitionPolicy83andnationalcasedatabases.

IneachcaseIaimtodiscoverinwhatcircumstancesnationaljudgesusethistool;what

questionswereaskedoftheCommission;thecontentandnatureoftheCommission’s

advice,forexamplepurelyfactual,economicorlegal;andtheimpactoftheCommission’s

opiniononthejudge–howcloselys/hefollowsit.Thiswillfeedintothediscussiononthe

relationshipwithandimplicationsforthejudicialpreliminaryreferenceprocedure.

81 Communication from the Commission to the European Parliament and the Council: Report on the functioning of Regulation 1/2003, COM (2009) 206 final, 8, and accompanying Commission staff working paper SEC (2009) 574, Brussels 29.4.2009, pp. 75-76, paras [277]-[278]: “As of 31 March 2009, the Commission has issued opinions on 18 occasions to national courts in Belgium (5), Spain (9), Lithuania (1), The Netherlands (1) and Sweden (2).” However, these cases are unnamed. 82 http://ec.europa.eu/competition/court/antitrust_requests.html (last accessed 7.9.2012) 83 http://ec.europa.eu/competition/publications/annual_report/index.html European Commission Annual Report on Competition Policy 2004, SEC (2005) 805 final vol I, 55; European Commission Annual Report on Competition Policy 2005, SEC (2006)761 final, 73, para [219]; European Commission Annual Report on Competition Policy 2006, COM (2007) 358 final, 33. Commission Staff Working Document, SEC (2008) 2038, 16.6.2008, 101- Annex To The European Commission Annual Report On Competition Policy 2007, COM (2008) 368; European Commission Annual Report on Competition Policy 2008, COM (2009) 374 final, 28, simply states that “the Commission received several requests for opinions which were pending at the end of the year.”

111

TABLE1:EuropeanCommissionopinionstonationalcourtsunderArticle15(1)Regulation1/2003

Casename MemberState

Court

Sector

Facts

Commissionopinion Commissionopinionsought(1),delivered(2),judgmentdelivered(3)

1.EmondvBrasserieHacht2004/MR/684

Belgium Brussels Court ofAppeal(referredfromLiège Court of Appealon9.9.2004)85

Beer ties(exclusivepurchasingagreements ‐EPA)

Brewery, Brasserie Hacht,concluded 10‐yr EPA for beerwith buyer, Emond, in 1993. 4yrs later concluded 5‐yr EPA forbeverages other than beer.Brewery had been guarantor ofEmond’s bank loan, penalties incase of EPA breach. Bar out ofbusiness in Sept 1999; Emondclaimedbrewerysharedliability.Courtdecidedrelevantpointwas

Q: compatibility with Art 81 ofconcurrentEPAs; if incompatible,scopeof81(2)nullity.Oncompatibility,Comreferredto its deminimis notices86, blockexemption notifications87; CJEU’sDelimitisonhowtoassessmarketforeclosure. On scope of nullity,CJEUCouragevCrehan88.

4.2.2005(2)23.6.2005(3)

84 Belgian (non-confidential) judgments from DG Comp national court judgments database: http://ec.europa.eu/competition/antitrust/national_courts/court_2005_027_be.pdf (accessed 17.8.2010). Opinion itself available at: http://ec.europa.eu/competition/court/antitrust_requests.html; http://ec.europa.eu/competition/court/brasserie_haacht.pdf (accessed 17.8.2010). 2005 European Commission annual report, p. 67 (unnamed); supplement 2005 p. 139-140; Belgian conseil de la concurrence annual report 2004 (including 2005 cases, published 2006): http://mineco.fgov.be/organization_market/competition/competition_council/annual_reports/report_competition_2004.pdf (accessed 22.6.2006 - no longer available online, but hard copy on file), 52-55 85 The Court of Appeal in Brussels asked for the Commission’s opinion in the following three cases. Belgium has a domestic preliminary reference system (art 42, superseded 1999 Protection of Economic Competition Act (LPCE)) in which lower courts can ask for an opinion, at the time from the Brussels Court of Appeal, and it is in this context that the Commission’s guidance was sought. The competence to deliver preliminary rulings has since been transferred to the Belgian Court of Cassation: Art 72-74 LPCE (in force 15 September 2006). 86 Most recently Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community, OJ C 368/07, 22.12.2001, 13 87 Commission Regulation (EEC) No. 1984/83 of 22 June 1983 on the application of Article 85(3) [now 101(3)] of the Treaty to categories of exclusive purchasing agreements OJ L 173, 30.6.1983 expired 31.5.2000, subsequent Commission Regulation (EC) No. 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices OJ L 336, 29.12.1999 88 C-453/99 Courage v Crehan [2001] ECR I-6297

112


Court

Sector

Facts


not conclusion of secondexclusive purchasing agreementfor beverages other than beer,but moment of its breach.Considering Com’s notices, EPAcovered by block exemptionnotices as market share did notexceed30%(wasnothigherthan10‐15%),non‐competeclausenolonger than 5 yrs. ContractcompatiblewithArt101.Emondunsuccessful.

2. SABAM vProductions &Marketing2004/MR/789

Belgium Brussels Court ofAppeal(referredfromBrussels CommercialCourt)

Collectingsocieties

Whether SABAM, collectingsociety protecting music right‐holders, abused dominantpositionbytyinggrantof licenceto other conditions; refusing togive reasons for its conditions;creating entry barriers byunjustifiably favouring firmsalready in the market fororganisationofconcerts.P&M, concert organiser needed

Q: compatibility with Art 102,esp. discrimination (102(c)), ofcollecting society’s criteria forgranting status of ‘grandorganisateur’ entitling 50%rebateonroyalties.Com referred to its decisionalpractice in sector, rehearsingfactors which can be taken intoaccounttoassesswhethercriteriathemselves, or their application,

4.2.2005(2)3.11.2005(3)

89 Belgian (non-confidential) judgments from DG Comp national court judgments database: http://ec.europa.eu/competition/antitrust/national_courts/court_2005_038_be.pdf . Opinion itself available at: http://ec.europa.eu/competition/court/antitrust_requests.html; http://ec.europa.eu/competition/court/sabam.pdf ; Commission annual report 2005, p. 67-68 (unnamed); 2005 supplement, p. 140-141; Belgian conseil de la concurrence annual report 2004, p. 55-57

113


Court

Sector

Facts


toobtaincopyrightlicencesfromSABAM. Only SABAM issuedlicences in Belgium. Refused togrant P&M status of ‘grandorganisateur’, denying benefit of50% reduced tariff. P&Mcontested bills, SABAM initiatedproceedings. P&M argued thatasSABAMwastheonlyoperatorof its kind in Belgium, marketentrydifficult.Court found criteria lackedclarity and transparency,specifically designed todiscriminate–criterianotpublic,unwritten, unknown in advance.Excessive differential betweentariffs paid for copyright, andSABAM gave no objective oreconomic justification. Breach ofArt102.

maybreachArt82.Comreferredto Belgian as well as EUjurisprudence on dominance.Explicitly stated its opinion wasnotbindingandonlyvalidwheretrade between Member Stateslikely to be affected by practicesalleged.

3. Wallonie Expo vFEBIAC2004/MR/890

Belgium Brussels Court ofAppeal(referredfromBrussels Commercial

Tradefairs/exhibitions

Commercial Court did notmention EC law in reference toCourtofAppeal,maintained that

Q:compatibilityofArts101&102with agreement betweenorganiser of truck exhibition,

4.2.2005(2)10.11.2005

90 Belgian (non-confidential) judgments from DG Comp national court judgments database: http://ec.europa.eu/competition/antitrust/national_courts/court_2005_039_be.pdf . Opinion itself available at: http://ec.europa.eu/competition/court/antitrust_requests.html, http://ec.europa.eu/competition/court/febiac.pdf ; Commission annual report 2005, p. 67 (unnamed); 2005 supplement, p. 141; Belgian conseil de la concurrence annual report 2004, p. 57-63

114


Court

Sector

Facts


Court Tribunal deCommerce/RechtbankvanKoophandel)

relevant geographic marketnational, so only Belgian lawapplicable. However,Competition Council submittedwritten observations thatcapable of affecting tradebetweenMemberStates,CourtofAppealagreed.Court found prohibition onexhibiting elsewhere within 6mths capable of restrictingcompetition.However,relevantmarket was national, optionremained for exhibitors toparticipate ineventsabroad.Not81(1) unlawful. But, prohibitionon participation in anotherexhibition in the6mthsprior toone in question was unjustifiedand disproportionate. Puttingthat clause into effect wouldbreachArt102.

WEX, and federation of truckexhibitors, importers anddistributors, FEBIAC, not to takepart in any similar event inBelgium in 6 mths prior to theexhib.Belgium system of notificationof agreements capable ofrestricting competition onnational market under Art7(1)LPCE. Com indicated fact thatFEBIAC regulation had not beennotified to Competition Councilhadnobearingonitslegality.Stillhad to be examined under Art101Recallingitsdecisionalpracticein sector, Com noted it hadgenerally exempted prohibitionclauses in regulation of fairs andexhibs on basis of 101(3), butexception should not be appliedautomatically ‐ needs economicanalysis of real and potentialeffects of clause on market,requiring delimitation ofgeographic market, and assesswhether agreement capable of

(3)

115


Court

Sector

Facts


foreclosingcompetitors.Opinion clarified relationshipbetween Art 101&102 andindicated that efficiencies can beconsidered in Art 102assessments.91

4.Unknown92 Belgium Antwerp Court ofAppeal. GerechtshofAntwerpen

Ports(indemnityclause)

FatalaccidentatAntwerpportin1995 where ship hit containercrane. Central issuewas liabilityof pilot and company holdingconcession for pilot services inAntwerpport.

Q: compatibility with Art 102 ofterms of concession‐holder’spilotage contract, incl. indemnityandexclusionofliabilityclauses‐whether contractual exclusion ofliabilityisabuseofdompos.Com laid out case law onexploitative abuses and unfairtrading conditions under 102(a),esp BRT v SABAM. Key waswhether dominant firm wouldhavebeenable to imposesimilarexclusion of liability if there hadbeen effective competition.Further, Court shouldproportionality of considerwhether restrictive effects ofcontractual clause. Liability

2006

91 Commission annual report 2005, p.75 92 Commission annual report 2006 supplement p. 123-124 (unnamed)

116


Court

Sector

Facts


clause should be considered incontext of whole contract andrelevantcircumstances.

5.Unknown93 Belgium Unknown Unknown applicability of Articles 101 and102totheexclusionofoneofthemembers of a standards settingorganisation

Unknown 2006?

6.Unknown94 Spain Unknown Retail sale ofautomotivefuel

WhetherservicestationoperatorcoulduseArt101asadefencetobe released from a contractualobligation.

Q: whether size and nature ofnetwork of Spanish suppliercould affect trade betweenMember States; whetherexclusive supply contractbetween the parties could beexemptunder101(3).Comindicatedhownetworkofexclusive supply contracts canlead to foreclosure,outlinedhowtoassessinlinewithDelimitis,its

2005

93 Communication from the Commission to the European Parliament and the Council: Report on the functioning of Regulation 1/2003, COM (2009) 206 final, p. 8, and accompanying Commission staff working paper SEC(2009)574, Brussels 29.4.2009, p. 80. Investigated available Belgian Competition Authority annual reports 2005-2009 but could find no corresponding case.http://economie.fgov.be/en/entreprises/competition/Belgian_Competition_Authority/Annual_Reports/index.jsp. 2005 and 2006 on French site: http://economie.fgov.be/fr/entreprises/concurrence/Autorite_belge_concurrence_Introduction/Conseil_concurrence/index.jsp (accessed 11.8.2010) 94 Commission annual report 2005, p. 75-76 (unnamed).

117


Court

Sector

Facts


own guidelines and notices, andArt27(4)notice95publishedinitsREPSOL investigation96. Reexemption, Com simply referredtoits101(3)guidelines.

7.Unknown97 Spain Unknown Retail sale ofautomotivefuel

Unknown Q: compatibility with Art 101 ofnon‐compete clause, specificallyresale price maintenance (RPM),whether agreement could becoveredbyblock exemption, andwhether service station operatorcouldbedefinedasanagent.As above, Com referred toDelimitis, its own guidelines andnotices, and the Art 27(4) noticein REPSOL on assessing marketforeclosure and individualexemption under 81(3). Outlinedcriteria for assessing whetherretailerisanagentbyreferringto

2005

95 Article 27(4) Regulation 1/2003: “Where the Commission intends to adopt a decision pursuant to Article 9 [commitments] or Article 10 [finding of inapplicability], it shall publish a concise summary of the case and the main content of the commitments or of the proposed course of action. Interested parties may submit their observations within a time limit which is fixed by the Commission in its publication and which may not be less than one month. Publication shall have regard to the legitimate interest of undertakings in the protection of their business secrets.” 96 COMP 38.348 – REPSOL, OJ C 258, 20.10.2004, 7-11 97 Commission annual report 2005, p.75-76 (unnamed)

118


Court

Sector

Facts


itsguidelines.Clauses providing for ahardcore restriction on RPM arevoid if not part of a genuineagency contract But, for Court todecidewhether a clause itmightfind void could be severed fromthecontractorwhetheritvitiatedcontractasawhole.

8. Clau v CepsaEstaciones deServicio, Case n°48/2004.98

Spain Provincial CourtGirona No. 1,Audiencia Provincialde Girona (on appealfrom Girona Court ofFirst Instance No 1,caseNo266/2002)

Retail sale ofautomotivefuel

Contracts for start‐up of servicestation and exclusive sale ofCEPSA products. Whethercontract was re‐sale agreementoragenuineagencyagreement.

Notknown 7.6.2004(3)Contractwasa“re‐saleagreement”.Actuallyagencyagreement.Invalidasdidnotfallunderblockexemptionregulations.Contractsvoid.Parties

98 http://ec.europa.eu/competition/publications/annual_report/2004/aeccr_en.pdf Annual Report on competition 2004 part III: the Application of EC Competition Rules in the Member States, pp. 57-58; FIDE 2008 Spain country report (in H F Koeck and M M Karollus (eds) Fide Congress 2008, Vol. 2: The Modernisation of European Competition Law - Initial Experiences With Regulation 1/2003 (Nomos / facultas.wuv, 2008), p. 307 lists 5 cases “among others” in which there was a Commission opinion. However, the report gives no details.

119


Court

Sector

Facts

Commissionopinion Commissionopinionsought(1),delivered(2),judgmentdelivered(3)toreimburseeachotherforservicesprovided

9.InversionesCobasavBPOil99caseno.103/05

Spain Juzgado de loMercantil No. 4 ofMadrid


Whether contract was re‐saleagreement or a genuine agencyagreement.

Q:whetheranyComproceedingsrelated to BP Oil contracts;whether these networks ofcontracts can produce an effectontradebetweenMemberStates;whether such agreements couldbeexemptedbyblockexemptionor individual under Art 101(3)TFEU;5yearexclusivityclauseComopinionnotknown

9.2.2005(1)19.10.2005(3)legalnatureofthecontractissimilar toabove ‐ not are‐saleagreementbut an agencycontract.Notgenuineagencyagreement ‐retailerassumessomefinancialrisk.However, sizeand type of

99 Sixth recital of court judgment available at http://ec.europa.eu/competition/antitrust/national_courts/court_2005_064_es.pdf (included in DG COMP national court judgment database) . FIDE 2008 Spain country report, p. 307, reports that the Commission opinion was requested inProvincial Court Madrid no. 28 and judgment was given on 6.2.2007, but actually it was requested in the first instance proceedings. Reference to court judgment in Supplement to Commission’s annual report on competition policy 2005 http://ec.europa.eu/competition/publications/annual_report/2005/report_supplement_20061113.pdf, p. 147

120


Court

Sector

Facts

Commissionopinion Commissionopinionsought(1),delivered(2),judgmentdelivered(3)networks donot affecttradebetweenMS,Noresalepricemaintenanceimposed. Onduration,contractbenefitedfrom blockexemption.

10. Grupo Texas vCepsa (case no. notknown)100

Spain Provincial Court ofMadridno.10


Currentlyunabletotrace Unknown 17.10.2005(3)

11. Gasonul vRepsol(case no. notknown)101




12.HermelavRepsol(case no. notknown)102




13. UAB Tew BaltijaKaunos v

Lithuania Vilnius District Court(Vilnius Apygardos

Publictender Whether long‐term exclusivitywould allow tender winner to

Q: compatibility with Art 106(1)& Art 102 of municipality

14.12.2005(3)

100 FIDE 2008 Spain country report, p. 307 101 FIDE 2008 Spain country report, p. 307 102 FIDE 2008 Spain country report, p. 307

121


Court

Sector

Facts


savivaldybyesadministracijosdirecktorius(Director ofadministrationof themunicipality of thecityofKaunas)Case 2‐1068‐52/05103

Teismas) abuse dominant position bycharging excessive prices tocertainclients.

carrying out public tenderprocedure for exclusive 15 yrwastecollectioncontract.Com gave sectoral advice,referring to Art 102 wastemanagement cases Københavnsand Dusseldorp, and Com noticeon definition of relevantmarket104. InKøbenhavns, breachof EC competition rules wasjustified under Art 106(2)relatingtopublicundertakings.Substantial standard of prooffor finding breach of Art 102 or106(1) – abuse by the successfulconcession‐holderwould have tobe“inevitableoratleastthelikelyresultoftenderconditions”.105

14. Danska StatengenornBornholmstrafiken vYstadHarnn Logistik

Sweden Swedish SupremeCourt(onappealfromYstad District CourtTingsrätt) Högsta

Ports Port of Ystad allegedly abuseddominant position by chargingexcessivepricesforportservices.Com opinion took similar

Q: definition of the relevantmarketCom advised should definemarket according to whether or

18.10.2006(1), 1.3.2007(2) [takinglonger than

103 Commission annual report 2005, p. 76-77 (although not named); Lithuanian Competition Council Annual report 2005, English version, p. 25, available at http://www.konkuren.lt/en/anual/2005_eng.pdf (accessed 13.8.2010); judgment available from DG COMP national court judgments database (in Lithuanian) at http://ec.europa.eu/competition/antitrust/national_courts/court_2006_10_lt.pdf (accessed 17.8.2010) 104 OJ C 372, 9.12.1997, 1 105 Commission annual report 2005, p. 77

122


Court

Sector

Facts


AktiebolagCaseT‐2808/05106

Domstolen approachtoSwedishHighCourt,whichhad ruled that thePort ofTrelleborg was not a substituteas this would increase ferryoperators’ costs and reducecustomerbase.

not other portswere substitutes,referred to ECJ and Commissiondecisional practice in other portsectorcases inassessingdemandandsupplysubstitution.Nationalcourtshoulddecidewhetherportservicesofferedwouldconstitutesingle or several markets. CJEUpreviously found thatorganisationofportactivitiesinasingle port may constitute arelevantmarket.Com stated that its opinion wasnot binding,would not carry outindependent assessment ofmarketorconsidermeritsofcase,only clarify criteria and evidencefordeterminingrelevantmarket.Court declared its lack ofjurisdiction inrespectofshareoffeesduetoarbitrationclause,but

target 4mthsin Courtsnotice]10719.2.2008(3)

106 Commission annual report 2007 Staff working paper (SWP), p.142-143. F Lindblom, ‘The Swedish Supreme Court asks for the EC Commission’s opinion on the definition of the relevant market concerning alleged excessive prices for port services (Port of Ystad)’, 1 March 2007, e-Competitions, n°13747; C Wetter & C J Sundqvist, ‘The Swedish Supreme Court declares itself lacking jurisdiction as a result of an arbitration clause (BornholmsTrafikken/Ystad Hamn)’, 19 February 2008, e-Competitions, n°21218. Judgment available on Swedish Supreme Court’s website (in Swedish): http://www.hogstadomstolen.se/Domstolar/hogstadomstolen/Avgoranden/2008/2008-02-19%20T%202808-05%20Dom.pdf (accessed 17.8.2010) 107 There is some discrepancy concerning the date: the Commission’s website states the opinion was delivered on 16.2.2007, which would keep it within the target time limit.

123


Court

Sector

Facts


followed the Commission’sopiniononmarketdefinitionanddecidedtheportwasdominant.

15. Övertorneåkommun m.fl. vEkforsKraftABm.fl.A 4/06; MD2007:26108

Sweden SwedishMarketCourt(Marknadsdomstolen)

Publictender 2municipalitiesinnorthSwedenhadagreementwithdominantelectricityprovider,Ekfors,forprovisionofpublicnetworkservicesandlighting.Disagreementaboutleveloffees,Ekforsdiscontinuedservices.

Q: notions of ‘undertaking’;whether public authority has‘legitimate interest’ for purposeof lodging a complaint underArt7(2)Reg1/2003‐whethermunicipalitiesshouldhavestandingindomesticcourtunderSwedishCompetitionAct.Comoutlinedcriteriatodistinguish(non‐economic)publicauthorityactivityfromeconomicactivity.Onlegitimateinterest,referredtoCom notice on handling ofcomplaints. Court found streetlighting not an essential facility,rejected refusal to supply andexcessivepricesclaim

21.12.2006(1)?.?.2007(2)15.11.2007(3)

108 Commission annual report 2007 SWP, p.142; FIDE 2010 Sweden country report in G C Rodriguez Iglesias & L Ortiz Blanco (eds) The Judicial Application of Competition Law: Proceedings of the FIDE XXIV Congress Madrid 2010 Vol 2 (Servicio de Publicaciones de la Facultad de Derecho, Complutense University, Madrid 2010), p. 32, available at http://www.fide2010.eu/multisites/fide2010/templates/yoo_beyond/pdf/suecia/Suecia-2.PDF (accessed 17.8.2010); A Flood & A Jasper ‘The Swedish Market Court rejects action for alleged abuse of dominant position in the electricity sector (Ekfors), 15 November 2007, e-Competitions, n°15760; J Lundström & M Lindgren ‘The Swedish Market Court holds that the electricity network for municipalities street and road lighting is not an essential facility and rejects alleged abusive refusal to supply and price increase (Ekfors)’ 15

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16.Praet enZonenvVereinigenProductenorganisatievan de NederlandseMosselculturUAC02/1136, LJN: BD1227109

Netherlands Appeal CourtGerechtshof ‘sGravenhage (onappeal fromRechtbankMiddelburg)

Agriculturalquotas

Musselseedquotaallocationsbyanassociationofmusselfarmers.Court of Appeal also invitedCommission to submitobservationsunderArt15(3)

Q: whether the EU competitionrules applied, or whether suchallocation practice fell withinspecific scope of Reg 26/62 onapplication of competition rulestoagriculturalproducts.Comrepliedthatitappearedtobe within the scope of theagricultural products regulation.Court followed the Commission’sdecisionasithadexclusivepowerunderArt 2(2) of the agriculturereg todeterminewhichpracticesfulfilledart2(10)ofthereg.Courtheld that the decision did notbreach101(1)

?.?.2005(1)?.4.2006(2)11024.4.2008(3)

17. BVBA DDBikes/BV Ducati

Belgium Rechtbank vanKoophandel te

Motorcycles(sale, repairand

DD Bikes, former authoriseddealer and repairer brought

Q Whether Ducati’s distributionsystem could benefit from block

2009

November 2007, e-Competitions, n°16061. Judgment available on Market Court’s website (in Swedish) at http://www.marknadsdomstolen.se/avgoranden/avgoranden2007/Dom07-26.pdf (accessed 17.8.2010) 109 Study on the conditions of claims for damages in case of infringement of EC competition rules 2005, Netherlands report, p. 22 http://ec.europa.eu/competition/antitrust/actionsdamages/national_reports/netherlands_en.pdf ; Commission annual report 2006 supplement SWP p. 123 (unnamed); T Baumé & S Janssen, ‘The Dutch Court of Appeal of The Hague, after having sought the opinion of the EC Commission, holds that a decision adopted by a mussel farmers association did not breach Art. 81.1 EC (Vereniging Productenorganisatie van de Nederlandse Mosselcultuur / Praet en Zonen)’, 24 April 2008, e-Competitions, n°21781); judgment available (in Dutch) at www.rechtspraak.nl; FIDE 2008 Netherlands country report, p. 216 110 Commission annual report 2006 staff working document, SEC (2007) 860, Brussels 25.6.2007 , p. 123, 2.1.1. Available at http://ec.europa.eu/competition/publications/annual_report/2006/part2_en.pdf

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NorthEurope(case no.Unknown)111

Dendermonde(Commercial DistrictCourt)

maintenance) action against Ducati for failuretobeadmittedtonetwork.

exemption reg 2790/1999 onverticalrestraints.Com said first establish whetherthere is separate market forrepair and maintenance, asopposed to sales; if so Ducati’smarketshareassupplierofsparepartsisrelevant–ifexceeds30%couldstillbenefitfromindividualexemption under 101(3). If noseparatemarket,shareislikelytobe less than 30%, falling underBE.

18. UABSchneidersöhneBaltija/UAB LibraVitalis A337/2008 of9.9.2008; A502‐34/2009 of20.11.2009modifying NCAdecision(reResolutionNo.2S‐13 of 26 October2006)112

Lithuania Lietuvos vyriausasisadministracinis(SupremeAdministrativeCourt)

Paperindustry Assessment of informationexchange relating to marketshares and sales volumes onpaperwholesalemarkets. Lowercourt reduced competitionauthority fine but rejected thesubstantive parts of the appeal.Parties admitted exchanges ofinfo, but argued they did notbreach either EU or nationalcompetition law, as Art 101infringement only where the

Assessment depends onwhetheragreementbyobject orbyeffect.If by object, no need to considermarket structure. If by effect,need to considerbothactual andpotential effects, real conditionsonthemarket.DetailedcitationofEU courts’ case law and Comdecisions,esprecentdecisions inpapercases:C‐7/95P[1998]ECRI‐3111 &T‐35/92 John Deere; C‐238/05 Asnef‐Equifax v

(1)9.9.2008(2)2008?113(3)20.11.2009

111 Commission annual report supplement SWP 2009 p. 117

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relevant market is oligopolistic,competitiononthemarketisnotsufficientand the infoexchangesallow the prediction ofcompetitors’ behaviour on themarket. Qs: (1) do highconcentration and oligopolisticmarket both have to beestablished to proveinfringement by effect?WhetherHHI values could be used, eventhough Com’s guidelines onhorizontal cooperationspecifically state they do notapplytoinfosharingagreements(para 10) A: can use themethodology for analysis ofmarket structure HHI, andleading firm concentration ratio(2) Other factors? (3) seekinganswer in given factual

Asociación de Usuarios deServiciosBancarios ) Comdec inIV/31.370&31.446OJ1992L68,p. 19 UK Tractor ExchangeThyssen Stahl T‐141/94 [1999]ECRII‐347;SuikerUnie40‐48/73[1975] ECR 1663, Züchner vBayerische Vereinsbank AG172/80 [1981] ECR 2021. CitedCom101(3)guidelinesonmarketstructure para 25 OJ C 101.DecisiPaper markets 27.4.2004,p. 97), (Atlantic Container T‐191/98, T‐212‐214/98 [2003]ECRII‐3275,para1154)DetailedcitationofEUcourts’caselawandCom decisions, esp recentmerger decisions in papermarkets: COMP/2245 Metsä‐Serla/Zanders; M.3227Paperlinx/Buhurmann; M.3822

112 Commission annual report supplement SWP 2009 p. 118; DG COMP national court judgments database (in Lithuanian): A502-34/2009 of 20.11.2009 modifying NCA decision: http://ec.europa.eu/competition/antitrust/national_courts/1151910.pdf; A337/2008 of 9.9.2008 http://ec.europa.eu/competition/antitrust/national_courts/752814.pdf; Opinion itself available at: http://ec.europa.eu/competition/court/opinion_2002_uab_en.pdf . Supreme Administrative Court of Lithuania annual report 2008 p. 9 (that particular part in Lithuanian); Lithuanian Competition Council Annual report 2009, English version http://www.konkuren.lt/en/anual/2009_eng.pdf, p. 14 and p. 15 (accessed 13.8.2010) 113 As with the Swedish Bornholmstrafiken case, the date of the opinion is uncertain. On its website http://ec.europa.eu/competition/court/antitrust_requests.html the Commission dates the opinion as 20.7.2008, but according to the opinion itself the request was not received until 9.9.2008.

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circumstances, but Comrefusedtoansweraswouldbegoingintomerits:“Comhasnotcarried out an independentassessmentoftheseissuesandit cannot substitute theanalysisthatthenationalcourtneeds tomakeon thebasisofthe facts and informationbeforeit.”(para48).

Stora Enso/SchneidersöhnePapier. Even if Com hasauthorisedmerger,noobstacletoNCA findingoligopolistic/concentratedmarket in applying Art 101.Degree of market power neededfor finding infringement of Art101(1) less than for findingdominance under Art 102. Commerger decs not binding onapplication of antitrust rules.Advisedcautiononinterpretationof these decisions: merger andArt101objectives, and thereforeanalysis, are different. Detailedprelimremarkson15(1)

19. Bright ServiceSA/REPSOLCPP114

Spain Juzgado de loMercantil no. 2Barcelona

Retail sale ofautomotive fuel(wholesalemarket forpetroleumproducts)

Implications of Com’s REPSOLdecision COMP/38348 of12.4.2006 – whether precludesNCAs and courts from assessingwhether exclusive supplyagreement part of thecommercialREPSOLnetworkhasinfringedcompetitionrules

Commitment decisions, but oblignot to take a decision runningcounter ‐ in practice conflictingwith the implementation ofcommitments

24.3.2009(1)

20. Dalphi Metal Spain Juzgado de lo Car airbags and Litigation following acquisition Q1:Whether unilateral provision 2009(1)

114 Commission annual report supplement SWP 2009 p. 118

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Court

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Facts


España/TRWAutomotive115

Mercantil no. 1Madrid

steering wheels(motor vehicleparts)

byTRWofDME’scarairbagandsteering wheel business. Takata(competitor, minority stake inDME and shareholding in all 3DME production joint ventures)brought action against DME’sproductioncompanieswhichhadrefused to give it access totransfer prices charged to DMEforcertainproducts

of info to competitor couldconstitute exchange of info – A:mere receipt of info can be anti‐competitive – reducesuncertainty [in effect, ComadvisesinfavourofDME]Q2: exchange of historical datadoes not influence marketconditions–noinfringement.Infomore than 1 year old can behistorical, but obsolescencemustbe assessed according to theindustryandmarketstructure.[No cases appear to have beenreferredto]

29.3.2010(2)

21. Petrocat/Canal yFils SL & Zero SetsSL116

Spain Juzgado de loMercantil no. 5Madrid


Whether long term exclusivesupply contract (27yrs+)infringesArt101

Assessment of foreclosure incontext of overall comp situationand economic and legal links(referringtoREPSOLandSpanishCA in CEPSA). Re clauses settingretail price, Com’s distinguishescontractsaccordingtoownershipand degree of risk, in identifyingwhetherservicestationmerelyanagent. If not genuine agent [see

2009

115 Commission annual report supplement SWP 2009 p. 118-119; (see also Commission annual report 2010 SWP para 403) 116 Commission annual report supplement SWP 2009 p. 119

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cases above], would violate Art101. Art 5(a) vertical restraintsBE reg 2790/1999 – exclusivityagreements only exempt if mktsharelessthan30%,ifremainingdurationon1 Jan2003 less than5 yrs, if sold by buyer frompremises owned by supplier orrented to 3rd parties notconnected with buyer. (i.e. byagent) Conditions to beinterpreted restrictively – “donotappeartohavebeenmetinthis case” [Commakes factualfinding]

22. Dalphi Metal (asabove)117

Spain Juzgado de loMercantil nº4 ofMadrid


Seecase20above Same as in case 20 above.Communicatedthatsameopiniontothenewcourt

29.3.2010(2)

23.Unknown118 Belgium Tribunal deCommerce deBruxelles/RechtbankvankoophandelBrussel

Smart mobilephones

Definition of relevant market,Art102related tosalesof smartmobile phones. Verticaldistribution agreement. Refusalto supply and discriminatorypractices.

Qs: assessment of relevantmarket; vertical distributionagreement and unilateralpracticesRe assessment of the relevantmarket, Com stated need to

17.12.2009(2)

117 Commission annual report 2010SWP p. 107-8, para [403] 118 Commission annual report2010 SWP p. 147, para [402]

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assess degree of substitutabilityand interchangeability ofproducts. Re assessment ofdominant position Com referredto case‐law of the EU courts [donotknowwhich].Com suggested court shouldexaminewhetherdifferenttreatment by dominantundertaking of certain partnersdistortscompetitionintheretail market and harmsconsumers.

131

Summarisingthetable,opinionsweredeliveredinthefollowingMemberStates:Spain

(11),Belgium(7),Sweden(2),Lithuania(2),TheNetherlands(1).Thelevelofcourtwas:

SupremeCourt:2;AppealCourt:10(althoughintheBelgiancasestheBrusselsCourtof

Appealactedinadomesticpreliminaryreferencecapacity);Firstinstancecourt:8(3

unknown).

5.1.1Contentoftheopinionsandimplicationsforthepreliminaryreferenceprocedure

Thepreliminaryreferenceprocedurehasbeencharacterisedasadialoguebetween

courts.119Itmightberemarkablethatajudgewouldseekanopinionoracceptan

interventionfromtheEuropeanCommissionasa(supranational)administrativebody.

Havingsummarisedthecasesinwhichanopinionwassought,thissectiondrillsdeeper

intothedetailofsomeofthoseopinions,andconsidertheimplicationsforthepreliminary

referenceprocedure.Insomeopinions,theCommissionsimplyrestatesthelaw,whereas

inothersitappearstogofurther.Forexample,inthePetrocatcase(no.21inthetable)the

Commissionappearstomakeafactualfinding.

ForthepurposesoftheCourtsNotice,‘courtsoftheMemberStates’aredefinedas“those

courtsandtribunalswithinanEUMemberStatethatcanapplyArticles[101and102

TFEU]andthatareauthorisedtoaskapreliminaryquestiontothe[CJEU]”.120Soby

definition,courtsrequestinganopinionfromtheCommissionunderArt15arealso

entitledtorequestapreliminaryreferencefromtheCJEU.Thewayinwhichtherequestto

theCommissionissuggestedtobedraftedbearsstrikingsimilaritywithrequeststothe

CJEU.TheguidanceonDGCOMP’swebsite121statesthattherequestshouldbelimitedto

tenpages,andshouldstatethesubjectmatterofthecase,findingsoffactthecourthas

alreadymade,reasonspromptingthecourt’srequestforassistance,asummaryofthe

parties’arguments,andthequestionsthemselvesinaseparatesection.Thisguidance,

evenatseveralpointsitsexactwording,isclearlymodelledontheCJEU’sowninformation

noteonreferencesforapreliminaryruling.122Farfromsomenationalcourtsbeing

concernedabouttheCommissionbeingtoointerventionist,therearereportsthatsome

119 K. Alter, ‘Explaining National Court Acceptance of European Court Jurisprudence: A Critical Evaluation of Theories of Legal Integration’ in in A-M. Slaughter, A. Stone Sweet and J.H.H. Weiler (eds), The European Courts and National Courts: Doctrine and Jurisprudence (Hart, 1997), 227-251 120 Point 1 of the Court notice 121 http://ec.europa.eu/competition/court/requests.html (accessed 13.2.2009) 122 Information Note on references from national courts for a preliminary ruling, OJ C 160, 28.5.2011, 1 , [22]-[24]

132

judgesaresimplysendingallthepleadingsinthecaseandaskingtheCommissiontomake

adecision123(forexample,intheSpanishpetrolcases).

ThescopeoftheCommission’sguidancemaycovereconomicandfactualquestionsin

additiontolegalones,andinthatsensehasbroaderscopethanapreliminaryruling.The

opinionsdeliveredsofarhavecoveredbothgeneralpointsoflawandsector‐specific

issues.Forexample,intheLithuanianUABTewBaltijacasetheVilniusDistrictCourtwas

facedwiththecompatibilitywithArticle106(1)andArticle102ofamunicipalitycarrying

outapublictenderprocedureforanexclusive15yearwastecollectioncontract.The

applicantinthecasehadarguedthatsuchlong‐termexclusivitywouldallowthetender

winnertoabuseadominantpositionbychargingexcessivepricestocertainclients.The

Commissiongavesectoraladviceinitsopinion,referringtotheArticle102waste

managementcasesofKøbenhavns124andDusseldorp125,inadditiontotheCommission

noticeonthedefinitionoftherelevantmarket.IntheKøbenhavnscase,abreachofEU

competitionruleswasjustifiedunderArticle106(2)TFEUrelatingtopublicundertakings.

However,aswellaspointingtoitsexistingnotices,theCommissionalsocommentedon

thestandardofproofneededtoestablishabuseofadominantposition,statingthatabuse

bythesuccessfulconcession‐holderwouldhavetobe‘inevitableoratleastthelikely

resultoftenderconditions.’126(emphasisadded)Thisappearstostrayontotheterritory

ofjudicialdeliberation.

IntheSpanishcourtstherehavebeenanumberofcasesonthevalidityofsupplycontracts

betweenpetrolstationoperatorsandoilcompanies,accountingforthevastmajorityof

SpanishnationalcourtjudgmentsnotifiedtotheCommissionpost‐2004.127

Asmentionedabove,interestinglyatleastoneSpanishopinionsoughtwasalsothesubject

ofaparallelpreliminaryreferencestotheCJEU.Inoneofthecases,theCommissiongavea

123 E Gippini Fournier, ‘The Modernisation of European Competition Law: First Experiences with Regulation 1/2003 (Institutional Report to FIDE Congress 2008) in H F Koeck and M M Karollus (eds) FIDE Congress 2008, Vol. 2: The Modernisation of European Competition Law - Initial Experiences With Regulation 1/2003 (Nomos / facultas.wuv, 2008), 468 124 Case C-209/98 Entreprenørforeningens Affalds/Miljøsektion (FFAD) v Københavns Kommune [2000] ECR I-3743 125 Case C-203/96 Chemische Afvalstoffen Dusseldorp BV and Others v Minister van Volkhuisvesting, Ruimtelijke Ordening en Milieubeheer [1998] ECR I-4075 126 Commission annual report 2005, 77 127 http://ec.europa.eu/competition/elojade/antitrust/nationalcourts/?ms_code=esp (last accessed 7.9.2012). See also the Spanish NCA annual reports e.g. Annual report of the Comisión Nacional de la Competencia 2007, available at: http://www.cncompetencia.es/Inicio/ConocerlaCNC/Memorias/tabid/72/Default.aspx (last accessed 9.9.2012) pp. 50-58, with details of cases notified to the Commission under Art 15(2) Reg 1/2003. However, there is no mention of Commission involvement. For some analysis of court practice see H Brokelmann ‘Enforcement of Articles 81 and 82 EC under Regulation 1/2003: The Case of Spain and Portugal’ (2006) 29(4) World Competition 535-554

133

definitestatementofthelaw–clausesprovidingforahardcorerestrictiononresaleprice

maintenancearevoidifnotpartofagenuineagencycontract–ratherthanindicatinga

generalanalyticalframework.ItindicatedthattheCJEUhadpreviouslyheldthatprovided

itispossibletosevertheanticompetitiveprovisionsofacontractfromtherestofthe

terms,theremainderofthecontractisstillvalidandenforceable.Itwasforthenational

courttodecidewhetheraclauseitmightfindvoidcouldbeseveredfromthecontractor

whetheritvitiatedtheentirecontractaccordingtoMemberState’scontractlaw.128Thisis

anexampleoftheCommissionrestatingandclarifyingthelawratherthanestablishing

‘rulesofconduct’inthesoftlawdefinition.

IntheBelgianSABAMcase,129thequestionwaswhetheracollectingsociety’scriteriafor

grantingthestatusofgrandorganisateurtocertaincommercialusers,entitlingthemtoa

rebateof50%onroyaltiespayable,werecompatiblewithArticle102orwhetherthey

amountedtounlawfuldiscriminationunderthatarticle(102(2)(c)).TheCommission

referredtoitsdecisionalpracticeinthesector,rehearsingfactorswhichcanbetakeninto

accounttoassesswhetherthecriteriathemselves,ortheirapplication,maybreachArticle

102.Butsignificantly,theopinionreferredtoBelgianaswellasEUjurisprudenceon

dominance.ItisratherunusualforajudgetobeeducatedinthiswayonhisownMember

State’slaw.TheCommissioncouldhavebeenattemptingtodemonstratethesimilarityin

nationalandUnionlawinthisarea,makingitsadvicemorelikelytobeaccepted.Italso

explicitlystatedthatitsopinionwasnotbindingandwasonlyvalidwheretradebetween

MemberStateswaslikelytobeaffectedbythepracticesalleged.130

Themechanismiscouchedintermsofassistancetothenationalcourt,ratherthanthe

CommissionexercisingitspowertoissueanopinionasunderArticle211EC.Thisis

especiallytruegiventhatjudgescanfindexistingguidanceincaselaw,Commission

regulations,decisions,notices,andguidelines,whilestillupholdingtheirindependence.

Nevertheless,howtheCommission’sinterpretationofthelawistreatedbythenational

judge,andconsequentlyitslegaleffect,isrelevanttobothArticle15tools.

Ontheevidenceoftheopinionssofar,nationalcourtshavenotraisedonlypointsof

clarificationorsoughtadviceonnovelissues,norusedtheopportunitysimplytoascertain

whethertheCommissionhasinitiatedproceedingsinacase.

128 Case C-56/65 Société Technique Minière v Maschinenbau Ulm [1966] ECR 235 and Case C-319/82 Société de Vente de Ciments et Bétons de L’Est v Kerpen & Kerpen GmbH [1983] ECR 4173. See R Whish & D Bailey, Competition Law (OUP, 7th edn, 2012), 322 for a discussion. 129 2004-MR-7 SABAM contre Productions et Marketing 130 Mentioned in Brussels Court of Appeal’s judgment 2004-MR-7 SABAM contre Productions et Marketing, 2005/7059, 3 November 2005, 6

134

Foritspart,itisnotablethatinalltheopinionsgiven,theCommissionindicatesexisting

caselawandguidelineseventhoughtheopinionmechanismwasintendedforsituations

whereexistingguidelinesdonotoffersufficientguidance(accordingtoparagraph27of

theCourtsNotice).ItcouldbearguedthattheCommissionisnotseekingtobetoo

interventionist,butonlytosummarisetheapplicablelawforthecourt.Indeed,thereis

anecdotalevidencethattherehavebeencaseswheretheCommissionhasrefusedtogive

anopinion,especiallywheretherequestwasmadebyalowercourt.131However,insome

casesitdoesgofurther–asdiscussedabove,intheLithuaniancaseitcommentedon

standardofproof,anditindicatedBelgiandomesticcompetitionlawprovisionsinSABAM.

LeavingasidetheCommission’sown‐initiativeinterventionsunderArticle15(3),fromthe

perspectiveofincentivesandpreferencesofjudges,132referringtotheCommissionunder

Article15(1)islessdrasticanddisruptivetoproceedingsthanareferencetotheCJEU.

AnobviousadvantageofconsultingtheCommissionratherthantheCJEUisapractical

issueoftimeconstraints–whereastheindicativedeadlineforprovisionofanopinionis

fourmonths,apreliminaryrulingcantakeatleastayear.Ashorterstayofproceedingsis

muchlessdisruptivetothecase.Forexample,theSpanishSupremeCourtreferred

preliminaryquestionsinthecontextofthepetrolstationcasesinMarch2005,onresale

pricemaintenanceinexclusivefuelpurchasingagreements,andagencycontractsbetween

servicestationoperatorsandoilcompanies,inparticularwhetherpetrolstationsshould

beregardedasresellersoragents.133TheCJEU’srulingwasdeliveredinDecember2006,

atleastayearafterthequestionsputtotheCommissioninthesamecase.

AnotheradvantageinseekingaCommissionopinionisthelackofadmissibilityissues,as

anycourtortribunalmayaskadviceonabroadrangeofeconomic,factualorlegal

questions.ItmayalsocontributetorelievingthecaseloadoftheUnionCourts.Giventhe

heavycaseload,theCJEUhasitselftriedtolimitunnecessaryreferences,encouragingself‐

restraintofnationalcourts.134Inrespectoflowercourts’discretionaryreferences,

AdvocateGeneralJacobsintheWienercasesuggestedthatlowercourtsshouldonlyrefer

131 Global Competition Review Report: Modernisation in Europe 2005, country report on Germany, 55, response to question 29. 132 W Mattli and A-M Slaughter, ‘The Role of National Courts in the Process of European Integration: Accounting for Judicial Preferences and Constraints’ in in A-M Slaughter, A Stone Sweet and J Weiler (eds), The European Courts and National Courts: Doctrine and Jurisprudence (Hart, 1997), 253-276 133 Case C-217/05 Confederación Española de Empresarios de Estaciones de Servicio v Compañía Española de Petróleos SA [2007] 4 CMLR 5. The court stipulated that a resale price maintenance clause was not covered by block exemption. 134 Another way of limiting preliminary references is through the admissibility criteria, such as the meaning of a court or tribunal. The way in which the CJEU limits references from quasi-judicial bodies, including competition authorities, was explored in the previous chapter.

135

wheretherewasaquestionofgeneralimportancelikelytopromoteuniformapplication

oflawthroughouttheEU.135Obligatoryreferencesfromthehighestcourtsare

constrainedbytheacteéclairéandacteclairconditionsinCILFIT.136

Facedwiththesemessages,thepossibilitytoasktheCommissionforadvicemayactually

empowerlowercourts.ThisrelatestoMemberStates’domesticinstitutionalrelationships

betweenexecutiveagenciesandthejudiciary.Byaskingforinformationdirectlyfromthe

Commission,anationalcourt,ifitsowishes,canbypassitsownNCA,whichcould

otherwiseraisethecaserelativelyinformallywithintheEuropeanCompetitionNetwork.

Nationaljudgesmaybemorecomfortablewithobtaininginformationthemselves

independentlyratherthanthroughanintermediary.Ontheotherhand,ifthereisalready

suchatraditioninnationalprocedurallaw,itmaymeanthatArticle15oftheRegulationis

usedmorereadilyinthoseMemberStates.MostMemberStateshaveprovisionintheir

nationallawfortheNCAtobecomeinvolvedorgiveadviceinprivateenforcement

cases.137Asnotedabove,intheRegulation1/2003negotiations,someMemberStateshad

proposedthattheirnationalcompetitionauthoritiesactasintermediariesbetweenthe

courtsandtheCommission.138

AsrevealedbytheCommissionstaffworkingpaperonArt15(3)discussedabove,one

intendedpurposeoftheamicuscuriaemechanismintheEU’sdecentralisedcompetition

regimewastoalertjudgestodecisionsinotherMemberStatecourts.139Asimilareffect

couldresultthroughtheinformationpassedinopinions.Thiscouldcreateaninformal

network,throughaflowofcooperationverticallyupbetweentheCommissionanda

MemberStatecourtandbackdowntoanotherMemberStatejudge.Untiljudgeshave

effectivedirecthorizontallinkswitheachother,cooperationcouldbestrengthened

throughverticallinkswiththeCommission.TheCommissionandNCAsaretoinformeach

135 Case C-338/95 Wiener v Hauptzollamt Emmerich [1997] ECR I-6495, at 18 136 Case 283/81 CILFIT and Lanificio di Gavardo SpA v Ministry of Health [1982] ECR 3415. Acte éclairé means it is not necessary to refer if a “materially identical” matter has already been decided by the Court of Justice. Acte clair means that the court does not need to refer if the answer to the question is “so obvious as to leave no scope for any reasonable doubt”. 137 ECN convergence survey as at 14 April 2008: ‘ECN Working Group on Cooperation Issues - Results of the questionnaire on the reform of Member States’ national competition laws after EC Regulation No. 1/2003.’p. 8, answer to Q13, available at http://ec.europa.eu/competition/ecn/ecn_convergencequest_April2008.pdf 138 Document: 5158/01 Secretariat to delegations, 11.1.2001 (for: Germany, Denmark, Luxembourg, Austria, Sweden – but Denmark requests that in normal circumstances NCAs should represent the Commission in national court proceedings. Conversely Germany requests that NCAs submit observations independently and not as the representative of the Commission. Document: 8383/1/02 (Spanish) Presidency to COREPER, 27.5.2002: France requests that the Commission be authorized to make written observations to the national court only via the national competition authority. 139 Commission Staff Working Paper: Reform of Regulation 17 – The proposal for a new implementing regulation – Article 15(3) submissions as amicus curiae, SEC (2001) 1827, 13.11.2001

136

otherthroughtheECNiftheyintervenewithanamicusbriefinanycase,indirectlylinking

nationalcourtswiththeECN.

Inthiswayitcouldsucceedinaligningnationalcourtdecisionalpracticewiththatof

nationalcompetitionauthoritieslinkedthroughtheECN,minimisingdivergentapplication

betweenpublicandprivatecompetitionenforcers.Theproposaltoallowthebinding

effectofNCAinfringementdecisionsthroughoutallMemberStatescontainedinthe

EuropeanCommissionWhitePaperondamagesactions,placingNCAdecisionsonapar

withthoseoftheCommission,couldcontributetothiseffect.Onecriticismofthe

proposal,however,isthatitimpliesahierarchyofpublicenforcementoverprivate

enforcementinthecourts.140Thisisdiscussedinthefollowingchapter.

TheimplicationofMasterfoods,andexplicitinrecital13ofthenoticeoncooperation

betweentheCommissionandnationalcourts,isthatacourt–evenalowercourt‐must

referaquestiontotheCJEUifitintendstotakeadecisioncountertoonetakenbythe

Commission.Inthiswayitimposesastricterrequirementthanthediscretionaryreference

underArticle267TFEU–itelevatesthediscretionaryreferenceoflowercourtstoa

mandatoryreference.Article16ofRegulation1/2003codifiestheMasterfoodsruling,that

anationalcourtorcompetitionauthoritymaynottakeadecisioncontrarytoonealready

madeorcontemplatedbytheCommission.Anationalcourtmaythereforedecidetostay

proceedingsandreferapreliminaryquestiontotheECJ.Thisisurgedmorestronglyinthe

Courtsnotice,recital13:“…ifanationalcourtintendstotakeadecisionthatrunscounter

tothatoftheCommission,itmustreferaquestiontotheCourtofJusticeforapreliminary

ruling…”141

ItremainstobeseenwhethernationaljudgeswillmakemoreuseofCommissionopinions

asanalternativetopreliminaryreferences,orwillusethetwomechanismsconcurrently

asintheSpanishcases.Asdiscussedabove,aCommissionopinioncouldbecomebinding

indirectlythroughthenationalcourt’sjudgmentifittransposestheCommission’sadvice.

Thismaybelikely,forinstance,wherethejudgeislessexperiencedincompetitionlawor

atjudgingeconomicevidence,wherethecourtismorewillingtoapplyaninterpretation

140 See A Komninos “Public and Private Antitrust Enforcement in Europe: Complement? Overlap?” (2006) 3(1) Competition Law Review 5-26, 26, who opposes the proposal on the grounds that it would create a false hierarchy of public over private enforcement. Note too that NCAs are bound only by existing decisions of the Commission, not envisaged ones (article 16(2) of the Modernisation Regulation) – could this be evidence of a public over private enforcement hierarchy, or does it merely reflect the reality of structured cooperation within the ECN? 141 Ultimately, if the highest court does not refer the Member State could incur State liability - remedies in national courts: C-6/90 Francovich and Others v Italian Republic [1991] ECR I-5357; C-224/01 Köbler v Austria [2003] ECR I-10239

137

ofUnionlawbyaUnioninstitution(albeitfromtheCommissionratherthantheCJEU),or

forreasonsofconvenience–iftheCommission’s‘expert’interpretationseemsreasonable,

theremaybelittleincentivetolookforanalternative.Inaddition,thenationaljudgecould

usetheopinionforinterpretationofother,eithernationalorEU,obligationsor

instruments.Whereasthejudgmentwouldbeeffectivebetweentheparties,amore

universaleffectcouldresultifaprincipleexpressedinaCommissionopinionisthenused

insubsequentcasesinthenationalcaselaw.142

5.1.2 Rightsoftheparties

InrequestingaCommissionopinionunderArt15(1),thenationaljudgeactsasa

gatekeeperinthesamewayass/hedoeswhendecidingwhethertorequestaCJEU

preliminaryreference.Thatis,theinterestedpartyneedstopersuadethejudgeofthe

needforsucharequest.Article15doesnotgrantrightstoindividuals.Thisisevidentfrom

somenationalcases.

InBrasseriesKronenbourg,143abeertiescase,thebartenantrespondent,JBEG,requested

thattheproceedingsbestayedtoseektheCommission’sopiniononwhetherthe

cumulativeeffectofagreementsinanationalmarketamountstoaneffectontrade

betweenMemberStates;andwhetherthedistributionagreementinquestionwascovered

byblockexemptionRegulation2790/99.Thejudgerefusedtherespondent’srequest,on

thebasisthatnationalcourtsarethemselvesempoweredunderArticle6ofReg1/2003to

applyEUcompetitionrules.144SimilarlyintheBelgianLust/DaimlerChryslercase,the

claimantrequestedtheCommercialCourttoaskfortheCommission’sassistance.The

CourtrefusedastheCommissionhadpreviouslyrejectedacomplaintfromtheclaimant

duetolackofCommunityinterest.145InRutamartheclaimantrequestedaquestiontothe

Commissionbutthecourtdidnotthinkitnecessary,citingsimilarcasesoftheSupreme

142 In the national context, the Dutch competition authority’s amicus curiae guidelines acknowledge that “The contents of these interventions are…of importance not only to the parties involved in the court proceedings…but also to other undertakings”: Nederlandse Mededingings Autoriteit Amicus Curiae Guidelines (2004), para[38]. Available at: http://www.nma.nl/images/Richtsnoeren_Amicus_Curiae22-157243.pdf (last accessed 7.9.2012) 143 Case 02/01205Brasseries Kronenbourg v SARL JBEG, , Strasbourg Tribunal de Grand Instance (first instance civil court, commercial chamber), judgment of 4.2.2005. 144 Supplement to Commission annual report 2005, p. 152-153 145 Case n° A/03/1022, Decision n° 4646 SPRL Lust automobiles and Paul Lust v. DaimlerChrysler AG Stuttgart and SA DaimlerChrysler Belgium Luxembourg Tribunal de commerce de Mons (Commercial Court of Mons), judgment of 23.12.2004, See J Derenne & W Broere ‘The Belgium Commercial Court assesses the validity of an alleged anticompetitive car distribution agreement on the basis of Art. 81 EC and the EC block exemption regulation (Daimler-Chrysler)’ 23 December 2004, e-Competitions, N°30700, www.concurrences.com

138

Courtonservicestationagencyagreements.Italsostatedthat,inanyevent,the

Commission’scriteriawerenotbindingonthecourt.146Conversely,inaBelgiancaseon

beersupplyexclusivityagreements,theAntwerpCourtofAppealinaninterimruling

invitedthepartiestoadoptapositiononrequestingaCommissionopinionunderArt

15(1),suggestingthatitwasopentonegotiationandthattheparties’wisheswere

paramount.147Theprincipleofequivalencewithnationallawironicallymeansthatparties’

rightstobeheardonEuropeanCommissioninterventionsmayvaryacrosstheUnion.

5.2CasesinwhichtheCommissionintervenedatitsowninitiative:Art15(3)Reg1/2003

IalsoinvestigatecaseswheretheCommissionhasintervenedatitsowninitiativeas

amicuscuriaeunderArt15(3),anditsreasonsfordoingso.Table2belowsummarisesthe

ninecases.148Thereasonsforinterveningandtheimpactofthejudgmentinsomeofthe

casesareanalysedinmoredetailbelow.

146 Spanish annual report 2005, p. 143: Case 578/2003 Rutamur, SA v Repsol Comercial de Productos Petrolíferos SA, Audiencia Provincial de Madrid (secc. n° 21), 5.7.2005 - appeal against the sentence of the Court of 1st Instance nº 26, Madrid 147 DG COMP report ‘Overview of the application of the EC competition rules by national courts in 2006’, 2. Available at http://ec.europa.eu/comm/competition/elojade/antitrust/nationalcourts/Overview+of+the+application+of+the+EC+competition+rules.pdf (accessed 23.2.2009) 148 This number of own-initiative interventions is confirmed in the 2011 Annual Report on Competition Policy, p. 15

139

TABLE2:EuropeanCommissionown‐initiativeinterventionsinnationalcourtproceedingsunderArt15(3)Regulation1/2003


Court

Sector

Facts/context Commissioninterventionandreasons

Commissionintervention;judgmentdelivered

1.GarageGrémeauvDaimlerChrysler188/07;filenumber05/17909149

France ParisCourtofAppeal(Courd’Appel)

Cardealerships(distribution)

VerticaldistributionagreementsDaimlerChryslerFrance’srefusaltorenewanagreementwithGrémeau,acardealer.CourtofAppealdidnotruleonthemeritsbutsuspendedthecasependingcriminalproceedingsbroughtbyDaimlerChrysleragainstGarageGrémeauforforgeryandfraud.

Oralaswellaswrittenobservations.Toinfluencewhetherinjunctiontobegranted(whilestressingnationalproceduralautonomy…).PotentialerroneousinterpretationofquantitativeselectivedistributionschemebythecommercialchamberoftheFrenchSupremeCourt(CourdeCassation)earlier(28.6.2005)inthecase,onappealfromtheCourd’appeldeDijon‐requiringsupplierstoapply

2.11.2006(Comintervention)7.6.2007(Courtjudgment)

149 Commission annual report 2006, p. 33 (unnamed); SWP SEC (2007) 860, 25.7.2007 Available at http://ec.europa.eu/competition/publications/annual_report/2006/part2_en.pdf (accessed 3.8.2010), (which includes annual report p. 124-125 (unnamed); FIDE 2008 France country report, p. 101, FIDE institutional 2008 report p. 468; Commission staff working paper SEC (2009) 574 accompanying Commission report on the functioning of Regulation 1/2003, COM (2009) 206 final, p. 81-82; see case notes by J Philippe and F Kramer in e-Competitions, October 2007-II; and N Lenoir, D Roskis and Ch M Doremus in e-Competitions December 2007-I for a fuller discussion of the case; interlocutory court judgment 7.6.2007 available in DG COMP national court judgments database at http://ec.europa.eu/competition/antitrust/national_courts/court_2007_20_fr.pdf (accessed 16.8.2010); Dijon Court of Appeal case mentioned in Commission annual report supplement 2005: application of the EC competition rules by Member States, p.57

140


Court

Sector



objectivecriteriaforselectionofdealersevenwheretheyuseonlyaquantitative,asopposedtoqualitative,selectionsystem.Qualitativeandquantitativeselectivedistributionintheframeworkofthenewblockexemptionregulation1400/2002

2.PierreFabréDermo‐Cosmétique08‐D‐25RG2008/23812150

France ParisCourtofAppeal(Courd’Appel)

Selectivedistributionagreements‐internetsalesofcosmetics

Frenchcompetitionauthorityhadfoundthatthecosmeticmanufacturer’spracticeofbanningitsdistributorsfromsellingovertheinternetinitsselectivedistributionagreementsbreachedArticle101TFEUandtheFrenchprovisions.Contextofappeal.

CommissionsupportedFrenchNCAthattheconductamountedtoahardcorerestrictionwithinthemeaningofblockexemptionregulation,unlessobjectivelyjustifiedbyexceptionalcircumstances.However,theCommissionalso

11.6.2009(Comintervention)29.10.2009(courtjudgment)ParisCourtreferredtoCJEUafterCom’sinterventionPrelimrulingtoCJEU,C‐439/09

150 Commission annual report 2009, p. 120; FIDE 2010 institutional report p. 42-4; L Ferchiche, ‘A French Court of Appeal makes a reference for a preliminary ruling to the ECJ on whether a general and absolute ban on Internet sales by approved distributors does constitute a “hardcore restriction” on competition by object within the meaning of Art. 81.1 EC (Pierre Fabre Dermo-Cosmétique)’, 29 October 2009, e-Competitions, n°29700; ECN brief 1/2010, pp. 17-18

141


Court

Sector



opinedthatalthoughitwasahardcorerestrictionbyobject,itmaystillbepossibletoqualifyforexemptionunderArticle101(3)

lodgedon10.11.2009anddelivered13.10.2011.Combriefmentionedat[30].CJEU’sconclusionwasinlinewiththeCommission’s.

3.XBVvInspecteurBelastingdienst06/00252,LJNBB3356(FirstinstanceinHaarlemDistrictCourt,22.5.2006,AWB05/1452,LJNAX7112)08/01180,LJN:BL7052151

Netherlands AmsterdamCourtofAppeal(firstinstanceinHaarlemDistrictCourtRechtbank)GerechtshofAmsterdam.

Tax WhetherfinesimposedforbreachofEUcompetitionlawtaxdeductiblefromprofits.Indomestictax,punitiveandbenefit‐deprivingelementsofafine.

TosafeguardeffectivenessanddeterrenceoffinesPreliminaryreference:whethertheCommissioncanintervenewithArticle15(3)observationsonlywherethenationalcaseinvolvesdirectapplicationofArticle101and102TFEU.

Interventionattempted12.9.2007.24.9.2009(Cominterventiondateclaimedonwebsite.Thiscouldrelatetowhentheinterventionwasfinallyacceptedfollowingpreliminaryreference.)Preliminaryref

151 www.rechtspraak.nl Dutch court judgments database; FIDE Netherlands report 2008, p. 217, FIDE 2008 institutional report, p. 468, 470; FIDE 2010 institutional report (A Bouquet ‘Institutional Report’ in G C Rodriguez Iglesias & L Ortiz Blanco (eds) The Judicial Application of Competition Law: Proceedings of the FIDE XXIV Congress Madrid 2010 Vol 2 (Servicio de Publicaciones de la Facultad de Derecho, Complutense University, Madrid 2010) p. 42-43, Staff working paper on 2009 Commission report functioning of Reg 1/2003, p. 82-83; Commission annual report 2009, p. 40-41, 120; ECN brief 2/2010 , p. 15-16; Commission annual report 2010 para [147] re intervention in Supreme Court

142


Court

Sector


Commissionintervention;judgmentdeliveredtoCJEUC‐429/078.12.2007;CJEUruling11.6.2009.152JudgmentdeliveredinAmsterdamCourtofAppeal11.3.2010inlinewithComopinionastoresult,butitisnotexplicitlymentioned‐Art.3.14.oftheIncomeTaxAct2001doesnotallowadistinctionbetweendeductibleandnon‐deductiblepunitiveandbenefit‐deprivingportions.Thereforefines

152 C-429/07 Inspecteur van de Belastingdienst v X BV [2009] 5 CMLR 1745 (not yet reported in ECR)

143


Court

Sector


Commissionintervention;judgmentdeliveredimposedbytheCommissionforacartellawinfringementarenotdeductiblefromtaxesindomesticlaw.But4.3.2“nomatterwhetheritisafinefromtheEuropeanCommissionortheDutchcompetitionauthority”..

4.XBV(seeabove)10/01358,LJN:BO6770HogeRaad153

DutchSupremeCourt(HogeRaad)post‐preliminaryreferenceintheAmsterdamAppealCourt

Seeabove

SeeaboveEnsuringCourtofAppeal’sjudgmentnotoverturned154

16.12.2010(Comintervention)12.8.2011(SupremeCourtjudgment–appealunfounded)

5.BeefIndustryDevelopmentSocietyCompetitionAuthority‐v‐BeefIndustryDevelopmentSocietyLtd

Ireland IrishHighCourt Beef AgreementamongbeefprocessorsinIrelandtoreducecapacityby25%(bygettingsomeprocessorstoleavemarketinreturnforpayment).Previousprelimref

EnsuringHighCourtfollowedCJEU’spreliminaryrulingrewhether101(3)satisfied.156

C‐209/07BeefIndustryDevelopmentSocietyandBarryBrothers

153 Available at www.rechtspraak.nl Opinion of A-G Wattel 16.11.2010. Final judgment 12.8.2011 (published 18.4.2012) 154 Commission Staff Working Paper Accompanying the Report from the Commission on Competition Policy 2010 {COM(2011) 328 final} SEC(2011) 690 final Brussels 10.6.2011,p.409

144


Court

Sector



&Another[2006]IEHC294(27July2006)155

fromIrishSupremeCourttoCJEUinMarch2007,prelimrulinginNov2008confirmedwasanobjectagreement.IrishSupremeCourtthereforefoundbreachofArt101(1)inNov2009,remittedtoHighCourttoconsiderwhetherArt101(3)satisfied.

CJEUcaselawCommission's2004GuidelinesontheapplicationofArticle101(3)TFEU.

[2008]ECRI‐8637,judgment20.11.2008.30.3.2010(Comintervention)CaseinIrishHighCourtwithdrawnbyNCAafterBIDSwithdrawnitsclaimforexemptiononefficiencygroundsunder101(3)inJan2011.

6.ZSCargoŽelezničnáspoločnosťCargoSlovakia,a.s157

Slovakia NajvyššísúdSlovenskejRepubliky(SlovakianSupremeCourt)

Railtransport Art102.Economicsuccessionandeffectivenessoffines.

Toensureeffectivenessoffinesandprincipleofeconomicsuccession–liability.Punishmentanddeterrence.No

25.6.2010(Comintervention)20.10.201027.2.2012?(Courtjudgment)

156 Commissionannualreport2010staffworkingpaper,p.405 155 2010 annual report para 147; SWP 2010 annual report p. 108, para 405; FIDE 2010 institutional report, p. 42-43; ECN brief 2/2010 announcing the Commission’s intention to intervene, p. 16; FIDE 2008 Ireland country report, p. 183-185 on the Competition Authority’s original case before the Irish High Court. 157 Commission annual report 2010 para 147; staff working paper 2010, p. 108-9, paras 406-408; FIDE 2010 institutional report p. 42. On the Commission’s intervention: ECN brief 05/2010 available at http://ec.europa.eu/competition/ecn/brief/05_2010/sk_cargo.pdf (accessed 14.1.2010). On the Supreme Court’s judgment: ECN brief 02/2012 available at http://ec.europa.eu/competition/ecn/brief/02_2012/sk_cargo.pdf (accessed 26.6.2012). Slovak NCA annual report 2010 p. 25-26. http://www.antimon.gov.sk/files/26/2011/VS%20PMÚ%20SR%202010.pdf (accessed 30.7.2011)

145


Court

Sector



reductionoffinepurelybecausefirmissuccessorcompanytoonewhichcommittedtheinfringementSupremeCourtannulleddecisionofRegionalCourt,upheldfineimposedbytheSlovakAntimonopolyOffice

SupremeCourtfollowedCom’sarguments

7.OrangeCaraïbe158 France CourdeCassation(FrenchSupremeCourt)

Mobiletelephony

PracticesbyFranceTelecomandaffiliateOrangeCaraïbeinFrenchoverseasterritoriesinCaribbean.FrenchNCAfinedthemforbreachofArt101and102TFEU.ParisCourtofAppealrulednoeffectontradebetweenMemberStatesandannulled.

ComintervenedtosupportFrenchNCA’sfine,tosafeguardEUjurisdiction–nationalcourtdefining‘effectontradebetweenMemberStates’narrowly.Comreferredtoitsguidelinesoneffectontradeconcept,particularlypartsonhowprincipleapplieswhenpracticesaffectonlypartofaMember

13.10.2011(Comintervention)31.1.2011(courtjudgment)SupremeCourtfollowedCom’sinterpretationAnnulleddecisionoftheParisAppealCourtandsentbacktotheCourtforasecondreview

158 Commission Staff Working Paper Accompanying the Report from the Commission on Competition Policy 2011 {COM(2012) 253 final}, Brussels, 30.5.2012 SWD(2012) 141 final, p. 15, fn 48 – not identified in the annual report http://ec.europa.eu/competition/publications/annual_report/2011/part2_en.pdf (accessed 26.6.2012). The case is identified at http://ec.europa.eu/competition/court/antitrust_amicus_curiae.html,

146


Court

Sector



State.

8.NationalGridElectricityTransmissionPlcvABBLtdandothercompanies[2011] EWHC 1717 (Ch) 159

UnitedKingdom

HighCourt Energy InthecontextofadamagesactionbroughtbyNationalGrid,UKutilitycompanyagainstanumberofcompanies(ABB,Siemens,AlstomandAreva)thatwereheldliablebytheCommissionin2007fortheirparticipationintheGasInsulatedSwitchgear(GIS)cartel.NationalGridsoughtaccesstoinformationfromthosecompanies’leniencyapplicationstotheCommissiontoassistinitsdamagesclaimagainstthem.AftermathofCJEU’spreliminaryreferenceinC‐360/09Pfleiderer,inwhichitruleditwasuptonationalcourtstodecidewhetherleniencydocumentsshouldbedisclosedinthecontextofdamagesclaimsbyprivateparties,balancingtherightsofdamagesclaimantsandleniencyapplicants.

Intervenedtosafeguardleniencyprogramme.Comstatedthattheweighingofthedifferentinterestsimpliedthattheinformationspecificallypreparedforthepurposeofanapplicationunderitsleniencyprogrammeshouldnotbedisclosed.

3.11.2011(Comintervention)4.4.2012(courtjudgment)HighCourtat[39]appliedaproportionalitytestasking(a)whethertheinfocouldbeobtainedfromothersourcesand(b)relevanceofleniencymaterialstothecaseasinfocouldnotbegainedelsewhereitalloweddisclosureofalimitedpartoftheconfidentialversionoftheCommission

159 Staff working paper on annual report 2011, p. 15, fn 49 – not identified in the annual report http://ec.europa.eu/competition/publications/annual_report/2011/part2_en.pdf (accessed 26.6.2012). The case is identified at http://ec.europa.eu/competition/court/antitrust_amicus_curiae.html,

147


Court

Sector


Commissionintervention;judgmentdelivereddecision.ThereforedidnotentirelyfollowCommission’sopinion.

9.Unknown160 Austria unknown unknown unknown ParallelapplicationofEUandnationallaw:“Initsobservations,theCommissionarguedthattheeffectiveenforcementofArticle101TFEUwouldbehinderedifajudgmentwouldhaveasitssubjectmattersolelynationallawandbeentirelysilentonthe(non)‐applicabilityofEUlaw,asthiscouldbedeemedasanassuranceforundertakingsthatacarteldoesnotinfringeArticle101(1)TFEU”

2011

160 Staff working paper on annual report 2011, p. 15 fn 47 – not identified http://ec.europa.eu/competition/publications/annual_report/2011/part2_en.pdf (accessed 26.6.2012)

148

5.2.1 Reasonsforintervening

Art15(3)empowerstheCommissiontointervene“wherethecoherentapplicationof

Article[101]or[102TFEU]sorequires”.InXBV,discussedindetailbelow,‘coherent’was

construedbroadlytomeaneffectiveapplication.Underthisumbrellaofeffectiveness,

therewerevariousreasonsforinterveninginthecaseidentifiedinTable2.

Anumberofamicuscuriaesubmissionssofarhavebeenrelatedtoblockorindividual

exemptionswhich,pre‐reform,wouldhavebeeninthesolejurisdictionofthe

Commission.GarageGrémeauintheParisCourtofAppealwasthefirstcaseinwhichthe

CommissionintervenedunderArt15(3),withoralaswellaswrittenobservations.It

concernedverticalagreementsinthecarsector,andDaimlerChrysler’srefusaltorenew

itsdistributiondealwithGarageGrémeau.TheCommissionappearstohaveintervenedto

influencewhetherornotaninjunctionshouldbegranted(whilststressingnational

proceduralautonomy).ItcentredontheFrenchSupremeCourt’searlierinterpretationof

thequantitativeselectivedistributionscheme.161ItseemstheCommissiontookthisasan

importantopportunitytostepintoclarifyandsafeguardtheuniforminterpretationof

blockexemptionsinthecarsectorfollowingthedecentralisationofArticle101(3).Asits

2006AnnualReportonCompetitionsuggests,theCommission’sgoalwasalsoto

encourageapreliminaryreferencetotheCJEUforabindingruling.162

InNationalGridintheEnglishHighCourttheCommissionintervenedtosafeguardits

leniencyprogramme.ThiswasinthecontextofadamagesactionbroughtbyNational

Gridagainstanumberofcompanies(ABB,Siemens,AlstomandAreva)thatwereheld

liablebytheCommissionin2007fortheirparticipationintheGasInsulatedSwitchgear

(GIS)cartel.Theclaimantwasseekingaccesstoleniencydocuments.TheCJEUhadruled

inthePfleiderer163caseshortlybeforehandthatitwasuptonationalcourtstodecide

whetherleniencydocumentsshouldbedisclosedinthecontextofdamagesclaimsby

privateparties,balancingtherightsofdamagesclaimantsandleniencyapplicants.There

wasgeneralalarmthatthiswouldjeopardisecompetitionenforcementbydiscouraging

cartelmembersfromblowingthewhistleoneachothertoacompetitionauthorityifthey

arethengoingtobeliablefordamagesinaprivateaction.TheCommissionsaidinits

amicuscuriaeobservationthattheweighingofthedifferentinterestsimpliedthatthe

161 See case notes by J Philippe and F. Kramer in e-Competitions, October 2007-II; and N Lenoir, D Roskis and Ch M Doremus in e-Competitions December 2007-I for a fuller discussion of the case 162 Annual Report on Competition Policy 2006 Commission Staff Working Document, SEC (2007) 860, 25.7.2007, 90. Available at http://ec.europa.eu/competition/publications/annual_report/2006/part2_en.pdf (accessed 3.8.2010) 163 C-360/09 Pfleiderer AG v Bundeskartellamt [2011] ECR I-0000

149

informationspecificallypreparedforthepurposeofanapplicationunderitsleniency

programmeshouldnotbedisclosed.

InOrangeCaraïbe,concerningmobiletelephonyinFrenchoverseasterritories,the

CommissionintervenedtosafeguardEUjurisdiction.TheParisCourtofAppealhad

overturnedthefineoftheFrenchcompetitionauthorityforbreachofArts101and102

TFEU.Thenationalcourtdefined‘effectontradebetweenMemberStates’narrowly,

meaningitwouldapplyonlytonationalcompetitionlaw.

TheIrishBeefIndustryDevelopmentSociety(BIDS)case164concernedanagreementamong

theprincipalbeefprocessorsinIrelandtoreduceprocessingcapacityby25%tosafeguard

theindustry.TheIrishSupremeCourthadpreviouslysubmittedapreliminaryreference

totheCJEU165.TheCJEUfounditwasanobjectagreementandthecasewasthenremitted

totheIrishHighCourtinthecontextofpublicenforcementproceedingstodetermine

whetherArt101(3)TFEUapplied.TheCommissionintervenedintheHighCourtto

ensurethatthepreliminaryrulingwasfollowed.AswithGarageGrémeauabove,this

showsthepotentialforacomplementaryrelationshipbetweenthepreliminaryreference

procedureandCommissioninterventions.Ontheotherhand,itisquestionabletowhat

extentnationaljudgeswouldneedfurtherhelpfromtheCommissionto‘interpret’the

CJEU’sruling.ThisalsohappenedinXBV–theCommissionintervenedagainintheDutch

SupremeCourttoensurethattheCJEU’sruling,anditspreviousinterventioninthe

AmsterdamAppealCourtwasfollowed.

InPierreFabre,theCommissionintervenedinsupportoftheFrenchcompetition

authority’sfindingthatinternetsalesbansinselectivedistributionagreementsbreached

Article101TFEUandtheFrenchprovisions.166InthiswaytheCommissionattemptedto

influencethesubstantivelaw,aswellasshowingthestrengthinnumbersoftheEuropean

CompetitionNetwork.TheFrenchcourtsubmittedapreliminaryreferencetotheCJEU

aftertheCommission’sintervention.Itdidsopreciselybecauseofthenon‐bindingnature

oftheCommission’sobservationsunder15(3)anditsguidelines.167Inatleastone

164 Competition Authority -v- Beef Industry Development Society Ltd & Anor [2006] IEHC 294 (27 July 2006) 165 Case C-209/07 Beef Industry Development Society and Barry Brothers [2008] ECR -8637, judgment 20.11.2008 166 Case 08-D-25 RG 2008/23812, Pierre Fabre Dermo-Cosmétique Paris Court of Appeal, 29 Oct 2009 167 C-439/09 Pierre Fabre Dermo-Cosmétique SAS v Président de l’Autorité de la concurrence, Ministre de l’Économie, de l’Industrie et de l’Emploi, judgment of the CJEU 13.10.2011, not yet reported, at [30]

150

SpanishcasethecourtsoughtboththeCommission’sopinionandtheCJEU’spreliminary

ruling.168

5.2.2 Impactoftheinterventioninthejudicialproceedings

InNationalGrid,theCommissionsaidinitsamicuscuriaeobservationthattheweighingof

thedifferentinterestsimpliedthattheinformationspecificallypreparedforthepurpose

ofanapplicationunderitsleniencyprogrammeshouldnotbedisclosed.Thejudgeinthe

HighCourttookamorenuancedapproach,applyingaproportionalitytestasking(a)

whethertheinformationcouldbeobtainedfromothersourcesand(b)therelevanceof

leniencymaterialstothecase[para39].Asinformationcouldnotbeobtainedfrom

anothersource,healloweddisclosureofalimitedpartoftheconfidentialversionofthe

Commissiondecision169.ThereforethejudgedidnotentirelyfollowtheCommission’s

opinion.

InOrangeCaraïbe,theFrenchSupremeCourtfollowedtheinterpretationoneffecton

tradebetweenMemberStatesputforwardbytheCommission.Itannulledthedecisionof

theParisAppealCourtandsentitbacktotheCourtforasecondreview.

IntheIrishBeefIndustrycase,itisnotpossibletojudgetheeffectoftheCommission’s

interventionasthecaseintheIrishHighCourtwaswithdrawnaftertheagreementwas

brokenupandtheBeefIndustryDevelopmentSocietydiscontinueditsclaimfor

exemptionunderArt101(3).Similarly,inGarageGrémeauthecourtdidnotruleonthe

meritsbutsuspendedpendingcriminalproceedingsbroughtbyDaimlerChrysleragainst

GarageGrémeauforforgeryandfraud.

5.3 ‘Invitations’fromthecourttosubmitobservations

Inpractice,therehavebeeninstancesofMemberStatecourts‘inviting’theCommissionto

submitawritteninterventionintheproceedings,which,conceptually,fallsbetweenthe

twocategoriesofArticle15(1)andArticle15(3).InNationalGrid,170theCommissionwas

168 C-217/05 Confederación Española de Expresarios de Estaciones de Servicio v Compañía Española de Petróleos SA (CEEES v CEPSA) [2006] ECR I-11987. Referred to in the Spanish NCA annual report 2007, 214 169 National Grid Electricity Transmission Plc v ABB Ltd and other companies [2011] EWHC 1717 (Ch) 170 http://ec.europa.eu/competition/court/amicus_curiae_2011_national_grid_en.pdf :

151

respondingtotheEnglishHighCourt’sinvitationtosubmitobservations–butthiswas

stillcategorisedasa15(3)owninitiativeintervention,presumablyasthedomesticcourt

didnotaskspecificquestions.AsreportedintheBelgiancompetitionauthority’sannual

report,theCommissionwassimilarlyinvitedtoofferobservationsintwoBelgiancases,

PowerOilandCourtraisis,171butdidnottakeuptheopportunitytodoso.TheBelgian

authoritysuggestedthiswasinlinewithArt15(3),asitwasnotanexplicitrequestfor

adviceontherulesofCommunitycompetitionlawwithinthemeaningofArticle15(1)Reg

1/2003.172OtherexamplesincludetheDutchMosselcultuurcase;173andMastercardvOFT

intheUK.174

Attheotherendofthescale,somecourtshavebeenresistanttoArt15(3)interventions.

OnesuchexampleistheXBVcase,thefirstinwhichanationalcourt,intheNetherlands,

askedtheCJEUtoruleonthecompetenceoftheEuropeanCommissiontointerveneand

addressesimportantquestionsaboutthenatureofthismechanism.Assuch,thiscase

meritsfurtherinvestigation.

6.AdmissibilityandscopeoftheEuropeanCommission’sown‐initiativeArt15(3)

interventionsinnationalcompetitioncases:thepreliminaryreferenceinXBV175

InspecteurvandeBelastingdienstvXBV176isostensiblyataxcaseratherthanadirect

Article101/102TFEUcase,whichiswhytheCommission’scompetencetointerveneunder

Regulation1/2003wasquestionedbytheDutchcourt.Itteststhesubstantivescopefor

whether national court has jurisdiction to order disclosure of leniency documents submitted to the Commission 171 Annual Report of the Belgian Competition Council 2005: http://economie.fgov.be/fr/binaries/report_competition_2005_fr_tcm326-36151.pdf (accessed 11.8.2010), 55-56. Power Oil SA/D.D. Invest SA, Case R.G. 2003/AR/1444, 7.3.2006; Compagnie Pétrolière du Courtraisis SA/Maurice Coene. Case R.G. 2004/MR/9, 7.3.2006. Both were in Brussels Court of Appeal, in the context of preliminary questions from lower court judges. 172 Annual Report of the Belgian Competition Council 2005, 55: “Dans ces deux affaires, la Cour avait également offert à la Commission européenne la possibilité de formuler des observations écrites, ce qui ne semblait constituer guère plus que la possibilité offerte à la Commission par l’article 15, alinéa 3 du Règlement 1/2003 de soumettre d’office des observations écrites, et ce qui n’était, dès lors, pas une demande explicite d’avis au sujet des règles communautaires du droit de la concurrence, au sens de l’article 15, alinéa 1 du Règlement 1/2003. La Commission n’a pas pris d’initiative allant dans ce sens.” 173 FIDE 2008 Netherlands country report, 216 174 The Competition Appeal Tribunal (CAT) contacted the Commission to ask whether it wished to make any observations on the appeal issues given its 2002 Visa International – Multilateral Interchange Fee decision OJ [2002] L 318/17 (FIDE 2008 UK country report, 367). 175 A more detailed version of this section was published as K Wright ‘European Commission Interventions as Amicus Curiae in National Competition Cases: the Preliminary Reference in X BV’ (2009) 30 (7) European Competition Law Review 309-313 176 Case C-429/07 Inspecteur van de Belastingdienst/P/kantoor P v X BV, reference OJ C 297, 8.12.2007, 23, opinion of Advocate General Mengozzi of 5.3.2009, CJEU preliminary ruling delivered 11.6.2009, 5 CMLR 12 not yet reported in ECR

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CommissionobservationsasamicuscuriaeunderArticle15oftheRegulation.TheCJEU

ultimatelyruledthataMemberStatecourtwasrequiredtoaccepttheCommission’sown‐

initiativewrittenobservation.TheCJEU’srulinggivestheEuropeanCommissionscopeto

interveneinnationalcourtproceedingsnotonlywhenthejudgeisactuallyapplying

Articles101and102TFEU,butalsowhereproceedingsinsomewaylinktotheeffective

applicationofthoseArticles.First,thecasesuggestsanemphasisoneffective(ratherthan

justcoherent)applicationoftheEUrulesoverjudicialindependence.Second,itallowsthe

Commissiontointervene,forexample,infollow‐ondamagescasesandincriminal

prosecutionsinnationalcourts.Arguablythisextendedcompetencewasneverintended

bytheRegulation.

Theissuewaswhetherfinesforbreachofthecompetitionrulesaretaxdeductible.The

casewaslinkedtotheplasterboardcartelinvestigation,inwhichtheCommissionimposed

fines(basedonArticle103(2)TFEU)onvariousfirmsforbreachofArticle101TFEU.177

Oneofthosefirms(anonymisedasXKG)haditsfinepartiallypaidbyoneofitsaffiliates

(XBV).Thedisputecameaboutin2004whentheDutchtaxinspectorateimposedatax

demandonXBV,whichtriedtohavetheCommissionfinedeductedfromitstaxable

income.TheHaarlemDistrictCourt(Rechtbank)consideredthattheEUconceptofa‘fine’

differsfromthenationallawconceptbecausethefineimposedonXKG,unlikefines

imposedbynationallaw,consistedofpunitiveaswellasbenefit‐deprivingelements.

NationalproceedingsaroseasunderDutchtaxlawafineimposedbyanECinstitutionon

afirmmaynotbedeductedfromthefirm’staxableincome.178Withoutgoingintothe

intricaciesofDutchtaxlawhere,theDistrictCourtruledinfavourofXBV.179

TheDutchtaxinspectorateappealedtotheAmsterdamCourtofAppeal(Gerechtshof).180

TheEuropeanCommissionindicatedthatitwishedtosubmitwrittenobservationsunder

Article15(3)andrequestedcasedocumentssothatitcoulddoso,onthebasisthatthe

caseconcernedthecharacterofaCommunityfine.TheCommissionwascarefultospecify

thatitswishtosubmitobservationswasnotaboutsubstantivetaxlawandnational

provisions;itwasnotconcernedwithwhetherthedeductionoftheamountofafinefrom

acompany’staxableprofitwascontrarytoEuropeanlaw.

177 Commission Decision 2005/471/EC of 27 November 2002 relating to proceedings under Article 81 of the EC Treaty against BPB PLC, Gebrüder Knauf Westdeutsche Gipswerke KG, Société Lafarge SA and Gyproc Benelux NV (Case No COMP/E-1/37.152 — Plasterboard), O J L 166, 8 178 Article 3.14(c) Dutch Income Tax Act 2001 179 Case AWB 05/1452, LJN AX7112, judgment of 22.5.2006 180 Case 06/00252, LJN BB3356

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InconsideringwhetheritshouldsenddocumentstotheCommissiontoallowitto

intervene,theGerechtshofdidnothavetheimpressionthattheCouncilofMinistershad

thistypeofcaseinmindwhenitenactedRegulation1/2003,butratherthattheCouncil

envisagedcaseswhereArticle101and102weredirectlyapplied:“realcompetition

cases”.181

InitsdeliberationstheGerechtshofconsideredrecital21ofRegulation1/2003and

recitals31&35oftheCourtsnotice.Thecourtnotedthatrecital21andrecital31ofthe

Courtsnoticerefertosubmissionstonationalcourts“calledupontoapplyArticle[101or

102]oftheTreaty”;whereasArticle15(3)itselfappearstohavebroaderscope,stating

thattheMemberStatecompetitionauthoritiesmaysubmitobservationson“issues

relatingtotheapplicationofArticles[101and102]oftheTreaty”,andtheCommission

maysubmitobservations“wherethecoherentapplicationofArticle[101]orArticle[102]

oftheTreatysorequires’.“[R]elatingto…”inArticle15(3)suggestedthatithadwider

rangethangenuinecompetitioncases.182TheGerechtshofalsonotedthattheredoesnot

appeartobeanintentionaldifferenceinscopebetweenArticle15(1),coveringrequests

fromanationalcourttotheCommissionforthetransmissionofinformationorforan

opinionon‘questionsconcerningtheapplicationoftheCommunitycompetitionrules’,and

Article15(3)providingforCommissioninterventionthroughamicuscuriaebriefson

“issuesrelatingtotheapplicationofArticles[101and102]oftheTreaty.”183Tocomplicate

matters,theExplanatoryMemorandumtotheDutchCompetitionAct,184Article3.4,

interpretsArt15(1)as“questionsrelatingtotheapplicationofArticles[101]and[102]of

theECTreaty’ratherthanjustthe‘competitionrules’(“…overdetoepassingvande

artikelen[10]1en[102]…”);itdoesnottransposethewordingofArticle15directly.

However,thecourtobservedthatrecital31oftheCourtsnoticeisnotparticularly

ambiguous,incorporatingbothoftheaboveideas:“…maysubmitobservationsonissues

relatingtotheapplicationofArticle[101]or[102]toanationalcourtwhichiscalledupon

toapplythoseprovisions”.185Inaddition,theDutchversionofrecital21ofthe

ModernisationRegulationcouldbeinterpretedtomean“whencalledupontoapply

181 At 2.5.1 of the Gerechtshof judgment of 12.9.2007 182 Gerechtshof , at 2.5.3 183 Gerechtshof, at 2.5.4 184 Wijziging van de Mededingingswet en van enige andere wetten in verband met de implementatie van EG-verordening 1/2003: Memorie van Toelichting (wet van 30 juni 2004, Stb. 345, Kamerstukken II, vergaderjaar 2003-4, 29276, nr 3) 185 The Dutch version of recital 31 of the Courts notice reads: „Overeenkomstig artikel 15, lid 3, van de verordening kunnen de nationale mededingingsautoriteiten en de Commissie voor de nationale rechterlijke instanties die de artikelen 81 en 82 van het Verdrag moeten toepassen, opmerkingen maken betreffende onderwerpen in verband met de toepassing van deze bepalingen.“

154

Articles[101and[102]”,whichcouldarguablyrequirecourtstobeapplyingArticle101or

102inthespecificcaseathandfortheCommissiontobecompetenttointervene.186

TheAmsterdamCourtofAppeal187consideredthat,ontheonehand,theserecitalscould

suggestthatArticle15(3)wasonlyapplicableincasesinvolvinganationalcourt’sdirect

applicationofArticles101and102,whereasthecurrentcasecentredontheapplicationof

Dutchdomestictaxlaw,onlyindirectlytouchingontheEUantitrustprovisions.Onthe

otherhand,itconsideredthatthedutyofloyalco‐operationbetweentheCommissionand

theMemberStatesarisingfromArticle10EC(nowArt4(3)TEU)andtheprincipleof

effectiveness,explicitlymentionedinrecital35oftheCourtsnotice,188suggestthatthe

scopeforCommissioninterventioncouldbeinterpretedmorewidelythantheapplication

ofArticles101and102.Italsoneededtobetakenintoconsiderationthattheprovisionsof

Article15(1)and(3)Regulation1/2003signalledachangeinthedistributionof

competencesoftheEUandnationalauthorities.189Furthermore,theexerciseofthe

Commission’scompetencetointerveneasamicuscuriaecouldleadtoaninfringementof

thegeneralprincipleofproceduralequalityoftheparties.190Takingthiswiththe

ambiguousnatureofArticle15(3),theAmsterdamCourtdecidedtostayproceedingsand

referredtotheCJEUforapreliminaryruling.191

ConcurringwiththeAdvocateGeneral’sview,192initsjudgmenttheCJEUconfirmedthe

“intrinsiclinkbetweenfinesandapplicationofArticles[101and102TFEU]”–andthat

“todisassociatetheprincipleofprohibitionofanti‐competitivepracticesfromthe

penaltiesprovidedwoulddeprivetheactionoftheauthoritiesofitseffectiveness.”193

186 “Anderzijds moeten de Commissie en de mededingingsautoriteiten van de lidstaten de bevoegdheid hebben schriftelijke of mondelinge opmerkingen voor de nationale rechterlijke instanties te maken, wanneer hun verzocht wordt artikel 81 of artikel 82 van het Verdrag toe te passen.’” 187 Case 06/00252, LJN BB3356, judgment of 12.9.2007 188 Commission Notice of 27 April 2004 on the cooperation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, OJ C 101, 27.04.2004, 54-64 189 Gerechtshof at 2.6.3 190 Gerechtshof, at 2.7 191 “Is the Commission competent, under Article 15(3) of Regulation No 1/2003, to submit, on its own initiative, written observations in proceedings relating to the deductibility from the (taxable) profit realised by the party concerned in 2002 of a fine for infringement of Community competition law, which was imposed by the Commission on X KG [a firm] and (partially) passed on to the party concerned?” 192 A-G’s opinion [38] 193 Judgment at [36]

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6.1‘Effective’,‘coherent’,‘consistent’or‘uniform’application?

InXBV,theAdvocateGeneraladdressedthemeaningofcoherentapplicationin

decentralisedenforcement.AlthoughthetextofArticle15doesnotmentioneffective

application,theAdvocateGeneralneverthelessraisedthegeneralprincipleof

effectivenessandlinkedittocoherence.HenotedthatArticle15(3)refersto‘coherent

application’ofArticles101and102,andnotonlytotheirinterpretation.Sinceapplication

suggestsaresultbeingattained,thiswouldmeanthatnotonlythecoherentapplicationof

thosearticles,buttheireffectiveapplicationcouldbeatrisk.Inlinkingthetwo,hewenton

todiscusstheconceptsofinternalandexternalcoherence.Internalcoherencewould

relatesimplytotheconsistentapplicationoftheconditionsofArticles101and102,

whereasexternalcoherencewouldimplythattheseprovisionsshouldhavealogicaland

intelligibleplaceinthemoregeneralframeworkofthesystemofEUcompetitionrulesor

theTreaty,alsoreferredtoas‘global’systemcoherence.194

TheAdvocateGeneral’sopinionthendealtwiththedistinctionbetween‘uniform’and

‘coherent’/’consistent’application.Whereas‘consistency’allowsfordifferentdegrees,he

consideredthat‘uniformity’doesnotaccommodatethis.Differentlanguageversionsof

Regulation1/2003usebothterms,‘uniform’and‘coherent’,apparentlyinterchangeably.

TheconceptofcoherencewouldbeflexibleenoughforabroadinterpretationofArticle

15(3)encompassingsituationswhereanationalcourtwouldcompromiseorwouldbe

likelytocompromisetheuniform,oreveneffectiveapplicationofArticles101and102

TFEU.ThebroadinterpretationapproachseemedtotheAdvocateGeneraltobeallthe

moreappropriategiventhattheobjectivesoftheRegulationare,inhisview,toprovidefor

uniformandeffectiveapplicationinthecontextoftheCommission’scentralsupervisory

responsibilityconferredonitbyEUlaw.195Thisseemstobethecaseeveninasystemof

concurrentcompetencestoenforcetherules.Inaninterestingexpressioninthecontextof

partnershipintheEuropeanCompetitionNetwork,theCourtreferredtotheCommission

as“theCommunitycompetitionauthority”196(emphasisadded),underliningitspositionas

firstamongequals.

194 A-G’s opinion [26]-[28]. The Advocate General referred to academic literature by N MacCormick, Amaya Navarro, and Bertea in support: N MacCormick ‘Coherence in Legal Justification’ in A Peczenik (ed) Theory of Legal Science (Reidel, 1984) 235). “They also, as a rule, distinguish between local systemic coherence and global systemic coherence, the former referring to a situation in which only certain areas of a legal system are coherently interlinked, the latter referring to the logical and intelligible interaction of all areas of the system: see, on this point, A Amaya Navarro An Inquiry into the Nature of Coherence and its Role in Legal Argument, Doctoral Thesis, European University Institute, Florence, 2006, in particular pp. 35 to 37, and S Bertea ‘Looking for Coherence within the European Community’ (2005) (2) European Law Journal 157 195 Opinion at [34] 196 Judgment at [39]

156

AlthoughArticle15(3)onlyreferstoArticle101and102,anapproachtoCommission

observationsexcludingotherprovisionsofCommunitylaw,includingArticle103(2)(a)EC

uponwhichfinesarebased,wouldbeinappropriategiventhatArticle103isameansfor

theCommissiontoensurecompliancewithArticle101andallowsittocarryoutits

supervisorytask.197WhileArticle15isprimarilyenvisagedtobeactivatedwhennational

courtsarecalledupontoruleontheapplicationofArticle101and/or102,thisshouldbe

consideredinthecontextofthedecentralisedenforcementregimeusheredinby

Regulation1/2003.198Itwouldbeartificialtosaythatdespitetheintrinsiclinkthatfines

havewiththeapplicationofArticles101and102TFEU,adisputeofnationallawraisinga

questionconcerningthenatureoffinesimposedbyaCommissiondecisionadoptedto

ensurecompliancewiththeprohibitionofArticle101(1)TFEUcannotaprioribelikelyto

affectthecoherentapplicationofthatArticle.199IninterpretingandapplyingArticles101

and102,thenationalcourtneedstohaveregardnotonlytotheCJEU’sinterpretationof

theseprovisions,butalsotothedecisionalpracticeoftheCommission,unlessthenational

courtconsideredthatpracticetobeillegal.200

TheAdvocateGeneralcomparedthewordingofArticle15(3)withrelatedprovisionson

thecooperationbetweentheCommissionandnationalcourts.Asmentionedabove,

Article15(1)allowsfornationalcourtstoasktheCommissionforinformationorits

opinionconcerningtheapplicationofCommunitycompetitionrules“inproceedingsfor

theapplicationofArticle[101]or[102]”[theGerechtshoffocusedonthe‘applicationof

Communityrules’partofthisclause].Under15(2),MemberStatesshouldforwardtothe

Commissionacopyofanywrittenjudgment‘decidingontheapplicationofArticle[101]or

[102]’.However,Article15(3)onlyrefersto‘coherentapplication’.LiketheGerechtshof,

theAdvocateGeneralalsonotedthatrecital21oftheRegulationdoesnotuseprecisely

thesamewordingas15(3).201HedrewattentiontotheimprecisedraftingofArticle15(3)

intermsofwrittenandoralobservationsandthecircumstancesinwhichtheCommission

andnationalcompetitionauthoritiesmaymakethem.Nationalcompetitionauthorities

maysubmitobservationson‘issuesrelatingtotheapplicationofArticle[101]or[102]’,

butitisnotclearwhetherthisalsoappliestotheCommission,orwhetherthelattermay

onlymakeobservationswherecoherentapplicationrequiresit.Thisimprecisionledhim

toconcludethatthewordscannotbeimbuedwitharigiddefinition,202andrecital21

197 opinion at [37] 198 opinion at [40] 199 opinion at [38], [42] 200 opinion at [35] 201 opinion at [43] 202 opinion at [45]-[46]

157

cannotbeusedtolimitthepossibilityoftheCommissiontofileobservationsprovided

Article15(3)ismet.203

TheAdvocateGeneraldidnotaddressthedisjunctureinthewordingbetweenRegulation

1/2003andtheExplanatoryMemorandumtotheDutchCompetitionActasdescribedin

theGerechtshof’sdeliberations.204Nordidheexplicitlyraisethesoftlawpointthat

recitalsinaRegulation,orinaNotice,cannotrestrictthetermsofanArticleinthat

Regulation.TheopiniondidnotrefertothespecificprovisionsoftheCourtsnotice,in

particularrecitals31and35whichwereexaminedbytheAmsterdamCourt.Hedid,

however,mentionitasan“interpretativetext”.

IncontrasttotheAdvocateGeneral,theCourtdidmakereferencetothefactthatrecitals

andnoticeprovisionsshouldnotprevailoverprovisionsintheRegulation(1/2003)itself.

Referringtorecital21ofRegulation1/2003,whichstatesthattheCommissionandNCAs

shouldbeabletosubmitwrittenororalobservationstocourts“calledupontoapply”

Articles101or102TFEU(seeAdvocateGeneral’sdiscussionabove),“whilstarecitalin

thepreambletoregulationmaycastlightontheinterpretationtobegiventoalegalrule,it

cannotinitselfconstitutesucharule.”TheCourtaddedthat“therecitalrefersmerelytoa

typicalsituationbutdoesnotexcludeothersituationsinwhichtheCommissionmay

intervene”.Itissubmittedthatthereisnotreallyanyevidenceforthis.Inaddition,“the

contentofaCommissionnoticecannotprevailovertheprovisionsofaregulation.”205

InconsideringthetwodifferenttypesofinterventioninArticle15(3)“withtwoseparate

fieldsofapplication”bynationalcompetitionauthoritiesrelatingtotheapplicationof

Articles101and102ontheonehand,andinterventionbytheCommissionwherethe

coherentapplicationofArticles101or102TFEUsorequiresontheother[28],theCourt

drewinferencesaboutthelegislativeintent::“…thefactthatthesecondandfourth

203 opinion at [43]-[44] 204 Incidentally, the Dutch provision (Law introducing new rules on economic competition – Wet houdende nieuwe regels omtrent de economische mededinging (Mededingingswet) of 22 May 1997 (Stb. 1997, no. 242), as amended by the law of 9 December 2004 (Stb. 2005, No. 172), Article 89h) states that the Netherlands Competition Authority and the European Commission may submit observations pursuant to Article 15(3) in appeal proceedings before the Administrative Court [6]: Article 89h(1) – the national provision would suggest that observations may not be submitted at first instance, or in other tribunals. This potential obstacle does not appear to have been taken up either by the national court or the CJEU. The explanatory memorandum to the law on competition, (Kamerstukken II, session 2003-2004, 29276, No 3 at para 3.4), explains that the implementation of Article 15 also takes place before the civil courts by amendment of the Code of Civil Procedure, Wetboek van Burgerlijke Rechtsvordering Article III. Para [7] 205 Judgment [31]-[32], citing Case 215/88 Casa Fleischhandels [1989] ECR 2789, [31] and Case C-136/04 Deutsches Milch-Kontor [2005] ECR I-10095, [32]

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sentencesarealmostentirelyidentical,emphasisesthefactthattheCommunity

legislatureintendedtodrawadistinctionbetweenthesetwosituations…”206.

AccordingtomyownresearchintotheCouncilnegotiations,however,thisdoesnotseem

tohavebeenanexplicitissue.SomeMemberStatestookpositionsonNCAsactingas

intermediariesoftheCommission,butthereisnothingspecificaboutthedifferentiated

circumstancesinwhichNCAsandtheCommissionwouldintervene.Themostrelevant

pointisindocument9999/01Secretariattodelegationsof27June2001,inwhichthe

Netherlandsdelegationproposedreferringto"theinterestofCommunitycompetition

policy"ratherthan"Communitypublicinterest".

Whenitsubmitsobservations,theCommissiondoesnotgainthefullstatusofintervening

party.EveniftheCommissionhada‘private’interestintheoutcomeofthecase,asargued

bytheDutchgovernment,itisextremelydifficulttoseparatethatfromtheCommission’s

publicinterestininterveningonthebasisthatthecoherentapplicationofECcompetition

rulesiscompromised.207TheAdvocateGeneralconcludedthatitthereforedoesnot

encroachonMemberStates’proceduralautonomy.208However,healsostatedthatthe

Commission’sinterventiondoesnotaffecttherightsofthepartiestothedispute.Inthis

case,thepartieshadhadopportunitiestorespondtotheCommission’srequestandeach

other’sobservations,asprovidedforinArticle89hoftheDutchCompetitionAct2004,

whichtheydidinApril2007,andatahearinginAugust2007,whentheCommission’s

competencetosubmitanamicuscuriaebriefwasraised.InotherMemberStates,

however,theparties’rightswouldbeaffectedparticularlyiftheyhadnorighttoreply.

Thiscouldleavethedooropentoafuturepreliminaryreferenceontheadmissibilityof

Commissioninterventions.

6.2‘Conditions’forintervention

Theparties’argumentsfocusedonthemeaningoftheCommission’scompetenceto

submitobservations“wherethecoherentapplicationofArticle[101]orArticle[102]of

theTreatysorequires”.XBVandtheDutchgovernmentfavouredastrictinterpretation,

withCommissioninterventionslimitedtocaseswherethenationaljudgeisinvitedto

interpretorapplyoneorotherofArticles101and102TFEU.209TheCommission

206 Judgment at [29] 207 Opinion at [59], [61] 208 Opinion at [63] 209 Summarised at [21] of the Advocate General’s opinion

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(supportedbytheItaliangovernment)arguedthatthisimposeda“supplementary

condition”,andthatithassufficientgroundstosubmitobservationswherethecasecould

“compromisethecoherentapplicationoftheCommunitycompetitionrules”.210Itargues

thatrecital21ofRegulation1/2003,discussedabove(submissionstonationalcourts

“calledupontoapplyArticle[101or102]oftheTreaty”),cannotrestrictawide

interpretationofArticle15(3).

TheliteralinterpretationfollowedbytheCJEUitselfledittoconcludethatthe“option”for

theCommissiontosubmitwrittenobservationsonitsowninitiative“issubjecttothe“sole

condition”thatthecoherentapplicationofArticles101or102TFEUrequiresthe

Commission’sintervention.“Thatconditionmaybefulfilledeveniftheproceedings…do

notpertaintoissuesrelatingtotheapplicationof[thosearticles].”(emphasisadded).211In

particular,theCJEUsaidthattheeffectivenessofthefinesimposedbytheCommission

underArticle103(2)TFEUisaconditionforthecoherentapplicationofArticles101and

102TFEUastheyareusedto“ensurecompliance”and“effectivesupervision”.212

TheCommissioncontendedithasalegitimateinterestinsubmittingobservations,

becausethefinessanctioninganti‐competitivebehaviourarelinkedtotheapplicationof

Articles101and102TFEU,asindicatedthroughArticle103(2)(a)TFEU,thelegalbaseof

theCommission’spowertoimposefinesonundertakingswhichhaveinfringedthose

articles.

Moreinterestingly,initsargumentstotheCourt,theCommissioncouchedthepotentialto

interveneintermsofitsown“significantmarginofappreciation”,inexaminingwhetherit

isnecessaryforittosubmitobservationsinacasebeforeanationalcourt,213ratherthan

thediscretionofthenationalcourttouseitsobservations.(Thisisinterestingasthis

phraseismoreoftenusedinjudicialreviewcaseswhentheCommissionmakeseconomic

assessments,anddenotesawideareaofdiscretion.)TheAdvocateGeneralseemedto

subscribetothisview,referringtothe‘right’oftheCommissiontosubmitwritten

observations.214WhereastheAdvocateGeneral’sopinionfocusedontheCommission

ensuringcoherentapplicationregardingtheeffectsofoneofitsowndecisions(rather

than,forexample,inafollow‐onactionfromanNCA),theCJEUdidnotexpresslymakethis

limitation.

210 Summarised at [22] of the Advocate General’s opinion 211 Judgment at [30] 212 Judgment at [37] 213 Judgment at [22] 214 Opinion at [27], [57]

160

OntheinterplaywithArticle15(2),AdvocateGeneralMengozziopinedthatthereshould

benoconditionforinterventionthatthejudgmenthadalreadybeennotifiedtothe

CommissionunderArticle15(2).Otherwise,theCommissionwouldbeunabletosubmit

observationstofirstinstancecourts,orwhereithadfoundoutaboutapossibleriskto

consistentapplicationoftherulesbyothermeans.215Inthiscase,ithadbeennotified

throughtheDutchcompetitionauthorityandthepress.Thefirstinstancejudgmenthad

notbeenreportedunderArticle15(2),perhapsprimarilyasitwasnotlabelledasa

‘competition’case.

TheAmsterdamCourtofAppealsubsequentlyruled216inlinewiththeCommission’s

opinionastotheresult‐finesimposedbytheCommissionforacartellawinfringement

arenotdeductiblefromtaxesindomesticlaw–butanydiscussionofeffectiveapplication

ofEUlawisabsent.TheCommission’sopinionisnotevenexplicitlymentioned.Moreover,

theAmsterdamCourtstatesthatitsconclusionwouldbethesame“nomatterwhetheritis

afinefromtheEuropeanCommissionortheDutchcompetitionauthority”.217Thismay

giveaclueastotheattitudeofthedomesticcourtstowardsCommissionintervention.

Havingsaidthat,thejudgmentdoesnotmakereferencetotheCJEU’spreliminaryruling

either.

InafurtherappealtotheSupremeCourt(HogeRaad),218thefirmandtheDutch

governmentbotharguedagainstallowingtheCommission’sinterventionagain.The

Commissiononceagainannounceditsintentiontointervene.XBVarguedthatitshould

notbeadmissiblebecausetheCommissionwasinvolvedwiththefactsofthecase.The

SecretaryofStatewasalsoopposedonthegroundsoftheearlierCJEUpreliminary

reference.TheDutchSupremeCourtrejectedtheargumentthattheCommissionshould

onlyinterveneonce,asinterveninginthehighestcourtwouldhavethemosteffect.

RespondingtotheDutchgovernment’ssubstantiveconcernabouttheCommission’sown

interest,theAdvocateGeneralintheCJEUhadstatedthatjudicialindependenceisnot

challenged,astheCommission’sopinionisnotbinding.219SincetheCJEU’sruling

confirmedthattheEuropeanCommissionmayinterveneinnationalcourtproceedingsnot

215 Opinion at [48] 216 08/01180, LJN: BL7052, 11 March 2010 2174.3.2 of the judgment: “geen verschil of het gaat om een boete van de Europese Commissie of van de Nederlandse Mededingingsautoriteit.” (my translation in text) 218 Available at www.rechtspraak.nl Opinion of A-G Wattel 16.11.2010, Case V-N 2010, 65.4, LJN B06770. Hoge Raad CPG 10/01358.Final judgment 12.8.2011 (published 18.4.2012) – appeal unfounded 219 See opinion at [6], [63], [66]

161

onlywhenthejudgeisactuallyapplyingArticles101and102TFEU,butalsowhere

proceedingsinsomewaylinktotheeffectiveapplicationofthoseArticles,inpracticeit

couldallowtheCommissiontointervene,forexample,incontractdisputes,follow‐on

damagescasesfromNCAs,and,evenincriminalprosecutions.Arguablythisextended

competencewasneverintendedbytheRegulation.

7.Conclusions

ThischapterhasinvestigatedthediagonalrelationshipbetweentheEuropean

Commission,asadministrativesupranationalauthoritywithquasi‐judicialfunctions,and

nationalcourts.Previously,theCourtofJustice’spreliminaryreferenceprocedure,a

‘dialoguebetweencourts’,wastheonlyformallinkbetweenthecourtsoftheMember

Statesandthesupranationallevel.ThischapterhasshownhowtheEuropean

Commissionhasaddedtothisgeneral(EUlaw)institutionallinkthroughthespecific(to

competitionlaw)instrumentofopinionsandown‐initiativeinterventionstonational

courtsincompetitioncases,underArt15Reg1/2003.Thistoolisdesignedintheabsence

ofaformaljudicialnetworktopromoteconsistentapplicationfollowingdecentralised

enforcementoftheEUantitrustrulesunderArticles101and102TFEU.Thechapterdrew

onoriginalresearchintothepre‐legislativedocumentsonArt15Reg1/2003.

Intheabsenceofaformaljudicialnetwork,theArticle15(3)mechanismcontributesto

safeguardingconsistentapplicationofCommunitycompetitionrulesinthedecentralised

enforcementsystem.However,itraisesconstitutionalquestionsabouttheeffectof

concurrentcompetencesontheinstitutionalbalanceatthesupranationallevelbetween

theCommissionandtheCourtofJustice,anddiagonallyintermsoftheeffectonnational

judicialautonomy.

Thediscussiontookbothatheoreticalandapracticalapproach.Thetheoreticalelement

examinedthelegalnatureoftheCommissionopinionasanEUinstrument,thewaysin

whichtheopinioncouldbecomebindingdrawingfromthesoftlawliterature,andthe

relationshipwiththejudicialpreliminaryreferenceprocedure.

Thelegaleffectofanopiniontoacourtisuncertain,especiallyasthistypeofopinionis

uniqueintheEUorder.Itdoesnotfiteasilyintothecategoryofsoftlawinstruments

establishing‘rulesofconduct.’Commissionopinionscouldbecomebindingindirectly

162

throughthenationalcourt’sjudgment,particularlyifitessentiallytransposesthe

Commission’sadvice.

RegardingtheinstitutionalbalancebetweentheCommissionandCJEU,itcouldbeargued

thattheCommissionistakingoverarole‐ultimateinterpretationofEUlawthrough

preliminaryreferences‐grantedtotheCJEUintheTreaty.However,theCJEUitselfhas

assentedtoawidejurisdictionfortheCommission’sintervention,asdemonstratedbyits

preliminaryrulinginXBV.TheconcurrentpowersoftheCJEUandCommissionsuggest

thatwheretheCommissionauthorssoftlawinstrumentsatthelegislativelevel,ormakes

aquasi‐judicialdecision(suchasimposingafine)regardingspecificparties,ithasprimacy

overinterpretationattheenforcementlevel.ThisiscoupledwiththeCJEUrestrictingits

ownjurisdictionregardingNCAsasexploredinthepreviouschapter.

Fromapracticalperspective,thechapterundertookananalysisoftheemergingpractice

underArt15,reportingoriginalresearchintoalltheopinionsandown‐initiative

interventionssofar.Ifound23opinionsunderArt15(1)and9interventionsunderArt

15(3).TheCommissionhasbeenmoretransparentsinceearly2012bymakingavailable

someinterventionsonitswebsite.Thisismoreevidentregarding15(3)interventions,

althoughoneAustriancaseisstillabsent.TheCommissionmaybemoresensitivetothe

transparencyoftheseown‐initiativeinterventions.Inaddition,thesearethecasesin

whichithasfeltcompelledtointervene,andsorepresentcompetitionissueswhichitfinds

tobemostimportantforcoherentapplication.AssuchitisintheCommission’sinterestto

publishthem.Bycontrast,onlyaroundaquarteroftheopinionsrequestedbynational

courtsunder15(1)havebeenpublicised.Thislackoftransparencyraisesquestionsabout

the‘backdoor’influenceoftheseopinionsinthejudicialproceedings.Moreover,itdoes

nothelplegalcertaintyandconsistentapplicationthroughouttheEU.Ideallythese

interventionsshouldalsobepublishedindifferentlanguageversionsformaximum

positiveimpactonconsistentapplication.Asafurtherpositiveeffect,thiswouldpromote

awarenessamongjudgesofcasesinotherMemberStates.

Itisnotalwayseasytoobservewhathappenedinthenationalcourtandtheinfluenceof

theCommissiononthoseproceedings.Withoutinterviewingjudges,courtstafforthose

involvedinthecasesthejudgmentistheonlyevidence.Thisdependsonaccesstonational

databasesandabilitytoreadtherelevantlanguages.Sometimesthejudgmentitselfdoes

notrefertotheCommission’sobservationsinanycase(forexample,intheXBV

AmsterdamCourtofAppealjudgment).Itisalsodifficulttoobservethosecasesinwhich

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anopinionwasrequestedbuttheCommissiondeclined,orwhereapartywantedto

requestanopinionbutthenationaljudgedidnotgrantthatrequest.

ThecaselawdemonstratesthatthecompetenceoftheCommissiontointervenein

nationalcourtproceedingsisnotstrictlylimitedtocasesdirectlyapplyingArt101or102

TFEU.IalsofindathirdcategorybetweenArt15(1)and15(3):casesinwhichthe

Commissionwas‘invited’tointervenebutnospecificquestionswereputtoit.Anumber

of15(3)submissionssofarhavebeenrelatedtoblockorindividualexemptionswhich,

pre‐2004reform,wouldhavebeeninthesolejurisdictionoftheCommission.

NationaljudicialautonomyfavoursminimalCommissionintervention.Theconverse

argumentiswhydoestheCommissionnotinterveneinmorecases?Thereisacertain

amountofdemandfrompartiesandtheirlegalrepresentativesfortheCommissionto

makemoreuseoftheseinstruments,asresponsestotheconsultationonthefirstfive

yearsofthefunctioningofRegulation1/2003suggest.220TheCommissionitselfmaynot

wanttodosoforfearofraisingitscaseload.InrelationtotheEuropeanCompetition

NetworkoneCommissionofficialsaidthatinterveningallthetime(e.g.bytakingovera

casefromanNCAunderArt11(6)Reg1/2003)wouldbethe“worstcasescenario”221.A

questionforfurtherresearchishowtheCommissiondecideswheretointervene.

GiventhesmallbutnotinsignificantnumberofcasessofarwheretheCommission’s

opinionwassought,itremainstobeseenhowjudgeswillavailthemselvesofthis

mechanismrelativebothtothepreliminaryreferenceprocedure,andtothepossibilityof

callingonthenationalcompetitionauthoritywhichoperateswithintheframeworkofthe

ECN.Thatislikelytodependonindividualjudgesandjudicialpreferencesindifferent

MemberStates.Art15(3)Reg1/2003alsoallowsnationalcompetitionauthoritiesto

interveneinnationaljudicialproceedingsintheirownMemberState.Togetherwiththe

proposaldiscussedinthefollowingchapter,thiscouldbringnationalcourtsindirectlyinto

theEuropeanCompetitionNetwork.Thatcouldhavepositivebenefitsfortheconsistent

applicationoftheEUcompetitionrules,butalsobringsjudicialautonomyintoquestion.

ThefollowingchapterdiscussestheextensionoftheMasterfoodsruleontheeffectof

EuropeanCommissiondecisions.Itexplorestheproposalintheforthcomingdraft

directiveondamagesactionstointroducethebindingeffectofnationalcompetition

authorities’decisiononnationalcourtsthroughouttheEU.Thatis,forforeignNCAsto

bindcivilcourts.

220 2009 Report on the functioning of Reg 1/2003, 9 221 Interview with DG COMP from ECN unit 13.7.2006

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CHAPTER5:BINDINGTHEJUDICIALWITHTHEADMINISTRATIVE:

TheProposalfortheBindingEffectofNationalCompetitionAuthorityDecisionson

NationalCourts1

1.Introduction

Theprevioustwochaptersexploredthediagonalrelationshipsbetweenjudicialand

administrativebodiesonthesupranationalandnationallevels:respectivelybetween

nationalcompetitionauthorities(NCAs)andtheCourtofJusticeoftheEuropeanUnion,

andbetweentheEuropeanCommissionandnationalcourts.Intermsoftheinstitutional

diagramintheintroductiontothisthesis,theMasterfoodsrule,accordingtowhich

MemberStatecourtscannottakeadecisionrunningcountertoonebytheCommission,

encapsulatedalinkbetweentheEuropeanCommissionandthenationalcourts.This

chapterinvestigatestheextensionofthatrule–theproposalintheEuropean

Commission’sWhitePaperanddraftdirectiveondamagesactionsforbreachofEU

antitrustrulestomakeNCAdecisionsbindingoncivilcourtsthroughouttheEU(‘the

bindingeffectrule’)2.ThisspecificexampleisusedtoexploretheimpactofEUantitrust

measuresontherelationshipbetweencompetitionauthoritiesandcourts–andjudicial

andadministrativebodiesmorebroadly‐onthenationallevel.Ontheinstitutional

diagram,thisrepresentsthelinebetweennationalcompetitionauthoritiesandnational

courtsadjudicatingincasesbetweenprivateparties,whichwouldnormallybeinthe

domainofnationalproceduralrules.Thischaptercontributestothequestionofthe

impactofthe2004andmorerecentcompetitionreformsonnationalcourtsandjudicial

autonomy.

Thebindingeffectproposalisputforwardinthecontextofawiderpackageof

recommendationstoovercomesubstantiveandproceduralhurdlesandenablevictimsof

infringementsofEUcompetitionlawtoexercisetheirrightstocompensation.Itaimsto

incentiviseclaimantstobringprivateenforcementcasesincivilcourtsbyalleviatingtheir

1 A shorter version of this chapter was published as K Wright, ‘Binding the Judicial with the Administrative: Some Aspects of the European Commission’s White Paper on Damages Actions for Breach of EC Antitrust Rules’ (2008) European Current Law, November 2008 xi-xv. Some ideas also appeared in K Wright ‘Book review: M Danov, Jurisdiction and Judgments in Relation to EU Competition Law Claims’ (2012) 37(3) European Law Review 355-358 2 White Paper on Damages Actions for Breach of the EC antitrust rules COM (2008) 165, 2.4.2008, Chapter 4; and Article 12 of the (leaked) draft directive according to E Truli ‘White Paper on Damages Actions for Breach of the EC Antitrust Rules: the Binding Effect of Decisions Adopted by National Competition Authorities’ (2009) 5(3) European Competition Journal 795-821, 801, fn 42

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burdenofproof.3Onpragmaticgroundstherulewouldavoidre‐litigationofissuesin

publicandprivateenforcement,4andcouldcontributetoconsistentapplicationoftheEU

competitionrulesbyindirectlylinkingnationalcourtstotheEuropeanCompetition

Network(ECN).

However,suchaproposalcarriesmuchbroaderconstitutionalsignificanceintermsofthe

interactionbetweenjudicialandadministrativeinstitutionsandtheirdecisions.These

constitutionalconsequences,andinparticulartheasymmetriceffectsbetweencourtsand

NCAs,havebeenlessemphasised.Theproposedrulecreatesanapparenthierarchyof

administrativedecisionsovercourtjudgments,narrowingthefieldofcivilcourts’

jurisdictionandimpedingjudicialautonomy.Theseconstitutionalconsequenceswillbe

exploredinthischapter.

Chapter2discussedthejudicialfunctionsofnorminterpretationandprecedent‐setting

whichmayalsobecarriedoutbyadministrativeagencies.Inlightofthesejudicial

functions,thepreviouschapter(chapter4)exploredtheinterpretativefunctionthrough

EuropeanCommissioninterventioninnationalcourtproceedings.Thatchapterdiscussed

theCommission’s‘preliminaryreferenceprocedure’andhowaCommissionopinionmay

becomeindirectlybindingthroughnationalcourtjudgementswhichtransposetheadvice.

Inthischapter,thebindingeffectofNCAdecisionsrelatestoanotheraspectofthejudicial

functiondiscussedinchapter2:precedent‐setting.Thelegalforceofthesedecisionswill

beexertedoncourtsthemselves.

ThechapterisinformedbymyoriginalresearchonthelegislativeprocessbehindReg

1/2003,inrespectoftheeffectofCommissiondecisionsonnationalcourts,andon

horizontalrelationsbetweennationalcompetitionauthoritieswithintheEuropean

CompetitionNetwork.ThisoriginalresearchwasconductedbyconsultingCouncilof

MinistersdocumentsontheReg1/2003negotiationsaswellasthroughinterviewswith

EuropeanCommissionandnationalcompetitionauthorityofficials.Ihavealsolooked

3 The White Paper also covers issues of standing and collective redress, access to evidence, fault requirements, damages, defences, limitation periods, costs, leniency programmes, and the relationship between public and private enforcement of EU competition law. 4 Avoiding re-litigation and enhancing judicial economy is the headline presented by the Commission justifying the rule: ‘What does the White Paper suggest to avoid the re-litigation of issues already decided?’ in the Policy paper on compensating consumer and business victims of competition breaches – frequently asked questions, MEMO/08/216, Brussels 3.4.2008, available at http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/216&format=HTML&aged=0&language=EN&guiLanguage=en, accessed 13.7.2010.

166

comprehensivelyattheconsultativeprocessbehindtheproposedbindingeffectrulewith

referencetoresponsestotheWhitePaperondamagesactions.

AccordingtotheEuropeanCommission’sworkprogramme5,thedirectivecontainingthis

proposalwillbeformallyproposedtowardstheendof2012,makingthediscussioninthis

chapterparticularlytimely.Havinglookedatthecurrentinteractionsbetweennational

courts,theCourtofJustice,theEuropeanCommissionandnationalcompetition

authorities,thischapterlooksaheadtothisforthcominglegislationwhichwillaffect

institutionalinteractionsbetweenjudicialandadministrativeauthorityatthenational

level.


Therestofthischapterisstructuredasfollows.Ifirstlayoutthebackgroundtothe

bindingeffectproposalanditsrelationshipwiththe2004reformsandtherightto

damages.SecondlyIconsidertheproposedbindingeffectruleinmoredetailwithits

purposeandscope.Ininvestigatingthescopeoftherule,Iconsideritsexplicittermsand

otheropenquestions,evaluatingtheextentoflimitsoncivilcourts’jurisdiction.Thirdly,in

consideringthebasisfortherule,IdiscusstheextensionoftheMasterfoodsrule;the

horizontalapplicationofthedutyofloyalcooperationbetweensub‐statebodies;andthe

analogywiththeBrusselsIRegulationonrecognitionofcourtjudgmentsacrossMember

States(IreturntothespecificTreatylegalbaseinthefinalsection.)Thefourthsection

investigatestheasymmetriceffectstowhichtherulecouldgiverise,takingintoaccount

thelackofbindingeffectbetweenNCAdecisionswithintheEuropeanCompetition

Networkandareverseoftheprincipleofequivalence,accordingtowhichnationalNCA

decisionswouldbetreatedlessfavourablythanNCAdecisionsfromanotherMember

State.Havingconsideredthedesirabilityoftheruleandsomeofitsunintended

consequences,thefifthsectionturnsattentiontothepossibilityandlikelihoodoftherule

beingadopted.ThissectionassessesthecurrentstatusintheMemberStatesofnational

competitionauthoritydecisionsincourtproceedingsbetweenprivateparties;objections

andobstaclestoadoptionoftheruleintheMemberStates;and,morepractically,the

currentstateofplayofthedraftdirectiveanditslegalbaseissues.Thechapterconcludes

withanevaluationofconditionsfortherule’sadoption. 5 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Commission Work Programme 2012: Delivering European Renewal, Brussels, 15.11.2011 COM (2011) 777 final

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2.Backgroundtotheruleandrelationshipwiththe2004reforms

InDecember2005theEuropeanCommissionpublishedaGreenPaper,6itselfresponding

totheresultsofa2004comparativestudyidentifyingandanalysingtheobstaclesto

successfuldamagesactionsintheEUMemberStates.TheGreenPaperfounda"total

underdevelopment"7ofactionsfordamagesforbreachofECcompetitionlaw,andan

“astonishingdiversity"intheapproachestakenbythedifferentMemberStates.8Thiswas

followedbythepublicationoftheEuropeanCommission’sWhitePaperondamages

actionsforbreachoftheECantitrustenforcementrulesinApril2008.9Thebindingeffect

ruleisonlyoneofitsproposals;theWhitePaper’schapterscovermeasuresonparties’

standingtobringaclaimandcollectiveredress,accesstoevidence,faultrequirements,

damages,defences,limitationperiods,costs,leniencyprogrammes,andtherelationship

betweenpublicandprivateenforcementofECcompetitionlaw.Accordingtoleaksofthe

draftdirective,itscontentisnotexpectedtobesubstantiallydifferentfromtheprovisions

oftheWhitePaper.10

TheEuropeanCommissionaimstostimulateprivateenforcementofEUcompetitionlaw

innationalcourts,complementingpublicenforcementbyDGCompetitionandnational

competitionauthorities.Oneoftheaimsofthe2004reformswastoencourageprivate

enforcement.11Indecentralisingenforcementtonationalcourtsaswellascompetition

authorities,thedoorwasopentoclaimantstoactasenforcers(‘privateattorney 6 Green Paper on Damages actions for breach of the EC antitrust rules COM (2005) 672 7 Which may not be true in some Member States, for example, Germany – see S Peyer ‘Myths and Untold Stories - Private Antitrust Enforcement in German’ (2010) CCP Working Paper 10-12 8 The Ashurst Study: Study on the conditions of claims for damages in case of infringement of EC competition rules. Comparative report prepared by Denis Waelbroeck, Donald Slater and Gil Even-Shoshan, 31 August 2004, available at http://ec.europa.eu/comm/competition/antitrust/actionsdamages/comparative_report_clean_en.pdf, accessed 21.7.2010, 1 9 White Paper on Damages actions for breach of the EC antitrust rules COM (2008) 165 final, accompanied by a Staff Working Paper SEC (2008) 404 and an Impact Assessment Report SEC(2008) 405.The White Paper was subject to a consultation, closing in July 2008, to which the response was mixed. Subsequently the Commission drew up a draft directive, which it had intended to formally propose it in October 2009. The draft directive was however leaked in 2009. The current state of play on the directive is discussed in the final section of this chapter. 10 In October 2009 the out-going Commission decided not to formally propose the draft directive, after the European Parliament’s March 2009 resolution (2008/2154(INI) P6_TA(2009)0187 urged the Commission to identify a legal basis for the adoption of the proposed measures (there was no reference to a legal base in the White Paper). The state of play on the directive, now expected before the end of 2012 according to the Commission’s work programme, is discussed in the final section of this chapter. 11 E.g. recital 7 Regulation 1/2003; D Woods, A Sinclair & D Ashton ‘Private enforcement of Community competition law: modernisation and the road ahead’ European Commission Competition Policy Newsletter no 2 Summer 2004, 31-37

168

generals’12)closetoinfringements,andtodirectlyclaimredressforcompetitionlaw

infringementsasaresultofwhichtheyincurredharm.Enforcementbynationalcourts

hadalwaysbeenpossible,butpracticallydifficultduetothebifurcationofArticle101

TFEU.OnlytheCommissionwasauthorisedtograntexemptionsunderArticle101(3),

leavingthenationalcourts’jurisdictionincomplete.Inaddition,therequirementforfirms

tonotifytheCommissionoftheiragreements,andthebacklogindecision‐makingonthose

notifications,meantthatproceedingswerestillpendingintheCommission.Theabolition

ofthenotificationprocedure,inadditiontothecompetencetoruleonthewholeofArticle

101,increasedtheambitofnationalcourts’competenceinantitrustenforcement.This

chaptershowshowthatambitcouldnarrowagainwiththebindingeffectrule.

Thereisanimportantbalancetobestrucktoensurethatpublicandprivateenforcement

arecomplementary.Theprincipalaimofpublicenforcementmustbedeterrenceasa

whole13(e.g.throughpunishmentsuchasfinesorevenimprisonment).Butcompetition

authoritiesarelesswellplacedtocompensateindividualswhoareharmedbycompetition

lawbreaches,andtheCommissionitselfisnotempoweredtograntdamages.Assuch,in

privateenforcementthecourtiscalledupontocompensatetheindividual.Private

enforcementincivilcourtsalsohasaroletoplayindeterrence,butitsprimarypurposeis

compensation.AsexplainedintheStaffWorkingPaperaccompanyingtheWhitePaper,

“Thisnotionofcomplementcoverstwocategoriesofcases.Firstly,itcoversthosecases

wherethepublicauthorities,forreasonsoflimitedresourcesandpublicpriorities,donot

takeanyenforcementaction,orlimittheirenforcementactivitiestospecificaspectsofa

particularbehaviour.Inthatcase,privateactionsfordamagescanextendtheenforcement

ofEClawthroughwhatareknownasstand‐aloneactions.Secondly,privateenforcement

coverscaseswhereaprivatepartyclaimsdamagesforharmarisingfromaninfringement

establishedbyapublicauthority.Theseareknownasfollow‐onactions.TheCommission

ensuredthatthemeasurescontainedintheWhitePaperare“designedinsuchawayas

nottojeopardisepublicenforcement.”14

12 Particularly used in the US context where private actions in competition enforcement are more prevalent. In the EU literature see e.g. A Andreangeli 'From Complainant to "Private Attorney General": the Modernisation of EU competition enforcement and private antitrust action before national courts' in J Peay and T. Newburn (eds) Policing: Politics, Culture and Control. Essays in Honour of Robert Reiner (Hart Publishing, 2012) 229-54; K Cseres ‘Governance Design for European Private Law: lessons from the Europeanization of Competition Law in Central and Eastern Europe’ in F Cafaggi (ed) Making European Private Law: Governance Design (Edward Elgar, 2008) 138-196, 143 13 A Komninos ‘Public and Private Antitrust Enforcement in Europe: Complement? Overlap?’ (2006) 3(1) Competition Law Review 5-26; W Wils ‘The Relationship Between Public Antitrust Enforcement and Private Actions for Damages’ (2009) 32 World Competition 3 14 White Paper staff working paper [21]

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TheWhitePaperthereforeputsforwardpolicyoptionstoovercomeperceivedsubstantive

andproceduralhurdlesandenablevictimsofinfringementsofECcompetitionlawto

exercisetheirrightstocompensation.AstheCommissionstates,theprimaryobjectiveof

theWhitePaperisto“improvethelegalconditionsforvictimstoexercisetheirrightunder

theTreatytoreparationofalldamagesufferedasaresultofabreachoftheECantitrust

rules.Fullcompensationis,therefore,thefirstandforemostguidingprinciple.”15

IndividualrightstocompensationhadbeenrecognisedbytheCJEUinCourageand

Crehan16andManfredi17.InCourage,theCJEUstatedthat“thepracticaleffectofthe

prohibitionlaiddowninArticle[101(1)TFEU]wouldbeputatriskifitwerenotopento

anyindividualtoclaimdamagesforlosscausedtohimbyacontractorbyconductliable

torestrictordistortcompetition”.18Further,inManfredi,“…anyindividualcanclaim

compensationfortheharmsufferedwherethereisacausalrelationshipbetweenthat

harmandanagreementorpracticeprohibitedunderArticle[101TFEU]”.19Thejudgment

alsostatedthat“IntheabsenceofCommunityrulesgoverningthatfield,itisforthe

domesticlegalsystemofeachMemberStatetosetthecriteriafordeterminingtheextent

ofthedamagesforharmcausedbyanagreementorpracticeprohibitedunderArticle[101

[or102]TFEU],providedthattheprinciplesofequivalenceandeffectivenessare

observed.”20

TheCourtdidlaydownminimumstandardsonthetypeofdamagesthatcanbeclaimed.

AccordingtotheCourt,“itfollowsfromtheprincipleofeffectivenessandtherightofany

individualtoseekcompensationforlosscausedbyacontractorbyconductliableto

restrictordistortcompetitionthatinjuredpersonsmustbeabletoseekcompensationnot

onlyforactualloss(damnumemergens)butalsoforlossofprofit(lucrumcessans)plus

interest.”21

Onamorecynicalunderstanding,ithasbeensuggestedthattheEuropeanCommissionis

usingtheCJEU’scaselawasaspringboardtointroducechangestoMemberStates’

15 White Paper, 3 16 Case C-453/99 Courage and Crehan [2001] ECR I-6297 [28]-[29], [36] 17 Joined Cases C-295/04 C-295/04, C-296/04, C-297/04 and C-298/04Manfredi [2006] ECR I-6619 [100] 18 Courage v Crehan [26] 19 Manfredi [61] 20 Manfredi [98] In its White Paper [186], the Commission states that “Although the judgment only refers to Article 81 EC [101 TFEU] because of the facts underlying the case, the reasoning of the Court is such that it can also be applied to Article 82 [102 TFEU] cases.” 21 Manfredi [95]

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procedurallaw,whilstarguingthatcompetitionenforcementis‘special’22:“thetraditional

tortrulesoftheMemberStates,eitherofalegalorproceduralnature,areofteninadequate

foractionsfordamagesinthefieldofcompetitionlaw,duetothespecificitiesofactionsin

thisfield….Inaddition,thedifferentapproachestakenbytheMemberStatescanleadto

differencesintreatmentandtolessforeseeabilityforthevictimsaswellasthedefendants,

i.e.toahighdegreeoflegaluncertainty.”23AsearlyastheannualFlorenceworkshopon

EUcompetitionlawin2001,itwassuggestedthatlegislation,possiblyaregulationbased

onArt83EC[nowArt103TFEU],“wouldhavetolaydownspecificrulesonremedial

relief”,goingbeyondthenegativeintegrationmeasuresoftheprinciplesofequivalence

andeffectiveness.24However,itwasacknowledgedthatreformandharmonisationof

proceduralrules,perhapsevenmoresothansubstantiveones,waspoliticallysensitive.

DoubtsstillremainaboutEUcompetenceinnationalproceduralmatters25.

TheproposaltoallowthebindingeffectofNCAfindingofinfringementoncourts

throughoutallMemberStatesispromotedinthecontextofthedraftdirectiveasawhole:

theprincipalaimoftheproposalistoencouragedamagesactionsbyalleviatingthe

burdenofproofontheclaimant,avoidingre‐litigationofissues;boostingjudicial

economy;andpromotingconsistentapplication.However,lessattentionhasbeengiven

tojudicialautonomyandtheeffectsoftheruleoninternalMemberStateinstitutional

structures.

TherearevariouspolicyoptionspertainingtothisproposalintheCommission’simpact

assessment,whicharepartofapackagewithotheraspectsoftheWhitePaper:Options

1&2‐findingsofNCAbindingifnotappealedorifconfirmedonappeal;Option3‐binding

onlyoncourtsoftheMemberStatewhosecompetitionauthorityissuedthedecision;

Option4:non‐regulatoryapproach–basedonbestpracticeandrecommendationsonly;

Option5:noaction–maintainthestatusquo.ThefirstistheCommission’spreferred

option.Fromthe2005GreenPaper26,theCommissionhasalreadyrejectedtheoptionof

22 F Marcos & A Sánchez Graells (2006) ‘Towards a European Tort Law? Damages Actions for Breach of the EC Antitrust Rules: Harmonising Tort Law Through the Back Door?’ Presented at the IV International Congress ‘European Private Law Beyond The CFR’, Lleida, Spain, 25-26. 10.2007. Available at SSRN: http://ssrn.com/abstract=1028963. Also published in (2008) 16(3) European Review Private Law 469-488 23 Staff Working Paper [5] 24 C-D Ehlermann & I Atansiu (eds) European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law, European University Institute (Hart, 2003), Introduction, p. xxxii 25 See C Leskinen ‘The Competence of the European Union to Adopt Measures Harmonizing the Procedural Rules Governing EC Antitrust Damages Action’ (2008) Working Paper Instituto de Empresa Law School, Madrid for a discussion of potential legal bases. 26 Green Paper on damages actions for breach of the EC antitrust rules, COM(2005) 672, 19.12.2005

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theNCAinfringementdecisioncreatingonlyarebuttablepresumptionindamagesactions

ratherthanirrefutableproof.Anumberofcriticsoftheproposal,particularlyongrounds

ofjudicialindependence,wouldhoweveradvocatetherebuttablepresumptionoption.

Thischapterrevisitsandanalysesthoseconcerns.

3.Theproposedruleanditspurpose

Currently,wherenationalcourtsruleonagreements,decisionsorpracticesunderArt101

or102TFEUwhicharealreadythesubjectofaEuropeanCommissionDecision,they

cannottakedecisionsrunningcountertothatdecision.IftheCommissioniscontemplating

adecision,thenationalcourtmustavoidadoptingadecisionthatwouldconflictwithit.27

ThisrulewasestablishedbytheEuropeanCourtofJusticeinMasterfoodsLtd(t/aMars

Ireland)vHBIceCreamLtd(C‐344/98),28andsubsequentlycodifiedbyArt16of

Regulation1/200329whichdecentralisedenforcementofECantitrustrules.Ina

decentralisedsystem,thisrulecontributestotheconsistentapplicationofCommunity

law.ItalsoimpliesthatwhentheEuropeanCommissionfindsabreachofthecompetition

rules,victimsofthatinfringementcanrelydirectlyontheCommission'sDecisionas

bindingproofincivilproceedingsfordamages.However,thecurrentproposalwouldgo

beyondthisexistingacquiscommunautaire.Evenasitstands,theobligationinthe

Masterfoodsruleisnotentirelyunambiguous,asdiscussedbelow.

Now,intheWhitePaperanddraftDirective,theCommissionproposesthatwhennational

courts,inactionsfordamages,ruleonconductunderArticle101orArticle102TFEU

whichisalreadythesubjectofafinaldecisionfindinganinfringementofthoseArticlesby

anationalcompetitionauthoritywithintheEuropeanCompetitionNetwork,theycannot

takedecisionsrunningcountertothatdecision.Therulewouldmeanthatwherea

nationalcompetitionauthorityfindsaninfringementoftheEUantitrustrules,a

complainantwouldbeabletorelyonthatfindingasirrefutableproof,notjustasa

presumption,whenbringingadamagesclaimbasedonthatbreachinanationalcourtin

anyMemberState,withoutthenecessityforfurtherproof.Thenationalcourtwouldnot

bepermittedtoreinvestigatethefactswhichledtothefindingofinfringement.The

27 See A Komninos, ‘Effect of Commission Decisions on Private Antitrust Litigation: Setting the Story Straight’ (2007) 44 Common Market Law Review 1387-1428 for discussion of the impact of a Commission decision on national proceedings in various scenarios, at 1404-1422 28 C-344/98 Masterfoods Ltd (t/a Mars Ireland) v HB Ice Cream Ltd [2000] ECR I-11369 29 Regulation 1/2003 on the implementation of the rules of competition laid down in Articles 81 and 82 of the Treaty [2003] OJ L1/1

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relevantsectionoftheWhitePaperis2.3,withreasonsexplainedmorefullyinChapter4

oftheStaffWorkingPaperaccompanyingit:“Nationalcourtsthathavetoruleinactions

fordamagesonpracticesunderArticle[101or102]onwhichanNCAintheECNhas

alreadygivenafinaldecisionfindinganinfringementofthosearticles,oronwhicha

reviewcourthasgivenafinaljudgmentupholdingtheNCAdecisionoritselffindingan

infringement,cannottakedecisionsrunningcountertoanysuchdecisionorruling”.30

TheproposedrulewouldputNCAdecisionsonapar,withsomecaveats,withthoseofthe

Commissioninnationalcourts,andthereforegoesbeyondtheexistingacquis

communautaire.ExistingEUlawstatesthatwherenationalcourtsruleonagreements,

decisionsorpracticesunderArt101orArt102TFEUwhicharealreadythesubjectofa

EuropeanCommissionDecision,theycannottakedecisionsrunningcountertothat

decision.IftheCommissioniscontemplatingadecision,thenationalcourtmustavoid

adoptingadecisionthatwouldconflictwithit,accordingtoMasterfoods31codifiedinArt

16Reg1/2003.TheMasterfoodsruleasabasisforbindingeffectofNCAdecisionsis

discussedinfurtherdetailbelow.Thecaveatsarefirst,itwouldapplyonlytoproceedings

involvingthesameinfringersandsamepractices.Secondly,onlyfinaldecisionswouldbe

binding,implyingthatallappealswouldhavetobeexhaustedandtimelimitsexpired.

Thirdly,itiswithoutprejudicetothenationalcourt’sright,orobligationinthecaseof

highestcourts,toseekclarificationontheinterpretationofArticle101or102TFEUby

preliminaryreferencetotheECJ.

TherationalesfortherulearetopromotelegalcertaintyandconsistentapplicationofEC

competitionrules;toavoidre‐litigationofissues,boostingjudicialeconomy;andto

alleviatetheburdenofproofonthecomplainantinbringingadamagesaction,to

encouragegreaterprivateenforcementthroughouttheCommunitytocomplementpublic

enforcementbycompetitionauthorities.AlthoughitisnotspecificallystatedintheWhite

Paper,therulecouldindirectlybringnationalcourtsintotheEuropeanCompetition

Network;butleavingthecompetitionauthoritiesinprimaryposition.Nationaljudges

couldstillcontributetothedevelopmentofECcompetitionlaw‐theburdenofproving

causallink,effectsoftheinfringementandquantumofthedamagesshouldremainwith

thecomplainantfordeterminationbythecourt‐butinamorelimitedway.

30 White Paper, 6; Staff Working Paper, 45 31 C-344/98 Masterfoods Ltd (t/a Mars Ireland) v HB Ice Cream Ltd [2000] ECR. I-11369

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4.Hierarchyofadministrativeoverjudicialdecisions?

MakingNCAdecisionsbindingonnationaljudgesineffectcreatesaninstitutional

hierarchyofthedecisionsofadministrativeauthoritiesovercourts.32Actualorperceived

generalhierarchyofdecisionsofadministrativebodiesovercivilcourtjudgments,orof

publicoverprivateenforcement,shouldbeavoided.Komninosrecognisesthis,butonthe

groundsthatpublicandprivateenforcementaretwoseparatelimbsofantitrust

enforcementindependentof,ifcomplementaryto,eachothersomewhathopefullyargues

thattheproposedrule“doesnotbringintoquestiontheprincipleofindependencesince

suchmeasuresareonlyintendedtofunctionasincentivesforfollow‐oncivilactions”.33

Evenifthereisnorealhierarchyofpublicoverprivateenforcement,thebindingeffect

rulecertainlylimitstheambitofjudicialcompetence.“Anabsoluterulerunscounterto

nationalrulesofevidencewhichpermitorrequirethenationaljudgefreelytoevaluate

everypieceofevidence.”34TheCommissionplaysdowntheseconcernsarguingthatin

practice,therequirementthattheNCAdecisionshouldbefinalbeforeitsbindingeffect

appliesmeansthatitwouldhavebeenupheldbyanappealorreviewcourt.Itwouldoften

‐althoughnotalways‐beajudgmentconfirmingtheNCAdecisionthatbindsthejudge

hearingthecivilcaseondamagesclaims.35Thisargumentisobviouslylessstrongifthe

decisionwasnotinfactappealed,eveniftheMemberStateallowedthepossibilityforan

appeal.Italsoneglectsthequestionofdifferentlevelsofintensityofjudicialreviewacross

theMemberStates.Morebroadly,itcreatesaprecedentofadministrativedecisionsover

judicialrulings,whichcouldhaveaneffectbeyondcompetitionlawinMemberStates’

systems.

32 It is important to take in account the different roles of courts in the competition enforcement system. Under Art.35 of the Modernisation Regulation a Member State may designate a court as a national competition authority or choose a bifurcated system where an administrative authority carries out the investigation but a judicial body makes the determination of an infringement, but this would be in a first instance public enforcement capacity rather than in a strictly reviewing function. Chapter 3 investigated the significance of these configurations for access to the preliminary reference procedure. 33 A Komninos “Public and Private Antitrust Enforcement in Europe: Complement? Overlap?” (2006) 3(1) Competition Law Review 5-26, 26. 34 AECLJ Association of European Competition Law Judges response to White Paper35 Staff Working Paper [149]

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5.Thescopeoftherule

Todetermineinwhatrespectstheproposedrulelimitstheambitofjudicialcompetence,a

considerationofthescopeoftheruleisnecessary.TheWhitePaperoutlinesthescopeand

conditionsofthebindingeffectofNCAdecisionsonnationalcourtsthroughouttheEU.

ThestaffWorkingPaperaccompanyingtheWhitePapergoesintomoredetailand

explainsthattheruleascurrentlyproposedisbasedontheMasterfoodsruleascodifiedin

Art16(1),but“shouldbemorelimitedthanthisruleinseveralrespects”:36itrelatesto

thesameinfringersandpractices37;onlyfinaldecisionsarebinding,meaningthatappeals

areexhaustedandlimitationperiodsexpired,38anditisalsowithoutprejudicetotheright

(orobligation)ofanationalcourttoaddressapreliminaryreferencetotheCJEU.39In

addition,therulewouldapplyonlytofindingsofinfringement,andnottofindingsthat

thereisnoinfringementofEUcompetitionrules.40

Theseconditionsprovokesomeopenquestions:themeaningofsameinfringersandsame

practices;theremedysoughtinthecivilcourtproceedings;theeffectofotherdecisions

notfindinganinfringement;andthemeaningoffinaldetermination.

5.1‘Sameinfringersandsamepractices’

Thefirstpointisthedefinitionof‘sameinfringersandsamepractices’.TheWhitePaper

clarifiesthattheNCAdecision’sprobativeeffects“canonlyrelatetothesameagreements,

decisionsorpracticesthattheNCAfoundtoinfringeArt101or102TFEUandtothesame

individuals,companiesorgroupsofcompanieswhichtheNCAfoundtohavecommitted

thisinfringement(normallytheaddressee(s)ofthedecision)”41[emphasisadded].This

bringstomindthesituationinCrehan42,whichconcernedwhethertheCommission’s

findingofmarketforeclosureinaninvestigationinvolvingotherparties,butonthesame

market,couldbequestionedbythenationalcourt.

36 Staff Working Paper [143] 37 Staff Working Paper [154] 38 Staff Working Paper [149], [155]-[157] 39 Staff Working Paper [150] 40 Staff Working Paper [152]-[153] 41 Staff Working Paper [154] 42 Crehan v Inntrepreneur Pub Company CPC [2004] EWCA Civ 637; Inntrepreneur Pub Company and Others v Crehan [2006] UKHL 38

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Thereisaclearlyaneedtoidentifytheallegedinfringerinbothsetsofproceedings.

However,identicalnessofallpartiestotheNCAandcourtproceedings,normallyneeded

forresjudicatatotakeeffect,43cannotberequiredforbindingeffectbecausetheclaimants

inthecivilproceedingsmaynotnecessarilyhavebeenpartytotheinvestigationand

proceedingsbeforetheNCA.44Thislendsweighttotheargumentthatadecisionmay

createabindingprecedentbeyondaspecificcase.Thesituationcouldbecomecomplicated

wheretherearemultipleplaintiffsanddefendants,especiallyiftheyarespreadacrossthe

EuropeanUnion.45Theremaybeproblemsofassigningresponsibilityingroupsor

associationsofundertakings,particularlywheresomepartieswerenotaddresseesofthe

decision.

ToconformwithArt6(1)ECHRandArt47oftheEUCharterofFundamentalRights,

bindingeffectofanNCAshouldbeemployedonlywhenthedefendantsinthefollow‐on

actionwereheardintheproceedingsleadingtotheforeignNCAdecision–ifnotas

addresseesofthedecisionatleastasparticipants.Section33(4)oftheGermanActagainst

RestraintsofCompetition,takenasamodelfortheproposedbindingeffectruleinthe

WhitePaper46,doesnotlimitbindingeffectofadministrativedecisionstoclaimsagainst

partiesaddressedbythedecision.However,ithasbeensuggestedthatinpracticeGerman

judgesmayinterprettheprovisionnarrowlytolimitbindingeffecttodecisionswherethe

defendantshavehadtherighttobeheard.47

43 Res judicata precludes re-litigation of the same issue between the same parties where there has been a final judgment no longer subject to appeal. 44 Staff Working Paper [154] 45 As far as defendants are concerned this would include parties who are deemed to be part of the same undertaking under EU law (e.g. subsidiaries). See e.g. Provimi Ltd v Roche Products Ltd et al (2003) QBD (6 May 2003), which enabled non-UK plaintiffs to use UK courts to pursue claims against non-UK defendants. This concerned follow-on damages actions arising out of the Vitamins (Empagran, Hoffman La Roche) cartel. An English or foreign claimant seeking damages for loss suffered as a result of a breach of European competition law, can sue for its entire loss in the English courts, irrespective of where the loss was suffered, provided there is an English subsidiary which implemented the anti-competitive conduct even if there is no contractual relationship between that subsidiary and the claimant. Subsidiaries (both UK and non-UK) of the German company Trouw, sued various companies (UK subsidiary, EU selling subsidiaries, and parent company of Roche) in English High Court, even though had only purchased from foreign subsidiaries and not the English ones. See J Joshua ‘After Empagran: Could London Become a One-Stop Shop for Antitrust Litigation?’ (2005) 4.14(3) Competition Law Insight 1-6; F Bulst, ‘The Provimi Decision of the High Court: Beginnings of Private Antitrust Litigation in Europe’ (2003) 4(4) European Business Organization Law Review 623-650. 46 According to W Wils ‘The Relationship Between Public Antitrust Enforcement and Private Actions for Damages’ (2009) 32 World Competition 3, as cited by E Truli ‘White Paper on Damages Actions for Breach of the EC Antitrust Rules: the Binding Effect of Decisions Adopted by National Competition Authorities’ (2009) 5(3) European Competition Journal 795-821, 800, fn 35 47 W Wurmnest, ‘A New Era for Private Antitrust Litigation in Germany? A Critical Appraisal of the Modernized Law against Restraints of Competition’ (2005) 6(8) German Law Journal 1173.

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5.2Damagesactionsonly

ThewordingoftheruleasproposedintheWhitePaperbegins“Whennationalcourtsin

actionsfordamagesrule…”.Thisraisesthequestionofwhathappensifaclaimantis

seeking,forexample,adeclarationand/oraninjunctioninthecivilcourtproceedings.The

referencetofollow‐onactions48alsoimpliesthatthebindingeffectrulewouldonlyapply

todamagesactionssubsequenttoanNCA’sdecision,notothertypesofremedysuchas

declarationsunderArt101(2)fornullity,andinjunctionapplications.TheNCAmay

alreadyhaveissuedaceaseanddesistorder,althoughitmaynotrelatespecificallytothe

effectoftheanticompetitiveconductonthatparticularclaimant.

5.3Findingsofinfringementandothertypesofdecision

Onlyfindingsofinfringementaretobebinding,notothertypesofNCAdecision.The

Commission’sjustificationforthisisthattherulecoversthetypeofdecisionsNCAsare

empoweredtomakeunderArt5Reg1/2003.49Inparticular,findingsthatthereisno

infringementarenotincluded.Suchafindingcouldtakeanumberofforms.Oneisthe

situationwherethereisanticompetitivebehaviouraccordingtoArt101(1)TFEU,butthis

ismitigatedundertheconditionsofArt101(3),inwhichcasethepracticewouldnotbe

prohibited.Afurtherexampleisthecaseofdecisionsthatfindthereisanticompetitive

conduct,butitisbelowacertainthresholdandtheeffectsarethereforeminimal(de

minimisdecisions50).

ThemostpressingexampleiswhereafirmadmitsanticompetitiveconductbuttheNCA

grantsleniency.51Ifthereisnoformalinfringementdecision,thisgivesrisetofurther

potentialclashesbetweenprivateenforcementandtheleniencyprogrammesuponwhich

publicenforcementisbased.Joshuaclaims(albeitwithoutgivingevidence)that“mostif

48 Staff Working Paper [153] 49 Staff Working Paper [152]-[153]. Decisions under Art 5 Reg 1/2003 are : requiring that an infringement be brought to an end; ordering interim measures; accepting commitments; imposing fines, periodic penalty payments or any other penalty provided for in their national law. 50 See e.g. Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community (de minimis) OJ C 368, 22.12.2001, 13-15 51 External impact study ‘Making Antitrust Damages Actions More Effective in the EU: Welfare Impact and Potential Scenarios’, December 2007, pp. 510-511, available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf#page=441, last accessed 24.8.2012.

177

notallinfringementdecisionsinvolvesuccessfulimmunityapplications”.52Whatabout

leniencyleadingtoadefactonon‐infringementdecisionforthefirstcomerwhoisentitled

tototalimmunity?Indeed,ifthereisnoguaranteeofanonymity,thefactthatafirmhad

comeforward,admittedguiltandbeengrantedleniencywouldbeevidencethatthefirm

hadbeeninvolvedinanticompetitiveconduct.WiththeEuropeanCompetitionNetwork’s

modelleniencyprogramme,differencesacrosstheEUhavebeenminimised.However,

MemberStatesrequiredifferentevidenceinordertoconsiderfullimmunity.53Asan

example,theHungarianlawallowsabeneficiaryofimmunitytoavoidpayingdamagesto

claimantsinfollow‐onproceedingsuntiltheclaimantshavefirstsoughtthedamagesfrom

theotherundertakingsinrespectofthesameinfringement.54

5.4‘Finaldetermination’

Onlyfinaldeterminationsarebinding,which“eitherhavebeenacceptedbytheir

addressees(byrefrainingfromanappeal),orwhichwereconfirmeduponappealbythe

competentreviewcourts.”55Afterthis,decisionswouldbeconsideredresjudicata

preventingre‐litigationofthesameissueswhichhadbeendecideduponinthepublic

enforcementproceedings.

Thisimpliesthatbeforelimitationperiodsforappealareover,evenifaninfringement

decisionhadbeenreached,anationalcourtwouldbefreetorevisitthefactsofthecase.

WhereasthenationalcourthasanobligationtostayproceedingspendingaCommission

decisionbyvirtueofArt16(1)Reg1/2003,itwouldnothavethesameobligationin

respectofaforeignNCA’sdecision.Ifanappealispendingnationalcivilcourtsare

“encouragedtoconsiderwhetherstayingtheirproceedingsisappropriate”56.

Stayingtheproceedingscould,however,underminethejudicialeconomybenefitsofthe

rule.Trulisuggeststhat“courtsshouldcontinuewiththeadjudicationofthedamages

52 J Joshua ‘After Empagran: Could London become a one-stop shop for antitrust litigation?’ (2005) 4.14(3) Competition Law Insight 1-6, 3 53 See ECN Model Leniency Programme Report on Assessment of the State of Convergence, 15.10.2009, available at http://ec.europa.eu/competition/ecn/model_leniency_programme.pdf (last accessed 11.8.2012), and 2006 Commission notice on immunity from fines and reduction of fines in cartel cases. OJ C 298, 8.12.2006, p. 17 54Art 88D Hungarian Competition Act. See C Cauffman ‘The Interaction of Leniency Programmes and Actions for Damages’ (2011) 7(2) Competition Law Review 181-220, 204 55 Staff Working Paper [149]. White Paper p. 5 56 Staff Working Paper [157]

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claimtotheextentthattheMemberStatehasaproceduralinstrumenttoreversethe

decision.”57ThiswouldsolvetheproblemwhereanNCA’sfindings,whichthecourthad

followed,weresubsequentlyoverturnedonappeal;orwheretheNCA’sfindingof

infringementwasconfirmedonappealandthecivilcourthadcometoadifferent

conclusion.IfnotallMemberStateshavesuchareversalmechanismthiscouldcause

uneveneffects.Inaddition,KomninosarguesthattheEUprincipleofeffectivenessgives

“nolegalbasisforthereopeningofthecontestedjudgment,ifsuchrecourseisunknown

undernationalprocedurallaw”.58

Oneelementtoconsideristheeffectoftimelimitsforappeals,andwhetherthisincludes

onlythefirstappeal.59Multipledefendantsmayalsoaffectthelimitationperiod.One

approachwouldbefortheNCA’sdecisiontobindacivilcourtinrespectofdefendants

whohavenotappealedadecision,butnotinrespectofthosewhohaveappealed.60

However,intheUK,theEmersonjudgment61meansthatallappealsofallco‐defendants

wouldhavetobecompletebeforethebindingeffectcameintoplay.Inorderforthisto

workcoherentlyacrosstheUniontheremayneedtobesomeharmonisationoflimitation

periods.

Anotherrelatedissueistheprecisesubjectoftheappeal.Themajorityofappealsare

againstthelevelofthefine,ratherthanagainstthesubstanceofthefindingof

infringementitself.TheStaffWorkingPaperstatesthatifthependingappealisagainstthe

amountofthefineonly,thereisnoriskofconflictingdecisionsanditwouldnotbe

necessaryfornationalcourtstoconsiderstayingproceedings.62Itcouldbearguedthat,

conversely,thisproposalmayencourageappealsonthesubstance,particularlyifthere

weredifferentialtreatmentbetweenco‐defendantswhohaveandhavenotappealedas

suggestedabove.Thiswouldariseiffirmsconsideredthatthelegalcostswereworthit

relativetotheriskofdamagesclaimstowhichtheycouldbeexposed.Inturn,anincrease

inappealswouldputpressureonNCAresourcesrequiredtodefendthedecision.

57 E Truli ‘White Paper on Damages Actions for Breach of the EC Antitrust Rules: the Binding Effect of Decisions Adopted by National Competition Authorities’ (2009) 5(3) European Competition Journal 795-821, 803 58 Komninos (2007), 1422 59 For example, the Czech Office for the Protection of Competition’s White Paper response notes that an NCA’s decision is reviewed by the Regional Court, but it is still possible to appeal to Supreme Administrative Court, proceed to review by the Constitutional Court and then potentially to the European Court of Human Rights. 60 Truli, 804 61 Emerson Electric Co v Morgan Crucible Co plc (1077/5/7/07) [2008] CAT 8 [66] 62 Staff Working Paper [157]

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Thefinalissuerelatedtoappealsisthelevelofscrutinyatappeal.SomeMemberStates

mayprovideforfullreinvestigationofthefacts,inwhichthecourtcansubstituteitsown

decisionforthatofthecompetitionauthorities.OtherMemberStatesmayadheretoa

judicialreviewwhichdoesnotallowforafullre‐examination.ThejudgeinMemberState

BwhoisboundbyNCAA’sdecisionmaywanttobeassuredthattheproceduralstandards

bothattheinvestigationstageintheNCA,andattheappealstage,arebroadlyonapar

withthoseinMemberStateB.

TheeffectofaCommissiondecisioncanberemovedbytheCourtofJusticebyanaction

forannulmentunderArt263TFEUorapreliminaryreferencerequestedbyanational

courtunderArt267TFEU.63However,anNCA’sdecisionanditscross‐bordereffectscould

notbedeclaredvoidbytheCourtofJustice,onlybyanationalcourt.Asfarasthe

preliminaryreferenceprocedureisconcerned,theCJEUcouldbecalledupontoresolve

anyoftheissuesofscopediscussedabove.Inparticular,itcouldinterpretwhethera

nationalcourthasgroundsforrefusingtorecogniseanNCAdecision.However,theCJEU

wouldbeunlikelytolookintothecircumstancesbehindtheindividualcase,andwouldbe

reluctanttogivearulingonwhetherMemberStateA’sproceduralsafeguardsare

adequaterelativetoMemberStateB.

5.5Limitingtheambitofjudicialcompetence?

Ifthebindingeffectruleisadopted,nationalcourtswouldnotbepermittedto

reinvestigatethefactswhichledtothefindingofinfringement.Thisnarrowstheambitof

judicialjurisdiction.However,nationaljudgescouldresistthis‘trespass’inanumberof

ways.Someoftheserelatetothescopeofthebindingeffectruleproposal;otherfactors

relatetodifferentstandardsacrossMemberStates.

Thefirstisadifferentsetoffactsinthepublicenforcementandciviljudicialproceedings,

e.g.conductinadifferenttimeframe;differenteffectsonthatMemberStates’market.

Thiswouldrequirethecourttoascertainwhetherthefactsonwhichtheinfringementwas

basedareexactlyrelevanttothecaseinthecivilproceedings.

Afurtherexampleisfaultrequirements:accordingtotheCommission’spreferredpolicy

option,inMemberStateswherethereisnostrictliability,faultispresumedassoonasthe

63 Also acknowledged in Staff working paper at [141]

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infringementhasbeenestablished.Inthiscontext,faultwouldthereforebeattributedby

theNCA’sdecision.Iffaultconditionsweredifferentinthe‘receiving’MemberStatecourt,

thejudgemightneedtoreopenthequestion.

WheretheNCAmadeafindingofnoinfringement,therulewouldstillallowajudgeto

makeapositivefinding,althoughinmanyMemberStatesafindingofnoinfringementis

persuasive.However,thisissubjecttothepointsmadeaboveaboutdecisionsotherthan

infringementdecisions.

Thecivilcourtwouldhavefulljurisdictioninstand‐alone(asopposedtofollow‐on)cases

whereaplaintiffbringsacasedirectlytocourtwithoutanexistingNCAinvestigationand

attemptstoprovetheinfringementherself.Thecourtwouldalsohavejurisdictionon

applicationsforother(non‐damages)reliefsuchasinjunctions.

Afurtherexampleiswherethefindingofinfringementismadeexclusivelyrelatingto

nationalrules,notonEUrulesorifbasedonnationallawwhichisstricterthanArticle102

TFEU.Thisrelatestothegeographicmarket.Art3Reg1/2003requiresparallel

applicationofEUlawandnationallawwherethereisaneffectontradebetweenMember

States,butArt3(2)allowsMemberStatestoadoptontheirownterritorystricternational

lawswhichsanctionunilateralconductbyundertakings.

Article34(1)oftheBrusselsIRegulation64,applyingtotherecognitionofforeign

judgments,allowsacourttoexceptionallyrefuserecognitionofanotherMemberState’s

judgmentongroundsofpublicpolicye.g.wherefairlegalprocessmayhavebeenimpeded

contrarytoEuropeanConventiononHumanRightsandtheCharteronFundamental

RightsoftheEuropeanUnionandthecaselawoftheCommunitycourts.Ifaprovision

analogoustoArt34(1)wereadopted,thiswouldbeanotherchannelforthejudgetolook

intoaforeignNCA’sdecision.TheanalogywiththeBrusselsIRegulationisdiscussedin

moredetailbelow.

Thefigurebelowgivesanexampleofthepossibleeffectofdifferentstandardsintwo

MemberStatesontheambitofjudicialjurisdiction.Thiscouldapplytodifferentfault

requirements,standardsofproof,investigationstandards,orlevelsofjudicialreview.The

shadedarearepresentswhatisrecognisedinbothMemberStates,withtheboldline

64 Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1

181

denotingthestandardassetinthatMemberState.Forexample,inthecaseoffault65,

MemberState1mighthaveastrictliabilitystandard,butMemberState2mightrequire

furtherevidenceofnegligenceorintention.AccordingtotheCommission’spreferred

policyoptiononfaultintheWhitePaper,inMemberStateswherethereisnostrict

liability,faultispresumedassoonastheinfringementhasbeenestablished.Inthis

context,faultwouldthereforebeattributedbytheNCA’sdecision.Intheeventof

excusableerror,thedefendantcanbeexonerated.Undertheotherpolicyoptions

(rebuttablepresumptionoffault,withexonerationforexcusableerror;oralternatively

strongprobativevalueofafindingofinfringement),courtswouldhavemorescopefor

makingadeterminationdependingonnationalcausationrules.Thebindingeffectofthe

NCAinfringementwouldnotnecessarilyleadtoapenaltyordamages.

Thisisonewayinwhichcourtscouldretaintheambitoftheirdiscretioniftheywere

uncomfortablewiththebindingeffectrule.Ifajudgesawthatthestandardofproofwas

lowerintheMemberStateoriginatorofthedecisionitwasaskedtorecognise,s/hecould

requirefurtherprooftomeetthestandardintherecognisinghomeMemberState.

Onstandardofproof,differenttypesofdamages‐e.g.punitive,exemplary,restitutionary‐

mayrequiredifferentstandardsofproof.Afurtherpointisthedifferentlevelsofproofin

administrativeproceedingsandcriminalorcivilactionsfordamages.Thiswouldbelessof

anissueifthestandardofproofwerehigherinadministrativeproceedingsthaninprivate

enforcementproceedings.66Giventherequirementofparallelapplication,decisionsmay

bebasedonbothEUandnationallawprovisions,whichmaycarrydifferentstandardsof

proof.Thisisparticularlyrelevanttocasesapplyingnationallawswhicharestricterthan

Article102.Itisquestionablewhetheritwouldbepossibletoseparateoutthefactswhich

applyonlytotheinfringementoftheEUrules.67

65 The Staff Working Paper [163] notes that “Member States take diverse approaches on the interaction between competition law and the general rules on liability for damages, in particular as regards the question of fault (culpa). It is also noteworthy that the concept of fault is not a homogeneous one across Member States.” 66 National report on Sweden in G C Rodriguez Iglesias & L Ortiz Blanco (eds) The Judicial Application of Competition Law: Proceedings of the FIDE XXIV Congress Madrid 2010 Vol 2 (Servicio de Publicaciones de la Facultad de Derecho, Complutense University, Madrid 2010); see also W Wils ‘The Relationship between Public Antitrust Enforcement and Private Actions for Damages’ (2009) 32(1) World Competition 3-26, 17 - “Procedural guarantees for the defendant tend to be stronger in public enforcement proceedings than in civil litigation” 67 This point is also made in the American Bar Association’s response to the White Paper on damages actions.

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Fig2:ExampleofthepossibleeffectofdifferentstandardsinMemberStatesontheambit

ofjudicialjurisdiction

Onlythefindingofinfringementitselfshouldbebinding,notfindingsontheeffectsofthe

infringement.Theburdenofprovingcausallink,effectsoftheinfringementandquantum

shouldremainwiththecomplainantfordeterminationbythecourt.Aninfringement

confirmedinonejurisdictionbyanNCAmaynothavehadeffectsinanother.

Iftheproposedrulewereadopted,thenationaljudgewouldstillberesponsiblefor

assessingthecausallinkbetweentheinfringementanddamagetothecomplainant,effects

oftheinfringement,andquantum.However,inpracticethesejudicialdomainsarealso

subjecttolimitation,astheCommissionhasissuedaguidancepaperonquantificationof

damages.68Inaddition,theCommissionisstudyingthepossibilityofNCAsactingas

amicuscuriaeforthepurposeofquantifyingdamages69.

68 http://ec.europa.eu/competition/consultations/2011_actions_damages/draft_guidance_paper_en.pdfConsultation on the guidance paper was open from June until September 2011 and the Commission intends to issue a final version based on those comments. The intention to draw up non-binding guidance for courts was signalled in the White Paper, p. 7 and accompanying Commission staff working paper , p. 60. It is based on the report ‘Quantifying antitrust damages: towards non-binding guidance for courts’, study prepared for the European Commission by Oxera economic consultancy and a multi-jurisdictional team of lawyers 21.1.2010 , available at http://ec.europa.eu/competition/antitrust/actionsdamages/quantification_study.pdf (accessed 19.8.2010) 69 ‘Provision of non-binding assistance for quantification of damages’ at 4.1.4 of the White Paper Impact Assessment Report SEC (2008) 405, 2.4.2008, p. 28. Also relevant is the external study for the impact assessment, ‘Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios’ – pp 200-201, 227-228, 485, table 33 of the Study, p. 242.

183

TheaimoftheGuidancepaperis“toofferassistancetocourtsandpartiesinvolvedin

actionsfordamagesbymakingmorewidelyavailableinformationrelevantforquantifying

harmcausedbyinfringementsoftheEUantitrustrules”.70Theguidancetocourtsis

“purelyinformative,doesnotbindnationalcourtsanddoesnotalterthelegalrules

applicableintheMemberStatestodamagesactionsbasedoninfringementsofArticle101

or102TFEU.”71However,thedraftalsosuggeststhattheguidancecouldbeusedwhen

applyingnationallaw‐i.e.notonlywhereArticle101or102areconcerned–andin

settlementproceedingsoralternativedisputeresolutionaswellasinthecourtroom.72

Theremayalsobespill‐overeffectsforthecalculationofdamagesinotherareasoflaw.73

Despitethenon‐bindingnatureoftheguidance,somerespondentstotheWhitePaper

consultationalsoraiseconcernsinprincipleaboutanyguidelinesrestrictingtheabilityof

nationaljudgestocometotheirownassessmentofquantificationofdamage.74Thisis

somewhatassuagedbythefactthatratherthanprovidingpreciseformulae,theguidance

paperprovidesarangeofsuggestedmethodsandmodels.Itisthereforea“toolkit”75for

courtsratherthanatemplate.Italsoprovidesexamplesfromdifferentjurisdictionsand

legalprecedentsfromtheEuropeancourts,whichmaymaketheguidancemoreamenable

tonationaljudges.Itwouldstillbeforthejudgetodecideonthelevelofevidenceneeded

toassessquantum.Theguidancepaperindicatesthatnothinginitshouldchangethe

standardofproofor“levelofdetailrequiredoffactualsubmissions”asestablishedin

nationallaw.76

Whatismorelikelytoaffectthecourts’abilitytoaccuratelycalculatedamagesisaccessto

evidence.Incalculatingharm,directevidence,suchasdocumentsonagreedsalesfigures

orpriceincreases,wouldbehelpfultothecourt.Thistypeofevidenceislikelytobe

70 Draft guidance paper p. 2 71 Draft Guidance paper [7] 72 Draft guidance paper [6] 73 This was the aim of the Oxera reports authors, although it is not mentioned in the subsequent draft guidance paper: In a communication about the report, the report’s authors say that “the methods and models presented here can be used for damages estimations in those different legal contexts as well” Oxera Agenda briefing: Quantifying damages: a step towards practical guidance http://www.oxera.com/cmsDocuments/Agenda_January%2010/Antitrust%20damages.pdf, p. 6 74 Bird & Bird White Paper response:“we would caution against proposals which could limit national courts’ ability to develop their own jurisdictional practice for damages claims by making any ‘soft law’ or guidelines too prescriptive.”; AFEP Association Française des Entreprises Privées White Paper response: “future attempts at quantification on the part of the Commission would deprive the court of its compensatory function, once again emptying the role of the court of its substance”. Possibly this is a misunderstanding – the Commission is not intending to calculate the quantum, but to give methods for doing so. However, it does demonstrate the attitude to ‘non-binding advice’ in some quarters. 75 Oxera study, p. 4 76 Draft guidance paper [8]

184

gainedthroughleniencyapplicationsinpublicenforcementbycompetitionauthorities.

Claimantsindamagesactionswillfinditeasiertoprovetheirloss,aswellasthe

infringementitself,iftheyhaveaccesstotheseleniencydocuments.InPfleiderer,theCJEU

ruledthatRegulation1/2003didnotprecludethepossibilityofleniencydocumentsbeing

disclosedforthepurposeofaprivateaction,leavingittonationalcourtstodeterminethe

conditionsunderwhichsuchaccessmustbepermittedorrefusedbybalancingthe

interestsprotectedbyEUlaw–thatis,theeffectivenessofleniencyprogrammesandthe

righttoclaimdamages.77HoweverthePfleidererjudgmentledtoalarmthatitwould

jeopardisecompetitionenforcementbydiscouragingcartelmembersfromreportingeach

othertoacompetitionauthorityiftheyarethengoingtobeliablefordamagesinaprivate

action.TheheadsofEuropeancompetitionauthoritiesrespondedwithadeclaration

affirmingthefundamentalimportanceoftheprotectionofleniencymaterial.78Thisison

thegroundsthatmostprivateactionsarecurrentlyfollow‐onactions.Intherecentcaseof

NationalGridintheEnglishHighCourt,theEuropeanCommissionintervenedinthe

contextofadamagesactionbroughtbyNationalGrid(UKutilitycompany)againsta

numberofcompaniesthatwereheldliablebytheCommissionin2007fortheir

participationintheGasInsulatedSwitchgear(GIS)cartel.79TheCommissionstatedthat

theinformationspecificallypreparedforthepurposeofanapplicationunderitsleniency

programmeshouldnotbedisclosed.80However,theHighCourttookamorenuanced

approach,applyingaproportionalitytestassessing(a)whethertheinformationcouldbe

obtainedfromothersourcesand(b)relevanceofleniencymaterialstothecase.81Asthe

materialswererelevantandcouldnotbeobtainedfromanothersource,theCourtallowed

disclosureofalimitedpartoftheconfidentialversionoftheCommissiondecision.82Asa

resultofthesecases,theinterfacebetweenleniencyanddamagesclaimsisanissuethat

willbeaddressedinthedraftdirective.83

77 Case C-360/09 Pfleiderer AG v Bundeskartellamt, 14.6.2011, not yet reported [32] 78 ECN resolution on protection of leniency material in the context of civil damages actions, 23.5.2012 , available at http://ec.europa.eu/competition/ecn/leniency_material_protection_en.pdf (last accessed 11.8.2012) 79 The Commission’s intervention was discussed in more detail in the previous chapter 80 Hearing 3.11.2011 in National Grid Electricity Transmission Plc v ABB Ltd and other companies: [2011] EWHC 1717 (Ch). Commission’s intervention available at: http://ec.europa.eu/competition/court/amicus_curiae_2011_national_grid_en.pdf (last accessed 11.8.2012) on whether national court has jurisdiction to order disclosure of leniency documents submitted to the Commission 81 National Grid judgment at [39] 82 National Grid Electricity Transmission Plc v ABB Ltd and other companies: ChD (Mr Justice Roth): hearing 4.4.2012 83 p. 3Annex to the Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Commission Work Programme 2012 COM(2011) 777 final , Brussels, 15.11.2011 available at http://ec.europa.eu/atwork/pdf/cwp2012_annex_en.pdf , last accessed 10.8.2012

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6.Basesoftherule

Thissectionconsidersthepossiblebasesofthebindingeffectrule.NoTreatylegalbasis

wasidentifiedintheWhitePaperortheleakeddraftproposal,whichisonereasonforits

stalledprogress.ThepossibleTreatybasesareconsideredinmoredetailinthefinal

sectionofthischapter.Thissectionconsiderswhichwiderprinciplesformthefoundation

forthebindingeffectrule.Therearethreepossibilities.Thefirstistheexplicitextensionof

theMasterfoodsrulethatajudgmentbyanationalcourtmustnotruncountertoa

decisionbytheCommission.ItcanbearguedthattheCommissionisdelegatingitspower

intheframeworkoftheEuropeanCompetitionNetwork,andgrantingasimilareffectto

decisionsofNCAs.ThesecondisthedutyofloyalcooperationbasedonArt4(3)TEU,

accordingtowhichtheUnionandMemberStatesshouldassisteachother.Ofparticular

interestisthehorizontalnatureofthedutyofloyalcooperation,thatis,between

institutionsatthesub‐nationallevel.Thethird,lesserbasis,isananalogywiththe

BrusselsRegulation,Regulation44/2001’sprovisionsontherecognitionandenforcement

ofjudgmentsincivilandcommercialmatters.

6.1ExtensionoftheMasterfoodsrule

SincethebindingeffectruleisexplicitlyanextensionoftheMasterfoodsrule,itis

importanttorevisitthatruleanditsinterpretations.TheexistingMasterfoodsrule,also

codifiedinArt16Reg1/2003,establishesthatwhereanationalcourtrulesonan

agreement,decisionorpracticeunderArticle101or102TFEUwhichisalreadythe

subjectofaEuropeanCommissiondecision,itcannottakedecisionsrunningcounterto

thatdecision.IftheCommissioniscontemplatingadecision,thenationalcourthasaduty

toavoidadoptingadecisionthatwouldconflictwithit.84

Accordingtomyoriginalresearch,differentinterpretationsofMasterfoodsandresistance

toitseffectareevidentinthepre‐legislativenegotiationsleadingtoReg1/2003.The

negotiationhistoryoftheRegulationintheCouncilofMinisterscanbetracedthroughthe

legislativeamendmentsinthetravauxpréparatoires.BysearchingtheregisterofCouncil

84 A Komninos EC Private Antitrust Enforcement: Decentralised Application of EC Competition Law by National Courts (Hart, 2008) 112-137. L Kjølbye, 'Case C-344/98, Masterfoods v HB Ice Cream' (2002) 39(1) Common Market Law Review 175–184

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documents,85itispossibletotracetheprogressoftheproposal,meetingbymeeting,

throughtheCouncil.Insomecases,thepositionsofMemberStatesarediscerniblethrough

annotations.Theoriginalproposalread“MemberStatesshalluseeveryefforttoavoidany

decisionthatconflictswithdecisionsadoptedbytheCommission”86.Germany,Denmark,

theNetherlands,FinlandandAustriarequesteddeletionofthisArticleassuperfluous

giventheexistingMasterfoodsjudgment.Denmark,France,Greece,theNetherlandsand

Portugalalsorequestedclearerformulationoftheobligationtoavoidconflictwith

Commissiondecisions.AustriarequestedspecificreferencetotheCJEU’srole.87France

askedforclarificationofthemeaningof"decisionsadoptedbytheCommission",andlater

requesteddeletionoftheparagraphthatnationalcourtsshouldnotadoptadecision

runningcountertoonebyCommission,withoutprejudicetothepreliminaryreference

procedureunderArt267TFEU.88Italyrequestedinsertionof"insofarasthefactsofthe

casearethesame".89Finlandsuggestedanalternative–tomovetheruletoa‘whereas’

clauseinrecitals.90LaterLuxembourgalsoproposeddeletingthecodificationof

Masterfoods,andwasthelastMemberStatetosustainthisposition.91

AccordingtoCommissionofficialsinvolvedinthenegotiations,MemberStateswerenot

convincedabouttheneedtocodifythejudgment,hopingthattheCJEUwouldchangeits

mind.SomeMemberStateswouldonlyagreeiftheCommissionhad“properly

investigated”.Thiswouldimplynationalcourtsbeingabletolookbehindthe

Commission’sdecisiontoitsevidenceandreasoning.Anotherintervieweeacknowledged

thattheMasterfoodsrulemayraiseaseparationofpowersissue,buttheimportantthing

wasthatitreducedtheriskofdivergenceofjudicialinterpretation.92Thisriskof

divergencehadbeenanimportantargumentagainstmodernisationwhichthe

Commissionwantedtodispel.AseniorDGCOMPofficialwentasfarastosaythatthe

Masterfoodsjudgmentwasthe“saviour”ofDGCOMPgivingupitsmonopolyin

enforcement.93

85 http://www.consilium.europa.eu/showPage.aspx?id=549&lang=EN 86 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’) COM(2000) 582 final - 2000/0243(CNS) OJ 2000 C 365 E/28 87 Document: 5158/01 Secretariat to delegations, 11.2001; Document: 9999/01 Secretariat to delegations, 27.6. 2001 (incorporating Document: 9999/01 corrigendum Secretariat to delegations 6. 7.2001) 88 Document: 13563/01 (Belgian) Presidency to COREPER, 20.11. 2001 89 Document: 5158/01 Secretariat to delegations, 11.1.2001 90 Document: 8383/1/02 (Spanish) Presidency to COREPER, 27.5.2002 91 Document: 13983/02 Working Party to COREPER, 8.11. 2002 92 Interview with a DG COMP official in the Modernisation working group, Brussels, 19.7.2005 93 Interview with a senior DG COMP official, Brussels, 6.9.2005

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ThewordingofArt16Reg1/2003isidenticaltoaparagraphintheMasterfoodsjudgment

tolendlegitimacytotheobligation.94Interestingly,theCJEUitselfdidnotusetheword

‘binding’.Nonetheless,thisishowtheobligationisexplicitlyinterpretedinthenoticeon

cooperationbetweentheCommissionandnationalcourts95:“WheretheCommission

reachesadecisioninaparticularcasebeforethenationalcourt,thelattercannottakea

decisionrunningcountertothatoftheCommission.Thebindingeffectofthe

Commission'sdecisionisofcoursewithoutprejudicetotheinterpretationofCommunity

lawbytheCourtofJustice.Therefore,ifthenationalcourtdoubtsthelegalityofthe

Commission'sdecision,itcannotavoidthebindingeffectsofthatdecisionwithoutaruling

tothecontrarybytheCourtofJustice”96.(emphasisadded)Itcouldbearguedthatthe

Courtsnoticeisasoftlawinstrumentthatdoesnothavethesameweightascaselawand

theRegulationitself.Butitisadocumentwhichismeanttoclarifycooperationbetween

theCommissionandnationalcourtsinpracticalterms.

ThereisalsoevidencethatMemberStatesthemselvesconsiderCommissiondecisionsto

bebinding.TheexplanatorynotestotheUK’sEnterpriseBill2001explainsthenew

section58Aandtheinfringementdecisionswhichwillbebindingoncourts:“Nomention

ismadeofthosedecisionsoftheEuropeanCommission(andothersimilardecisions)that

arebindinginanyeventbyvirtueofEClaw.”97Howthecourtsactuallydealwiththisis

demonstratedbytheHouseofLordsjudgmentinCrehan,discussedbelow.

Therecanbedifferentinterpretationsofthepreciseobligation.Sayingthatcourtsshould

nottakeadecision‘runningcounterto’oneoftheCommissiondoesnotnecessarilymean

thatthatdecisionis‘binding’.Acommoninterpretationisthatitisnotapositivedutyto

blindlyfollowtheCommission’sreasoning,butanegativedutytoabstainfrom

contradictingit.98“MasterfoodsandArticle16donotstatethatnationalcourtsare‘bound’

byCommissiondecisions,butthattheycannottakedecisions‘runningcounter’tothem.It

requiresinmyview,ineachcase,toexamineifthedecisionintendedbythenationalcourt

94 Interview with a DG COMP official in the Modernisation working group, Brussels, 14.9.2005 95 Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC, OJ 2004 C 101/04 96 Courts notice [13]. See also the scenarios in Komninos (2007), 1404-1422 97 UK Enterprise Bill explanatory notes 115-EN, in respect of clause 18: findings of infringement [78] available at http://www.publications.parliament.uk/pa/cm200102/cmbills/115/2002115.htm last accessed 20.8.2012 98 Komninos (2007), 1392 and 1395

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wouldpreventthebindinglegaleffectsgeneratedbythedecisionitselffromtaking

place…”99(emphasisinoriginal).

However,theWhitePaperdoesusetheword‘binding’inrespectoftheproposedeffectof

NCAdecisions.IfCommissiondecisionsarenotformallybinding,whyshouldforeignNCA

decisions,whicharehorizontalinrelationtootherMemberStatesratherthanverticalas

inthecaseofEUinstitutions,benefitfrombindingeffect?Isthereaninstitutional

hierarchy?

AccordingtotheCJEUinMasterfoods,theCommission’sprimacyovernationaljudicial

proceedingsisjustifiedsothattheCommissioncanfulfiltheroleassignedtoitbythe

Treaty.100Komninosrightlyarguesthatthenotionofbindingnessisnotcompatiblewitha

systemofparallelcompetencesinenforcementbytheCommission,NCAsandnational

courts.Inasectionon‘non‐applicabilityofthesupremacyruletoNCAs’decisions’,he

positsthat“thisleadstotheconclusionthatdecisionsofNCAscannot…positivelyor

negativelybindcivilcourts,evenactingintheframeworkoftheECNandapplying

competitionlawunderReg1/2003.”101Suchadutymaybeprescribedbynationallaw,but

notbyEUlaw.102

Komninosdeniesanyinstitutionalhierarchy,butclaimsthatnationalcourts’obligationis

basedonsupremacyofEUlaw:“…primacyisnotoneoftheCommission,ascompetition

authority,overcivilcourts,butratheroftheCommission,assupranationalCommunity

organ,overnationalcourts.”[emphasisinoriginal].Butasheacknowledges,thisargument

doesnotholdforprecedenceofNCAdecisionsovernationalcourts.GippiniFournier

makesasimilarpoint:“Asamatteroflaw,theonlythingthatdistinguishesadecisionof

theCommissionapplyingArticle[101or102]inanindividualcasefromasimilardecision

beingtakenbyaNCAisthattheCommission’sdecisionisaCommunityactandcontains

provisionsformingpartoftheCommunitylegalorder….ItisnottotheCommissionthat

nationalcourtsmustpaydeference,buttotheprovisionsofCommunitylawthatits

decisionsconstitute…”103

99 E Gippini Fournier, ‘The Modernisation of European Competition Law: First Experiences with Regulation 1/2003 (Institutional Report to FIDE Congress 2008)’ in H F Koeck and M M Karollus (eds) The Modernisation of European Competition Law - Initial Experiences With Regulation 1/2003: Proceedings of the FIDE XXIII Congress Linz 2008 vol 2 (Nomos / facultas.wuv, 2008), 121 100 Masterfoods [46], discussed by Komninos (2007), 1389 101 Komninos (2007) 1396 102 Komninos (2007) 1397 103 E Gippini Fournier (2008), 120

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TheWhitePaperconclusionitselfalsousestheterm‘binding’:“BindingeffectofNCA

decisions:WhenevertheEuropeanCommissionfindsabreachofArticle81or82oftheEC

Treaty,victimsoftheinfringementcan,byvirtueofestablishedcaselawandArticle16(1)

ofRegulation1/2003,relyonthisdecisionasbindingproofincivilproceedingsfor

damages.”[emphasisadded]Sincethisis‘byvirtueofexistingcaselaw’,itsuggeststhat

thoseprovisionsalsodenotebindingeffectofCommissiondecisions.

AdecisionoftheCommission,alongwithotherEUinstitutions,ispresumedvalidandits

validitycannotbequestionedbynationalcourts.Ifthenationalcourtdoubtsthelegalityof

theCommission’sdecision,itcannotavoidtheeffectsofthatdecisionwithoutarulingto

thecontrarybytheCJEU,accordingtoFotoFrost104andreaffirmedintheCourtsNotice

recital13.TheeffectofaCommissiondecisioncanonlyberemovedbyajudgmentofthe

CommunitycourtsinthecontextofanactionforannulmentunderArticle263,orina

preliminaryrulingunderArt267TFEU.

OnlywherethenationalcourtcannotreasonablydoubtthecontentoftheCommission’s

contemplateddecision,orwheretheCommissionhasalreadydecidedonasimilarcase,

maythenationalcourtdecideonthecasependingbeforeitwithoutaskingthe

Commissionforinformationorawaitingitsdecision105.Thisechoesthedoctrineof

precedent,wherethejudgeinterpretsthecaseinlinewithexistinglawbyfollowingthe

decisionsincaseswithsimilarfacts.ItimpliesthatCommissiondecisionsmaynotonlybe

bindingonnationalcourtsinthesamecasewiththesameparties,butbindinginother

casestoo.

Thisistiedtothequestionofwhetherthecompetitionauthority’sdecisionandthecivil

courtproceedingsrelatetothesamefactsandthesameparties.AccordingtoAdvocate

GeneralCosmasinMasterfoods,thereisnoconflictbetweenajudgmentofthenational

courtandadecisionoftheEuropeanCommissionwheretheproceedingsarenot

‘completelyidentical’(para16).IntheEnglishcaseofInntrepreneurvCrehan,106

concerningbeertiearrangementsbetweenabreweryandapubleaseholder,theHouseof

LordsinterpretedtheAdvocateGeneral’sstatementasmeaningthattherewasa

requirementtoacceptthefactualbasisofadecisionreachedbyaCommunityinstitution

onlywhenthespecificagreement,decisionorpracticebeforethenationalcourthasalso

beenthesubjectofaCommissiondecision,involvingthesameparties.TheissueinCrehan 104 Case 314/85 Foto-Frost [1987] ECR 4199 [12]-[20] 105 Courts Notice recital 12 106 Inntrepreneur Pub Company and Others v Crehan [2006] UKHL 38

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concernedtheCommission’sfindingofforeclosureinthebeertiemarketinthecontextof

aninvestigationintootherparties.107

Perhapsmoreproblematically,inMasterfoodstheAdvocateGeneralalsosaidthata

conflictonlyarises“whenthebindingauthoritywhichthedecisionofthenationalcourt

willhaveconflictswiththegroundsandoperativepartoftheCommission’sdecision.”Itis

arguablethatthat‘grounds’ofthedecisioncouldencompassfindingsoffactopento

reconsiderationbythenationaljudge.InCrehanintheHouseofLords,LordHoffman

ruledthat“wherethereisnoquestionofaconflictofdecisions[wheretheUKcourtisnot

consideringthesameagreementorconductbetweenorbythesameparties]thedecision

oftheCommissionissimplyevidenceproperlyadmissiblebeforetheEnglishcourtwhich,

giventheexpertiseoftheCommission,maywellberegardedbythatcourtashighly

persuasive.Asamatteroflaw,however,itisonlypartoftheevidencewhichthecourtwill

takeintoaccount.If,uponanassessmentoftheevidence,thejudgecomestothe

conclusionthattheviewoftheCommissionwaswrong,Idonotseehow,consistentlywith

hisjudicialoath,hecansaythatasamatterofdeferenceheproposesneverthelessto

followtheCommission.”108

Thislinkstothequestionofwhichpartofthedecisionhaslegaleffect.Isitonlythefinding

oftheinfringementitselfwhichisbinding,oralsotheunderlyingfactsandreasoning‐the

‘grounds’whichtheAdvocateGeneralinMasterfoodsreferredtoabove‐leadingtothat

finding?GippiniFournier’sopinionisthat“TheCommission’sreasoningleadingittoa

particulardecision,includingitsinterpretationofArticle81orArticle82anditsfindings

offactareclearlynot‘binding’assuch…Itisintheoperativepartofthedecisionthat

specificprovisionsarefound…Thisisthepartofthedecisionthatbecomespartof

Communitylawandisvestedwithsupremacyaslongasthedecisionstands.”109However,

itisnotalwaysstraightforwardtoseparatethese.

AccordingtotheGeneralCourtinthecaseofVlaamseTelevisieMaatschappijinthecontext

ofStateaid,theoperativepartofadecision“mustbeconstruedinthelightofthe

107 Whitbread [1999] OJ L 88/26 dated 24 February 1999, recital 127. Commission Decision of 24 February 1999 relating to a proceeding pursuant to Article 85 of the EC Treaty (Case No IV/35.079/F3 - Whitbread) (notified under document number C(1999) 346) 108 Crehan HL [69] 109 Gippini Fournier (2008), 120

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statementofthereasonsuponwhichitisbased”.110Thisraisesthequestionofwhether

thismeansthattheCommission’sreasoningisalsobinding;or,whethersubsequentcases

canbedistinguishedbasedonthosereasons,andassuchwhetherthecourtcanlookinto

thatreasoning.111

Asdiscussedabove,thereisanargumentthattheobligationnottotakeadecisionrunning

countertoonebytheCommissionappliesbyvirtueofsupremacyofEUlaw,withthe

decisionundertheultimatecontroloftheEuropeanCourtofJustice–therelationshipis

notoneofdeferenceofthenationalcourttotheCommission,butofprimacyofUnionover

nationallaw.ThismakeslesssenseifthenationalcourtisalsoapplyingEUcompetition

rulesratherthannationallaw.ItwouldbeapplyingEUrulesiftherewereanyeffecton

tradebetweenMemberStates,inaccordancewiththerequirementforparallelapplication

underWaltWilhelm112andinArt3Reg1/2003.TheMasterfoodsobligationwouldnot

comeintoplayotherwise.IfnationalcourtsareUnioncourts113,thenanationalcourt’s

interpretationofEUlawisjustasvalidastheCommission’s.Theremaybeaquestionover

whetherthenationalcourt’sjudgmentis“undertheultimatecontrol”oftheCourtof

Justice,inthesensethatanationalcourtjudgmentcannotbeannulledbytheCourtof

Justice,unlikeadecisionoftheCommissionunderArticle263TFEU.However,the

nationalcourt’sinterpretationcouldbesubjecttothepreliminaryreferenceprocedure

underArt267TFEU.

AsNCAdecisionsdonotcurrentlyenjoythestatusofEUlaw,thereisaweakerbasisfor

thebindingeffectofaforeignNCAdecisioninthenationalcourtsoftheotherMember

States.Anargumentcouldbemadethatthisisadelegatedpoweralongsidethe

Commission’sdelegatedpowersofenforcementtoNCAsthroughtheEuropean

CompetitionNetwork.Anotherbasisisthemoregeneralprincipleofloyalcooperation.

110 Case T-266/97 Vlaamse Televisie Maatschappij NV v Commission [1999] ECR II-2329 [151]. This judgment does not mention Masterfoods directly but follows the Suiker Unie case [1975]. The Commission cites the case in the Staff Working Paper accompanying the White Paper [140] 111 There are also cases in which Commission statements falling short of a final decision have persuasive effect on courts, such as Postbank and Synthetic Rubber/ENI, in which the Commission’s statement of objections was relied upon by claimants – see A Bouquet ‘Institutional Report’ in G C Rodriguez Iglesias & L Ortiz Blanco (eds) The Judicial Application of Competition Law: Proceedings of the FIDE XXIV Congress Madrid 2010 Vol 2 (Servicio de Publicaciones de la Facultad de Derecho, Complutense University, Madrid 2010), 42-43; Truli, 797 Chapter 4 of this thesis also dealt with the possible legal effects of Commission pronouncements short of a decision, such as opinions in court proceedings. 112 Case 14/68 Walt Wilhelm v Bundeskartellamt [1969] ECR 1 113 I Maher ‘National Courts as European Community Courts’ (1994) 14(2) Legal Studies 226-243

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6.2Dutyofloyalcooperation

Thedutyofloyal,orsincere,cooperationinArt4(3)TEU114isconcentratedontheUnion

andMemberStatesassistingeachother.Oneaspectofthisistheverticalnatureofthe

duty,betweentheUnioninstitutionsandtheMemberStates.ThepreviousversioninArt

10EC115focusedontheobligationoftheMemberStatestowardstheUnion,ratherthana

mutualduty.TheMemberStatesstillhavetheobligationto“refrainfromanymeasure

whichcouldjeopardisetheattainmentoftheUnion’sobjectives”.

However,loyalcooperationalsoimpliesahorizontalelement‐thedutiesofMember

StatestoassisteachotherincarryingouttaskswhichflowfromtheTreaties.Ofparticular

interestforthischapteristhehorizontalnatureofthedutybetweeninstitutionsatthe

sub‐nationallevel.116ThishorizontaldutyhasbeenestablishedintheCJEU’scaselaw,for

exampleinCase42/82FrancevCom(Italianwine)).117Cooperationbetweennational

competitionauthoritiesandnationalcourtsis“primarilyamatterofnationallaw”118–

primarily,butnotexclusively.Therelationshipbetweennationalcompetitionauthorities

andnationalcourtsissubjecttoahorizontaldutyofloyalcooperationwhereEUlawis

applied,andincross‐bordermatters.119Conversely,KomninosarguesthatArt10EC[now

Art4(3)TEU]cannotcreatesuchahorizontaldutyofcooperationbetweennational

competitionauthoritiesandnationalcourtsbecausewhenapplyingEUlawbothareacting

114 “Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.

The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union.

The Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives.” 115 “Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community's tasks. They shall abstain from any measure which could jeopardise the attainment of the objectives of this Treaty.” 116 J Temple Lang 'The Duties of National Authorities under Community Constitutional Law' (1998) 23 European Law Review 109 117 E.g. Case 42/82 France v Commission [1983] ECR 1013 (Italian wine)). See S Brammer Co-operation Between National Competition Agencies in the Enforcement of EC Competition Law (Hart, 2009), 422 for further discussion 118 K Lenaerts and D Gerard ‘Decentralisation of EC Competition Law: Judges in the Frontline’, (2004) 27(3) World Competition 313-349, 331-332 119 J Temple Lang ‘The Duties of Co-operation of National Authorities and Courts under Article 10EC – two more reflections’ (2001) 26 European Law Review 84, 87

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asEUinstitutions.120Assuchtherecanbenoresolutionofahierarchicaldisputebyusing

thedutyofloyalcooperation.

ThedutyemanatingfromArt4(3)TEUisnotastand‐aloneone,121andmustbeusedin

conjunctionwithanotherTreatyorlegislativeprovision.Regulation1/2003hasmade

somespecificdutiesofcooperationexplicit.Thequestioniswhetherthegeneraldutyof

loyalcooperationinEUlawstretchestorequiringrecognitionofNCAdecisions.Despite

theprovisionsofArticle11providingforMemberStatestonotifyeachotherwhenthey

openaninvestigation,andtoshareenvisageddecisions30daysbeforetheyareadopted,

theRegulationdoesnotdirectlyaddressthequestionofrecognitionorenforcementof

NCAs’decisions.InrespectofrelationsbetweenagenciesintheEuropeanCompetition

Network,Brammerarguesthatthereshouldbe“deference”tootherNCAdecisionsonthe

basisofloyalcooperation,whichwouldamounttoacase‐by‐caseconsiderationofthe

effectsofthedecision,butapparentlynotfullbindingeffect.122Theclosestprovisionto

oneofmutualrecognitionisArt13Reg1/2003whichgivesanNCAgroundstosuspendor

refusetoopenproceedingsifanotherNCAisdealingwiththecase.GiventhatMember

StatescivilcourtsarenotmembersoftheECN,therearenoprovisionsoncourt

recognitionofNCAdecisions.ThisbringsustotheanalogywiththeBrusselsRegulationas

abasisforthebindingeffectrule.

6.3AnalogywiththeBrusselsRegulation

TheproposalforMemberStatecourtstorecogniseandgiveeffecttoadministrative

authoritydecisionsfromotherMemberStatesbringstomindRegulation44/2001,the

BrusselsIRegulation,123ontherecognitionofforeignjudgments.Themodelofthe

RegulationisacknowledgedintheWhitePaperproposal.Thepossibilityofmutual

recognitionofNCAdecisionsunderamultilateraltreatyanalogouswiththeBrussels

RegulationwasalsosuggestedbyrespondentstotheWhitepaperonthereformof 120 A Komninos “Public and Private Antitrust Enforcement in Europe: Complement? Overlap?” (2006) 3(1) Competition Law Review 5-26, 25. I make a similar point above concerning the Masterfoods rule and national courts as EU courts. 121 J Temple Lang ‘The Duties of Co-operation of National Authorities and Courts under Article 10EC – Two More Reflections’ (2001) 26 European Law Review 84-93 122 S Brammer Co-operation Between National Competition Agencies in the Enforcement of EC Competition Law’ (Hart 2009) , 432 drawing from AG van Gerven in C-128/92 H J Banks & Co Ltd v British Coal Corporation [1994] ECR I-1209 (cited in Court of Appeal Crehan v Inntrepreneur Pub Company CPC [2004] EWCA Civ 637). Brammer also limits the categories of decision to prohibition and fining, excluding non-action and commitment decisions. 123 Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ 2001, L 12/1

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Regulation17,whicheventuallybecametheproposalforRegulation1/2003.124However,

thisrelatedtomutualrecognitionasbetweenNCAs,ratherthancourts,andpre‐datedthe

provisionsoftheECN.Responsestothemostrecentconsultationondamagesactions

arguethat“greatermaturityoftheECNandfurtherdevelopmentoftheconceptofmutual

recognitioninCommunitylaw”isneededbeforethebindingeffectruleisadopted.125

TheBrusselsIRegulationaimstofacilitatecross‐borderdamagesactions.Forexample,

Art6(1)allowstortvictimstocumulatedamagesactionsagainstallco‐defendantsbefore

onecourtwhereatleastoneco‐defendantisdomiciled,ratherthanhavingtostartseveral

actionsindifferentMemberStates.Art33(1)oftheRegulationisrelevantforthebinding

effectrulediscussedinthischapter,asitprovidesthat“AjudgmentgiveninaMember

StateshallberecognisedintheotherMemberStateswithoutanyspecialprocedurebeing

required.”

Art34(1)allowsacourttoexceptionallyrefuserecognitionofanotherMemberState’s

judgmentongroundsofpublicpolicye.g.wherefairlegalprocessmayhavebeenimpeded

contrarytoEuropeanConventiononHumanRightsandtheCharteronFundamental

RightsoftheEuropeanUnionandthecaselawoftheCommunitycourts.126TheBrussels

Regulationisthereforerelevantinprovidingatemplatefortheconditionsinwhicha

nationalcourtcouldrefusetorecogniseanNCA’sdecision.TheCommissionhasalready

statedthatitwouldnotobjecttothatpublicpolicyexceptionbeingincluded.127

Itissubmittedthatanyrulerequiringnationalcourtstorecogniseandgiveeffectto

nationalcompetitionauthoritydecisionsshouldhaveatleastthesamesafeguardsofArt

34(1)oftheBrusselsRegulation.Theconditionsforrecognisingthebindingeffectofthe

decisionofanadministrativebodyshouldnotbelessstrictthanrecognitionofanother

court’sjudgment.Thisisfortworeasons.First,itwouldcreatealevelplayingfieldanda

completesystemofenforcementregardlessofthetypeofdecision.Ifthiswerenotthe

case,decisionsofadministrativebodieswouldbeaffordedaprivilegedpositionrelativeto

124 White Paper on Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty, Commission Programme No 99/027, Brussels, 28.04.1999. Summary of responses at http://ec.europa.eu/competition/antitrust/others/wp_on_modernisation/summary_observations.html (last accessed 16.8.2012) 125 Addleshaw Goddard response to White Paper on Damages Actions for Breach of the EC antitrust rules COM (2008) 165, 2.4.2008; see also UK Competition Law Association; AFEC, Association Française d'Etude de la Concurrence; APDC Association des Avocats Pratiquant le Droit de la Concurrence; Slaughter & May responses making similar points 126 C-7/98 Krombach v Bamberski [2000] ECR I-1935 [21] 127 Staff Working Paper [162]

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judgmentsofcivilcourts.Secondly,courtsarethearbitersofdueprocessstandards.There

shouldbeatleastthesamesafeguardsforrightsofdefence,particularlyasareviewor

appealcourtmaynothavepositivelyconfirmedtheNCA’sdecisionifithasnotbeen

appealed.Itwouldbestrangetoallowacourttolookintowhetheranothercourt’sprocess

wasfair,butnotallowittolookintoadministrativeproceedingsinasimilarway,

particularlyifthoseproceedingshadnotbeensubjecttoappealorjudicialreview.

RenderinganNCAinfringementdecisionbindingwouldincreaseefficiencybydoingaway

withintermediateproceedings–therewouldbenoneedtosecureaCourtrulingin

anotherMemberStatethenusetheBrusselsRegulationtorecognisethejudgmentcross‐

border.Inpractice,iftheNCA’sdecisionisupheldbyarevieworappealcourtitwouldbe

simplyamatterofrecognisinganotherMemberStatecourt’sjudgment.This‘courtto

court’dialoguemaybemorepalatableandfamiliartojudges.

WhilecompetitionenforcementcanborrowfromtheBrusselsRegulation,theBrussels

Regulationcanalsoborrowfromcompetitionenforcement.Intermsofjurisdictionalrules

andpreventingparallelproceedings,Danovproposestransposingtheprincipleofthe‘well

placedtoact’authorityfromthecaseallocationrulesoftheEuropeanCompetition

Networkwhichwouldallowanothercourttodeclinejurisdiction128Moreinterestingly,in

thecontextofrecognisingforeignjudgmentsinrelationtoEUcompetitionlawclaims,he

advocatesthatNCAsshouldberegardedascourtsforthepurposesofBrusselsIwhen

determininganinfringementofArticle101or102TFEU129“toavoidtheriskof

irreconcilabledecisionsbeingrenderedonthesameantitrustissueintwodifferent

MemberStatesbydifferentbodies(anNCAandacourt)”.Thisisclearlymore

constitutionallyproblematic.Itistruethatthis“wouldbeastrongargumentwherea

judicialbodyhadbeendesignatedasanNCA”130;inpractice,however,mostMember

StatesNCAsarenowintegratedadministrativebodies,carryingoutbothinvestigativeand

adjudicativefunctions.

Art1oftheBrusselsIRegulationstatesthatthe‘Regulationshallapplyinciviland

commercialmatterswhateverthenatureofthecourtortribunal’[emphasisadded].

Asaresult,Danovsuggeststhat“thecontextinwhichthedecisionoftheNCAismade

wouldbemoreimportantthantheconstitutionalstatusofthepublicauthoritybefore

128 M Danov Jurisdiction and Judgments in Relation to EU Competition Law Claims (Hart, 2010), 130. See also K Wright book review (2012) 37(3) European Law Review 355-358 129 Danov, 131, 281-282 130 Danov, 203-4

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whichtheproceedingsarebrought.”131Thatis,thesubjectmatteroftheproceedings

wouldbedecisive,notwhethertheactionispendingbeforeacourtoranadministrative

body.132

Oneconsequencewouldbethatacourtshouldstayproceedingstoavoidconflictwitha

first‐seisedNCAdecision,echoingthebindingeffectproposal.Fromtheotherside,evenif

acourtisfirstseised,thereiscurrentlynoobligationfora‘non‐court’suchasanNCAto

stayproceedings.DanovrightlyassertsthatintheongoingreviewoftheBrusselsI

Regulationthedifferentresultsderivingfromthedifferentconstitutionalstatusesof

courtsandadministrativepublicauthoritiesneedtobeaddressed.Theseeffectsalsoneed

tobeaddressedinrelationtothecurrentbindingeffectproposal.

ThebindingeffectruleimpliesthatcivilcourtsmustbeawareofallNCA(infringement)

decisionsthroughoutEU‐andshowthattheyhavebeentakenintoaccountinthe

judgment.Inpracticeitwouldbefortheclaimanttobringtheforeigninfringement

decision,onwhichs/hewouldrely,totheattentionofthecourt.Alternatively,theNCA

whichhadbecomeawareofanotherNCA’sdecisionthroughtheECNcouldintervenein

theproceedings.Thedefendantscouldnotsimilarlyrelyonanon‐infringementdecision.

Althoughanon‐infringementdecisioncouldbeusedaspersuasiveevidence,this

asymmetriceffectdependingonthetypeofdecisionraisesthequestionofequalityof

arms.Facedwithabindingdecisionfromtheopponent,theonlyoptionwouldbeto

attempttounderminetheNCA’soriginaldecision,by,forexample,pointingtolower

proceduralsafeguards,orlessrigorousjudicialreview.Thiswouldallowthedefendantto

takeadvantageofaprovisionanalogoustoArt34(1)BrusselsReg.Whilesuchaprovision

isanessentialsafeguard,itcouldbeoverused.

Ratherthanencouragingcoherenceandmutualrecognitionofstandards,abindingruleas

opposedtoarebuttablepresumptioncouldreopenthequestionofdifferentinvestigation

131 Danov, 123 132 Danov 124

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standardsamongNCAs.133Thisthreatenstounderminethetrustandmutualcooperation

whichcounterpartsintheECNcurrentlyenjoy.134

Asapositiveeffect,thebindingeffectrulecouldlinkcivilcourtsenforcingcompetition

rulesbetweenprivatepartieswiththeEuropeanCompetitionNetwork,madeupof

nationalcompetitionauthoritieschargedwithpublicenforcement.Itcouldcontributeto

aligningthedecisionalpracticeofnationalcompetitionauthoritiesandcourts,minimising

divergentapplicationofcompetitionrulesbetweenpublicandprivatecompetition

enforcers.Inpracticeacourtwouldbecomeawareofafindingofinfringementthrough

theclaimant’sordefendant’spleadings,orbyadomesticorforeignNCAgivinganopinion,

joiningasaninterveningpartyorinterveningasamicuscuriae(subjecttonational

proceduralrules),havingbecomeawarethroughtheECN.Itcouldfunctionintandemwith

thetoolsinArt.15Reg1/2003,asexploredinthepreviouschapter,providingforthe

EuropeanCommissionandnationalcompetitionauthoritiestointerveneinjudicial

proceedingswithinformationorobservations.TheCommissionandNCAsaretoinform

eachotherthroughtheECNiftheyintervenewithanamicusbriefinanycase,which

wouldindirectlylinknationalcourtswiththeECN.135Ithasbeensuggestedthatnational

courtsshouldbeabletoaddressquestionstoforeignNCAstoclarifyanyquestionsonthe

meaningoftheirdecisionorcircumstancesoftheirdecision.136TheideaofNCAsasamicus

curiaehasalsobeenproposedinthecontextofquantificationofdamagesincivilcourts,as

discussedabove.

Theseamicuscuriaemechanismsstillleavecourtsrelianton,orevenlimitedby,

competitionauthorities.Thebenefitsofconvergencebetweenpublicandprivateenforcers

areunlikelytoberealisedifthereareasymmetriceffectsintheinteractionsbetween

enforcers.Thatis,ifNCAdecisionsarebindingoncourts,butnotbindingonfellowNCAs.

133 The different standards among NCAs, particularly different levels of resources and experience, was a consideration leading up to the 2004 reforms. This was one reason for the European Commission building in the ability to take over a case under Art 11(6) Reg 1/2003, and the reference in Art 35 Reg 1/2003 to Member States designating competition authorities “in such a way that the provisions of this regulation are effectively complied with”. Source: interview with a DG COMP official from the ECN unit 13.7.2006) 134 On trust in the ECN, see H Kassim and K Wright ‘The European Competition Network: a Regulatory Network with a Difference’ Paper presented at European Consortium for Political Research (ECPR) Standing Group on Regulatory Governance Third Biennial Conference, Dublin, 17-19 June 2010 reporting the results of interviews with NCA officials working in the ECN; Interview with a DG COMP official from the ECN unit 13.7.2006. 135 See the previous chapter 136 Joint Working Party of Bars and Law Societies of England & Wales response to White Paper on damages actions

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7.AsymmetriceffectsandtheEuropeanCompetitionNetwork

A(presumably)unintendedconsequenceoftheproposalisanasymmetrybetweenthe

effectsofdecisionsofadministrativebodiesundertakingpublicenforcementintheECN

andthoseofcivilcourtjudgments.Therearedifferenteffectsderivingfromthedifferent

constitutionalstatusesofcourtsandadministrativeauthorities.Lookingattherespective

relationshipsofcourtsandNCAswiththeEuropeanCommission,theMasterfoodsand

Article16(1)Reg1/2003obligationoncourtsalreadyextendsfurtherthananNCA’sduty

underArt16(2)nottocounteranexistingdecision.Courtsshouldalsostayproceedingsin

respectoffuturecontemplateddecisionsoftheCommission.Thiscouldbeevidenceofa

publicoverprivateenforcement/administrativeoverjudicialhierarchy.Oritmaysimply

reflecttherealityofmorestructuredcooperationbetweentheCommissionandNCAs

withintheECN,inparticulartheobligationsunderArticle11Reg1/2003.137

TheEuropeanCompetitionNetworkisbasedonasystemofparallelcompetences,where

eachnetworkmemberretainsfulldiscretionindecidingwhetherornottoinvestigate.138

Asaresult,ifthebindingeffectproposalwereadopted,NCAdecisionswouldbebinding

oncourts,butnotonfellowNCAs.UnderArt.13oftheModernisationRegulation,thefact

thatoneNCAisinvestigatingissufficientgroundsforanothertosuspendproceedingsor

torejectacomplaint.However,ithas“noobligationtodoso”.139

ThesummaryofresponsesontheWhitepaperonthereformofRegulation17,which

eventuallybecametheproposalforRegulation1/2003,givesanindicationofhow

territorialeffectofNCAdecisionswasperceivedatthetime.140OnlyfiveMemberStates

respondedspecificallyonthispoint.Ofthose,threeagreedthatNCAdecisionsshouldhave

bindingeffectthroughouttheEU,andtheothertwowereopposed.Notsurprisingly,firms

andtheirlegalrepresentativesweremoreinfavourofEU‐wideeffectonthegroundsof

legalcertainty.AnumberdidproposearuleinwhichfellowNCAsandtheEuropean

CommissionwouldhaveadeadlineforobjectingtoanNCA’sdecision,afterwhichifno

137 To notify the Commission and other Member States at the opening of the first investigative procedure 11(3), and 30 days before the adoption of a decision requiring that an infringement be brought to an end, accepting commitments, or withdrawing the benefit of a block exemption (11(4)) 138 Commission Notice on cooperation within the Network of Competition Authorities OJ C 101, 27.4.2004, 43-53 [5]. The Notice sets out rules for case allocation, cooperation and consistent application of the EU antitrust rules between Member States’ competition authorities and the Directorate General for Competition of the European Commission. 139 Network Notice [22] 140 http://ec.europa.eu/competition/antitrust/others/wp_on_modernisation/summary_observations.html (last accessed 16.8.2012)

199

objectionwereraisedthatdecisionwouldautomaticallybeeffectivethroughouttheEU.(It

mustberememberedthatthisconsultationtookplacebeforetherulesoftheEuropean

CompetitionNetworkwerefullyinplace.)Thiswouldbesalient,forexample,where,

basedonEUaswellasnationallaw,theNCAinMemberStateAinvestigatedandimposed

finesoncartelmembersXandYinMemberStateA;meanwhiletheNCAinMemberState

BstartedproceedingsagainstfirmZ,amemberofthesamecartel.TheNCAinMSBthen

proposedafindingofnoinfringement.Thiswouldundermineenforcement.

However,theprovisionsofRegulation1/2003anditsaccompanyingNetworkNotice141

weredraftedsothatpositivedecisionsatnationallevelcannothaveabindingeffecton

otherMemberStateNCAs.Clearlythecurrentproposalforbindingeffectoncourtswas

notenvisagedatthetimeRegulation1/2003wasdrafted.IntheCommission’s

explanatorymemorandumfortheproposalwhichbecametheRegulation1/2003,itstated

that:“IfthecompetitionauthorityofaMemberStatefindsthatbehaviour,actingona

complaintoronitsowninitiativedoesnotinfringeArticle[101]asawholeorArticle

[102],itcanclosetheproceedingsorrejectthecomplaintbydecision,findingthatthere

arenogroundsforaction.Suchdecisionsbindonlytheauthorityadoptingthedecision.

Theeffectofothertypesofdecisionsadoptedbythenationalcompetitionauthoritieswithin

theirownMemberStateisnotregulatedintheproposedRegulation.Thisisamatterof

nationallaw.Decisionsadoptedbynationalcompetitionauthoritiesdonothavelegaleffects

outsidetheterritoryoftheirMemberState,nordotheybindtheCommission”.142(emphasis

added)ThisprovisionlimitsitselftothetypesofdecisionswhichNCAshavethe

competencetodeliverunderArticle5Reg1/2003.143Inotherwords,non‐infringement

decisionsareeffectiveonlyontheterritoryoftheMemberStateoftheNCAwhichmakes

it,andnotthroughouttheEU.OneNCAcannotpreventanotherNCAfromsubsequently

findinganinfringementofArticle101or102TFEUinrespectofitsownterritory.Onlythe

Commission,underArticle10Regulation1/2003,iscompetenttomakeafindingthatthe

141 Notice on co-operation within the Network of Competition Authorities [2004] OJ C101/43 142 Explanatory Memorandum accompanying the 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”), COM (2000) 582 final - 2000/0243 (CNS), [2000] OJ C 365E/284, 16-17 143 These are: requiring that an infringement be brought to an end; ordering interim measures; accepting commitments; imposing fines, periodic penalty payments or any other penalty provided for in their national law. The Commission’s staff working paper [152]-[153] explicitly gives Art 5 Reg 1/2003 as a reason for excluding other types of decisions

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EUcompetitionrulesareinapplicableinagivencasewhichbindsNCAsandnational

courts.144

GiventhecaseallocationruleswithintheECN,145ideallyasingleNCAoraleadauthority

shouldadoptadecision,butthereisnoguaranteethattheECNwillcontinuetoworkin

thisway.ItisconceivablethatseveralNCAswithintheECNcouldbeinvestigatingthe

sameconduct,andmayadoptdifferentdecisions.Ifstronglydivergentdecisionswere

envisaged,forexample,onefindinganinfringementandonefindingnoinfringement

affectingtradebetweenMemberStates(asopposedtoonlyinthenationalmarket),or

differingastothedegree(fault,effects)oftheinfringement,theCommissionwouldneed

tointerveneandpossiblytakeoverthecaseasforeseenunderArt.11(6)Reg1/2003.It

couldbeexpectedthatadefendantwouldraiseanyfindingofnoinfringementasevidence,

anddivergentdecisionswouldrequirethecivilcourttoinvestigatethefactsofthealleged

infringement.

MemberStateNCAdecisionsarenotifiedfirstthroughtheECN,soallNCAswouldhave

hadtheopportunitytoraiseobjectionsorrisksofdivergenceafteranNCAhadnotifiedits

envisageddecisiontotheothermembersoftheECNasrequiredunderArt.11(4)Reg

1/2003.However,therewouldhavebeennocourtinputatthatstageexceptwhereacourt

wasdesignatedasanNCAinapublicenforcementrole.Inorderforacourttobebound,it

wouldneedtoknowabouttheexistenceofarelevantdecision.Thecourtwouldbe

dependentontheparties,oraninterveningNCA,tobringsuchadecisiontothecourt’s

attention.WhatifacourtdoesnotknowaboutanNCAdecisioninanotherMemberState

andgoesaheadandmakesapotentiallydivergentjudgment?Couldalitigantraiseitlater

pleadingachangeofcircumstances,thereforeleavingthecourtdecisionuncertainand

vulnerabletoappeal?146Thereareimplicationsherefortheprincipleofresjudicata,and

thepointatwhichadecisionbecomes‘final’andthereforebinding.Furtherlitigationto

establishthescopeandapplicationofforeignNCAs’decisionscouldalsoariseasan

unintendedconsequenceofthebindingeffectrule.

IfNCAsindifferentMemberStatesarenotformallyboundbyeachother’sdecisions,there

isanasymmetryandaconsistencygapifnationaljudgesaretobeboundbythedecisions 144 see Commission staff working paper accompanying the report on functioning of Reg 1 SEC (2009) 574, p. 36 145 This is based on the notion of the ‘well-placed to act’ authority: [5]-[15] of the Network Notice 146 C-453/00 Kuehne & Heitz [2004] ECR I-837 concerned the obligation to re-examine final administrative decisions adopted in violation of subsequent EU law and confirmed by a national court. Importantly, the case places obligations on administrative bodies to reopen their decisions, rather than courts.

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offoreignNCAs.Timewilltellwhetherthesoftercooperationmechanismsofthe

EuropeanCompetitionNetworkcompensateforthislackofhardbindingeffect.

7.1Reverseprincipleofequivalence?

Accordingtotheprincipleofequivalencenationalproceduralrulesgoverningactionsto

ensuretheprotectionofindividualrightsunderEUlawshouldnotbesubjecttoless

favourableconditionsthanthosegoverningsimilaractionsunderdomesticlaw.147

AtleasthalfoftheMemberStatesdonotprovidefortheirnationalcourtsbeingboundby

decisionsoftheirownNCAs.Itwouldbestrangeifnationalcourtswereboundby

decisionsoftheCommissionandforeignNCAs,butnottheirdomesticauthority.Domestic

lawwouldhavetobridgethisanomaly.ImposingtheoptionofbindingeffectofanNCA

decisioninthedomesticcontextonlyinthecourtsofthatMemberStateislikelytobemet

withresistanceonthegroundsofsubsidiarityandnationalproceduralautonomy.By

allowingcomplainantstorelyonaninfringementfindingbyaforeignNCA,thebinding

effectruleactuallydiscriminatesinfavourofclaimsbasedonEUrulesthroughdecisions

fromotherMemberStates.

TakingtheexampleoftheUK,ina2007reportonprivateactions,theOfficeofFair

TradingrecommendstheinsertionofaprovisionintotheCompetitionAct1998requiring

UKcourtsandtribunalsto“haveregardto”theUKcompetitionauthorities'decisionsand

guidancewhendeterminingcompetitionissues.Itspecificallyrecommendsthatcourts

shouldmerely“haveregard”toUKNCAs’decisionsandguidance,notproposingthat

courtsbebound,butonlythatthey“giveseriousconsideration”tothedecision.148

Withoutfetteringjudge’sjurisdiction,wherejudgesdepartfromapolicystatementor

decision“ItisimportantthatdeparturesordifferencesbyUKNCAsareadequately

explainedintheinterestsoflegalcertainty”particularlyreconcilingdifferent

precedents.149However,oddlyinaseparatepartofthesamereporttheOFTdoessupport

bindingeffectofotherMemberStateNCAs’decisions,whichitstatesisbestachievedat

theEUlevel.150

147 Case 33/76 Rewe Zentralfinanz eG v Landwirtschaftskammer fur das Saarland [1976] ECR 1989 148 ‘Private actions in competition law: effective redress for consumers and business: recommendations from the Office of Fair Trading’, OFT916resp, November 2007, p.41, [10.6]-[10.7]. 149 OFT recommendations [10.7] 150 OFT recommendations [12.6]-[12.7] This apparently contradictory position is a source of confusion – in its response to the White Paper on damages actions the OFT fully supports the binding effect proposal,

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AsVanGervenarguesinamoregeneraldiscussionoftheprincipleofequivalence,

“Nationalcourtsmayfeeltheneedtoundo…’reversediscrimination’infavourof

Communityrights,byimprovingjudicialprotectiongiventopurelynationalrights.”151

Thiscouldofcoursebeagoodthingforcomplainants.Buttheconsequencescouldbe

unevennessofthestatusofcertainbodies’decisionsincompetitionlawrelativetoother

policyareas.AsimilarpointismadeintheEuropeanParliament’sresolutionontheWhite

Paper:EUmeasures“mustnotleadtoarbitraryorunnecessaryfragmentationof

proceduralnationallaws”.152

Evenabsentthebindingeffectruleinthedraftdirective,asaconsequenceofahorizontal

dutyofloyalcooperationitcouldbearguedthattheprincipleofequivalencerequiresa

horizontalcross‐borderbindingeffect.Thatis,ifaMemberStateallowsbindingeffectof

itsownNCAdecisionsonitsowncivilcourts,mustitafforddecisionsfromotherNCAsthe

samestatuswherethosedecisionsarebasedonEUcompetitionrules?SofarGermanyis

theonlycountrywheredecisionsofforeignNCAsarebinding(section33(4)ActAgainst

RestraintsonCompetition).

Thefigurebelowshowsasymmetricnationalandcross‐bordereffectsofthebindingeffect

ruleeffectswithreferencetotwoMemberStates.InMemberState1,NCA1’sdecisionsare

bindingonthecourtsinitsownMemberState,andbyvirtueoftheEU‐levelbindingeffect

rule.InMemberState2,thecourtsareboundbythedecisionsofNCA1byvirtueoftheEU

rule,butnotbydecisionsofNCA2intheirownMemberState.

but Allen & Overy, among others “urge[s] adopting a similar approach to that in the OFT’s Recommendations, requiring national courts to have regard to decisions of NCAs without being bound to follow them.” 151 W Van Gerven, ‘Of Rights, Remedies and Procedures’ (2000) 37 Common Market Law Review 501-536, 534; the Nederlandse Raad voor de rechtspraak, Dutch Council for the Judiciary also makes this point in its response to the White Paper 152 European Parliament resolution of 26 March 2009 on the White Paper on damages actions for breach of the EC antitrust rules (2008/2154(INI)) P6_TA(2009)0187

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Fig3:Asymmetricnationalandcross‐bordereffectofthebindingeffectrule

8.Thepossibilityofthebindingeffectproposal

Havinganalysedtheelementsofthebindingeffectproposalanditsimplications,this

sectionaddressesthepossibilityoftherulebecomingeffectiveacrosstheUnion.Itfirst

laysoutthecurrentlegaleffectoncivilcourtsofnationalcompetitionauthoritydecisions

indifferentMemberStatestoassesstheworkthatneedstobedone.Thisisdonethrough

considerationofMemberStatecompetitionlawstatutes,the2004AshurstComparative

Study(nowsomewhatoutofdate),153submissionstotheEuropeanCommission’s

consultationontheWhitePaperondamagesactions,theFIDEXXIVCongress2010

countryreportsontopic2:thejudicialapplicationofEuropeancompetitionlaw154,andan

153 Ashurst report: ‘Study on the conditions of claims for damages in case of infringement of EC competition rules’ Comparative report prepared by Denis Waelbroeck, Donald Slater and Gil Even-Shoshan, 31 August 2004, including national reports, available at http://ec.europa.eu/competition/antitrust/actionsdamages/study.html 154 16 Member States’ reports were available as at 20.7.2010, at: http://www.fide2010.eu/index.php?option=com_content&view=article&id=58&Itemid=71&lang=en, accessed 20.7.2010. Now published as G C Rodriguez Iglesias & L Ortiz Blanco (eds) ‘The Judicial Application of Competition Law’ Proceedings of the FIDE XXIV Congress Madrid 2010 Vol 2 (Servicio de Publicaciones de la Facultad de Derecho, Complutense University, Madrid 2010). Questions 9, 10, 11, 12, 13, 15 are relevant: e.g. Q9: ‘Has the national court to stay its proceedings once the national competition authority (NCA) has initiated proceedings on the same matter, until a decision has been reached?’. Q10: ‘Has the NCA to stay its proceedings once a national court has initiated proceedings on the same matter, until a decisions has been reached?’, Q11: ‘Are national courts bound by the final decisions adopted by a NCA declaring that a certain practice amounts to an infringement? Is the response the same where the NCA rules that the practice does not infringe competition law?’, Q12: ‘Is the NCA bound by the final decisions adopted by a national court declaring that a certain practice amounts to an infringement? Is the response the same where the national court rules that the practice does not infringe competition law?’, Q13: ‘If not [see Q12], what is the value for a national court of a final decision adopted by a NCA and vice versa?’, Q15: ‘Does your legal/constitutional system allow courts to be bound

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independentstudyrecentlypreparedfortheEuropeanParliamentonCollectiveRedress

inAntitrust.Thesereportsdonotallagreewitheachother,asmostrelyonindividual

rapporteurs,155buttheygiveanindicationofhowtherulewouldplayoutinpracticeand

amendmentsthatwouldneedtobemadetonationallaws.Secondly,thissectionevaluates

theobstaclestothebindingeffectrulebeingadopted,inparticulartheobjectionson

constitutionalgrounds,whichwillbethemostdifficulttosurmount.Finally,thissection

considersthecurrentstateofplayofthedraftlegislationondamagesactionswhich

containsthebindingeffectproposal,includingthediscussiononitsTreatylegalbase.

8.1CurrentlegaleffectofNCAdecisions

AllMemberStatesprovidefordecisionsofnationalcompetitionauthoritiestobe

submittedasevidenceincivilcourtproceedings.156However,thesedecisionsorother

evidencefromcompetitionauthoritiesarenotconsideredbindinginallMemberStates.It

mayonlybeoneelementamongothertypesofevidencethatthejudgecantakeinto

account;itmaybeaparticularlypersuasivepieceofevidence,eitherlegallyorinpractice;

thedecisionmaygiverisetoarebuttablepresumptionof(non‐)infringement,opentothe

otherpartytochallengewiththeirownevidence;thenationalcompetitionauthority’s

decisionmaybeformallybinding,leavingnoroomtoreopenaninvestigationintothe

findingofinfringement;orevenforeignNCAdecisionsmaybebindingonacourtinthe

‘home’MemberState.157Assuchtherearedifferentdegreesofpersuasivenessinthe

MemberStates.Insomecasesitalsodependsonthetypeofdecision(e.g.non‐

infringementaswellasinfringement,),and,whereseveralbodiesaredesignatedNCAs,

whichofthosebodiesmadethedecision.

by administrative decisions – as provided for in Article 16 of Regulation 1/2003 in respect to the Commission’s decisions? In the absence of a specific legal provision such as Article 16… what is or could be the value for a national court of a final decision adopted by a NCA of [an]other Member State? And of a judgment of the court of another Member State?’ 155 This may also reflect the difference between law in statute and court practice, and changes in legislation. 156 See Ashurst Study, 69 157 See the independent study prepared by Lear for the European Parliament’s Economic and Monetary Affairs Committee, ‘Collective Redress in Antitrust’, IP/A/ECON/ST/2011-19, PE 475.120, 12.6.2012, 24-25

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8.1.1BindingeffectofforeignNCAdecisions

TheonlyMemberStatecurrentlytoallowthebindingeffectofforeignNCAdecisionsis

Germany158unders.33(4)oftheActagainstRestraintsofCompetition159,aprovision

whichtheCommissionhasclearlydrawnuponinitsdraftingoftheWhitePaperproposal.

TheGermanexperiencecouldprovideausefulindicationofhowtherulewouldworkin

practice.However,sofarthereappeartohavebeennocasesrelyingonaforeignNCA

decision.160Section33(4)oftheGermanActagainstRestraintsofCompetitiondoesnot

limitbindingeffectofadministrativedecisionstoclaimsagainstpartiesaddressedbythe

decision.WurmnestsuggeststhatinpracticeGermanjudgesmayinterprettheprovision

narrowlytolimitbindingeffecttodecisionswherethedefendantswereaddresseesofthe

foreignNCAdecisionorhavehadtherighttobeheard.161

8.1.2BindingeffectofdomesticNCA/administrativedecisions

SomeMemberStatesallowforthebindingeffectofdecisionsoftheirdomesticNCAs.

Article88BoftheHungarianCompetitionActprovidesthatanystatementontheexistence

orabsenceofaninfringementmadeinadecisionoftheHungarianCompetitionAuthority

shallbebindingonacourthearingarelatedlawsuit.IntheCzechRepublic,thecourtsare

158 The Lear study for the European Parliament, p. 25, claims that Sweden also allows for binding effect of foreign NCA decisions, but gives no precise source. The FIDE 2010 report explains that such a proposal would be against the Swedish Constitution according to the Instrument of Government Section 11:2 and 11:7: “[n]o public authority, including the Swedish Parliament, may determine how a court of law is to adjudicate an individual case or otherwise apply a rule of law in a particular case”. (The Instrument of Government, Section 11:2). Similarly, “[n]o public authority may determine how an administrative authority is to decide in a particular case involving the exercise of public authority vis-à-vis a private subject or a local authority, or the application of law”(The Instrument of Government, Section 11:7).. Consequently, the proposal in the White Paper as regards the binding effect of National Competition Authorities’ decisions upon the judiciary are incompatible with the Swedish Constitution, and would thus require a constitutional reform to be implemented in Sweden.” 159 “Where damages are claimed for an infringement of a provision of this Act or of Article 81 or 82 of the EC Treaty, the court shall be bound by a finding that an infringement has occurred, to the extent such a finding was made in a final decision by the cartel authority, the Commission of the European Community, or the competition authority - or court acting as such - in another Member State of the European Community. The same applies to such findings in final judgments resulting from appeals against decisions pursuant to sentence 1. Pursuant to Article 16(1), sentence 4 of Regulation (EC) No. 1/2003 this obligation applies without prejudice to the rights and obligations under Article 234 of the EC Treaty.” 7th Amendment 2005 of the Gesetz gegen Wettbewerbsbeschränkungen, (GWB). English version available at http://www.bundeskartellamt.de/wEnglisch/download/pdf/GWB/0911_GWB_7_Novelle_E.pdf . The most recent 8th Amendment was adopted in March 2012. 160 Informally confirmed by S Peyer 161 W Wurmnest ‘A New Era for Private Antitrust Litigation in Germany? A Critical Appraisal of the Modernized Law against Restraints of Competition’ (2005) 6(8) German Law Journal 1173

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boundbyadministrativedecisions(notonlyincompetition)findinganadministrative

offence(art135(1)CivilProcedureCode)162.Infringementdecisionsarenotbindingbut

thecourtshouldgivereasonsifitdeviates(art135(2)).InAustria,bothinfringementand

non‐infringementdecisionsoftheCartelCourtarebindingonthecourtdecidingonthe

damagesclaimwherethepartiesandthefactsareidentical.163InEstoniadecisionsare

bindingregardingtheactandtheinfringerincriminalandadministrativeoffences,butthe

factsandreasoningarenotbindingotherwise.OtherMemberStatesinwhich

infringementdecisionsarebindingareGreece,Poland,SloveniaandSweden(thesetwo

onlyregardingindividualexemptiondecisions).164

IntheUK,Section58AoftheCompetitionAct1998165makesfindingsofinfringementby

regulatorsandtheCATbindingoncivilcourts,againonceappealshavebeenexhausted.

Section58Aprovidesthatwhereafollow‐ondamagesclaimisbroughtintheHighCourt,

thecourtisbound(subsection(2))byaninfringementdecisionoftheOFTortheCAT

(subsection(3))whenitbecomesfinal.166Section58,meanwhile,providesthatanyfinding

offactbytheOFTwhichis“relevanttoanissuearisingin[competitionlaw]proceedings

[beforethecourt]isbindingontheparties”,unlessthecourtotherwisedirects.

Thiswordingofsection58isclearlybroaderthanthatof58Ainseveralways:‘relevantto

anissuearisinginproceedings’isbroaderthanafactmaterialtothefindingof

infringement;findingsoffactarebindingonthepartiesratherthanthecourt;andthe

courthasdiscretionindirectingthatthosefindingsoffactarenotbinding.Ithasbeen

suggestedthatthisdiscretionwouldlikelybeexercised“incircumstanceswheretheparty

concernedhasnothadaproperopportunitytotesttheevidenceonwhichthefindingof

factwasmade.”167ThisechoestheGermanexampleabove.

Thequestionofpreciselywhichpartofthedecisionisbindingwasraisedinpassinginthe

firstprivateenforcementcasetogotofullhearingbeforetheCAT,andsubsequentlytothe

CourtofAppealonthebasisofdamages,EnronCoalServices(inliquidation)vEnglish,

162 FIDE 2010 proceedings 163 FIDE 2010 proceedings 164 Ashurst study, 69-70 165 Introduced by section 20 of the UK Enterprise Act 2002 166 Limitation periods in subsection (4) 167 C Brown and D Ryan, UK country report for FIDE Congress 2010, available at http://www.ukael.org/associates_21_2528442727.pdf, p 10 fn 62

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ScottishandWelshRailwaysLimited.168ThistouchedontheextenttowhichtheCATis

boundbyfindingsoffactcontainedinaninfringementdecision,asopposedtoonlythe

findingofinfringementitself.ThepartiesdisagreedonwhethertheOfficeoftheRail

Regulator’sdecisionhadfoundthedefendanttohaveoverchargedcausinglosstothe

claimant,onwhichtheclaimantbaseditsclaimfordamages.FortheCATtoentertaina

claim,therehadtobeadecisionofaregulatorofthekindinsection47A(6),whichinturn

wouldbebindingupontheCAT.TheCourtofAppealtookarestrictiveapproach.PattenLJ

stated:

“Theuseoftheword‘decision’makesitclearthats.47Aisdifferentiatingbetweenfindings

offactastotheconductofthedefendantmadeaspartoftheoveralldecisionanda

determinationbytheregulatorthatparticularconductamountstoaninfringementofthe

ChapterIIprohibition[thedomesticequivalentofArticle102TFEUonabuseof

dominance].Itisnotopentoaclaimant…toseektorecoverdamagesthroughthemedium

ofs.47Asimplybyidentifyingfindingsoffactwhichcouldarguablyamounttosuchan

infringement.”169(emphasisadded).Thisseemstosuggestthatforafindingoffacttobe

binding,itwouldhavetobematerialtothefindingofinfringement.

ThereisnorulerequiringthecivilcourtstotakeintoaccountOFT,thatisdomestic,

decisionswhichdonotinvolvethesamepartiesandconduct.However,relevantdecisions

andstatementsoftheCommissionaretobetakenintoaccount,evenwhencourtsare

applyingonlydomesticlaw,aslaiddowninSection60(3)CompetitionAct1998.“in

practice,however,courtsdotakeintoaccountrelevantdecisionsoftheOFTinmuchthe

samewayastheyhaveregardtorelevantdecisionsoftheCommission.”170Non‐

infringementdecisionsarenotexplicitlymentionedintheUKCompetitionAct,butare

alsolikelytobepersuasivewhereacourtishearingadamagesactionbasedonthesame

conduct.

168 [2009] EWCA Civ 647. On 1 July 2009, the Court of Appeal upheld an appeal against a judgment of the CAT by English Welsh & Scottish Railway Limited (EWS) that partly refused an application by EWS to strike out part of the damages claim brought by Enron Coal Services Limited. 169 Enron [31] 170 C Brown and D Ryan FIDE 2010 report, p. 10, fn 64

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8.1.3Persuasive/evidentialvalueofdomesticNCAdecisions

InotherMemberStates,NCAfindingsofinfringementaretreatedasparticularly

persuasive,buttechnicallyrebuttablee.g.Belgium,Lithuania,Malta,Cyprus,Latvia,

Denmark,Italy,Finland,France,Poland.Instillothers,theNCA’sdecisionisjustanother

pieceofevidencetobetakenintoaccounte.g.inPortugalpursuanttoArticles671and674

ofthePortugueseProceduralCode171;Spainwherethereisnorequirementtohaveregard

totheNCA’sdecision,anddecisionsofadministrativeauthoritiesingeneralhaveno

bindingeffectoncivilcourts;inLuxembourgitwoulddependonthe“strengthandnature

ofreasoning”172;andinSwedenitwouldbeevidenceonlyregardingdecisionsotherthan

individualexemptions.

8.1.4Reformtoconstitutionsneeded

Ofcourse,theCommissioncannotadoptthebindingeffectrulewithoutsupportfromthe

MemberStates.ResponsestotheWhitePaperconsultation173suggestthatitspassagewill

bedifficult‐severalcontributionsstronglystatethattobringtheproposedruleintoeffect

wouldrequireconstitutionalchange,asitisagainstthefundamentalnotionofjudicial

independenceandlackofhierarchyofadministrativeinstitutionsoverthejudiciary.174

ThereisalsotheproblemofdifferentstandardsofappealandjudicialreviewinMember

States.Othersarguethatasaprerequisiteforthebindingeffectrulemoreworkneedsto

bedonewithintheECNonthemutualrecognitionofdecisionsandharmonisingrulesof

procedurebeforeNCAs.175

171 Ashurst Study, 69-70. However, according to the FIDE Portugal country report 2010, “A final decision adopted by an NCA, with the same value than a judgment in the country where it was issued, must be considered by the Portuguese Courts as if it was a decision from a foreign court.” (response to Q15). This raises the question of whether decisions from Member States with courts designated as competition authorities (e.g. Ireland) would be favoured. 172 FIDE 2010 country report 173 available at http://ec.europa.eu/comm/competition/antitrust/actionsdamages/white_paper_comments.html . 174 Very few judges or courts made direct representations to the White Paper consultation. Exceptions were the Association of European Competition Law Judges (AECLJ) and the Italian Supreme Court. It was a similar situation in the context of the 2004 reforms: one judge noted that German judges took no active part in the discussions. The principals were the European Commission, Bundeskartellamt, Monopolkommission and academics – comment of J Gröning in C-D Ehlermann (ed) European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Hart, 2001), 487 175 Addleshaw Goddard, AFEC, Association Française d'Etude de la Concurrence; APDC Association des Avocats Pratiquant le Droit de la Concurrence; UK Competition Law Association; Slaughter & May

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Theconstitutionalbarrierswillbemostdifficulttoovercome.ExamplesincludeFrance–

opponentsoftheproposaldrawattentiontothejudicialindependenceprincipleinArt64

oftheFrenchconstitution.176AccordingtothePortugueseCompetitionAuthority,there

wouldalsobeconstitutionalobstaclesinPortugalbasedonseparationofpowersand

independenceofthejudiciary,meaningthatanNCAdecisionwouldneedtobeactively

confirmedbyacourt.177InSweden,“[n]opublicauthority,includingtheSwedish

Parliament,maydeterminehowacourtoflawistoadjudicateanindividualcaseor

otherwiseapplyaruleoflawinaparticularcase”.178

Thefirstunofficialversionofthedraftdirectiveonantitrustdamagesactionsredraftsthe

ruleinArticle12:“Wherenationalcourtsrule,inactionsfordamages,onagreements,

decisionsorpracticesunderArticle[101or102]oftheTreatywhicharealreadythe

subjectofafinalinfringementdecisionbyanationalcompetitionauthorityorbyareview

court,MemberStatesshallensurethatthenationalcourtscannottakedecisionsrunning

countertosuchinfringementdecision.Thisobligationiswithoutprejudicetotherights

andobligationsunderArticle[267]oftheTreaty.”179ThefactthattheArticleisentitled

‘Effectofnationaldecisions’withouttheuseoftheword‘binding’suggeststhatthe

Commissionisawareofthecontroversies.Inaddition,thereferencetotheECNisplayed

downandmoreemphasisisplacedontheroleofreviewcourts.

Anotherpossibilitywouldbetocreateanirrebuttablepresumption,whichinpracticehas

thesame‘binding’effect,butsemanticallyrespectstheindependenceofthecourttomake

afinding.180

9.Thecurrentstateofplayoflegislationondamagesactions

FollowingtheconsultationontheWhitePaperin2008‐2009,thedraftdirectiveon

damagesactionswasduetobeproposedbytheCommissioninOctober2009.181However,

176 Association des Avocats Pratiquant le Droit de la Concurrence White Paper response, p 12. French constitution of 4 October 1958 177 Autoridade da Concorrência Portuguesa response to White Paper on damages actions 178 The Instrument of Government, Section 11:2, as reported in FIDE 2010 country report 179 Reported in Truli, 801 180 Italian Supreme Court Corte Suprema di Cassazione and Luxembourg Competition Authority, Conseil de la Concurrence and Inspection de la Concurrence responses to the White Paper on damages action: Out of respect for separation of powers it is not advisable to use ‘binding’ but “présomption irréfragable, présomption par laquelle le juge et les parties seront liés”

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theproposalwasdelayeduntilthenewCollegeofCommissionershadtakenofficedueto

objectionsfromtheEuropeanParliamentinaresolutionofMarch2009,largelyonthelack

oflegalbaseandinsistenceonitsinvolvementinthelegislativeprocedure.182

TheEPresolutionspecificallyaddressescommentsonthebindingeffectofNCAdecisions,

butisambiguous.Itstatesthatanationalcourtshouldnotbeboundbyadecisionofthe

nationalcompetitionauthority–butthisiswithoutprejudicetorulesthatprovidefor

bindingeffectofadecisionapplyingArticle101or102TFEUrelatingtothesamesubject

matteradoptedbyamemberoftheEuropeanCompetitionNetwork.Thesecondpart,

recommendingtrainingandexchangeprogrammestoencourageacceptanceofanother

NCA’sdecision,suggeststhattheParliamentisreferringtotheeffectofdecisionsbetween

NCAs,notoncivilcourts.183Thereferencetotrainingandexchangeprogrammesalso

suggestssoftconvergenceratherthanhardbindingrules.

Thedraftdirectiveonactionsfordamagesforbreachesofantitrustlawnowfeaturesin

theEuropeanCommission’sworkprogrammefor2012,explainingthat“Theobjectiveof

thislegislativeinitiativewouldbetoensureeffectivedamagesactionsbeforenational

courtsforbreachesofEUantitrustrulesandtoclarifytheinterrelationofsuchprivate

actionswithpublicenforcementbytheCommissionandthenationalcompetition

authorities,notablyasregardstheprotectionofleniencyprogrammes,inorderto

preservethecentralroleofpublicenforcementintheEU.Therightofvictimsofantitrust

infringementstosuchdamageshasalreadybeenestablishedbytheCourt.”184The

directiveisduetobeproposedinthefourthquarterof2012.Theworkprogrammestates

itwillprogressundertheordinarylegislativeprocedure,whichmeansthattheEuropean

181 See e.g. ‘Plans for Private Antitrust Damages Actions Directive Suffer Setback’ http://www.internationallawoffice.com/newsletters/Detail.aspx?g=71e1fd5c-7f47-40a1-9a8f-951fe751fb5d last accessed 10.8.2012 182 European Parliament resolution of 26 March 2009 on the White Paper on damages actions for breach of the EC antitrust rules (2008/2154(INI)) P6_TA(2009)0187. Objections to no legal base [2], requesting co-decision (now known as ordinary legislative procedure post-Lisbon) [5]. 183 European Parliament March 2009 resolution [14] 184 The 2012 work programme was released on 25.11.2011, available at http://ec.europa.eu/atwork/key-documents/index_en.htm. See also Joaquín Almunia Vice President of the European Commission responsible for Competition Policy Work Programme for 2012 Presentation at ECON, European Parliament 22 November 2011, SPEECH/11/785, available at http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/785&format=HTML&aged=0&language=EN&guiLanguage=en. The content of the work programme is in its annex: Annex to the Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Commission Work Programme 2012 COM(2011) 777 final , Brussels, 15.11.2011 available at http://ec.europa.eu/atwork/pdf/cwp2012_annex_en.pdf , last accessed 10.8.2012, p. 3

211

Parliamentwillhaveagreaterroleinthelegislation’spassagethanmereconsultation.

However,thepreciselegalbaseis“stilltobedetermined”.185

Theroadmaponantitrustdamagesactionslinksthislegislativeproposaldirectlytoaction

oncollectiveredressmorebroadlyinothertypesofclaims.186Anyactiononcollective

redresswilltakeahorizontalapproachacrosspolicyareas,andisjointlychampionedby

theCommissionDirectoratesGeneralofJustice;Competition;andHealthandConsumer

Policy.Acommunicationisduearoundthesametimeasthedraftdirectiveondamages

actions,withthepossibilityoffurtherlegislativeornon‐legislativeactionbasedonthe

TreatyontheEuropeanUnion(TEU).187Thelinkingofthesetwoinitiativesmayhelpto

addressconcernsraisedbytheEuropeanParliamentandbyrespondentstotheWhite

Paperconsultationaboutthefragmentationofnationalprocedurallawbytreating

competitionasa‘special’policyarea.188

TheviewoftheEuropeanParliamentisimportantasthedraftlegislationwillbeadopted

undertheordinarylegislativeprocedure,accordingtotheCommission’swork

programme.ThissuggeststhatArt103TFEU,thelegalbaseforantitrustonlyprovisions,

willnotbetheonlybasis,asthatoperatesunderthespeciallegislativeprocedure,inwhich

185 http://ec.europa.eu/atwork/pdf/forward_programming_2012.pdf (last accessed 9.8.2012) Commission actions expected to be adopted 18/07/2012 - 31/12/2012:.2009/COMP/023 Proposal for a Directive on rules governing actions for damages for infringements of the competition law provisions. Interestingly, the description of the legislation now opens with the sentence about the CJEU establishing the right to compensation, perhaps to underline its existing jurisprudential basis. 186http://ec.europa.eu/governance/impact/planned_ia/docs/2009_comp_023_damages_breaches_antitrust_en.pdf, last accessed 10.8.2012 187 Commission work programme 2012 annex, 20: 2012/JUST+/017 Communication on general principles of the EU framework for collective redress “The potential initiative will ensure that the European approach to collective redress is coherent and consistent. It will be a horizontal initiative covering several policy areas. The aim of the initiative is to improve the enforcement of EU law and access to justice for citizens and companies in situations where shortcomings exist under the status quo. Depending on the policy option chosen, it will take the form of legislative or non-legislative action.” 188 See for example Nederlandse Kabinet – Dutch government, including Dutch competition authority -response to White Paper on damages actions; European Parliament March 2009 resolution [6]. The Parliament adopted a further resolution in response to the Commission’s collective redress consultation on 2.2.2012:European Parliament resolution of 2 February 2012 on 'Towards a Coherent European Approach to Collective Redress' (2011/2089(INI)) P7_TA(2012)0021, available at http://www.europarl.europa.eu/oeil/FindByProcnum.do?lang=en&procnum=INI/2011/2089 (accessed 11.8.2012). Since this resolution the Parliament’s Economic and Monetary Affairs Committee has commissioned an independent study, ‘Collective Redress in Antitrust’ European Parliament Directorate-General for Internal Policies, Policy Department A: Economic And Scientific Policy ‘Collective Redress in Antitrust’ IP/A/ECON/ST/2011-19, PE 475.120, 12.6.2012, available at http://www.europarl.europa.eu/committees/en/studiesdownload.html?languageDocument=EN&file=74351 (accessed 11.8.2012) which strongly suggests that decisions should be binding on courts (81, 90). The report also proposes limiting the exposure of leniency applicants to damages claims, and requiring claimants to notify their claim to the relevant NCA when they begin an action in a civil court, which would allow, but not oblige, an NCA to intervene (14, 90). It also supports a regulation rather than a directive (12). However, this is not an adopted report of the Parliament itself.

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theEuropeanParliamenthasonlyaconsultativerole.Art103couldbejustifiedonthe

groundsthattheCourtofJusticehasrecognisedtherighttoclaimdamagesforharm

causedbybreachofArt101and102TFEU,andthatlegislationisneededtogivefulleffect

tothatright.However,giventheconsequencesfornationalproceduralrulesmorebroadly,

itmaybeusedinconjunctionwithotherTreatyarticles.189

Ifahorizontalapproachistaken,incorporatingcollectiveredressandmeasuresforother

consumer‐relatedactions,thisgivesmoreweighttootherlegalbases.Thesewouldmost

likelybeArticle81TFEU190onjudicialcooperationincivilmatters,andArticle114191on

approximationoflaws.Art169TFEUonconsumerprotectioncouldalsobeused.Itseems

highlyunlikelythattheproposalcouldbebasedonthesedifferentarticlesonly,without

Article103TFEU,giventhatcompetitionlawisthefocusoftheproposal.Amixoflegal

basescouldalsogiverisetocompetencedisputesasArticles81,114and169requirethe

ordinarylegislativeprocedure,involvingco‐decisionbetweenCouncilandParliament,

whereasArt103onlyrequiresaconsultativerolefortheParliamentunderthespecial

legislativeprocedure.

Fromtheperspectiveofinstitutionalbalance,Art103(d)referstoantitrustlegislation

definingrespectivefunctionsoftheCommissionandtheCourtofJusticeforthepurposes

ofapplyingArticles101and102TFEU.However,itisdoubtfulwhetherthisprovisioncan

beusedasabasisfordeterminationoftherelationshipbetweenadministrativeand

judicialpoweratthenationallevel.192

189 See C Leskinen ‘The Competence of the European Union to Adopt Measures Harmonizing the Procedural Rules Governing EC Antitrust Damages Action’ (2008) Working Paper Instituto de Empresa Law School, Madrid for a discussion of potential legal bases and C Leskinen ‘Antitrust Damages Actions: Recent Developments’ http://blogeuropa.eu/2009/05/13/antitrust-damages-actions-recent-developments/#more-503 13.5.2009 190 “1.The Union shall develop judicial cooperation in civil matters having cross-border implications, based on the principle of mutual recognition of judgments and of decisions in extrajudicial cases. Such cooperation may include the adoption of measures for the approximation of the laws and regulations of the Member States.” In particular (f): “the elimination of obstacles to the proper functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States”; (a)the mutual recognition and enforcement between Member States of judgments and of decisions in extrajudicial cases; (e)effective access to justice 191 “Save where otherwise provided in the Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26 [ensuring the functioning of the internal market]” 192 See, to this effect, Irish Department of Enterprise, Trade and Employment response to White Paper on damages actions.

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10.Conclusions

Thischapterhasexploredtheproposalforthebindingeffectofnationalcompetition

authoritydecisionsoncivilcourtsthroughouttheEU.Thisruleisproposedtoincentivise

claimantstobringprivateenforcementcasesincivilcourtsbyalleviatingtheirburdento

proveaninfringement.Therulewouldalsoavoidre‐litigationofissuesinpublicand

privateenforcement,andcouldcontributetoconsistentapplicationoftheEUcompetition

rulesbyindirectlylinkingnationalcourtstotheEuropeanCompetitionNetwork(ECN).

Thebindingeffectrulecouldalsolinkcivilcourtsenforcingcompetitionrulesbetween

privatepartieswiththeEuropeanCompetitionNetworkthroughamicuscuriae

interventions,asexploredinthepreviouschapter.NCAscouldbecalleduponbyacourtto

assistifmoreexplanationofafindingofinfringementwereneeded.

However,suchaproposalcarriesmuchbroaderconstitutionalsignificanceintermsofthe

interactionbetweenjudicialandadministrativeinstitutionsandtheirdecisions.The

proposedrulecreatesanapparenthierarchyofadministrativedecisionsovercourt

judgments,narrowingthefieldofcivilcourts’jurisdictionandlimitingjudicialautonomy.

Italsoimpliesacertainburdenonjudges:thatcivilcourtscourtsmustbeawareofallNCA

infringementdecisionsthroughoutEU‐andshowthattheyaretakenintoaccountintheir

reasoning.

MyoriginalresearchintothelegislativeprocessbehindReg1/2003informsthischapter

inrespectofthehorizontalrelationsbetweennationalcompetitionauthoritieswithinthe

EuropeanCompetitionNetwork,andtheeffectofCommissiondecisionsonnational

courts.Drawingonthisresearchthechapterhasshowntheasymmetriceffectsderiving

fromthestatusofcivilcourtsandnationalcompetitionauthorities.NCAdecisionswould

bebindingonnationalcourts,buttherewouldbenosimilarhorizontalbindingeffecton

fellowNCAswithintheEuropeanCompetitionNetwork.Theassumptionisthatahardrule

bindingNCAswitheachother’sdecisionsisnotneededgiventhecooperationruleswithin

theECN,butthereisnoguaranteethattheECNwillcontinuetooperateaccordingtothese

rules.TherearealsouneveneffectsconcerningMemberStatescourtsbeingboundby

decisionsofaforeignNCAbutnotbythoseofthedomesticNCA.

TheexplicitbasisforthebindingeffectruleisanextensionofMasterfoodscodifiedinArt

16Reg1/2003,whichobligesEUMemberStatecourtsnottomakearulingrunning

countertoonemadeorcontemplatedbytheEuropeanCommission.Thischapterhas

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consideredthedifferentunderstandingsofMasterfoods,asapositiveobligation,orasa

negativedutyofabstention.Commissiondecisionsderivetheireffectbyvirtueof

supremacyofEUlaw,butthebasisofextensiontobindingeffectofforeignadministrative

decisionsinEUlawlessclear.Thebindingeffectrulecouldbeunderstoodasadelegation,

ordevolution,oftheCommission’senforcementpowers.ButifnationalcourtsarealsoEU

courts,nationaljudge’sinterpretationofEUlawisasvalidastheCommission’s,andby

extensionanNCA’s.

ThereisananalogywiththeBrusselsIRegulationonjurisdictionandrecognitionof

judgmentsbetweenMemberStates.Thebindingeffectruleshouldhaveatleastthesame

safeguardsasArt34(1)BrusselsReg,whichwouldallowacivilcourttolookbehindan

authority’sdecisionsinexceptionalcircumstances.Ifthiswerenotthecase,decisionsof

administrativebodieswouldbeaffordedaprivilegedpositionrelativetojudgmentsof

civilcourts.However,questioningotherMemberStates’compatibilitywithfairlegal

processstandardsmayunderminetrustcurrentlyfosteredintheECN.Bindingeffect

shouldbeemployedonlywherethedefendantsinthefollow‐onactionwereheardin

proceedingsleadingtotheforeignNCAdecision–ifnotaddresseesofthedecisionatleast

asparticipants.

CurrentlytheonlyMemberStatetoimposethebindingeffectofforeignNCAdecisionsis

Germany.InanumberofMemberStatesthereareconstitutionalobstaclestotherule

beingadoptedbasedonrespectfortheprincipleofjudicialautonomy.Onewayaround

thismaybeasemanticone–packagingthefindingofinfringementasan‘irrebuttable

presumption’asatleastsymbolicgesturetoindependenceofthejudiciary.Inparticular,

theword‘binding’shouldbeavoided,drawingupontheinterpretationsofMasterfoods.

Thisuncertaintycouldhoweverleadtosatellitelitigationtodeterminethepreciseeffect

ofaforeignNCAdecisioninindividualcases.

Bylookingcomprehensivelyintotheconsultativeprocessbehindtheproposedbinding

effectrulethroughresponsestotheWhitePaperondamagesactions,thechapteralso

identifiedresistancetoadoptionoftheruleandobstaclesintheMemberStates.

Asalsoshowninchapter4onCommissioninterventioninnationalcourtproceedings,

therearetrade‐offsbetweenjudicialautonomyandeffectiveenforcementofEU

competitionlaw,andeffectiveenforcementtakespriority.Thiscontributestoan

institutionalhierarchyofadministrativeauthorities,carryingoutpubliccompetitionlaw

215

enforcement,overcivilcourts.ThisEUproposalwillaffectinstitutionalinteractions

betweenadministrativeauthoritiesandcourtsatthenationallevel,withpotentialimpact

beyondcompetitionlawenforcement.

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CHAPTER6:CONCLUSIONSANDDIRECTIONSFORFURTHERRESEARCH

Thisthesisexploredtheconstitutionalimplicationsofinteractionbetweencourtsand

administrativeauthorities,betweenthesupranationalandnationallevels,inEU

competitionlawenforcement.Withafocusontheroleofcourts,itconsideredtheimpact

ofthe2004andmorerecentcompetitionreformsonnationalcourtsandjudicial

autonomy.InsodoingitinvestigatedhowtheEuropeanCommissioncanimpacton

judicialdecision‐makingatthenationallevel,andtowhatextenttheEuropean

Commissionchallenges,orcomplements,thejudicialroleoftheCourtofJusticeofthe

EuropeanUnionintheinterpretationofcompetitionlaw.Thethesisalsoconsideredhow

theinteractionofdifferentmechanismsforcoherentinterpretationandapplicationofEU

competitionlawimpactsontherelationshipbetweenjudicialandadministrative

authorities.Thethesisrevealedasymmetriceffectsderivingfromthedifferent

constitutionalstatusesofcourtsandadministrativepublicauthorities.

Fromatheoreticalperspective,thethesistookforwardtheunderstandingoftherelatively

newconceptofinterpretativepluralism.ThethesisconfirmsMaduro’ssuggestionthat

courtsdonothaveamonopolyontheinterpretationofthelaw.However,contrarytohis

idea,oneinstitutiondoesneedtohavethe‘lastword’.ItalsotakesforwardKomarek’scall

forresearchintocourts’deferencetoadministrativeagencies’interpretationofthelaw.

Ifthereisaninstitutionalhierarchyofadministrative/executiveagenciesovercourts,then

thischallengestheinstitutionalbalanceandjudicialautonomyatthenationallevel.

Contributingtothistheoreticalcontribution,thethesisinvestigatedtheemergingpractice

inthepost‐2004regime.Thiswasevidentinthecontrastbetweenchapter3onNCAs’

apparentlackofaccesstotheCJEU,andchapter4onEuropeanCommissionintervention

innationalcourtproceedings.Chapter4setoutadetailedpresentationofhowArticle15

Regulation1/2003operates,trackingallcasesinwhichtheCommissionhasprovidedan

opinionorintervenedinnationaljudicialproceedings.Thisshowstheshapeofthe

Commission’sroleinthedecentralisedsystem.Inaddition,withthepotentialforprivate

enforcementinnationalcourtsincreased,itisimportanttoinvestigatewhatactually

happensintheMemberStates.Morebroadly,itcontributestoknowledgeonhowEUlaw

isappliedinMemberStatecourts.

Chapter2laidthebasisforthecasestudiesbyexploringconceptsintheinteractions

betweeninstitutions.ItexploredtheEUprincipleofinstitutionalbalanceatthe

supranationallevelbetweentheCJEUandtheEuropeanCommission.Itisquestionable

217

whethertherecanbea‘diagonal’institutionalbalancebetweenthesupranationalandthe

nationallevels,whichactivatesthejudicialautonomyofMemberStatecourts.However,

thereisadutyofloyalcooperationbetweentheEUinstitutionsandauthoritiesandcourts

atthesub‐statelevel.Thechapterthenwentontoconsiderdifferenttypesofcoherence,

attheglobal,system,andsinglecaselevel;thejudicialfunctionsofupholdingcoherence

andtheclaimsofdifferenttypesofauthority.Itconcludedwithanassessmentof

interpretativepluralisminasystemofconcurrentcompetences.

Chapter3consideredthediagonalrelationshipbetweennationalcompetitionauthorities

andtheCourtofJusticethroughtheir(lackof)accesstotheCourt’spreliminaryreference

procedureunderArt267TFEU.Thepreliminaryreferenceprocedureisimportantasthe

primarymeansforencouragingcoherenceofEUlawthroughtheCJEU’sinterpretation.

Itfirstsetthecontextbysurveyingthepost‐2004landscapeofEUcompetitionlaw

enforcement,inparticularmultipleenforcersandthechallengeofconsistentapplication

ofantitrustrulesindecentralisedenforcement;andthequasi‐judicialnatureof

competitionenforcementundertakenbythesemultipleenforcers.Itwentontoconsider

theMemberStates’designationofinstitutionalstructuresforpublicenforcementof

competitionlawunderArticle35Regulation1/2003andassessedthesignificanceofthese

designationsforobligationsunderReg1/2003.Thenthediscussionturnedfromthe

designationofcourtsoradministrativeagenciesascompetitionauthoritiesatthenational

level,tothecriteriaintheEU’sautonomousdefinitionofa‘courtortribunal’forthe

purposesofthepreliminaryreferenceprocedure.ItconsideredhowtheCJEUincludingits

AdvocatesGeneralhavedefinedanddevelopedtheconceptthroughspecific,albeit

occasionallyflexible,criteria.Thesecriteriaareimportantfordeterminingwhichnational

bodieshaveaccesstotheCJEU’sadviceandinterpretationofthelaw.Ofparticular

relevancearetheneedforthereferringbodytohaveaninterpartesprocedurei.e.tobea

thirdpartyadjudicatorbetweentheparties,tobeindependent,andtohavecompulsory

jurisdictionleadingtoadecisionofajudicialnature.

ThechapterfocusedontheSyfaitcaseinwhichtheGreekCompetitionCommission,asa


areferencetotheCJEUbutwasultimatelyrefused.Thechapteranalysedwhetherthe

judgmentbarsallNCAsfromaccesstotheCJEU.TheanalysisfocusedontheCJEU’s

interpretationoftheindependencecriterionandtheCourt’sreasoningthatthe

CommissionmayalwayspotentiallyrelieveanNCAofitscompetenceunderArticle11(6)

Regulation1/2003,implyingthatproceedingsinitiatedbeforetheNCAwillnotnecessarily

culminateina‘decisionofajudicialnature’.Inpracticethislattercriterioncouldbar

218

referencesfromallNCAs,regardlessoftheirdesign,sincetheyareallsubjecttoArt11(6)

withintheEuropeanCompetitionNetwork.ThechapterarguedthattheCJEU’sjudgment

wasflawedastheeffectsofArt11(6)applyonlytotheprosecutingauthority,accordingto

Art35(4)Regulation1/2003.Inaddition,theCommissionhadnotinpracticeactivatedArt

11(6).However,evenifthelegalargumentcanbemadefortheCourttoaccept

preliminaryreferencesfromNCAs,itisarguedthatthemessagesentinSyfaithas

effectivelyfrozenthemandtheCourthascurtaileditsownjurisdiction.


anddecision‐makingfunctions.IntegratedmonistNCAs,themostprevalentNCAmodelin

theEU,haveanextrahurdletoovercomebecausetheydonothavethestructural

separationoffunctionsrequiredtomeettheindependencerequirement.Asaresultthey

donothavethesameopportunitytoseekguidancefromtheCJEU.Aconsequenceofthis

isunevenaccesstothejudicialtoolofthepreliminaryreferenceprocedure,dependenton

institutionalstructure.

Chapter3foundthatthereareasymmetricavenuestothesupranationallevelfornational

courtsandcompetitionauthorities.FromtheCJEU’sperspective,itseemsmotivatedto

preserveitsdialoguebetweencourtsonlyandtoexcludequasi‐judicialNCAswith

integratedfunctions.IftheCJEUadoptsanarrowdefinitionofacourtortribunal,it

constrainsitsownjurisdiction.ByemphasisinginSyfaitthatNCAsarerequiredtoworkin

closecooperationwiththeCommissioninthecontextoftheEuropeanCompetition

Network,theCJEUeffectivelypassesoverresponsibilitytotheCommissionforhowNCAs

shouldinterpretandapplycompetitionlaw.

Meanwhile,theEuropeanCommission,asasupranationaladministrativeauthoritywith

quasi‐judicialfunctions,hasextendeditssphereofinfluencebystrengtheningitslinks

withnationalcourts.Chapter4investigatedthisotherdiagonalrelationship.Previously,

theCourtofJustice’spreliminaryreferenceprocedure,a‘dialoguebetweencourts’,was

theonlyformallinkbetweenthecourtsoftheMemberStatesandthesupranationallevel.

Chapter4showedhowtheEuropeanCommissionhasaddedtothisgeneral(EUlaw)

institutionallinkthroughthespecific(tocompetitionlaw)instrumentofopinionsand

own‐initiativeinterventionstonationalcourtsincompetitioncases,underArt15Reg

1/2003.Thiswasplacedwithinthecontextofthebroaderrelationshipbetweenthe

EuropeanCommissionandnationaljudgesinEUcompetitionlawthroughcaselaw,in

particulartheeffectofCommissiondecisionsandotherpronouncementsonnational

courts.InformedbyoriginalresearchintothelegislativebackgroundofArt15Reg

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1/2003,itexplainedhowthistoolisdesignedintheabsenceofaformaljudicialnetwork

topromoteconsistentapplicationfollowingdecentralisation.Chapter4arguedthatthis

raisedconstitutionalquestionsabouttheeffectofconcurrentcompetencesonthe

institutionalbalanceatthesupranationallevelbetweentheCommissionandtheCourtof


Thediscussiontookbothatheoreticalandapracticalapproach.Throughthesoftlaw

literature,thetheoreticalelementexaminedthelegalnatureoftheCommissionopinionas

anEUinstrument.ItarguedthattheCommission’sopinioninthiscontextisaunique

instrumentandassuchitslegaleffectsareuncertain.Itdoesnotfiteasilyintothecategory

ofsoftlawinstrumentsestablishing‘rulesofconduct.’However,itcouldbecomebinding

throughthenationalcourt’sjudgment.Havingexploredthetheoreticalcontext,the

chaptercontributedoriginalresearchonhowArt15worksinpractice.Itsoughttotrace

alloftheopinionsandown‐initiativeinterventionstodate.Thechapterreported23

opinionsunderArt15(1)and9interventionsunderArt15(3),withvaryingdegreesof

successinidentifyingthepartiesandhowtheopinionwasdealtwithbythenational

court.ThechapterfoundadefactothirdcategorybetweenArt15(1)and15(3):casesin

whichtheCommissionwas‘invited’tointervenebutnospecificquestionswereputtoit.

InrelationtoArt15(3),thechapterdiscussedtheCommission’sreasonforintervention,

whereitcouldbeobserved,whetherthenationaljudgefollowedtheCommission.

ThepreliminaryrulinginXBVwasanalysedindetail,asitrelatedtotheadmissibilityof

Art15(3)interventions.TheCJEU’sresponsegavetheCommissionwidescopeto

interveneinanationalcourtcaserelatedtotheeffectiveapplicationofArticles101and

102TFEU,evenifthecourtisnotdirectlyapplyingthem.Chapter4foundthatthecase

suggestsanemphasisoneffective–notonlycoherent‐applicationoftheEUrules,and

thatitimpliesthataCommissioninterventioncouldextendtonationalcasesconcerning,

forexample,contractdisputes,follow‐ondamagesactions,orcriminalproceedings‐not

initiallyintendedbyRegulation1/2003.

SomeinterventionsareavailableontheCommission’swebsite,buttheyarenotformally

published,forexampleintheOfficialJournal.TheCommissionhasmadeavailablemostof

itsown‐initiativeobservations.Thesearethecasesinwhichithasfeltcompelledto

intervene,andsorepresentcompetitionissueswhichitfindstobemostimportantfor

coherentapplication.AssuchitisintheCommission’sinteresttopublishthem.By

contrast,onlyaroundaquarteroftheopinionsrequestedbynationalcourtsunder15(1)

havebeenpublicised.Thislackoftransparencyraisesquestionsaboutthe‘backdoor’

220

influenceoftheseopinionsinthejudicialproceedings.Moreover,itdoesnothelplegal

certaintyandconsistentapplicationthroughouttheEU.Thechapterthereforecalledfor

transparencythroughthepublicationofobservations,ideallyindifferentlanguage

versions.ThiswouldalsopromoteawarenessamongjudgesofcasesinotherMember

States.

Timewilltellhowjudgesrespondtothismechanismrelativebothtothepreliminary

referenceprocedure(oneparallelreferencefromaSpanishcourtwasfound),andtothe

possibilityofcallingonthenationalcompetitionauthoritywhichoperateswithinthe

frameworkoftheECN.Thatislikelytodependonindividualjudgesandjudicial

preferencesindifferentMemberStates.Art15(3)Reg1/2003alsoallowsnational

competitionauthoritiestointerveneinnationaljudicialproceedingsintheirownMember

State.Togetherwiththeproposaldiscussedinchapter5,thatcouldbringnationalcourts

indirectlyintotheEuropeanCompetitionNetwork.Thatcouldhavepositivebenefitsfor

theconsistentapplicationoftheEUcompetitionrules,butalsobringsjudicialautonomy

intoquestion.

Chapter5discussedtheproposalintheforthcomingEUdirectiveondamagesactionsto

introducethebindingeffectofnationalcompetitionauthorities’decisiononnational

courtsthroughouttheEU.Thechapterwasinformedbyoriginalresearchonthe

legislativeprocessbehindReg1/2003,inrespectoftheeffectofCommissiondecisionson

nationalcourts,andonhorizontalrelationsbetweennationalcompetitionauthorities

withintheEuropeanCompetitionNetwork;andresearchingtheconsultativeprocess

behindtheproposedbindingeffectrulethroughresponsestotheWhitePaperondamages

actions.Thechapterexplainedthecontextoftherule‐toincentiviseclaimantstobring

privateenforcementcasesincivilcourtsbyalleviatingtheirburdentoprovean

infringement.Itthenwentontohighlightmuchbroaderconstitutionalsignificancein

termsoftheinteractionbetweenjudicialandadministrativeinstitutionsandtheir

decisions.Itarguedthattheproposedrulecreatesanapparenthierarchyofadministrative

decisionsovercourtjudgments,narrowingthefieldofcivilcourts’jurisdiction.Italso

impliesacertainburdenonjudges:thatcivilcourtsmustbeawareofallNCAinfringement

decisionsthroughoutEU‐andshowthattheyaretakenintoaccountintheirreasoning.

Thischapterdemonstratedtheasymmetriceffectsderivingfromthestatusofcivilcourts

andnationalcompetitionauthorities.NCAdecisionswouldbebindingonnationalcourts,

buttherewouldbenosimilarhorizontalbindingeffectonfellowNCAswithinthe

EuropeanCompetitionNetwork.TheassumptionisthatahardrulebindingNCAwitheach

221

other’sdecisionsisnotneededgiventhecooperationruleswithintheECN,butthereisno

guaranteethattheECNwillcontinuetooperateaccordingtotheserules.Therearealso

possibleuneveneffectsconcerningMemberStatescourtsbeingboundbydecisionsofa

foreignNCAbutnotbythoseofthedomesticNCA.

Thechapterconsideredthebasisforthisrule.Explicitly,itisanextensionofMasterfoods,

whichobligesEUMemberStatecourtsnottomakearulingrunningcountertoonemade

orcontemplatedbytheEuropeanCommission.Assuchthechapterrevisitedthedifferent

understandingsofMasterfoods.Commissiondecisionsderivetheireffectbyvirtueof

supremacyofEUlaw,butextensiontobindingeffectofforeignadministrativedecisionsin

EUlawlessclear.Thebindingeffectrulecouldbeunderstoodasadelegation,or

devolution,oftheCommission’senforcementpowers.Thechapterarguedthatifnational

courtsarealsoEUcourts,andinthesystemofconcurrentcompetences,nationaljudges’

interpretationofEUlawisasvalidastheCommission’s,andbyextensionanNCA’s.

Thechapteralsoexaminedthehorizontaldutyofloyalcooperationbetweensub‐state

bodies,andtheanalogywiththeBrusselsIRegulationonjurisdictionandrecognitionof

judgmentsbetweenMemberStates.Itarguedthatthebindingeffectruleshouldhaveat

leastthesamesafeguardsasArt34(1)BrusselsReg,whichwouldallowacivilcourtto

refusetorecogniseanauthority’sdecisionsinexceptionalcircumstances.Ifthiswerenot

thecase,decisionsofadministrativebodieswouldbeaffordedaprivilegedposition

relativetojudgmentsofcivilcourts–anotherexampleofasymmetriceffects.However,

questioningotherMemberStates’compatibilitywithfairlegalprocessstandardsmay

underminetrustcurrentlyfosteredintheECN.

Thechapterconcludedwithanassessmentofthepossibilityoftherulebeingadopted,

includingissuessurroundinglegalbaseofthedirectiveandviewsintheMemberStates.

CurrentlytheonlyMemberStatetoimposethebindingeffectofforeignNCAdecisionsis

Germany.InanumberofMemberStatestherewouldneedtobeconstitutionalreformfor

theruletobeadopted.Thechaptersuggestedthatonewayaroundthismaybeasemantic

one–packagingthefindingofinfringementasan‘irrebuttablepresumption’asatleast

symbolicgesturetoindependenceofthejudiciary.Inparticular,theword‘binding’should

beavoided,drawinguponsomeMemberStatecourts’interpretationsofMasterfoods.As

alsoshowninchapter4,therearetrade‐offsbetweenjudicialautonomyandeffective

enforcementofEUcompetitionlaw,andeffectiveenforcementappearstotakepriority.

ThisEUproposalwillaffectinstitutionalinteractionsbetweenadministrativeauthorities

222

andcourtsatthenationallevel,withpotentialimpactbeyondcompetitionlaw

enforcement.

Whileapparentlyempowering(national)courts,thepost‐2004regimestilllimitsthe

ambitofjudicialcompetenceinfavourofadministrativebodies.Insomecases,itisthe

CourtofJusticedeferringtotheauthorityoftheCommissionwhichlimitstheCJEU’sown

jurisdictionandtheautonomyofnationalcourts.TheCJEUhaseffectivelyruledout

preliminaryreferencesfromnationalcompetitionauthoritiesonthebasisoftheir

relationshipwiththeCommissionintheEuropeanCompetitionNetwork,thuslimitingits

ownjurisdiction.TheCommissionhasitsownsoft‘preliminaryrulingprocedure’with

nationalcourts,paralleltotheroleoftheCJEU,andisalsoabletointervenewithlegal

opinionsatitsowninitiativeinnationaljudicialproceedings.TheCourtofJusticehas

confirmedtheCommission’swidejurisdictiontointerveneincasesinsomewayrelatedto

thecompetitionrules,notnecessarilyonlyapplyingArticle101or102TFEU.Inan

extensionofnationalcourts’obligationnottorulecountertoaEuropeanCommission

decision,theyarenowtobeboundbynationalcompetitionauthoritydecisions.

Apluralityofinterpretations–andinterpreters–ofthelawsuggestsalooserconceptof

unityorcoherence.However,theinterpretationofnationaljudgesissupervised.Asthe

casestudiesshow,inthedecentralisedsystem‘coherent’applicationoftherulesappears

tomean‘effective’application.Whilecoherenceisacentralaspectoftheruleoflawas

overseenbyjudges,effectivenesscanbesupervisedbyadministrativeauthorities.

Traditionaljudicialindependenceconsiderationsarealsotrumpedbytheneedfor

effectivenessandefficiency.

Allthesedevelopmentssuggestthatthereshouldbemoreemphasisonhorizontal

relationshipsbetweencourts,ledbyjudgesthemselves.1Thiswouldnotonlylenditselfto

coherent–andeffective–applicationofcompetitionlaw,butwouldalsoallowcourtsto

pushbackagainsttheapparentdominanceofadministrativeauthoritiesinthisarea.

Onewayofdoingthiswouldbethroughdatabasesofjudgmentsasabasisofmutual

guidancetoallowcourtstonetworkthemselves.Thereisalreadysomemovementinthis

1 In a broader context, Carol Harlow has suggested that national courts should network themselves to come to their own idea of justice, but, interestingly, versus the CJEU. Paper presentation, ‘Cause Groups and Legal Accountability in EU Governance’, UACES Annual Conference, Bruges, Sep 2010. She also draws attention to judicial networks in other areas - C Harlow & R Rawlings ‘Promoting Accountability in Multi-Level Governance: A Network Approach’ (2006) European Governance Papers (EUROGOV) No. C-06-02, 11

223

direction.2Theyshouldnotonlybeavailabletospecialistcompetitionlawjudges,

however.Thediversityoflanguagesandlegalconcepts3neednotbeabarrieras

secondarysupportcouldbedrawnfromexistingdatabasesonterminologycouldbeused,

forexampletheIATEdatabase.4Resourcesforcontinuingtranslationofjudgmentsremain

anissue,however.

Directionsforfurtherresearch

Moreworkneedstobedoneonjudicialpreferencesandresponsivenesstothe

Commission’s–andNCA’s‐involvementinnationalcourtproceedings.Thecases

uncoveredunderArt15(1)inthisthesisgiveanindicationoftheMemberStateswhichare

mostamenabletothiskindofinteraction.Fromtheotherside,itisnotcurrentlyclearhow

theCommissiondecideswhethertointerveneunderArt15(3),andtheareasofpriority.

AsnotedintheReportontheFunctioningofRegulation1/2003,5theremayactuallybea

demandfortheCommissiontointerveneinmore,ratherthanfewercases.Thereisalimit

towhatcanbeobservedthroughtherecordofthejudgmentofthenationalcourt.This

wouldlenditselftointerviewswithcourtstaff,judges,othersinvolvedincases,andthe

interveners.Ideallythiswouldneedateamofnationalrapporteurs.Thisresearchon

judicialpreferencescouldbecomparedwithnationalcourts’practiceonpreliminary

rulings.6

2 e.g. Through the Association of European Competition Law Judges (AECLJ): “a more long term objective of the AECLJ, (as and when funding becomes available) is the creation of a database of judgments in the competition law field from each of the Member States to provide a readily accessible body of relevant materials for Members.” http://www.aeclj.com/3587/The-work-of-the-Association.html (last accessed 19.9.2012) ; Oxford University Press online national competition law case-reporting service; European Commission funded projects at http://ec.europa.eu/competition/court/call_2010_results_en.pdf (accessed 23.10.2011) including ‘Colloquium on European competition law for judges: Implementation, Decentralisation, Cooperation, Consistency (I.D.C.C.) and setting-up of an internet site on European Competition Law (E.A.S.E. – European Antitrust-Law search engine by Sept 2013’ 3 K Lenaerts and D Gerard ‘Decentralisation of EC Competition Law: Judges in the Frontline’ (2004) 27(3) World Competition 313-349, 336 4 InterActive Terminology for Europe – The EU’s multilingual term base http://iate.europa.eu/iatediff/SearchByQueryLoad.do?method=load (last accessed 19.9.2012) 5 Communication from the Commission to the European Parliament and the Council: Report on the functioning of Regulation 1/2003, COM (2009) 206 final 6 In competition law, see B Rodger (ed) Article 234 and Competition Law: An Analysis (Kluwer, 2008), relating to pre-2004 cases. Stone Sweet suggests that under-researched questions are “to what extent does the law and politics of litigating European law vary across jurisdictional and national boundaries? Are some jurisdictions more receptive than others to enforcing E[U] law?” A-M Slaughter, A Stone Sweet & J Weiler (eds), The European Courts and National Courts: Doctrine and Jurisprudence (Hart, 1997) 330.

224

InEUlawenforcementmorebroadly,thediagonalrelationshipbetweentheEuropean

Commissionandnationalcourtsdoesnotseemtohavebeenresearched.Isitpossibleto

generaliseabouttheroleoftheEuropeanCommission,givenitshistoricalparticular

dominanceincompetitionenforcement?WhataboutotherEUpolicyareas?

Inastillwiderliteratureonjudicialpolitics,thiscouldrelatetoresearchintotheimpactof

amicuscuriaeinterventions,andadministrativeagencies’interpretationsofthelawmore

broadly,onjudicialdecision‐making.

225

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APPENDIX:PUBLISHEDWORK

SomematerialinChapter4waspublishedas:KWright‘TheEuropeanCommission’sOwn‘PreliminaryReferenceProcedure’inCompetitionCases?’(2010)16(6)EuropeanLawJournal736‐759Anearlierversionoftheideas,andthecasetables,inChapter4appearedin:KWright‘EuropeanCommissionOpinionstoNationalCourtsinAntitrustCases:ConsistentApplicationandtheJudicial‐AdministrativeRelationship’(2008)ESRCCentreforCompetitionPolicyworkingpaper08‐24OthermaterialinChapter4waspublishedas:KWright‘EuropeanCommissionInterventionsasAmicusCuriaeinNationalCompetitionCases:thePreliminaryReferenceinXBV’(2009)30(7)EuropeanCompetitionLawReview309‐313AshortversionofChapter5waspublishedas:KWright‘BindingtheJudicialwiththeAdministrative:SomeAspectsoftheEuropeanCommission’sWhitePaperonDamagesActionsforBreachofECAntitrustRules’(2008)EuropeanCurrentLawNovember2008xi‐xvSomeideasinChapter5alsoappearedin:KWright‘Bookreview:MDanov,JurisdictionandJudgmentsinRelationtoEUCompetitionLawClaims’(2012)37(3)EuropeanLawReview355‐358Referenceismadeinthisthesistointerviewresearchonthe2004EUcompetitionlawreformsandontheEuropeanCompetitionNetworkwhichalsoresultedinaco‐authoredpublication,HKassim&KWright‘BringingRegulatoryProcessesBackIn:TheReformofEUAntitrustandMergerControl’(2009)32(4)WestEuropeanPolitics738‐755