Chillin'Competition

On Thursday last week AG Wahl delivered his Opinions (in this post we will only discuss one) in the appeals against the General Court’s Judgments endorsing a Commission’s decision requesting information to a number of cement producers. The case is one of maximum importance on the procedural front, and the ECJ’s Judgment is set to clarify what the Commission can and cannot do with regard to information requests.

As you might recall, I (who –disclosure- acted as a lawyer for one of the companies appealing in first instance) already commented on the General Court’s Judgments here.

The Opinion proposes to annul the GC’s Judgments and the Decision. As para. 173 states, in AG Wahl’s view the decision was unlawful because “it contained an insufficient statement of reasons regarding the purpose of the request, it did not fulfill the requirement of necessity, and it misinterpreted the notion of “information” within the meaning of Article 18 of Regulation No 1/2003”. In the AG’s view, “each of these legal errors is, by itself, sufficient for the annulment of the whole decision”.

At first sight, anyone not having read the Opinion in detail may be tempted to think he arrives to this conclusion on a basis of a too strict or rigorous test. Not at all. I’m happy to offer a beer (an AB InBev one, since they are a conference sponsor) to anyone who can point to a single paragraph in the Opinion that does not strike the right balance between the powers that the Commission needs to have to carry out its job properly and the rights of investigated companies. What is extreme in this case is not the Opinion, but rather the challenged decision.

In addressing the specific situation of the case, AG Wahl also addresses the underlying general issues related to the broad question he says the case poses in para. 1 of the Opinion ( “What are the conditions for, and limits to, the Commission’s power to require, by way of decision, undertakings to supply information in the context of investigation relating to possible breaches of EU competition rules?”)

The Opinion starts off with a background introduction to the legal regulation of requests for information under Regulation 1 (para. 22 to 28). It refers to established case-law and reads in a way that reminds one of the underlying idea in Deutshe Bahn: the Commission enjoys great powers for good reasons, but it is precisely because of that that EU Courts must be careful to police any improper use thereof.

Paras. 31 to 55 of the Opinion deal with the issue of whether the statement of reasons in the RFI was sufficient or not. Para. 33 makes it clear that in the AG’s view the case-law on inspections applies mutatis mutandi, which to me is pretty uncontroversial. In para. 36 it recalls that the General Court itself said that the statement of reasons in the decision had been drafted in “very general terms which would have benefitted from greater detail and [warrant] criticism in that regard” (at the oral hearings I attended the General Court had been quite critical on this point, more than the judgments show). The AG demonstrates some fair flexibility towards the Commission in paras. 41 to 45, where he admits that the statement of reasons could also, in theory, be found in the decision opening proceedings (43) or even “indirectly or implicitly” in the questions asked. In this case, however, he observes that the questions were “extraordinarily numerous and cover very diverse types of information” and made it “extremely difficult to identify a connecting thread”. I would suggest you read para. 46 of the Opinion to see some examples of the questions we had been asked; you’ll be amazed. Quite rightly, and in one of the key recitals of the Opinion (47), AG Wahl states that if the connecting thread was “a complete mapping of the undertakings’s revenue and cost structure to enable the Commission to analyse it by econometric methods (comparing it with those of other companies active in the cement industry), [which is exactly what this exercise was about!] it could be questioned whether such a broad and all-encompassing request for information is at all appropriate under Article 18”, noting that perhaps a sector investigation would have been more appropriate. Amen.

Para. 50 is also interesting in as much as it says that a different, stricter, lever of precision should be required from statements of reasons in advanced stages of the investigation. In 51 he finds it “unexcusable” that in spite of all the info provided to the Commission over years the companies were “left in the dark” regarding the precise scope of the investigation, and in 52 he observes that the scarcity of information on the suspected infringements also makes judicial review more difficult.

Paras. 56 to 66 are also perfectly sensible, to the extent that they are even not so interesting. In them he says that the GC was right in holding that the Commission did not need to justify why it sent the RFI by decision instead of by simple request or why it was setting the time-limits it set.

Paras. 70 to 95 of the Opinion, dealing with the “necessity” of the information are in my view the key and most interesting ones:

Read the rest of this entry »