On the Commission’s powers to request information (II)- Opinion of AG Wahl in case C-247/14 P, Heidelberg Cement.
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:
In this section he explicitly recognizes that the criterion of “necessity” of information is to be assessed in the light of the indicia at the Commission’s disposal, and that “failing any concrete indicia constituting reasonable grounds for suspicion, the adoption of an [RFI] may be considered to be an arbitrary measure of investigation” (para. 73). Interestingly, this is an argument that no party other than us (in T-296/11) had made in first instance (paras. 69 and 78 in fact say that since the applicant in this case had not raised them the GC could not be criticized for not having verified it.
The Opinion also refers to the Judgment in our case twice to support the contention that the existence and sufficiency of indicia can be subject to judicial review, so that “the Commission may be required to disclose the evidence on which it based its grounds for suspicion” in order for the Court to assess whether the RFI was arbitrary (to my knowledge, in relation to RFIs this has only happened in the case in which Luis Ortiz Blanco and I acted in this cement saga- this comment now looks like an ad, the same happened in Prysmian and Nexans concerning inspections). In our case the General Court seemed to agree with the theory, but dismissed the appeal on the facts, ruling that the indicia were sufficient to justify an information request even if we had offered alternative explanations. The non-disclosure agreement we had to sign –also vis-a-vis our own client- remains valid, so I can’t say whether the GC was too generous or not. It is nevertheless public that on 31 July the Commission closed its investigation due to lack of evidence (see here).
The Opinion goes on to say that since the purpose of the RFI had been badly defined, the addressee of the RFI was not in a position to identify the necessity of the information (82) and then develops the reasons why the GC was wrong to consider that “necessity” is satisfied when there is a connection between the info requested and the presumed infringement. As he says on 85, “the key issue is whether that information could reasonably be expected to be helpful to the Commission”. In 87-92 he also explains that the info could not have been “necessary” in the cases in which the Commission already had it, and in 93 he extends that conclusion to information that was already “in the public domain”.
Paras. 96 to 123 contain an interesting discussion on whether the Commission can require information to be provided in a given specific format. Once again, the AG’s take is balanced: he explains that undertakings cannot provide info in a “chaotic, unsystematic or fragmented manner”, but sets the limit in not forcing them “to complete tasks which belong to the building of a case” by the Commission’s staff (106). Paras. 108 to 123 discuss this in detail and are interesting, but I won’t bother to summarize them (as it’s Friday and I want to leave early and try my new acquisition –for the avoidance of doubts, it’s the wheeled one-…).
With regard to the whether the time-limits to respond where reasonable (124-135) the AG says that the means available to the undertaking seem to be a factor that may be taken into account when setting time limits, but notes that it was not argued in the case that the Commission had erroneously pondered this factor.
With respect to the vagueness of the questions, the AG criticizes the GC´s stance, which consisted in finding that the “relative vagueness” of some questions could not be considered a violation of the principle of legal certainty, but that it should be taken into account by the Court should it ever have to review a decision imposing a fine for supplying a vague answer. In 143 he criticizes the GC reasoning for (i) not having engaged annulled the specific questions it thought were vague and; (ii) not having identified which were those questions and why they were vague.
Finally, the Opinion contains some interesting ideas on self-incrimination, namely that questions that are purely factual can also, in certain circumstances, breach the right against self-incrimination (152-158; although, in the GC’s defense, I think in this point its mistake did not lie in a wrong interpretation of the law but in the drafting of the Judgments; had it referred to questions “seeking economic data” instead of to “factual questions”, it may have escapade this criticism). The AG does not take a definitive stance on whether one specific question at issue was objectionable or not, but seems to be inclined to see it as possibly “equivalent to an admission of guilt”, which is the key question he says the GC bypassed (165).
In sum, this is a welcome, well written, sensible and balanced contribution. And the adjectives have nothing to do with the fact that AG Wahl will be a speaker at our conference, nor with the fact that we had said pretty much exactly the same the Opinion in our appeal before the General Court…
On our next post we will discuss the Judgment in AC-Treuhand. As you might recall in our comment on the Opinion we anticipated that AG Wahl would maybe not be followed on that one, and we got it right. I am willing to take the opposite bet here: I bet another beer that in this case he will be substantially followed. Any takers?