Chillin'Competition

[As promised yesterday, I am back with a post with materials from our ‘workshop’ on EU courts and competition law. I am delighted that this first post of the series features Denis Waelbroeck‘s intervention. I feel immensely fortunate to have been Denis’s student and teaching assistant in Bruges. As someone who cares deeply about the EU and its institutions, it was only natural to have him with us for the occasion. He chose an important, original and timely topic – and before I forget: the title of the post was suggested by Alfonso!]

I thought that– in these five minutes you have given me – I might say a word about the EU Courts’ judicial review in competition cases, but would do so from another angle than the one which has been very much at the centre of discussions post-Menarini.

There are indeed two distinct problems in my view with the “too complex to review” case-law:

• One is the Menarini problem – or the “Article 6 ECHR issue,” with the Commission being prosecutor and judge, and the need as a result to have a “full jurisdictional review” – that problem is well rehearsed and extensively discussed in Fernando and Eric’s excellent new book.
• there is however in my mind a second issue, which has caught less attention and that relates to the predictability of the law.

To put it bluntly, if the Court says : “this issue is too complex for me to understand and to control“, then the question is: why is it too complex for the Court but not “too complex” for companies to understand ? Or to put is differently : if the law is “not clear“, can you really punish parties for infringing it ?

This raises in other words an “Article 7 ECHR issue. As we know, Article 7 ECHR effectively translates into European law the old Latin rule that “nulla poena sine lege certa” (“No punishment without a clear law“) (see also Article 49 Charter).

The old Romans indeed wisely held that before imposing sanctions, the law should be “clearer than the day” (Justinian Code book IV, vol XX, I, 1-258).

In other words, if the Court finds that the law is “too complex” to be applied by it, then – in my mind – this has serious consequences :

• First, you cannot impose sanctions on a party for not complying with a law which the Court itself finds “too difficult to understand“.
• Second, you cannot give the Commission the “benefit of the doubt“[1]. Rather, if someone should have the “benefit of the doubt“, it is the accused and not the enforcer (to put it in Latin again : “in dubio pro reo“)[2].
• And still for the same reasons, if the law is not clear, not only there can be no sanction, but there can in my view be no fault giving rise to liability and damage actions.

The Swiss Bundesverwaltungsgericht has made this point nicely in its Swisscom judgment of 24 February 2010 (see 9. Wettbewerbskommission, B.2050/2007, point 4.5.1) where it ruled that the Swiss equivalent of Article 102 TFEU lacked, in and of itself, the predictability necessary for the imposition of penalties.

And also in the United States, fines will be imposed for per se violations, i.e. for cartels, but not for the more contentious infringements under Section 2 of the Sherman Act for instance. (See US DOJ Report on “Competition and Monopoly : single-firm conduct under Section 2 of the Sherman Act” of September 2008 – https://www.justice.gov/sites/default/files/atr/legacy/2009/05/11/236681.pdf).

Now, as we know, the European Courts have taken on the contrary the view that “the use of imprecise legal concepts within a provision does not prevent liability being established against a person who contravenes it. As the Commission point out, if it were otherwise, an infringement of Articles 101 or 102 TFEU – which are themselves drawn up using imprecise legal concepts, such as distortion of competition or “abuse” of a dominant position, could not give rise to a fine without the prior adoption of a decision establishing the infringement” (GC, 27 June 2012, Microsoft, T-167/08, EU:T:2012:323, para. 91).

In view of the general principle of legal certainty, I wonder whether this is the right approach.

But to make myself very clear: my point is not to criticise “modernisation“, I am all for “economic based approach“, but my only point is that if it implies that the law becomes “too complex” to be reviewed, then the competition authority should look at it differently : then its role is not so much to impose sanctions. Then the authority in fact becomes a regulator for the future. That is no less important and no less useful. But it changes obviously significantly the nature of the rule.

So I would like to submit that this is an important dimension which requires further thinking and discussions.

[1]                Systematic approach of the European Courts, see e.g. GC, 30 January 2007, France Telecom (Wanadoo), T-340/03, ECR, EU:T:2007:22, paras 129 and 153.

[2]            Ammianus Marcellinus relates in his Rerum Gestarum how Numerius stood on trial before Emperor Julian. His prosecutor, Delphidius, “a passionate man” seeing that there was not sufficient proof against the accused, exclaimed vehemently “Ecquis, florentissime Caesar, nocens esse poterit usquam si negare sufficiet? (“Oh, illustrious Caesar! If it is sufficient to deny what hereafter will become of the guilty?“) to which the Emperor replied “Ecquis, ait innocens esse poterit si accusasse sufficiet?” (“If it is sufficient to accuse, what will become of the innocent?“).