Chillin'Competition

[This is a guest post by our friend Rafael Allendesalazar (MLAB) discussing the EU case law on the ne bis in idem principle in the wake of the Slovak Telecom Judgment and of Amazon’s appeal against the Commission’s decision to carve Italy out of its BuyBox investigation. A very interesting take on an important and timely topic]

The principle of ne bis in idem, also known as the prohibition of “double jeopardy”, “undoubtedly constitutes one of the cornerstones of any legal system based on the rule of law” and its “rationale lies in ensuring legal certainty and equality”, as reminded by the then AG Wahl in his Opinion in the Powszechny Zakład Ubezpieczeń na Życie Case C-617/17.  The ECJ has repeatedly acknowledged that it is a fundamental principle of EU law, that has been enshrined in Article 50 of the Charter and Article 4 of Protocol 7 to the ECHR as regards criminal proceedings and penalties, but that must also be observed in proceedings that may lead to the imposition of fines under competition law. It precludes an undertaking from being found liable of proceedings being brought against it afresh on the grounds of anticompetitive conduct for which it has been penalised or declared not liable by an earlier decision that can no longer be challenged. The principle is subject to a twofold condition: that there is a prior definitive decision (the ‘bis’ condition), and that the prior decision and the subsequent proceedings or decisions concern the same person and the same offence (the ‘idem’ condition).

As to the ‘idem’ condition, the same offence could be defined by reference to the facts, to their legal classification or to the legal interest protected. Regarding criminal proceedings, the ECJ has opted for the first criterion and has explicitly rejected the other two (Case C-436/04, Van Esbroeck). “Same offence” is defined as the “identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together, and which resulted in the final acquittal or conviction of the person concerned” (Case C-537/16, Garlsson). It does not require the facts to be identical, as it suffices that the offences “have the same essential elements” (Judgment of the ECHR of 07.12.2006, Application 37301/03, Hauser-Sporn); for instance, exporting and importing the same illegal goods from different States are considered the same offence. Furthermore, even where the imposition of a criminal penalty depends on an additional subjective constituent element in relation to the administrative fine of a criminal nature, this does not call into question the identity of the material facts at issue (Case Garlsson).

When applying the ne bis in idem principle to competition law cases, the ECJ has interpreted it narrowly and has required, not only an identity of offender and of facts (which includes the same territory and the same period) but also an additional third identity: the legal interest protected in both cases must be the same. This divergence in the scope of the ne bis in idem principle in criminal law and in competition law cases was strongly criticized by AG Kokott in her Opinion in Toshiba: “to interpret and apply the ne bis in idem principle so differently depending on the area of law concerned is detrimental to the unity of the EU legal order. The crucial importance of the ne bis in idem principle as a founding principle of EU law which enjoys the status of a fundamental right means that its content must not be substantially different depending on which area of law is concerned. For the purposes of determining the scope of the guarantee provided by the ne bis in idem principle, as now codified in Article 50 of the Charter of Fundamental Rights, the same criteria should apply in all areas of EU law”. AG Kokott concluded that retaining the criterion of the unity of legal interest protected would not be compatible with the requirement of homogeneity as enshrined in the third subparagraph of Article 6(1) TEU and the first sentence of Article 52(3) of the Charter. More recently, in his above-mentioned Opinion in Case C-617/17, the then AG Wahl also rejected the application of the three-fold criterion in competition law cases and concluded that “on the basis of the two-fold criterion based on the identity of the facts and offender, the principle of ne bis in idem can ensure effective prosecution of anticompetitive conduct in the European Union. It also ensures more legal certainty for undertakings”. AG Wahl recalled that the origin of the ECJ’s case-law requiring the identity of legal interest can be traced back to the Walt Wilhem judgment of 1969, at times where the risk of cumulative application of national and EU competition law was limited and such legislations were often designed to safeguard different legal interest; furthermore, neither the Charter nor Protocol 7 to the ECHR were then in force. More than fifty years later, and following the adoption of Regulation 1/2003, the risk of cumulative application is now inherent to the decentralised system of competition law enforcement it has set up, despite Regulation 1/2003 containing some rules seeking to avoid parallel prosecution, particularly in Articles 11 and 13. That is why —Wahl concludes— the application of these rules and of the principle of ne bis in idem should not be made “subject to overly cumbersome criteria”.

The Slovak Telekom judgment and its consequences

Notwithstanding these opinions, the ECJ has reiterated that the ne bis in idem principle requires the identity of legal interest and has defined rigorous formal identity requirements to apply Article 11(6) of Regulation 1/2003. In its recent judgment of 25.02.2021 in the Slovak Telekom Case C-857/19, the ECJ has reaffirmed its strict interpretation.