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Archive for September 21st, 2022

NEW PAPER | Law, Policy, Expertise: Hallmarks of Effective Judicial Review in EU Competition Law

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It is always a pleasure to share are recently completed paper (which can be accessed here) and invite comments. I am particularly delighted to do so today, as this piece is the first of my entries to be posted simultaneously via EU Law Live, which had the great idea of organising a symposium (the first of many, I hope) around it.

This particular entry, as much as the paper itself, is devoted to a topic that is close to my heart: judicial review in EU competition law. Some of you may remember that I presented these ideas at Cambridge back in March (see here for the post I prepared at the time). The end product, now available as a working paper, will be coming out before the end of the year in the Cambridge Yearbook of European Legal Studies.

Working on the paper gave me the chance to revisit the topic in light of some recent developments. Anyone who has devoted some thinking to the subject knows how hard it is, from a methodological standpoint, to determine whether judicial review is truly effective.

My suggestion – and my main argument here – is that this question that is best approached obliquely, that is, by identifying the techniques that the EU courts have developed over the years and that allow them to meaningfully scrutinise administrative action.

I call these techniques the ‘hallmarks’ of effective judicial review (hence the image accompanying the post). The analysis of these hallmarks is useful not only to understand how the EU courts operationalise an abstract remit, but also as a benchmark to identify individual instances where the intensity of judicial review may have varied.

I find it useful to divide the ‘hallmarks’ around three main themes or areas.

Some of the techniques relate to the way in which the EU courts engage with substantive law. There is no need to explain at length that the Commission enjoys no discretion when interpreting primary (and indeed secondary) EU law. Full review of issues of law has to be meaningful, in the sense that it has to go beyond a mere declaration or abstract commitment.

The case law suggests that, in practice, the EU courts go about implementing their mandate by crafting clear legal tests that are capable of constraining administrative action and against which the lawfulness of future decisions can be evaluated.

The four conditions set out in Magill are arguably the canonical example in this sense, and the one that comes to mind immediately. More recent examples include the (by now famous) five criteria laid down by the Court of Justice in Intel, and CK Telecoms, where the General Court introduced a structured set of factors akin to the Airtours conditions (yet another classic).

This technique would not be effective, however, if the Commission were allowed to disregard the applicable legal test in subsequent cases (that is, if the relevant criteria were only relevant to assess the legality of a single decision). Thus, another ‘hallmark’ of effective judicial review – at least as relevant as the preceding one – is the ‘stickiness’ of legal tests over time: the scrutiny of administrative action cannot meaningful if the law is allowed to fluctuate too much from one case to the next.

A second theme or area relates to the theoretical and empirical evidence on which administrative action relies. The case law suggests, in this regard, that effective judicial review implies verifying whether Commission decisions are grounded on the best available evidence. There are two dimensions to this ‘hallmark’. One of them has to do with the role of non-legal expertise. It would be impossible to meaningfully review administrative action if an administrative authority were able to disregard the expert consensus of a non-legal discipline that informs the interpretation of the law (including, to be sure, economics).

Another dimension relates to the need, for the Commission, to pay due regard to the relevant economic and legal context. It is not difficult to think of examples in which administrative action has been quashed for not fully considering the circumstances surrounding the case. For instance, there is a long line of Article 101 TFEU decisions that were annulled for failing to assess the effects of the practice against the counterfactual. Cartes Bancaires, where the Commission did not draw the legal consequences from the two-sided nature of the relevant market, is another wonderful example (not to mention Intel again).

Finally, some ‘hallmarks’ of effective judicial review have to do with the policy positions expressed by the Commission in Guidelines and other soft law instruments. It follows from the principle of good administration that an authority must behave in a manner that is consistent with the positions declared in one such instrument. If it ever deviates from them, one would expect, at the very least, an explanation of why it is appropriate to do so in a particular instance.

It is interesting to note, moreover, that both the Court of Justice and the General Court have expressly relied on the Commission’s Guidance Paper on exclusionary abuses in some of the most recent judgments (including, again, the Intel renvoi and Servizio Elettrico Nazionale). This last factor suggests that soft law instruments are valuable not only as a check for intertemporal consistency, but for another reason.

Typically, Guidelines and similar documents are an encapsulation of the expert consensus. This is true, inter alia, of the Guidance Paper itself or, say, the Guidelines on horizontal and non-horizontal mergers (both of which reflect the relevant advances in economics). If one takes this factor into consideration, it becomes clear that soft law can become an effective means to ensure that administrative authorities remain committed to the best available evidence (and not just to the policy positions declared in them).

I would very much welcome your comments (if there was any doubt: nothing to disclose, as usual). And remember that, thanks to the great crowd at EU Law Live, there will be a symposium where some of these ideas will be discussed (including a post by Alfonso). Do not hesitate to join the crowd of discussants!


Written by Pablo Ibanez Colomo

21 September 2022 at 10:08 am

Posted in Uncategorized