WORLD COMPETITION Law and Economics Review - SSRN papers

WORLD COMPETITION Law and Economics Review

Published by: Kluwer Law International PO Box 316 2400 AH Alphen aan den Rijn The Netherlands Website: www.kluwerlaw.com Sold and distributed in North, Central and South America by: Aspen Publishers, Inc. 7201 McKinney Circle Frederick, MD 21704 United States of America Email: [email protected] Sold and distributed in all other countries by: Turpin Distribution Services Ltd. Stratton Business Park Pegasus Drive, Biggleswade Bedfordshire SG18 8TQ United Kingdom Email: [email protected] World Competition is published quarterly (March, June, September, and December). Print subscription prices, including postage (2012): EUR 596/USD 795/GBP 438. Online subscription prices (2012): EUR 551/USD 736/GBP 406 (covers two concurrent users). World Competition is indexed/abstracted in the European Legal Journals Index. Printed on acid-free paper. ISSN 1011-4548 © 2011 Kluwer Law International BV, The Netherlands All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the publisher. Permission to use this content must be obtained from the copyright owner. Please apply to: Permissions Department, Wolters Kluwer Legal, 76 Ninth Avenue, 7th Floor, New York, NY 10011-5201, USA. Email: [email protected] Printed and Bound by CPI Group (UK) Ltd, Croydon, CR0 4YY.

Editor José Rivas Associate Editor Book Review Editor Publisher US Review Editor Economics Review Editor

Samia Ahmed Valentine Korah Christine Robben Spencer Weber Waller Doris Hildebrand

Advisory Board Robert Anderson, World Trade Organization

Sir Christopher Bellamy, President, Appeals Tribunal, United Kingdom Competition Commission Manuel Conthe, Former Chairman of Spain’s Securities Commission Sir David Edward, Professor, University of Edinburgh; former Judge, Court of Justice of the European Union. Claus-Dieter Ehlermann, Senior Counsel at Wilmer Cutler Pickering Hale & Dorr LLP Jonathan Faull, Director General of Justice and Home Affairs, European Commission, Professor of Law, Vrije Universiteit Brussels Eleanor M. Fox, Walter J. Derenberg Professor of Trade Regulation, New York University School of Law Allan Fels, Professor at the Australia and New Zealand School of Government Nicholas Forwood, Judge, General Court of the European Union Rafael García-Valdecasas y Fernández, Former Judge, General Court of the European Union Francisco Enrique González Díaz, Cleary Gottlieb, Steen and Hamilton, Brussels Barry E. Hawk, Director, Fordham Corporate Law Institute and Partner, Skadden, Arps, Slate, Meagher & Flom LLP Herbert Hovenkamp, Ben V. & Dorothy Willie Professor of Law and History, University of Iowa, USA Rafael Illescas Ortiz, Professor of Commercial Law, University Carlos III, Madrid Frédéric Jenny, Professor of Economics at ESSEC, Chair of the OECD Competition Committee Valentine Korah, Emeritus Professor, University College London, Honorary Professor of the College of Europe Koen Lenaerts, Judge, Court of Justice of the European Union Ignacio de León, Professor, Department of Economics, New York University Patrick McNutt, Visiting Fellow, Manchester Business School, UK and former Chairman, Competition Authority, Dublin and former Chairman, Jersey Competition & Regulatory Authority, UK. John L. Murray, Chief Justice of Ireland; former Judge, Court of Justice of the European Union and Visiting Professor, l’Université Catholique de Louvain David O’Keeffe, Professor, University College London and Visiting Professor, College of Europe, Bruges Giuseppe Tesauro, Judge, Corte Constituzionale della Repubblica italiana Spencer Weber Waller, Professor and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of Law Wouter P.J. Wils, Hearing Officer, European Commission, and Visiting Professor, King’s College London Editorial Board Ralf Boscheck, Marie Demetriou, Romain Galante, Juan Gutiérrez, Donogh

Hardiman, Benoît Keane, Pablo Muñiz, Ali Nikpay, Morten Nissen, Kletia Noti, Laura Olza-Moreno, Dimosthenis Papakrivopoulos, Rudolph Peritz, Tom Pick, Azza Raslan, J. Matthew Strader, Nicoleta Tuominen, Michael Weiner All correspondence should World Competition be addressed to: Bird & Bird Avenue, Louise 235 box 1, 1050 Brussels, Belgium. Tel: +32 (0)2 282 6022 Fax +32 (0)2 282 6011 E-mail: [email protected] © 2011 Kluwer Law International BV, The Netherlands, All Rights Reserved. ISSN 1011-4548 Mode of citation: 34 W.Comp. 4

Guide to Authors

(1) Proposed contributions are invited and received on the understanding that they are final, and not preliminary drafts. They must not have been published or submitted for publication elsewhere and a statement to this effect should be included with the text submitted for publication. Only articles in English will be considered for publication. (2) In general, the most acceptable length for articles is between 3,000-8,000 words. Under no circumstances will articles exceed 12,000 words. (3) World Competition is a refereed journal. Every manuscript is submitted for peer review for the purpose of maintaining the standards of the journal. (4) Due to strict production schedules it is not possible to amend texts after acceptance or send proofs to authors for correction. The Editors reserve the right to make alterations as to style, grammar, and punctuation. (5) Articles which are submitted for publication must be accompanied by a 200-word abstract giving a brief description of the content. This abstract will be published online. (6) Articles should be provided in an electronic form (preferably in Microsoft Word or Word Perfect). (7) Higher Degrees, distinctions and the correct title of the author’s present position should appear in a footnote marked by an asterisk after the author’s name on the opening page of the article. General information about an article or acknowledgement for any assistance in its preparation may be added to this footnote. (8) Special attention should be paid to quotations, footnotes, and references. All citations and quotations must be verified before submission of the manuscript. The accuracy of the contribution is the responsibility of the author. Contributors should be particularly cautious of material which could be considered defamatory or litigious. (9) Footnotes should be numbered consecutively (so that if any footnote is added or deleted, all affected notes should be renumbered) and printed at the bottom of the relevant page. (10) Authors are encouraged to make reference to articles on the same or related topics previously published in World Competition. (11) Articles should be cited as follows: author’s name, title of article in quotation marks, journal reference; e.g., Doris Hildebrand, ‘The European School in EC Competition Law’, W.Comp. 25 (2002): 1. Book references include the author/editor’s name, title of book in italics, edition, place of publication, publisher, year, and page reference; e.g., Carl Michael von Quitzow, State Measures Distorting Free Competition in the EC (The Hague: Kluwer, 2002), 254. Guidelines for additional citation styles are available upon request. (12) For cross-references, please use ‘above’ and ‘below’, e.g., as note 14 above. (13) Tables should be self-explanatory and their content should not be repeated in the text. Do not tabulate unnecessarily. Tables should be numbered and may include a title. Column headings should be kept as brief as possible and descriptive text in narrow columns should be avoided. (14) General style rules are: (a) Abbreviations and acronyms should be spelled out in the first instance with the abbreviation following in parentheses. (b) Dates are as 1 May 2002, May 2002, 2001-2002, 1990s. (c) Case names should be italicized, e.g., Case C-286/88, Falciola v. Comune di Pavia, (1990) ECR 1-191. A reference to the relevant paragraph(s) in the judgment or decision should be provided. (d) Use single quotation marks (‘’), with double quotation marks within single. (e) Extracts should follow the original for spelling, punctuation and capitalization. (f) All punctuation marks should appear outside quotation marks unless the quotation includes an entire sentence. (g) When using numbers, spell out zero to ninety-nine and use numerals for the rest, e.g., 120 or 1,200. (h) Heading levels should be clearly indicated. (i) Oxford-z spelling is preferred, unless the whole article comes from an American author or the material is an extract from an American case or document. (15) Contributions should be posted to José Rivas, Bird & Bird, Avenue Louise 235 box 1, 1050 Brussels, Belgium or sent electronically to [email protected] or [email protected]

No Longer Presumed Guilty? The Impact of Fundamental Rights on Certain Dogmas of EU Competition Law Marco BRONCKERS* and Anne VALLERY** That the penalties imposed under European Union (EU) competition law amount to criminal sanctions within the meaning of Article 6 of the European Convention on Human Rights (ECHR) has been settled for some time.Yet whether the entry into force in December 2009 of the Charter on Fundamental Rights (as part of the Lisbon Treaty), and the EU’s intended accession to the ECHR, should bring about changes in the operation of EU competition law is a question frequently debated now. Most of that debate has focused on the institutional make-up of competition law enforcement in the EU, notably on whether the European Commission ought to adapt its multiple roles of being simultaneously investigator, prosecutor, adjudicator, and policymaker, its practices relating to dawn raids, etc. This article takes a different tack and calls attention to the potential impact of fundamental rights on certain procedural or even substantive concepts in EU competition law. For many years now, the Commission has used presumptions to ease its administrative burden in bringing competition law cases. These presumptions have weighed heavily on defendant companies. This article submits that such administrative presumptions need to be curtailed in order to avoid conflicts with the fundamental presumption of innocence and the attendant rights of the defence.We will illustrate this thesis by reference to the presumptions inherent in the parental liability for anticompetitive conduct of subsidiaries and in the infringement attributed to the exchange of future price information between competitors.

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SOME BACKGROUND ON FUNDAMENTAL RIGHTS THE RELEVANCE OF THE EUROPEAN CONVENTION ON HUMAN RIGHTS (ECHR) TO EUROPEAN UNION (EU) COMPETITION LAW

The European Community (now the ‘European Union’ (EU)) was not a signatory to the European Convention on Human Rights (ECHR) and was, therefore, not formally bound by it.Yet the European Court of Justice (now the ‘Court of Justice’ of the EU) transformed the ECHR as being part of the Community’s general * **

Professor of law, University of Leiden; Partner,VVGB Avocats, Brussels. Partner,VVGB Avocats, Brussels.With the usual disclaimer, we have much appreciated the stimulating discussions with Robbert de Bree, Michiel van Emmerik, Chiara Galiffa, Yves van Gerven, Rafaël Jafferali, Richard Lauwaars, Rick Lawson, Frédéric Louis, Pinar Olcer, and Bas Steins Bisschop. Excellent research assistance was provided by our colleagues Sophie Goelen, Elise Hujoel, Samuel Sadden, and Ravi Soopramanien.

Bronckers, Macro & Vallery, Anne. ‘No Longer Presumed Guilty? The Impact of Fundamental Rights on Certain Dogmas of EU Competition Law’. World Competition 34, no. 4 (2011): 535–570. © 2011 Kluwer Law International BV, The Netherlands

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principles of law.1 In this way, the ECHR became a benchmark of sorts to test Community measures and procedures. Such transformation of international law into general principles of Community law is a technique the Court of Justice has used in respect of other international treaties as well, allowing it to pay respect to international agreements while remaining the final arbiter on the legality of Community measures.2 More particularly, through this technique, the Court of Justice avoided being bound by the case law of the European Court of Human Rights (EctHR).This is not to say that the Court of Justice sought open confrontation with or ignored ECtHR rulings. However, the Court did create, and some would say use,3 space to steer a somewhat different course than the ECtHR might have done, for example, in areas like competition law where the ECtHR has had only few occasions to pronounce itself. 1.1[a] The Lisbon Treaty The Lisbon Treaty reinforced the EU’s adherence to fundamental rights by incorporating a Charter on Fundamental Rights in the EU Treaty framework4 and by stipulating that the EU shall accede to the ECHR.5 The Charter provides that to the extent it affords rights that correspond to ECHR rights, the meaning and scope of those rights shall be the same as those laid down by the said Convention, although EU law should retain the possibility of providing more extensive protection.6 This wording indicates that the case law of the ECtHR should acquire more binding force, even before the EU’s accession to the ECHR, in that the ECHR (including its ongoing interpretations by the ECtHR) is now supposed to lay a floor in the protection of fundamental rights by the EU. Indeed, the

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Case 36/75, Rutili [1975] ECR 1219, para. 32. On this case law and its further development, see Rosas, ‘The European Union and Fundamental Rights/Human Rights’, in International Protection of Human Rights: A Textbook, eds Krause & Scheinin (Turku/Äbo: Äbo Akademi University Institute for Human Rights, 2009), 443–474. See Bronckers, ‘From “Direct Effect” to “Muted Dialogue”: Recent Developments in the European Courts’ Case Law on the WTO and beyond’, Journal of International Economic Law 11 (2008): 885, 890. Weiß, ‘Human Rights and EU Antitrust Enforcement: News from Lisbon’, European Competition Law Review 32 (2011): 186, 189–190; Louis & Accardo, ‘Ne Bis in Idem, Part “Bis”’, World Competition 34 (2011): 97, 100; Forrester, ‘Due Process in EC Competition Cases: A Distinguished Institution with Flawed Procedures’, European Law Review 34 (2009): 817, 822; Bronckers,‘The Relationship of the EC Courts with Other International Tribunals: Non-committal, Respectful or Submissive?’, Common Market Law Review 44 (2007): 601, 604; Douglas-Scott; ‘A Tale of Two Courts: Luxembourg, Strasbourg and the Growing Human Rights Acquis’, Common Market Law Review 43 (2006): 629, 665. See Art. 6(1) TEU. See Art. 6(2) TEU. See Art. 52(3) Charter.

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renewed relationship between the Court of Justice and the ECtHR in view of the EU’s accession to the ECHR is leading to complex deliberations.7 When the debate about possible incompatibilities of EU competition law proceedings with human rights or fundamental rights principles broke out in force at the time the Lisbon Treaty entered into effect in December 2009, some observers reacted with considerable scepticism. In their view, the relevance of these principles to competition law had already long been recognized, without leading to any major upsets in litigation before the Court of Justice. They felt that certain corporate interests had merely amplified the noise level of human rights complaints, without really adding new elements. It is true that certain complaints now being vigorously debated about the EU’s competition law procedures were heard before.8 However, the ECHR and ECtHR rulings undoubtedly have acquired more importance now, and this merits a fresh look at their impact on EU law.9 1.1[b]

The Jussila Factor

Another line of argument to minimize the impact of fundamental rights principles, notably those contained in Article 6 of the European Convention (right to a fair trial), on EU competition law has been more subtle. Reference is made here to the ECtHR’s Jussila judgment of 2006. In this judgment, the ECtHR 7

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On these deliberations, see Smulders, ‘De drie-pijlerstructuur van de grondrechtenbescherming in de EU; enkele institutioneelrechtelijke overwegingen omtrent de groeiende complexiteit van deze bescherming na Lissabon’, in Today’s Multi-layered Legal Order: Current Issues and Perspectives, Liber Amicorum Arjen W.H. Meij (Zutphen: Paris Legal Publishers, 2011), 325, 336–339. Recall, for instance, that already in the late 1970s companies challenged EU competition law decisions on the grounds that the Commission combined the functions of prosecutor and judge in violation of the fair trial principles of Art. 6 ECHR. At that stage, the Court of Justice summarily dismissed these arguments as irrelevant, positing that the Commission could not be described as a tribunal within the meaning of Art. 6 ECHR. See Joined Cases 215-218/78, Fedetab [1980] ECR 3125, paras 79–81. This does not necessarily mean that all the complaints from the past will now suddenly be successful. For example, the multiple roles played by the Commission in EU competition law proceedings, tolerated by the Court of Justice in Fedetab, supra n. 8, have remained controversial. There were some suggestions that this institutional set-up might not find favour with the ECtHR. See ECtHR, Dubus v. France, judgment of 11 Jun. 2009, paras 35 and 60–62 (Art. 6 ECHR is applicable to the disciplinary proceedings before the French Commission Bancaire, and the insufficient separation of prosecutorial and sanctioning roles within this Commission casts doubt on its independence and impartiality and leads to a violation of Art. 6 ECHR). Most recently, however, the ECtHR upheld a similar institutional framework in Italy’s competition law. See ECtHR, Menarini Diagnostics v. Italy, judgment of 27 Sep. 2011 discussed, infra, text at n. 24 (multiple roles of Italian Antitrust Authority compatible with Art. 6 ECHR given broad review by Italy’s administrative courts). See also Zivy & Luc, ‘L’équité procédurale devant l’Autorité de la concurrence’, Concurrences 85, no. 4 (2010), paras 37–43 (distinguishing the French Commission Bancaire from the European Commission and national competition law authorities in the EU); see also Case T-138/07, Schindler, judgment of 13 Jul. 2011 (in which the General Court declared EU competition law proceedings compatible with Art. 6 ECHR), discussed, infra, text at nn. 29–37.

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stated that the guarantees of Article 6 ECHR may not apply with full stringency to cases that are deemed ‘criminal’ within the autonomous meaning of the ECHR but that do not carry the same degree of stigma as hard core criminal law cases.10 In the words of the ECtHR: While it may be noted that the above-mentioned cases in which an oral hearing was not considered necessary concerned proceedings falling under the civil head of Article 6 § 1 and that the requirements of a fair hearing are the most strict in the sphere of criminal law, the Court would not exclude that in the criminal sphere the nature of the issues to be dealt with before the tribunal or court may not require an oral hearing. Notwithstanding the consideration that a certain gravity attaches to criminal proceedings, which are concerned with the allocation of criminal responsibility and the imposition of a punitive and deterrent sanction, it is self-evident that there are criminal cases which do not carry any significant degree of stigma. There are clearly ‘criminal charges’ of differing weight. What is more, the autonomous interpretation adopted by the Convention institutions of the notion of a ‘criminal charge’ by applying the Engel criteria have underpinned a gradual broadening of the criminal head to cases not strictly belonging to the traditional categories of the criminal law, for example administrative penalties (Öztürk, cited above), prison disciplinary proceedings (Campbell and Fell v. the United Kingdom, 28 June 1984, Series A no. 80), customs law (Salabiaku v. France, 7 October 1988, Series A no. 141-A), competition law (Société Stenuit v. France, 27 February 1992, Series A no. 232-A), and penalties imposed by a court with jurisdiction in financial matters (Guisset v. France, no. 33933/96, ECHR 2000-IX). Tax surcharges differ from the hard core of criminal law; consequently, the criminal-head guarantees will not necessarily apply with their full stringency (see Bendenoun and Janosevic, § 46 and § 81 respectively, where it was found compatible with Article 6 § 1 for criminal penalties to be imposed, in the first instance, by an administrative or non-judicial body, and, a contrario, Findlay, cited above).11

From this paragraph in Jussila, it has been deduced that EU competition law belongs to the periphery, outside the hard core of criminal law.12 As the Commission has pointed out,13 EU competition law explicitly characterizes competition law fines as not being of a criminal nature.14 Peripheral cases of criminal law would be entitled to less scrutiny under the fair trial principles of Article 6 ECHR. For instance, so the argument continues, criminal penalties in

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ECtHR, Jussila v. Finland, judgment of 23 Nov. 2006, para. 43. Ibid. Wils, ‘The Increased Level of EU Antitrust Fines, Judicial Review, and the European Convention on Human Rights’, World Competition 33, no. 5 (2010): 14–15. See summary of Commission argument in the Opinion of Advocate General Sharpston of 10 Feb. 2011 in Case C-272/09 P, KME, para. 57. See Art. 23.5 of Council Regulation (EC) No. 1/2003 of 16 Dec. 2002 on the implementation of the rules on competition laid down in Arts 81 and 82 of the Treaty, OJ L 1, 4 Jan. 2003, 1–25 (‘Reg. 1/2003’).

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competition law cases could be imposed by a body like the European Commission combining investigative and decision-making powers.15 Yet this reading of Jussila has not gone unchallenged.Thus, it has been pointed out that the ECtHR’s language does not imply that all ‘new categories’ of criminal law fall outside of the hard core of Article 6 ECHR.16 Furthermore, Jussila concerned a tax rectification resulting from the applicant’s incomplete VAT declarations. This rectification did not involve the same financial consequences as the finding of a competition violation. To illustrate, in Jussila, the surcharge amounted to EUR 308,800. In EU competition law, the fines routinely amount to millions or hundreds of millions of euros and can approach or exceed EUR 1 billion.17 Moreover, a tax rectification does not carry the same stigma as the finding of a competition law violation. It is not consistent to argue how serious antitrust offences are when publicizing high fines,18 while at the same time maintaining that this conduct is not that offensive when confronted with the constraints of fundamental rights.19 To date, the ECtHR has looked at several national competition law cases through the lens of Article 6 ECHR. Its standard enquiry to determine whether a law is covered by this provision is whether the law meets the so-called Engel criteria: does the domestic law treat the contested charges or penalties as criminal law; is the nature of the offence of general concern and application; does the charge imposed operate as punishment and/or a deterrent or more like pecuniary 15

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Wils, 2010, supra n. 12. See also Advocate General Mengozzi in his Opinion of 17 Feb. 2011 in Case C-521/09 P, Elf Aquitaine, paras 31 and 36 (who, while ultimately leaving the question open, does not exclude that the Commission’s multiple roles satisfy the requirements to a fair trial guaranteed by Art. 6(1) ECHR after having analysed the scope of judicial review to which Commission decisions are subject). Smits & Waelbroeck, ‘When the Judge Prosecutes, Power Prevails over Law’, in Trade and Competition Law in the EU and beyond, eds Quick & Bronckers (Govaere: Edward Elgar, 2011), 446, 448–449. For example, Case COMP/39.125, Car Glass, summary published in OJ C 173, 25 Jul. 2009, 13–16 (Saint-Gobain fined EUR 896,000,000); Case COMP/C-3/37.990, Intel, summary published in OJ C 227, 22 Sep. 2009, 13–17 (Intel fined EUR 1,060,000,000). For example, former Commissioner Kroes, ‘Tackling Cartels – A Never-Ending Task’, Commission’s press release, SPEECH/09/454, 8 Oct. 2009 ([C]artels are always changing shape – adapting like viruses to fight our attempts to kill them off. Always building up resistance, always trying to outsmart us. Our investigations show that cartels try to cover their tracks using encrypted e-mail, attributing code names, using fake or misleading e-mail accounts, pre-paid mobile phones. . . it is a long list of deceptions.Today’s fight is nothing new – cartels have plagued capitalism since industrialisation began. From the ‘conspiracies to raise prices’ noted by Adam Smith and onwards, cartelists have had a long time to perfect their tactics). Various other prominent competition law authorities have recently compared cartels to theft or cancer; see Slater, Thomas & Waelbroek, ‘Competition Law Proceedings before the European Commission and the Right to a Fair Trial: No Need for Reform?’ GCLC Working Paper 04/08, 14–15, . Smits & Waelbroeck, supra n. 16, 449–450. However, see Castillo de la Torre, ‘Evidence, Proof and Judicial Review in Cartel Cases’, in European Competition Law Annual 2009: Evaluation of Evidence and its Judicial Review in Competition Cases, eds Ehlermann & Marquis (Oxford and Portland: Hart, 2010), 319, 396 (who remains deeply skeptical about any stigma attached to competition law violations).

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compensation for damage caused.20 The ECtHR has emphasized that these criteria are alternative and not cumulative.21 In one case, Fortum, Finland did not contest that its competition law was (fully) covered by Article 6 ECHR, which the ECtHR accepted. It then found that the applicant’s rights to a fair trial had been violated.22 In another case, Neste, Russia argued that its competition law was not covered by Article 6 ECHR. This too was accepted by the ECtHR, given the particular characteristics of the law at issue (notably, limited application to commodities markets and absence of sanctions with deterrent or punishment character).23 Most recently, in September 2011, the ECtHR, overruling Italy’s objections, held in Menarini that Italy’s competition law was covered by Article 6 ECHR, especially given the severity of its sanctions (at issue was a EUR 6 million fine).24 The ECtHR did not find a violation of fair trial principles in this case. Significantly though, there was no suggestion in this Menarini judgment that Italy’s competition law would not belong to the hard core of Article 6 ECHR. Given the severity of the sanctions, the distinction drawn in Jussila between a hard core and a periphery within criminal law was apparently not considered relevant by the Court.25 Having recognized that EU competition law is covered by the principles of Article 6 ECHR for a good many years now, the Court of Justice has not decided yet where EU competition law is to be classified: at the core or at the periphery of criminal law. Meanwhile, whereas some of its Advocate Generals (AGs) have tended to leave the question open as well,26 AGs Kokott27 and Sharpston28 recently opined that EU competition law proceedings are covered by Article 6 ECHR but do not belong to the hard core of criminal law. Yet they did not elaborate on their finding, reflect on the severity of EU competition law sanctions, or engage with the Jussila rationale. Similarly, the General Court in its recent Schindler judgment of July 2011 also found that EU competition law belonged to 20 21 22 23

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ECtHR, Engel v.The Netherlands, judgment of 8 Jun. 1976, para. 82. ECtHR, Janosevic v. Sweden, judgment of 23 Jul. 2002, para. 67. ECtHR, Fortum v. Finland, judgment of 15 Jul. 2003, paras 36 and 44–45. ECtHR, Neste v. Russia, judgment of 3 Jun. 2004 (admissibility decision in re application no. 69042/ 01 ff.). ECtHR, Menarini Diagnostics v. Italy, judgment of 27 Sep. 2011, paras 41–42. Interestingly though, the Court did observe that certain modalities of applying Art. 6 ECHR might be different in respect of an administrative proceeding (such as competition law) compared to a criminal proceeding in the narrow sense of the term as these proceedings differ in nature – although all the guarantees of Art. 6 ECHR have to be respected. Ibid., para. 62. For example, the Opinion of Advocate General Bot of 26 Oct. 2010 in Case C-216/09 P, Arcelor Mittal, para. 41 ff. (‘AG Bot Opinion’); Opinion of Advocate General Mazàk of 14 Sep. 2010 in Case C-90/09 P, General, para. 34. See the Opinion of Advocate General Kokott of 14 Apr. 2011 in Case C-109/10 P, Solvay, para. 256. See the Opinion of Advocate General Sharpston of 10 Feb. 2011 in Case C-272/09 P, KME, paras 65–67. Implicitly, Advocate General Mengozzi seemed to be of the same view in his Opinion in Elf Aquitaine, supra n. 15, paras 30–31.

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the periphery of Article 6 ECHR and then held that EU competition law proceedings are compatible with the supposedly looser strictures of that provision applying to its periphery.29 For the General Court, it was key that competition law proceedings are not considered criminal under EU law.30 The Court did not address any other elements of EU competition law (such as the level of the fines).31 The question where EU competition law proceedings belong in Article 6 ECHR, and how loose the requirements of this provision really are in respect of its periphery, may well have to be finally settled by the ECtHR (although the Court of Justice still has to pronounce itself). On the basis of the ECtHR’s case law, we tend to believe that EU competition sanctions do fall within the hard core of criminal law. Particularly relevant in our view are the nature of the offence (free competition is of general interest to society32 ), the stigma attached to it, as well as the severity and deterrent character of the fines.33 EU competition law is not noticeably different in these respects than Italy’s competition law, which was held squarely to fall within Article 6 ECHR in the ECtHR’s recent Menarini judgment discussed above. In fact, Italy’s competition law, dating from 1990, is modelled on EU law principles.34 The mere fact that EU competition law explicitly characterizes competition law fines as being non-criminal35 does not mean that such fines fall outside 29 30 31

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See T-138/07, supra n. 9. Ibid., para. 53. However, it should be noted that the ECtHR in its recent Menarini judgment (supra nn. 9 and 24), even though it did consider the severity of the Italian competition law sanctions, and even though it saw no reason to relegate Italian competition law to the periphery of Art. 6 ECHR, reached a result similar to Schindler. The ECtHR found the institutional set-up of the Italian Antitrust Authority (which resembles the multiple roles played by the EU Commission and challenged in Schindler) to be compatible with Art. 6 ECHR in view of the broad review by the Italian courts in that case (which may or may not resemble the review of the EU Commission’s decisions by the EU courts). See ECtHR, Menarini Diagnostics, supra n. 24, at para. 40. See already the considerations of the European Commission of Human Rights in respect of French competition law, in a case withdrawn before the ECtHR could render judgment on the merits: Société Stenuit v. France, decision of 27 Feb. 1992 (para. 62 of the Commission’s Opinion, appended to the ECtHR’s decision to strike out the case). Accord Barkhuysen & van Emmerik, Case Note on ECtHR, Jussila, supra n. 11, in Administratiefrechtelijke Beslissingen 51 (2007), para. 6. However, see Editorial Comments,‘Towards a More Judicial Approach? EU Antitrust Fines under the Scrutiny of Fundamental Rights’, Common Market Law Review 48 (2011): 1405, 1409 (Compared to traditional criminal sanctions, EU antitrust fines have a narrower focus since they are primarily designed to counteract economic incentives to engage in anti-competitive conduct by outweighing expected profits from such behavior). See Carpagnano,‘Private Enforcement of Competition Law Arrives in Italy:Analysis of the Judgment of the European Court of Justice in Joined Cases C-295-289/04’, Competition Law Review 3 (2006): 47, 47 ([A]t the end of 1990,after a very long drafting process,the first Italian CompetitionAct was adopted in strict adherence with the competition law provisions contained in the EC Treaty); Gerber & Cassinis,‘The “Modernisation” of European Community Competition Law: Achieving Consistency in Enforcement – Part I’, European Competition Law Review 27 (2006):10,13. See, supra n. 14.

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criminal law. The characterization of a sanction by domestic law is the least important of the Engel criteria to decide whether a national law is covered by Article 6 ECHR.36 By the same token, it is not plausible to read Jussila as saying that national law would suddenly be decisive for the question of whether a sanctioning system belongs to the core or to the periphery of Article 6 ECHR. In other words, the fact that EU competition law holds its fines to be non-criminal does not mean that these fines belong to the periphery of Article 6 ECHR. Again, what appears more decisive is the gravity of the fine, its deterrent nature, and the stigma attached to it. (For good measure, we note that an increasing number of EU Member States are subjecting individuals participating in EU and national competition law infringements to classic criminal sanctions. In those instances, the Jussila factor clearly does not limit the role of Article 6 ECHR.37 ) However, even assuming that EU competition law would belong more to the periphery of Article 6 ECHR, that does not render meaningless all of the strictures of this provision.Whatever the applicability of other elements of a fair trial (such as an oral hearing, which the ECtHR in Jussila found could be dispensed with in the circumstances of that case), it seems a stretch to argue that the presumption of innocence would not be applicable to some of the criminal penalties covered by Article 6 ECHR. This would put into doubt the very essence of the guarantees governing a fair trial regarding criminal charges. In short, despite the recent Schindler judgment of the General Court,38 we still tend to think that EU competition law sanctions fall within the hard core of criminal law pursuant to Article 6 ECHR, as outlined in Jussila. Accordingly, these sanctions would have to be fully compatible with Article 6 ECHR and its companion provisions of the Charter.39 However, be that as it may, the analysis below proceeds from the assumption that EU competition law proceedings must, in any event, recognize the presumption of innocence, being key to the fundamental right to a fair criminal trial. The relevance of the presumption of innocence to EU competition law proceedings before the Commission was already accepted explicitly and unconditionally by the Court of Justice in Hüls in 1999.40 36

37 38 39 40

See supra n. 20. It will be recalled that the Engel criteria are alternative and not cumulative. See ECtHR, Janosevic, supra n. 21, para. 67. See Slater et al., supra n. 18, text at nn. 38 and 116 (2008). See T-138/07, discussed supra at nn. 29–33. See Arts 47 and 48 Charter. Case C-199/92 P, Hüls [1999] ECR I-4287, para. 150 (in support, the Court cited case law of the ECtHR, necessarily predating the latter’s 2006 Jussila judgment). Prior to this judgment, the (full) applicability of the presumption of innocence in Art. 6(2) ECHR to EU competition law proceedings had been contested. See, e.g., the Opinion of Advocate General Cosmas of 15 Jul. 1997 in Hüls, para. 93, referring to his Opinion of the same date in Case C-235/92 P, Montecatini [1999] ECR I-4539, para. 66 and n. 42 (extremely doubtful).

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543

THE PRESUMPTION OF INNOCENCE IN THE CASE LAW OF THE ECtHR

More than twenty years ago, in 1988, the ECtHR was confronted with a criminal case in which the applicant was presumed by French courts to have imported prohibited goods (drugs) because they had been found in his possession when he went through customs. Mr Salabiaku claimed that this presumption, which he felt was almost irrefutable, infringed the fundamental presumption of innocence to which he was entitled by virtue of Article 6 ECHR. The ECtHR’s judgment included several remarkable formulas that still resonate in the present discussions on EU competition law: Presumptions of fact or of law operate in every legal system. Clearly, the Convention does not prohibit such presumptions in principle. It does, however, require the Contracting States to remain within certain limits in this respect as regards criminal law.… Article 6 §2 does not therefore regard presumptions of fact or of law provided for in the criminal law with indifference. It requires States to confine them within reasonable limits which take into account the importance of what is at stake and maintain the rights of defense.41

In keeping with its standing case law, the ECtHR did not test the presumption established in a French statutory provision in the abstract, yet considered its application in the circumstances of the actual case before it. The Court found that the French courts had been careful to avoid resorting automatically to the presumption, noting that Mr Salabiaku had not offered any relevant rebuttal.42 In 2002, the ECtHR was asked to assess Swedish rules on tax surcharges that were imposed on a taxpayer who provided incorrect or incomplete information to the tax authorities. In certain circumstances, the tax surcharges were remitted when the failure to submit correct information was excusable. Swedish law articulated a number of excuses that were available to taxpayers to resist a surcharge. The ECtHR first established that the Swedish rules on tax surcharges were covered by Article 6 ECHR, even though under Swedish law they were not considered to be of a criminal nature.43 For the Court, it was decisive that the penalties were both deterrent and punitive;44 the Court highlighted the severity of the potential penalty, which could amount to 20% or 40% of the tax avoided, without an upper limit.45 When turning to the presumption of innocence, the Court recalled some of its basic implications: [t]he burden of proof is on the prosecution, and any doubt should

41 42 43 44 45

ECtHR, Salabiaku v. France, judgment of 7 Oct. 1988, para. 28. Ibid., para. 30. ECtHR, Janosevic, supra n. 21, para. 66. Ibid., para. 68. Ibid., para. 69.

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benefit the accused.46 It then elaborated on the balancing test it had formulated in Salabiaku: in other words, the means employed have to be reasonably proportionate to the legitimate aim sought to be achieved.47 In the particular circumstances of the case, the Court acknowledged that the Swedish law presumptions regarding tax surcharges were difficult to rebut48 but found that they stayed within reasonable limits, given that the law provided certain means of defence and given the importance of an efficient system of taxation to the State’s financial interests.49 It cited with approval a ruling of the Swedish Supreme Administrative Court that this proportionality test requires that the courts. . . make a nuanced and not too restrictive assessment in each individual case as to whether there are grounds for setting aside or remitting the tax surcharge.50 Mr Janosevic’s appeal to Article 6 ECHR ultimately failed because he had made no attempt, according to the ECtHR, to rebut the presumption against him.51 Most recently, in June 2011, the ECtHR put in clear terms that the ECHR and Article 6(2) must be interpreted in a way that concretely and realistically guarantees its rights, including the presumption of innocence. A theoretical or illusory application is not good enough.52 What one can draw from this case law is that the ECtHR permits governments to use presumptions in criminal law proceedings within the meaning of Article 6 ECHR if they reasonably serve a public policy goal, are not applied automatically, and do allow effective rebuttals. What one can probably also deduce from the ECtHR’s case law is that the more far-reaching the presumption leading to fault of the accused, the more robust the test will be whether the interference with the presumption of innocence is justified.53

46 47 48 49 50 51 52

53

Ibid., para. 97 (citing ECtHR Barberà, Messegué and Jabardo v. Spain, judgment of 6 Dec. 1988, para. 77). Ibid., para. 101. Ibid., para. 102. Ibid., para. 104. Ibid. Ibid. ECtHR, Klouvi v. France, judgment of 30 Jun. 2011, para. 40 (French statute condemning false accusations of rape leads to violation of presumption of innocence). For example, see a contrario ECtHR, Grayson & Barnham v. UK, judgment of 23 Sep. 2008 (having obtained a conviction on drug trafficking, the government can easily presume that assets in the possession of the convicted are related to the crime and can therefore be confiscated, subject to a rebuttal by the convicted).

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545

THE PRESUMPTION OF INNOCENCE IN THE CASE LAW EU

OF THE COURTS OF THE

As is evident from the Hüls judgment cited above,54 the Court of Justice has been considering challenges of EU competition law decisions based on the presumption of innocence for some time already.55 However, successful pleas premised on the presumption of innocence in competition proceedings have been rare. More particularly, pleas based on the Commission’s purported breach of the presumption of innocence were considered in dozens of cases.56 In none of the cases decided after 2006, when the ECtHR introduced the distinction between hard core and periphery of criminal law in Jussila,57 did the EU courts ever circumscribe the impact of the presumption on the grounds that EU competition law belongs merely to the periphery of Article 6 ECHR.58 In other words, the EU courts accorded the presumption of innocence full force.Yet in all but one of these cases, the EU courts dismissed the applicants’ claims to the presumption of innocence. In the only successful case, Volkswagen AG,59 the applicant still did not succeed in obtaining the annulment of the contested decision.The General Court accepted that the Commission had infringed the presumption of innocence by informing the press of Volkswagen’s purported infringement of EU competition law prior to deliberations by the College of Commissioners.Yet, despite this determination, the Court summarily denied Volkswagen’s request for annulment of the Commission decision on the grounds that Volkswagen had not proven that the College of Commissioners would have decided differently had the press release not been issued.60 We recall that the presumption of innocence is part of the right to a fair trial and has several implications. First, the presumption underlies the idea that the 54 55

56 57 58

59

60

See supra n. 40. See Sibony & Barbier de la Serre,‘Charge de la preuve et théorie du contrôle en droit communautaire de la concurrence: pour un changement de perspective’, Revue Trimestrielle Droit Européen 43 (2007): 205, 220, and 225. See . See discussion, supra, at n. 10 and the following. For a recent example, see Joined Cases T-141/07, T-142/07, T-145/07, and T-146/07, judgment of 13 Jul. 2011, paras 71–77. Case T-62/98, Volkswagen [2000] ECR II-2707, para. 281. See also Case T–474/04, Pergan [2007] ECR II–4225, paras 75–78 (annulment of Hearing Officer decision rejecting confidential treatment of appellant’s name in published decision of a cartel case, in part because publication of appellant’s name in the specific circumstances of the case was capable of infringing the appellant’s presumption of innocence). See also Case C-185/95 P, Baustahlgewebe [1998] ECR I-8417, paras 26–49 (the Court of Justice reduced the competition law fine of EUR 3 million by EUR 50,000 because the General Court exceeded reasonable time to rule on the appellant’s appeal against the Commission decision, in contravention of the principle enshrined in Art. 6(1) ECHR).

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defendant is entitled to an independent and impartial judge, who respects the rights of the defence. After all, a biased judge will not start from the position that the defendant is innocent. Second, the presumption of innocence implies that the burden of proving the crime rests on the prosecuting authority. In EU competition law, this is established in the basic procedural Regulation 1/2003, according to which the Commission has the burden of proving an infringement of Articles 101 and 102 TFEU.61 This is recognized as well in the case law of the Court of Justice, though elsewhere the Court does admit presumptions that shift the burden of proof to a defendant.62 Third, the presumption of innocence also has implications for the standard of proof that the Commission must meet in proving its case. A lower standard of proof imposed on the Commission will again more easily shift the burden of rebutting the Commission’s case on the defendant.63 Fourth, the presumption of innocence has implications too for the standard of proof that a defendant must satisfy in order to rebut the Commission’s allegations of having committed an infringement and shift the burden of proof back to the Commission. How the Commission and the Court of Justice approach the conditions flowing from the presumption of innocence will be analysed in more detail below. Here, we want to flag how the EU courts generally have dealt with the interaction between the standard of proof and the burden of proof in competition law cases. When it brings a competition law case, the burden is on the Commission to prove an infringement, and it must do so to the requisite standard of proof.64 Without arriving at a generally accepted definition, the Courts have indicated that the requisite standard of proof is met by the Commission if it is able to produce a body of evidence that, as a whole, is sufficiently precise and consistent,65 or convergent and convincing,66 or simply cogent.67 It is noteworthy though that, according to the General Court in BPB, the Commission need not adduce proof beyond reasonable doubt of the existence of an infringement in cases where it imposes heavy fines.68

61 62 63

64

65 66 67 68

See Art. 2 Reg. 1/2003. Case C-45/08, Spector Photo Group [2009] ECR I-12073, para. 43 (insider trading). The standard of proof and the burden of proof, both conceptually and in practice, involve many complex issues, which this contribution cannot address in any detail. See generally the contributions to the European Competition Law Annual 2009: Evaluation of Evidence and its Judicial Review in Competition Cases, eds Ehlermann & Marquis (Oxford and Portland: Hart, 2010). See Lenaerts, ‘Some Thoughts on Evidence and Procedure in European Community Competition Law’, Fordham International Law Journal 30 (2007): 1463, 1470. Joined Cases T-67/00,T-68/00,T-71/00, and T-78/00, JFE Engineering [2004] ECR II-2501, para. 179. Case T-314/01, [2006] ECR II-3085, para. 97. Case T-305/94, Limburgse Vinyl Maatchappij [1999] ECR II-931, para. 644. Case T-53/03, BPB [2008] ECR II-1333, para. 64. See discussion, infra, in text at n. 133.

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While the EU courts have extensively elaborated on the requisite standard of proof that the Commission must satisfy to establish its case, they have so far not fully addressed the question of what standard of proof is required for a defendant to put forth a successful rebuttal of a Commission allegation. In Dresdner Bank, the General Court pointed out that: Any doubt in the mind of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement at issue to the requisite legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment of a decision imposing a fine. In the latter situation, it is necessary to take account of the principle of the presumption of innocence resulting in particular from Article 6(2) of the European Convention on Human Rights.69

This translates into a more relaxed standard of proof for the defendant as opposed to the standard of proof required for the Commission to prove its case. In other words, it should not be expected from a defendant to disprove the facts on the basis of the unfavourable presumption beyond reasonable doubt or to produce a consistent, precise, and cogent body of counter-evidence. To trigger a rebuttal, it should instead be sufficient that a defendant is able to weaken or shed doubt on the presumptions or the factual interpretations on which the prosecuting authority relies. 2

PRESUMPTIONS IN EU COMPETITION LAW

EU competition law works with a variety of presumptions, as do other areas of the law. Presumptions allow inferences to be drawn from certain facts, for instance, as to whether certain unilateral pricing conduct is abusive (presumed when prices fall below average variable costs), or from certain events, for instance, as to whether a merger having a Community dimension is compatible with the internal market (presumed when the Commission has not taken a decision within the prescribed time limits), and so on. Distinctions have been drawn between substantive and evidentiary presumptions or between conclusive and rebuttable presumptions.70 Rather than providing another overview or typology, this contribution focuses on a few presumptions and enquires whether they are problematic from a fundamental rights perspective, notably the presumption of innocence codified in Article 6 ECHR.

69

70

Joined Cases T-44/02 OP, T-54/02 OP, T-56/02 OP, T-60/02 OP, and T-61/02 OP, Dresdner Bank [2006] ECR II-3567, paras 59–65. See generally Bailey, ‘Presumptions in EU Competition Law’, European Competition Law Review 31 (2010): 362–369.

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THE PRESUMPTION OF PARENTAL LIABILITY FOR THE CONDUCT OF SUBSIDIARIES

A presumption that has been attracting considerable controversy concerns the liability of parent undertakings for competition law infringements of their wholly owned subsidiaries.71 From the mere fact that a parent holds 100% of the shares of a subsidiary, which has infringed competition law, the Commission can draw the rebuttable presumption that the parent did in fact exercise decisive influence over that subsidiary’s conduct and hold this parent jointly and severally liable for any fine. In order for the presumption to operate, it is not necessary for other indicia, actually proving the exercise of decisive influence of the parent on its subsidiary’s conduct, to be present. This presumption was endorsed by the Court of Justice in its Akzo Nobel judgment of September 200972 and recently confirmed again in the ArcelorMittal judgment of March 2011.73 National courts have followed this European case law, which has already led one company, Ooms, involved in a Dutch competition proceeding to challenge the irrefutable character of the parental liability presumption as a violation of the presumption of innocence before the ECtHR.74 2.1[a]

The Relevance of Fundamental Rights

The first question this case law raises is whether the presumption of innocence is at all relevant to the parental liability construed here. AG Kokott, in Akzo Nobel, as well as the Dutch Court in Ooms, posit it is not. According to the Dutch Court, when a parent company holds 100% of the shares of a subsidiary company, both companies are deemed to form one economic unit or ‘undertaking’ in competition law. In the event a member of this economic unit has infringed competition law, it is really the undertaking (or the economic unit) that has committed the infringement. The presumption of innocence no longer comes into play, according to the Court, as the infringement has been proven as a matter of competition law. Whether one member within the undertaking (i.e., the parent) can be considered financially liable for payment of a fine levied on another member of the undertaking (i.e., the subsidiary) is a 71

72 73 74

For a recent attack on this presumption in EU competition law, see Hofstetter & Ludescher, ‘Fines against Parent Companies in EU Antitrust Law: Setting Incentives for “Best Practice Compliance”’, World Competition 33 (2010): 55 (arguing that the current practice of the European Commission is at odds with the fundamental concept of limited liability of a parent company for subsidiaries). Case C-97/08 P, Akzo Nobel [2009] ECR I-8237, paras 60–61. Case C-216/09 P, ArcelorMittal, judgment of 29 Mar. 2011, paras 97–99. See the judgment of the Dutch Appellate Tribunal (College van Beroep van het Bedrijfsleven or CBvB) of 18 Nov. 2010, AWB 08/616 in re Beheersmaatschappij A B.V.; appeal to the ECtHR, Ooms Avenhorn Holding B.V. and Others v.The Netherlands, appl. no. 41490/11.

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different question that no longer concerns innocence or guilt, so that the fundamental right no longer plays a role.75 AG Kokott draws a distinction between the burden of proof and the standard of proof, the presumption of innocence only being relevant to the former. She argues that for parental liability to be established the key question is whether decisive influence was actually being exercised by the parent over the subsidiary. For her, it is incontrovertibly the Commission’s burden to prove decisive influence. Accordingly, as there is no issue here regarding the burden of proof, the presumption of innocence does not come into play. How decisive influence can be proven by the Commission (e.g., by relying on a 100% shareholding) concerns the standard of proof.76 In our view, these attempts to rule out the presumption of innocence in respect of the parental liability presumption are unconvincing. The distinctions drawn here are too subtle; as discussed above, for example, when the standard of proof imposed on a competition law authority is relaxed, this will necessarily ease its burden of proving an infringement.77 Fundamentally, such distinctions distract from the basic question of whether one corporate entity can be punished for conduct engaged in by another, separate corporate entity. In economic terms, it may make sense to look through different legal personalities and find that the relationships between members of one economic unit raise insufficient concerns to justify regulatory intervention.78 However, should conduct of one of the members in respect of third parties trigger criminal sanctions, it is a very different question governed by fundamental rights whether another corporate entity (be it or not a member of a larger economic unit) can be held responsible for it. 2.1[b] The Impact of Fundamental Rights Whether a government’s intervention under competition law is justified depends on whether the effects on competition (market structure), on society as a whole, are expected to be positive or not. Some errors are accepted, and the policy choices of one competition law system compared to another are often described as a preference for Type I (false negatives, insufficient interventions) or Type II (false positives, mistaken interventions) errors. Both choices are considered legitimate; 75 76

77

78

See CBvB judgment, ibid., paras 3.2.4.4–3.2.4.7. See the Opinion of Advocate General Kokott in Case C-97/08 P, Akzo Nobel [2009] ECR I-8237, para. 74.AG Kokott’s distinction is cited approvingly by Castillo de la Torre, supra n. 19, 335. See text, supra, at n. 63. Accord Schweitzer, ‘The European Competition Law Enforcement System and the Evolution of Judicial Review’, in European Competition Law Annual 2009: Evaluation of Evidence and its Judicial Review in Competition Cases, eds Ehlermann & Marquis (Oxford and Portland: Hart, 2010), 79, 107. See Case C-73/95 P, Viho [1996] ECR I-5457, para. 16.

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the United States is typically seen as preferring Type I errors and the EU as more inclined to accept Type II errors.79 The presumption of innocence is concerned with a very different, moral philosophy: It seeks to protect the individual against governmental might and, possibly, abuse. Furthermore, to the extent any errors are admitted, there is only one type: It is preferable to allow a guilty party to go free than to condemn an innocent party. In other words, competition or regulatory perspectives raise very different policy issues than fundamental rights, and the tolerance for errors differs from one perspective to another. As a starting point, not only private citizens but also corporate entities enjoy protection from human80 or fundamental rights.81 That is not to say that there are no differences between private individuals and corporate entities and that such differences could not play a role in determining the extent of the protection.82 Yet whatever exceptions might be envisaged, it is difficult to conceive of substantial differentiations in protection between companies and natural persons where the presumption of innocence is concerned. Thus, there is no good reason to accept more bias from a tribunal in respect of companies as compared to individuals. By the same token, to hold one corporate entity responsible for the acts of another is problematic as well, as would be the criminal liability of one natural person for the acts of someone else. Now we know from long experience that corporate veils can be pierced.This is recognized both in international83 and national laws. In torts law, for instance, 79

80

81

82

83

See McChesney, ‘Legal and Economic Concepts of Collusion: American Antitrust versus European Competition Law’, 3rd Annual Research Symposium on Antitrust Economics and Competition Policy (24–25 Sep. 2010), 31–33, (in respect of horizontal arrangements); Whish, Competition Law, 6th edn (OUP, 2009), 190–191 (in respect of unilateral conduct). See, e.g., Art. 34 ECHR, providing that both natural and legal persons can apply for protection to the ECtHR. For a recent example, see Case C-279/09, DEB Deutsche Energiehandels- und Beratungsgesellschaft, judgment of 22 Dec. 2010 (the right to effective legal protection enshrined in Art. 47 of the Charter can also benefit legal persons, taking into account their situation such as whether or not they are profit-making). See the annotation of Oliver in Common Market Law Review 48 (2011). See generally Emberland, The Human Rights of Companies: Exploring the Structure of ECHR Protection (OUP, 2006). On distinctions that might be relevant for competition law, see Wils, ‘EU Antitrust Enforcement Powers and Procedural Rights and Guarantees:The Interplay between EU Law, National Law, the Charter of Fundamental Rights of the EU and the European Convention on Human Rights’, World Competition 34 (2011): 189, 206–207. Distinctions are also favored by Oliver, The Protection of Privacy in the Economics Sphere before the European Court of Justice, Common Market Law Review 46 (2009): 1443–1483. International Court of Justice, Barcelona Traction, Light and Power Co., Ltd. Second Phase (Belgium v. Spain), ICJ Reports 3, 5 Feb. 1970, para. 58 [‘. . . the process of lifting the veil, being an exceptional one admitted by municipal law in respect of an institution of its own making, is equally admissible to play a similar role in international law. It follows that on the international plane also there may in principle be special circumstances which justify the lifting of the veil. . .’]. In the particular circumstances of this case though, the ICJ found that Belgium lacked jus standi to exercise diplomatic

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disregard for the separation between independent corporate entities has been advocated to protect the interests of ‘involuntary creditors’, who, unlike contract creditors, cannot assess the potential creditworthiness of a corporate entity before they are injured.84 Some scholars have gone much further and have argued for wholesale reform of the principles of limited liability and corporate separation within multinational enterprises. They have questioned the history and economic justification of such liability limitations and have developed a theory of ‘enterprise liability’ instead for specific areas of the law.85 Yet a recent, careful review of the laws of Belgium, France, Germany, the United Kingdom, and the United States shows that, despite considerable differences in approach even within one and the same country, corporate veils are only pierced in the presence of particular circumstances: notably, intensive involvement of the parent in the subsidiary’s business, bankruptcy of the subsidiary caused by a parent’s conduct, or specific concerns about abuse or lack of good faith in the case at issue.86 Similarly, a recent study in the Netherlands found that, with respect to human rights violations of their subsidiaries, parent companies could only be held responsible in exceptional circumstances.87 While recognizing the importance of corporate social responsibility, this finding was explicitly endorsed by the Dutch government in early 2011. The government recalled the generally accepted fundamental principle of company law that each independent legal person is only responsible for its own conduct and liable for any damage it causes.88 Expressed differently, none of these legal systems was found to presume liability of a parent company for a subsidiary’s conduct merely because of its shareholding in the subsidiary.

84

85

86

87

88

protection on behalf of Belgian shareholders in a company incorporated in Canada (Barcelona Traction) with respect to measures taken by Spain; thus, the ICJ did not allow for the piercing of Barcelona Traction’s corporate veil in the interest of Belgian shareholders. Hansmann & Kraakman, ‘Toward Unlimited Shareholder Liability for Corporate Torts’, Yale Law Journal 100 (1991): 1879, 1920. For example, Muchlinski, ‘Limited Liability and Multinational Enterprises: A Case for Reform?’, Cambridge Journal of Economics 34 (2010): 915 (with references to other literature). Vandekerckhove, Piercing the Corporate Veil (Kluwer, 2007) (noting that some courts have occasionally inclined towards a more comprehensive economic unit theory, such as the Paris Court of Appeals, which was not followed though by the French Supreme Court [see 44–45] as well as a judgment of the UK Court of Appeals, later distinguished by the House of Lords [see 72]). See also Voet van Vormizeele, ‘Die EG-kartellrechtiche Haftungszurechnung im Konzern im Widerstreit zu den nationalen Gesellschaftsrechtsordnungen’, Wirtschaft und Wettbewerb (2010): 1008, 1016–1017 (including references to other European jurisdictions as well). Castermans & van der Weide, De juridische verantwoordelijkheid van Nederlandse moederbedrijven voor de betrokkenheid van dochters bij schendingen van fundamentele, internationaal erkende rechten (Leiden, 15 Dec. 2009), . See the Letter of the Deputy Minister for Economic Affairs, Agriculture and Innovation to the Dutch Parliament of 23 Mar. 2011, IIe K 2010/11, 26485, No. 105, 2.

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Consequently, with the far-reaching presumption of parental liability for a subsidiary’s conduct, EU competition law has moved considerably ahead of what in national law would be considered acceptable in order to pierce the corporate veil of a subsidiary’s independent legal personality. When this was pointed out to the General Court, the Court dismissed the relevance of national law, essentially on the ground that national laws did not represent the proper legal framework and that EU competition law was different.89 Except for a reference though to the term ‘undertaking’ in the founding European treaties, the Court gave no explanation why EU competition policy is so different from the policies underlying torts, bankruptcy law, human rights protection, etc., that it requires the piercing of corporate veils to an unusual extent. It makes sense to interpret the term ‘undertaking’ in Article 101 TFEU from an economic perspective to determine when regulatory intervention in market behaviour is desirable to achieve more optimal economic welfare.90 The economic unit theory is a defensible interpretation to put a brake on governmental interventions so as to avoid Type II errors (when an economically unobjectionable practice could be deemed anticompetitive). Expressed differently, when used to determine that conduct within a corporate group requires no competition law intervention, the economic unit theory does not interfere with corporate choices in establishing different corporate entities with separate legal personalities; it constrains governmental interventions. In contrast, the parental liability presumption does interfere with such corporate choices: It expands the possibility for governmental intervention, notably the imposition of fines, and leads to piercing the corporate veil. The EU courts themselves have had to recognize that in order to implement sanctions under EU competition law, the concept of ‘economic unit’ is unhelpful. It becomes necessary to identify entities with a legal personality on whom a fine can be imposed.91 In virtually all cases, the legal personality of corporate entities is still established by national law. To this extent then, EU competition law is still dependent on national law, and that is neither unusual nor wrong. The limitations inherent in national law are generally respected by EU law, absent EU legislation to the contrary and subject to the principle that such national limitations cannot jeopardize the ‘effectiveness’ of EU law.92 We have seen no evidence that the term ‘undertaking’ in Article 101 TFEU, which has remained unchanged from the original European treaties of the 1950s, represents a legislative choice favouring an 89 90 91 92

Case T-299/08, Elf Aquitaine, judgment of 17 May 2011, para. 72. See text, supra, at n. 79. For example, Case T-24/05, Alliance One, judgment of 27 Oct. 2010, para. 125. For example, Cases C-295/04, C-298/04, Manfredi [2006] ECR I-6619, para. 62; Case C-453/99, Courage [2001] ECR I-6297, para. 29.

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‘enterprise liability’ theory in respect of competition law violations by any and all members of an economic unit.93 Nor are we aware of a claim in the Commission’s current decision-making practice that a far-reaching parental liability presumption is necessary to preserve the effectiveness of EU competition law. ‘Enterprise liability’ theories have not been broadly accepted and are generally of recent vintage.94 In fact, these ‘enterprise liability’ theories usually involve a more far-reaching reform of economic and corporate organization beyond competition law. Indeed, proponents of an enterprise liability assert that parents should be liable as well for civil damages caused by competition law violations of their subsidiaries.95 Yet as the overview above shows, a far-reaching reform of corporate responsibility finds no support in the EU Member States. Moreover, whether the corporate veil can be pierced so as to hold one corporate entity criminally responsible for the acts of another is also a fundamental rights issue, which notably raises non-economic concerns. From the perspective of the presumption of innocence, one would expect more rather than fewer constraints on the attribution of acts from one person to another.96 The same is true too, incidentally, when considering the principle of personal responsibility for criminal violations enshrined in the ECHR.97 To date, the Court of Justice and the General Court have not squarely addressed these issues.They either have glossed over the appeal to the presumption of innocence, insisting on the concept of economic unit in EU competition law, or maintained that there is no conflict as the presumption that a parent because of

93

94

95

96

97

See, e.g., Gerber, Law and Competition in Twentieth Century Europe (Oxford: Clarendon Press, 1998), 232–265, 334–358. Compare text, supra, at nn. 84–85, with text at nn. 86–88. An early advocate of an enterprise liability theory was Walter Eucken, of the Freiburg School of ordoliberal thought. See his last work published in 1952, Grundsätze der Wirtschaftspolitik, Book Four, Ch. XVI, VI (Haftung), 279–285 (reprinted as Mohr Siebeck, UTB 1572, 7th edn (2004)). See Kersting, Liability for Competition Law Infringements in a Group of Companies (Wettbewerbsrechtliche Haftung im Konzern), text at nn. 121–122, to be published in Konzern 2011 (the author relies on principles relating to unlimited liability between members of a partnership or other associations under national law to construe liability under EU competition law for separate corporate entities within an economic unit, whereas barring exceptional circumstances national and international laws do recognize the limited liability of separate corporate entities; thus, the author seems to negate the concept of limited liability companies in national law and the existence of different forms of doing business, some having limited liability attached to them, others not). See, e.g., ECtHR, A.P., M.P., et T.P. v. Switzerland, judgment of 29 Aug. 1997 (while tax liabilities can be passed on from the deceased to his heirs, criminal sanctions for tax evasion by the deceased that are imposed on his heirs violate the presumption of innocence to which the latter are entitled by virtue of Art. 6(2) ECHR). See, e.g., ECtHR, Sud Fondi et al. v. Italy, judgment of 20 Apr. 2009, paras 115–116 (Art. 7 ECHR implies that criminal sanctions can only be imposed on those who are personally responsible for the infringement).

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its 100% shareholding can exercise decisive influence over a subsidiary is rebuttable (a recent illustration is the General Court’s judgment in Otis of July 201198 ). Significantly though, after a searching analysis of the presumption of innocence in respect of EU competition law proceedings, AG Bot, in his recent Opinion in Arcelor Mittal did sound important warning notes. First of all, he questioned whether the presumption of decisive influence over a subsidiary deriving merely from the parent’s 100% shareholding was a presumption that was kept within reasonable limits, as required by the ECtHR in Salabiaku.99 He noted, for instance, that this presumption had also been applied to a sub-subsidiary that had engaged in an infringement, being controlled by a subsidiary, which was itself wholly owned by the parent company.100 In his view, other indicia of a parent’s involvement in the conduct of the subsidiary must be present before the presumption could be applied.101 Furthermore, in our view, it is not obvious that the parental liability presumption is proportionate to the in itself laudable goal of ensuring the effective implementation of competition law. The effects this presumption may have really go quite far: not only piercing the corporate veil but also enabling an increase of the fine as the parent’s presumably larger global turnover will now operate as a ceiling.102 Why would a fine imposed on a subsidiary for its infringing conduct normally not be good enough to ensure the effective implementation of EU competition law?103 In addition, when increasing a fine with a deterrence factor, based on the relatively small proportion a subsidiary’s turnover represented of the total turnover attributable to its parent company, the Commission argued in Hydrogen peroxide that this was justified. Otherwise, so the Commission reasoned, a very large company involved in one or several cartels could escape from high fines by creating small subsidiaries with little turnover to engage them in illegal practices.104 This was recently upheld by the General Court.105 98 99 100

101 102

103

104

105

Case T-141/07, Otis, supra n. 58. See AG Bot Opinion, supra n. 26, para. 211. AG Bot referred to Case C-90/09, General Química and Others v. Commission, in which AG Mazàk had rendered his Opinion, supra n. 26, a month earlier. AG Bot Opinion, supra n. 26, para. 204. Fines are limited to 10% of an undertaking’s worldwide turnover. See Art. 23(2) Reg. 1/2003. For example, Case T-26/06, Trioplast Wittenheim SA, judgment of 13 Sep. 2010, paras 112–116. Note that the Court of Justice has rejected certain pleas of defendant undertakings on the grounds that were they upheld, they would impinge seriously on the effectiveness of European competition law. See Case C-338/00 P, Volkswagen [2003] ECR I-9189, para. 97. So far, it has not invoked this justification for the parental liability presumption. Case COMP/F/C.38.620, Hydrogen Peroxide and Perborate, summary published in OJ L 353, 13 Dec. 2006, 54–59, para. 465 of the full decision, . Case T-190/06, Total and Elf Aquitaine, judgment of 14 Jul. 2011, paras 224–225.

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If fraud or bad faith were involved in the creation of subsidiaries by a parent company, piercing the corporate veil of these subsidiaries and making the parent with all of its financial resources liable for the subsidiary’s conduct might indeed be justified. National law points in the same direction as we saw.106 Yet the Commission really seems to be assuming too much here: On the basis merely of its capital holding, not only does the Commission presume that the parent company is directly involved in the conduct of the subsidiary, but it also presumes that the parent has created subsidiaries with the dubious intent of escaping full liability for its own misdeeds. This level of distrust regarding corporate groups generally does not seem justified by common experience107 nor necessary to ensure effective compliance with EU competition law. To the best of our knowledge, there is not one example of such an abuse in the Commission’s published case law to date. Perhaps in earlier days, it was considered necessary to pierce the corporate veil rather easily as a means to preserve the efficacy of EU competition law. In those early days, when the ‘implementation’ doctrine held sway, the Commission was bent on finding local subsidiaries within the EU in order to reach their foreign-based parent companies and sanction anticompetitive conduct from abroad that harmed the EU. Having found a local subsidiary, which might have been relatively insignificant in economic terms, the Commission then needed to lift its corporate veil in order to get at the foreign parent.108 This was a controversial exercise at the time109 but might have been understandable in order to overcome the difficulties of extraterritorial jurisdiction.Yet now that EU competition law has embraced the ‘effects’ doctrine,110 there is no longer a need to go so far. In short, we are concerned that, in recent decisions of the Commission and judgments of the EU courts, the application of the parental liability presumption has gone too far and has become too automatic to be consistent with the case law of the ECtHR.111 Personal responsibility rather than strict liability is the starting point of EU competition law, as AG Bot recalled.112 It seems to us then that the attribution of criminal liability to one legal person for the acts of another independent legal person is a particularly far-reaching interference with the 106 107

108

109

110

111 112

See text, supra, at n. 86. See Case T-141/07, Otis, supra n. 58, para. 73 (referring to AG Kokott’s Opinion in Case C-97/08P, Akzo Nobel, supra n. 76, para. 72). For example, Case 48/69, Dyestuffs [1972] ECR 619, paras 132–134 (endorsing the Commission’s practice). See Lev, ‘European Community Competition Law: Is the Corporate Veil Lifted Too Often?’, Journal of Transnational Law & Policy 2 (1993): 199, 206–210. Geradin, Reysen & Henry, ‘Extraterritoriality, Comity and Cooperation in EC Competition Law’, , July 2008;Van Gerven & Hoet, ‘Some Notes on Transnational Competition Law Issues’, Legal Issues of Economic Integration 28 (2001): 195–210. See, supra, text at n. 42. AG Bot Opinion, supra n. 26, para. 43 (citing Case C-49/92 P, Anic [1999] ECR I-4125, para. 78).This is also a basic human or fundamental rights principle. See, supra, text at n. 97.

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presumption of innocence.113 We believe, therefore, that AG Bot was right in insisting that other indicia of parental involvement in a subsidiary, beyond the holding of capital, need to be present before the presumption of parental liability can be applied.114 AG Bot also echoed the scepticism of many practicing lawyers in respect of the general assertion that the parental liability presumption is rebuttable and therefore compatible with the fundamental right to be presumed innocent under Article 6 ECHR. In AG Bot’s view, actual experiences had shown that this presumption was very difficult to rebut.115 For example, in a recent case, the Court of Justice found that a subsidiary’s reporting of implementation of strategic and commercial plans to the parent company constituted an indication of the parent exercising control over the subsidiary.116 Yet absent extraordinary circumstances (such as receivership or trusteeship), it is doubtful that a wholly owned subsidiary could ever refrain from sharing such information with its parent.117 Interestingly, AG Bot felt too that respect for fundamental rights in EU competition law proceedings was even more important given the Commission’s multiple roles as investigator, prosecutor, and decision-maker.118 2.1[c]

Better Reasoning:An Interim Solution?

In light of this debate, it is of special interest that in very recent judgments both the Court of Justice and the General Court have begun to quash the Commission’s application of the parental liability presumption.The General Court came first. In its Air Liquide and Edison judgments of June 2011, it found that the Commission had not properly examined the appellant’s rebuttals against this presumption. According to the Court, the Commission had not explained why 113

114

115

116 117

118

See, supra, text at nn. 53 and 96. Accord Bailleux, ‘Le salut dans l’adhésion? Entre Luxembourg et Strasbourg, actualités du respect des droits fondamentaux dans la mise en œuvre du droit de la concurrence’, Revue Trimestrielle du Droit Européen 46 (2010): 31, 44. Note that AG Bot ultimately did not find a violation of the presumption of innocence in ArcelorMittal, because he felt that the General Court and Commission actually did take other indicia into account before applying the presumption.AG Bot Opinion, supra n. 26, paras 214–215. To illustrate this point, he referred to the General Court’s review of the detailed rebuttals in Case T-174/05, Elf Aquitaine, judgment of 30 Sep. 2009, paras 160–174. See AG Bot Opinion, supra n. 26, para. 212 and n. 91. Case C-90/09 P, General Química, judgment of 11 Jan. 2011, para. 107. Winckler, ‘Parent’s Liability: New Case Extending the Presumption of Liability of a Parent Company for the Conduct of Its Wholly Owned Subsidiary’, Journal of European Competition Law & Practice 2 (2011): 231, 233. See also Voet van Vormizeele, supra n. 86, 1014 (in practically all cases in which a parent company can hold its subsidiary accountable, the parent will be deemed liable under EU competition law for that subsidiary according to the present case law). AG Bot Opinion, supra n. 26, para. 205. Compare authorities quoted, supra, in nn. 8, 9, and 15. This consideration echoed earlier case law of the General Court; see Case T-30/91, Solvay [1995] ECR II-1775, para. 83.

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the specific and documented rebuttals raised by the defending parent company about the autonomy enjoyed by its subsidiary were not pertinent. The rebuttals referred to both structural and actual decision-making autonomy of the subsidiaries.119 The Court agreed with the appellant that the Commission thereby had violated its EU treaty obligation to duly state the reasons for its decisions.120 Having annulled the contested decision on this ground, the Court in an exercise of judicial economy declined to rule on the companies’ alternative plea that the Commission, by not addressing their rebuttals to the parental liability presumption, had violated their rights of defence.121 Thus, the General Court avoided being drawn into the debate on fundamental rights in cases involving parental liability. Similarly, in September 2011, the General Court invalidated the liability attributed to parent company Grolsch. The General Court found that the Commission had insufficiently reasoned its attribution of the subsidiary’s conduct to the parent company.Thus, the Commission had denied the parent company the possibility to rebut the parental liability presumption.122 In addition, just before this article went to press, the Court of Justice reversed the General Court’s judgment in Elf Aquitaine. It found that the lower court could not have upheld the reasoning given by the Commission to reject the rebuttals of the appellant parent company to the presumption of its liability for conduct by a subsidiary. According to the Court of Justice, the Commission’s reasoning was deficient.123 The effect of these judgments may well be to weaken the parental liability presumption by creating more space for rebuttals of defendants attesting to the autonomy of subsidiaries. Important questions remain though. What exactly are the rebuttals that can persuasively demonstrate that the presumption of parental liability should not apply in a particular case? Must these rebuttals indicate that the subsidiary concerned generally acted autonomously from the parent company or that the subsidiary acted autonomously in respect of the impugned conduct? Likewise, what degree of autonomy is required? To the extent the Commission would now more readily examine and accept rebuttals to the presumption of parental liability for wholly owned subsidiaries, this would be in line with the impact a claim, based on the presumption of innocence, should have in a successful challenge of the parental liability rule under the ECHR. Such an outcome would certainly be positive, as it means a more immediate change in EU (and national) competition law before the ECtHR has 119

120 121

122 123

Case T-185/06, Air Liquide, judgment 16 Jun. 2011, paras 65–82; Case T-196/06, Edison, judgment of 16 Jun. 2011, paras 60–90. See Art. 253 TFEU. To be more precise, the General Court declined to deal with the plea relating to the rights to the defence in Edison (para. 95) and summarily dismissed this plea in Air Liquide (para. 39). Case T-234/07, Koninklijke Grolsch NV, judgment of 15 Sep. 2011, paras 84–92. Case C-521/09 P, Elf Aquitaine, judgment of 29 Sep. 2011, paras 159–168.

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had occasion to rule on the matter. At the same time, the technique used by the EU courts of referring only to the reasoning requirement of EU law could blunt the impact of the presumption of innocence of Article 6(2) ECHR. Although the difference in practice may not appear all that great, fundamentally Article 253 TFEU and Article 6(2) ECHR have different consequences. As long as the Commission comes up with better explanations when rejecting rebuttals to the parental liability rule, it could conceivably meet the EU courts’ criticisms in these recent judgments. In contrast, a consideration of the presumption of innocence might force competition authorities like the Commission (and, ultimately, the Courts) to do something about the content of the presumptions. Where the parental liability rule is concerned, the Commission might have to accept rebuttals showing autonomy in the subsidiary’s conduct rather more easily or even, given the far-reaching consequences of the presumption, to require certain accompanying indicia showing decisive influence of the parent in the offending subsidiary’s conduct before the presumption can operate. 2.2

THE PRESUMPTIONS INHERENT IN THE PROHIBITION ON EXCHANGES OF FUTURE PRICES

The Commission’s new Horizontal Guidelines published in January 2011 posit that individualized exchanges of future prices among competitors have a high potential to generate restrictive effects as they are likely to lead these competitors to reach a collusive outcome.124 Accordingly, the Commission categorizes such information exchanges as restrictions ‘by object’ within the meaning of Article 101 TFEU.125 The Guidelines add that exchanges of information on future prices are very unlikely to fulfil the conditions of Article 101(3) TFEU.126 With this approach, the Commission has significantly reduced the burden it would normally carry in showing an infringement of competition law: (i) it presumes that exchanges of future prices result in a concurrence of wills on the market (joint conduct127 ), and (ii) it presumes that this market conduct, which it

124

125 126 127

Guidelines on the applicability of Art. 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, OJ C11, 14 Jan. 2011, 1 (‘Horizontal Guidelines’). Ibid., para. 74. Ibid. A terminological comment: We will use the term ‘joint conduct’ to denote a concurrence of wills, as opposed to ‘parallel’ conduct that is not the result of concertation or a concurrence of wills. Parallel conduct (‘conscious parallelism’) is considered unobjectionable in EU competition law. For this distinction, see Case C-8/08, T-Mobile Netherlands BV and Others v. Raad van bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-4529, para. 41; Joined Cases C-116/85, C-117/85, and C-125/85–C-129/85, A.Ahlström Osakeyhtiö and Others v. Commission [1993] ECR I-1307, para. 126.

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considers to be particularly offensive, almost always has anticompetitive effects (and therefore amounts to a restriction ‘by object’). Moreover, the Commission anticipates that these presumptions cannot really be rebutted. While it is true that discussions among competitors about future prices may be suspect, the shortcuts taken by the Commission in its Horizontal Guidelines appear problematic for several reasons, not least in view of the presumption of innocence. Once companies have exchanged information on future prices, they are virtually condemned by the Guidelines. The discussion below focuses on the presumption that an exchange of future prices causes joint market conduct. We note at the outset that this troublesome presumption of causality so far has received far less attention than the parental liability presumption. Accordingly, there are fewer cases and commentaries. Furthermore, we will also take a closer look at the concept of restriction ‘by object’, which aggravates the problems with the causality presumption. 2.2[a]

Presumption of Causality

The presumption that information exchange leads to a concurrence of wills on the market cannot be a foregone conclusion. That would conflict with the requirements of Article 6 ECHR, assuming of course that the presumption of innocence is relevant. 2.2[a][i]

The Relevance of Fundamental Rights

The debate on whether the presumption of innocence is relevant to the causality presumption is usefully illustrated by the proceedings in the T-Mobile case.128 The Dutch Court in T-Mobile was originally asked to review whether the Dutch Competition Authority had correctly established that an information exchange between mobile telecommunications providers on commissions payable to their sales agents constituted a concerted practice prohibited by Article 101 TFEU. This required a showing of three elements: (i) parallel conduct on the market, which (ii) was caused by (iii) concertation among competitors – so that the market conduct could be said to have been the result of a concurrence of wills (and therefore actually constitutes ‘joint conduct’).129 The first element was not in dispute, as there was sufficient evidence that information on commissions payable 128

129

For more detail, though not on the presumption of innocence, see Gerbrandy, ‘Case Note on Case C-8/08,T-Mobile Netherlands BV, KPN Mobile NV,Orange Nederland NV,Vodafone Libertel NV v. Raad van bestuur van de Nederlandse Mededingingsautoriteit’, Common Market Law Review 47 (2010): 1199–1220. Case C-235/92 P, Anic [1999] ECR I-4125, para. 147.

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to agents had been exchanged during one meeting. The third element did not appear to be in dispute either, as the operators did lower the commissions to their sales agents subsequent to the meeting. What was in dispute was whether one thing (the reduction of the commissions) was caused by another (the information exchange at one single meeting) and whether the Dutch Court was obliged to apply the presumption of a causal link established by the Court of Justice in earlier cases in respect of Commission decisions130 in this particular case, which concerned national proceedings. On these contested issues, the Dutch Court asked a preliminary ruling from the Court of Justice. According to AG Kokott, the question of whether a causal link existed did not concern the burden of proof but the standard of proof. She opined that in national proceedings concerning Article 101 TFEU, only the burden of proof is a matter of EU law, while the standard of proof is not.131 Still, EU law would become relevant to the standard of proof in the event the effectiveness of EU law enforcement might be jeopardized.132 From this perspective, AG Kokott did offer some EU law-inspired thoughts on the standard of proof after all. She felt that the presumption of causality was acceptable in order to avoid imposing an impossible standard of proof on competition law authorities. She called attention to the difficulties the authorities have in collecting proof on secretive anticompetitive practices.133 She felt it was only natural, a matter of common experience, to presume a causal link between concertation (information exchange) and market conduct – unless defendant companies could produce a cogent alternative explanation for their conduct, supported by evidence.134 Interestingly, AG Kokott also briefly considered the presumption of innocence.135 She quickly concluded that the causality presumption did not conflict with this fundamental right, as the presumption was based on common experience and companies were at liberty to refute it.136 The Court of Justice chose a somewhat different path. It went further than AG Kokott and held that the causality presumption stems from Article 101 TFEU 130 131

132 133

134 135

136

See Case C-8/08,T-Mobile,supra n.127,paras 51–53;Case C-199/92 P,Hüls,supra n.40,paras 161–163. See the Opinion of Advocate General Kokott in Case C-8/08, T-Mobile [2009] ECR I-4529, para. 81 (‘AG Kokott Opinion’). Ibid., para. 87. The notion that the Commission’s standard of proof in respect of cartels can be lowered, because of their secretive nature, has not gone unchallenged. See Forrester, ‘A Bush in Need of Pruning: The Luxuriant Growth of Light Judicial Review’, in European Competition Law Annual 2009: Evaluation of Evidence and its Review in Competition Cases, eds Ehlermann & Marquis (Oxford and Portland: Hart, 2010), 407. See AG Kokott Opinion, supra n. 131, paras 89–90. Although two months later in the Akzo Nobel case, in the context of the parental liability, she would say that the presumption of innocence is not relevant to the standard of proof. See text, supra, at n. 76. See AG Kokott Opinion, supra n. 131, paras 92–93.

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and is an integral part of EU law, which national courts are obliged to apply – subject to proof from the defendant companies to the contrary. Thus, the Court made no distinction between the burden and the standard of proof nor did the Court allow national courts a certain leeway in applying the causality presumption according to their national rules. Furthermore, although envisaging the possibility that defendant companies might offer rebuttals to the causality presumption, the Court of Justice did not investigate at all the implications of the presumption of innocence. The Court also held that the causality presumption could apply to this case, even though the information exchange took place during only one meeting. Depending on the circumstances, and the legal and economic context, the Court did not rule out that one single meeting between competitors was capable of distorting competition.137 The Court’s silence on the presumption of innocence might suggest that the Court found that it was of no relevance to the causality presumption. By stating that the latter presumption stems from Article 101 TFEU, was the Court saying that the causality presumption was part of substantive law and therefore implicitly rejecting the relevance of the presumption of innocence? We do not believe that this would be a correct reading. Even if the Court somehow elevated the causality presumption to being part of Article 101 TFEU, this does not necessarily mean that this presumption is part of the definition of concerted practices. It could mean that the Court considers that rules on evidence are part of substantive law and not procedural law.138 Either way, this does not shake off the presumption of innocence. Even if some argue that the presumption of innocence is not pertinent to the definition of the infringement to be proven,139 the line between rules of evidence and elements of the infringement is hazy. In this connection, it is worth recalling the Court’s recent Spector judgment. This case concerned a request for a preliminary ruling from a Belgian court, asking for an interpretation of the prohibition on insider trading in an EU directive.140 The Court of Justice did not hesitate in recalling the requirements of the presumption of innocence in giving an interpretation of the substance of this prohibition.141 More specifically, the Court rejected a broad interpretation pursuant to which any primary insider in possession of inside information who enters into a market transaction would automatically fall within the prohibition of 137 138

139

140

141

Case C-8/08, T-Mobile, supra n. 127, paras 59–61. See Castillo de la Torre, supra n. 19, 333, n. 61. However, see Gerbrandy, supra n. 128, 1214, who suggests a more nuanced analysis. See Castillo de la Torre, supra n. 19, 323. However, see Tadros & Tierney, ‘The Presumption of Innocence and the Human Rights Act’, Modern Law Review 67 (2004): 402, 413. Directive 2003/6/EC of the European Parliament and of the Council of 28 Jan. 2003 on insider dealing and market manipulation (market abuse), OJ L 96, 12 Apr. 2003, 16. Case C-45/08, Spector Photo Group, supra n. 62, paras 39–43.

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insider trading.142 The Court insisted, with reference to fundamental rights, that any presumption attributed to the author of insider trading should be open to rebuttal and guarantee the rights of the defence.143 Going back to T-Mobile, when the Dutch Court received the preliminary ruling, it applied the legal principles of EU competition law elucidated by the Court of Justice but then took a surprising turn.The Dutch Court found that the Dutch Competition Authority had infringed the presumption of innocence, having dealt all too summarily with the defendants’ rebuttals to the causality presumption (which the Dutch Court was instructed to apply by the Court of Justice). We believe the Dutch Court was right to do so and will test the causality presumption as formulated by the Commission in its Horizontal Guidelines accordingly. 2.2[a][ii]

The Impact of Fundamental Rights

The Commission’s starting point in the Horizontal Guidelines is that companies must determine their commercial policy independently,144 which makes sense.The Guidelines then posit that this precludes any direct or indirect contact between competitors, the object or effect of which leads to collusive market conduct.145 Again, this makes sense.Yet the Guidelines continue to affirm in almost the same breath that sharing of strategic data among competitors amounts to concertation, because it reduces the independence of competitors’ conduct on the market.146 This is a big leap, as the Commission now presumes that sharing of information necessarily will lead companies to joint conduct on the market. For one thing, the Commission thereby ignores that, having exchanged information, companies may well use that information (as any other market intelligence they gather) to compete more fiercely with each other. Nevertheless, once parallel conduct has been established following an information exchange, the presumption of a causal link may seem appropriate (in which case that conduct would become objectionable, joint conduct). According to AG Kokott in T-Mobile,147 such an inference would be supported by common experience. We would not take issue with that. However, the presumption of innocence requires that rebuttals must be effectively available to the defendants. One problem of the Guidelines is that no such possible rebuttals have been

142 143 144 145 146 147

Ibid., para. 46. Ibid., para. 44. Ibid., para. 60. Ibid., para. 61. Ibid. AG Kokott Opinion, supra n. 131, para. 90.

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articulated (with one very limited exception, relating to ‘distancing’, discussed below).148 The other defence mentioned by the Commission, the possibility of an exemption under Article 101(3) TFEU, has nothing to do with the causality presumption. This exemption could only be used at a later stage, to justify a restriction once it has been found to exist. Nor do the Guidelines indicate which standard of proof defendant companies must meet in any rebuttal they do put forward. AG Kokott does seem to go too far in requiring cogent proof.149 It is not necessary either, as the Dutch Court clarified in T-Mobile, that defendants produce irrefutable evidence that the information exchange had no effect on their market conduct.150 It should be sufficient for the rebuttal to weaken or throw doubt on the causality presumption.151 Yet the Guidelines seemingly create yet another, more fundamental, problem. By affirming that sharing of strategic data among competitors amounts to concertation, because it reduces the independence of competitors’ conduct on the market, the Commission also implies that it does not need to make a showing of parallel, let alone joint conduct following an information exchange. In other words, for the Commission, exchange of strategic data creates a presumption of both a causal link and joint market conduct.152 In our view, such a truncated analysis is taking too many liberties with the Commission’s standard and ultimately its burden of proof.153 This creates a profound tension with the presumption of innocence. Admittedly, there is case law of the Court of Justice that may appear to lend support to the Commission’s approach. The Court seems to have reasoned sometimes that an information exchange between competitors reduces their uncertainty about market conditions, and thereby reduces their independence on the market. In this way, the Court seems to have construed a direct link between information exchange and market conduct, so that information exchange is deemed concertation that necessarily leads to anticompetitive market conduct.154 However, such statements of the Court have to be put in the context of the facts of a particular case, which may have left very little room for doubt that one thing (market conduct) followed another (information exchange).This cannot be a justification though for any shortcuts in a general statement like the Horizontal 148

149 150 151 152 153

154

See, e.g., ECtHR, Janosevic, supra n. 21, paras 100, 102, and 104 (favourably noting that the national law establishing the presumption articulated various rebuttals). See text, supra, following n. 69. CBvB, 12 Aug. 2010,AWB 06/657, 06/660, and 06/661, T-Mobile Netherlands B.V., para. 7.5.2. Ibid.; see also text, supra, following n. 69. Horizontal Guidelines, supra n. 124, para. 61. See also Loozen, ‘The Application of a More Economic Approach to Restrictions by Object: No Revolution After All (T-Mobile Netherlands (C-8/08))’, European Competition Law Review 31 (2010): 146, 150. See, e.g., Case C-199/92 P, Hüls, supra n. 40, paras 165 and 167; Case C-8/08, T-Mobile, supra n. 137, para. 51.

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Guidelines that need to set out the various steps in the legal reasoning, without being distracted by the facts of a particular case. Moreover, contrary to the Court’s case law, the Guidelines were drafted following the entry into force of the Lisbon Treaty, including the Charter and its linkage to the ECHR. Accordingly, the presumption of innocence has become more directly relevant to any presumptions the Commission now formulates to alleviate its burden of proof.155 One counter to our thesis that the Commission must show the existence of at least parallel conduct subsequent to an information exchange, before the presumption of a causal link can become operational, is that in respect of an exchange of future prices we effectively deny that they constitute a restriction ‘by object’.We would be forcing the Commission to show anticompetitive effects. It is to be recalled though that the Court of Justice distinguishes between effects on conduct on the market (market conduct) and (restrictive) effects on the market (market effects).156 The Commission must show that a concertation between the investigated companies was reached and later those undertakings pursued market conduct precisely in accordance with that concertation and it may then presume a relation of cause and effect between concertation and market conduct.157 However, where certain market conduct is deemed to represent a restriction ‘by object’, the Commission does not have to show restrictive effects of that conduct on the market. Expressed differently, to counter allegations that their market conduct was the result of concertation, it is for the investigated companies to prove that there is an alternative explanation for their market conduct, so that the concertation did not influence their market conduct.158 The line between the two concepts (market conduct and market effects) may appear subtle.Yet the distinction can be illustrated by considering the example of two small companies present in different geographic markets exchanging information. Even if this exchange can be shown to have led to joint market conduct, the effects any conduct of these two players can have on the market (or competitive conditions) will probably be minimal. In fact, the problems with the causality presumption, and the presumption of joint conduct following an exchange of future prices, are exacerbated because these exchanges are also characterized as a restriction ‘by object’. In our view, combining these presumptions while eliminating the requirement that the Commission must show effects of conduct it believes to be anticompetitive reverses the burden of proof to an unacceptable extent. The Commission has 155 156

157 158

See text, supra, at n. 62. See, e.g., Case C-199/92 P, Hüls, supra n. 40, para. 165 (although the very concept of a concerted practice presupposes conduct by the participating undertaking on the market, it does not necessarily mean that that conduct should produce the specific effect of restricting, preventing or distorting competition). AG Kokott Opinion, supra n. 131, para. 90. Ibid.

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turned the exchange of future prices159 into a crime, against which participating companies in practice are unable to defend themselves. After all is said and done, the Commission would seem to offer only two ways out: (i) withdrawal from the market, which is a draconian step, or (ii) otherwise distancing oneself from the information exchange and the presumed effect on one’s conduct this is supposed to have had.Yet how such distancing is to be done is left unclear.The Commission only suggests that a clear and immediate statement that one did not want to receive such information would suffice.160 Yet this again presumes that the information exchange could only have led to a collusive and anticompetitive outcome. The Commission leaves no room for a rebuttal that the information exchange did not lead to a concurrence of wills (or that such joint conduct was not anticompetitive). Again, this is a serious problem from the perspective of the presumption of innocence, which we submit the Commission needs to resolve (and the EU courts need to clarify161 ). In our view, the Commission is well advised to publish a supplement or an amendment to its Horizontal Guidelines in which it explicitly engages with the implications of fundamental rights, enshrined in the Charter and the ECHR.With respect to the causality presumption attached to the exchange of future prices (or quantities), clarification is needed on several issues, notably: – the causality presumption does not apply unless there is a showing of a concurrence of wills on the market following an information exchange; – rebuttals beyond ‘distancing’ are available to the presumption of a causal link; – the standard of proof defendant companies have to meet in formulating their rebuttals is relaxed to weakening or raising doubts about the causality presumption. This recommendation fits well with other initiatives the Commission has taken. Since a few years now, the Commission has been issuing papers in which it enquires how the increased importance of fundamental rights, such as the presumption of innocence, can affect EU policies.162 These are laudable initiatives well worth following in the area of competition law.163

159

160 161 162

Note that the Commission has excluded from its definition of reprehensible exchanges of future prices those instances where companies are fully committed to sell in the future at prices that they announced to the public previous to an information exchange with a competitor. See Horizontal Guidelines, supra n. 124, 16, n. 4. Ibid., para. 62. Compare Case C-235/92 P, Anic, supra n. 129, para. 127. Commission Staff Working Paper, Operational Guidance on Taking Account of Fundamental Rights in Commission Impact Assessments, 6 May 2011, SEC(2011) 567; Communication from the

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Restriction ‘by object’

As indicated above, in our view, the characterization of exchanges of future prices as a restriction ‘by object’ is controversial, as it exacerbates the problems raised by the presumption of causality. Within the confines of this article, a few issues raised by the characterization as restriction ‘by object’ should be briefly mentioned. First, the presumption of innocence would seem to discipline the characterization of restriction ‘by object’ as well. That characterization really presumes anticompetitive effects, without this presumption being rebuttable.164 According to the ECtHR, presumptions should not go further than is reasonably necessary to achieve a public policy goal.165 Given the lack of certainty surrounding the effects of information exchanges, even on future prices, it seems disproportionate to automatically infer an anticompetitive object, with the procedural consequences this entails for the companies concerned. In its Guidelines on Maritime Transport of 2008,166 the Commission noted that an information exchange, in its own rights, might constitute an infringement of Article 81 of the Treaty by reason of its effects. Nowhere did the Commission refer to any infringement ‘by object’. Given that presumptions are to be based on common experience,167 it is legitimate to ask what experience the Commission gained between 2008 and 2010, which allows it to presume now that any exchange of future prices is anticompetitive ‘by object’. In the Horizontal Guidelines, the Commission has not called attention to any relevant developments,168 and we can only note that disagreements on the effects of information exchanges among

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Commission, Strategy for the Effective Implementation of the Charter of Fundamental Rights by the European Union, 19 Oct. 2010, COM (2010) 573/4; Green Paper,The Presumption of Innocence, 26 Apr. 2006, COM(2006) 174. In its Best Practices on Procedures, the Commission refers only once, and summarily, to fundamental rights in discussing the right to be heard. See ‘Best Practices on the Conduct of Proceedings concerning Arts 101 and 102 TFEU’, , 2010, para. 3.1. See ‘DG Competition, Best Practices for the Submission of Economic Evidence and Data Collection in Cases concerning the Application of Arts 101 and 102 TFEU and in Merger Cases’, , 2010, 3, n. 1; Communication from the Commission, Guidelines on the Application of Art. 81(3) of the Treaty, OJ C101, 27 Apr. 2004, 100, para. 21. However, see Castillo de la Torre, supra n. 19, 321–322. See, supra, text at n. 47. Guidelines on the Application of Art. 81 of the EC Treaty to Maritime Transport Services, OJ C245, 26 Sep. 2008, 8, para. 43. See, supra, text at n. 107. The Court’s judgment in T-Mobile (supra nn. 127 and 137) certainly did not posit such a broad presumption and the very few cases that intervened in this period do not represent a common experience (apart from the fact that they are being challenged before the EU courts). See, e.g., Case COMP/39.188, Bananas, summary published in OJ C 189, 12 Aug. 2009, 12–14, .

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economists persist. Thus, some economists have pointed out that exchanges on future prices do not necessarily lead to anticompetitive outcomes.169 The Commission’s conclusive approach in the Horizontal Guidelines is also questionable in light of the case law of the Court of Justice. For one thing, in T-Mobile, the Court stated that the assessment as to whether a concerted practice is anticompetitive ‘by object’ requires that close regard must be paid in particular to the objectives which it is intended to attain and to its economic and legal context.170 It went on to say that the concerted practice must be capable in an individual case, having regard to the specific legal and economic context, of resulting in the prevention, restriction or distortion of competition within the common market.171 This contextual approach towards finding restrictions ‘by object’ was reiterated by the Court in the GSK case,172 though it actually criticized the lower Court on other grounds. AG Trstenjak in that case showed more clearly the implications of the contextual approach. She expressly rejected a plea by the Commission that an agreement that seeks to restrict parallel trade should always be regarded as a restriction of competition ‘by object’.173 According to the AG, market structure, development, and other characteristics all should be assessed to be able to determine whether specific conduct amounts to a restriction of competition ‘by object’.174 As far as information exchange on prices is concerned, we would think that factors meriting analysis would include market power, market (in)stability (evolution of market shares of suppliers exchanging information), maturity of the market, and customer bargaining power. Any automatic (conclusive) presumption 169

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See, e.g., Padilla, ‘The Elusive Challenge of Assessing Information Sharing among Competitors under the Competition Laws’, in Information Exchanges between Competitors under Competition Law, OECD Policy Roundtable 2010 (Paris: OECD, 2011), 434, 437; Rosati, ‘Echange d’informations et autres comportements coordonnés: Pour une théorie de l’entente, Droit & économie’, Concurrences 27, 28, no. 4 (2008); but see, e.g., Kühn, Designing Competition Policy towards Information Exchanges – Looking Beyond the Possibility Results, OECD Policy Roundtable 2010, 416, 422–423; Bennett & Collins, ‘The Law and Economics of Information Sharing: The Good, the Bad and the Ugly’, European Competition Journal (2010): 311, 328. For a useful summary of the different positions, see Jenny, ‘L’économie des échanges d’informations entre concurrents et le droit de la concurrence, Droit & économie’, Concurrences 1–4, no. 2 (2011). Case C-8/08, T-Mobile, supra n. 127, para. 27. Ibid., para. 31. See Lebrun & Balthazar, ‘Definition of Restrictions of Competition ‘by object’: Anything New Since 1966?’, in The International Comparative Legal Guide to Merger Control (2011) (Global Legal Group, 2011), 10, 13 (arguing that an extensive interpretation of restriction by object infringes the rights of the defence). Joined Cases C-501/06 P, C-513/06 P, C-515/06 P, and C-519/06 P, GlaxoSmithKline [2009] ECR I-9291, 55–64. Opinion of Advocate General Trstenjak in GlaxoSmithKline, ibid., paras 92 and 98. A similar contextual approach towards finding restrictions by object was recently followed by the Belgian Competition Council, Case 2009-I/O-11, BCT, decision of 28 May 2009 (where even an instance of price fixing and market sharing was not considered a restriction ‘by object’ because of the context). See Louis, ‘Note: le Conseil de la concurrence refuse la solution de facilité: L’objet et l’effet restrictif de la concurrence dans l’affaire des bus touristiques bruxellois’, Revue de la Concurrence Belge 5 (2010): 113.

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of restriction ‘by object’, regardless of a contextual assessment, could well produce too many Type II errors. Moreover, in minimizing the possibility of justifying any exchanges of future prices, the Commission comes close to formulating a per se prohibition. Yet any such prohibition runs counter to a basic tenet of EU competition law. As the Court of Justice underlined in its seminal Société Technique Minière judgment, contrary to US law, EU competition law does not admit per se illegality. The Court of Justice ruled that Article 85(1) [(now Article 101(1) TFEU)] is based on an assessment of the effects of an agreement from two angles of economic evaluation, it cannot be interpreted as introducing any kind of advance judgment with regard to a category of agreements determined by their legal nature.175 There is, of course, also an institutional reason why the Commission could not lay down new competition law restrictions in a policy document. The Lisbon Treaty has strengthened the principle of democracy, according to which the Commission’s delegated powers have been circumscribed more carefully than before.176 Nevertheless, we see a useful role for Commission documents, such as the Horizontal Guidelines, outlining the lessons it draws from case law. Such documents can help create more legal certainty for stakeholders. However, such documents do need to take into account all directly relevant legal principles, which now include fundamental rights. In sum, there are several compelling reasons why the presumptions inherent in the Horizontal Guidelines on information exchange are too sweeping and need to be restated. 3

CONCLUSION

This article has reviewed the impact of fundamental rights, notably the presumption of innocence, on certain concepts commonly used in EU competition law. These concepts, themselves presumptions, ease the standard and ultimately the burden of proof that the Commission must meet in order to show an infringement of competition law and impose fines. We have first argued that the presumption of innocence, enshrined in Article 47 of the EU’s Charter on Fundamental Rights and in Article 6 ECHR, is relevant to these competition law concepts. To demonstrate this, we have traced the case law of both the ECtHR and the EU courts.When considering the impact 175

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Case 56/65, Société Technique Minière (L.T.M.) v. Maschinenbau Ulm GmbH (M.B.U.) [1966] ECR 235, 248. See notably Art. 290 TFEU. Its implications for competition law are analysed in Weiß, ‘After Lisbon, Can the European Commission Continue to Rely on “Soft Legislation” in Its Enforcement Practice?’, Journal of European Competition Law & Practice 2 (2011): 441–451.

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of the presumption of innocence on competition law, we have submitted that each branch of law has different policy concerns.To the extent competition law chooses not to interfere with the conduct of certain companies, because they form part of an economic unit, for example, this involves an economic policy choice that raises no particular concern under fundamental rights. On the other hand, whenever the Commission decides to fine companies, this is not just a matter of economic policy. Given the severity of these fines (which run in the millions and can approximate EUR 1 billion), their deterrent character, as well as the stigma attached to them, the underlying proceedings before the Commission must also respect fundamental rights. We have tested whether the presumptions used by the Commission in these cases comply with the presumption of innocence in two respects. First, the mere holding of capital (100% of shares) by a parent in a subsidiary nowadays creates a rebuttable presumption that the parent did in fact exercise decisive influence over that subsidiary’s infringing conduct and renders its parent jointly and severally liable for any fine. One of the consequences is that the Commission can effectively impose higher fines. It has long been recognized that the corporate veil of corporate entities may be lifted in exceptional circumstances, when there is, for instance, evidence of fraud or bad faith on the part of the parent. However, with its far-reaching presumption of parental liability EU competition law is interfering too much with the presumption of innocence, also given the considerable difficulties parent companies face in rebutting this presumption. Second, in its new Horizontal Guidelines, the Commission has virtually condemned any company that exchanges future prices with a competitor. This prohibition conflates several presumptions: that there is a concurrence of wills on market conduct following such an information exchange and that this market conduct has anticompetitive effects that are so nefarious that the object of the exchange itself is anticompetitive.With one very limited exception, the Guidelines admit no rebuttals in respect of these presumptions. This creates a profound tension with the presumption of innocence.We recommend that the Commission supplement or amend its Guidelines and explicitly engage with the implications of fundamental rights for EU competition law; it has done so elsewhere. One place to start would be to restate the presumptions on information exchange, so as to bring them into conformity with the presumption of innocence. This article underlines our concern more generally that human or fundamental rights probably have a stronger impact on EU competition law proceedings than the European Commission so far seems to have recognized. As always, it does take some time and effort to reconcile two branches of law that until now have not interacted that much and that were written with different policy objectives in mind (other examples that come to mind are competition law

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and corporate social responsibility177 or international trade law and environmental protection178 ). Yet given the increasing severity of competition law sanctions, the exercise of reconciling these two legal disciplines is both timely and necessary.

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For example, Ottervanger, ‘Maatschappelijk verantwoord concurreren: mededingingsrecht in een veranderende wereld’, Markt & Mededinging 13 (2010): 93–99 (in translation – ‘Competing Responsibly: Competition Law in a ChangingWorld’). For example, Pauweleyn (ed.), Global Challenges at the Intersection of Trade, Energy and the Environment (Geneva:The Graduate Institute, 2010).

Editor José Rivas Associate Editor Book Review Editor Publisher US Review Editor Economics Review Editor

Samia Ahmed Valentine Korah Christine Robben Spencer Weber Waller Doris Hildebrand

Advisory Board Robert Anderson, World Trade Organization

Sir Christopher Bellamy, President, Appeals Tribunal, United Kingdom Competition Commission Manuel Conthe, Former Chairman of Spain’s Securities Commission Sir David Edward, Professor, University of Edinburgh; former Judge, Court of Justice of the European Union. Claus-Dieter Ehlermann, Senior Counsel at Wilmer Cutler Pickering Hale & Dorr LLP Jonathan Faull, Director General of Justice and Home Affairs, European Commission, Professor of Law, Vrije Universiteit Brussels Eleanor M. Fox, Walter J. Derenberg Professor of Trade Regulation, New York University School of Law Allan Fels, Professor at the Australia and New Zealand School of Government Nicholas Forwood, Judge, General Court of the European Union Rafael García-Valdecasas y Fernández, Former Judge, General Court of the European Union Francisco Enrique González Díaz, Cleary Gottlieb, Steen and Hamilton, Brussels Barry E. Hawk, Director, Fordham Corporate Law Institute and Partner, Skadden, Arps, Slate, Meagher & Flom LLP Herbert Hovenkamp, Ben V. & Dorothy Willie Professor of Law and History, University of Iowa, USA Rafael Illescas Ortiz, Professor of Commercial Law, University Carlos III, Madrid Frédéric Jenny, Professor of Economics at ESSEC, Chair of the OECD Competition Committee Valentine Korah, Emeritus Professor, University College London, Honorary Professor of the College of Europe Koen Lenaerts, Judge, Court of Justice of the European Union Ignacio de León, Professor, Department of Economics, New York University Patrick McNutt, Visiting Fellow, Manchester Business School, UK and former Chairman, Competition Authority, Dublin and former Chairman, Jersey Competition & Regulatory Authority, UK. John L. Murray, Chief Justice of Ireland; former Judge, Court of Justice of the European Union and Visiting Professor, l’Université Catholique de Louvain David O’Keeffe, Professor, University College London and Visiting Professor, College of Europe, Bruges Giuseppe Tesauro, Judge, Corte Constituzionale della Repubblica italiana Spencer Weber Waller, Professor and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of Law Wouter P.J. Wils, Hearing Officer, European Commission, and Visiting Professor, King’s College London Editorial Board Ralf Boscheck, Marie Demetriou, Romain Galante, Juan Gutiérrez, Donogh

Hardiman, Benoît Keane, Pablo Muñiz, Ali Nikpay, Morten Nissen, Kletia Noti, Laura Olza-Moreno, Dimosthenis Papakrivopoulos, Rudolph Peritz, Tom Pick, Azza Raslan, J. Matthew Strader, Nicoleta Tuominen, Michael Weiner All correspondence should World Competition be addressed to: Bird & Bird Avenue, Louise 235 box 1, 1050 Brussels, Belgium. Tel: +32 (0)2 282 6022 Fax +32 (0)2 282 6011 E-mail: [email protected] © 2011 Kluwer Law International BV, The Netherlands, All Rights Reserved. ISSN 1011-4548 Mode of citation: 34 W.Comp. 4

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