Human Rights and Community Competition Law: a Rights of Defence Issue for the Commission

Riley, Human Rights and Competition Law.

Human Rights and Community Competition Law: A Rights of Defence Issue for the Commission.

By Dr. Alan Riley, Senior Lecturer in European Competition Law, Centre for Legal Research, Nottingham Law School, and Associate Research Fellow, Centre for European Policy Studies, Brussels.

I. Introduction At first sight classical human rights, such as the right not to be tortured or the right to life appear to have little to do with the defence rights of undertakings engaged in competition procedures before the European Commission. Human or fundamental rights claims were initially treated with a high degree of scepticism by the Commission and the Community courts, save in a few key due process instances, such as the basic public law right to be heard, and to a degree legal professional privilege. However, two factors have transformed the debate. First, the developing case law of the European Court of Human Rights in cases such as Saunders and Colas Est, which have cast doubt on the human rights compliance of Community competition procedures. Second, the cartel enforcement revolution, which has led to far many more true ‘sanction’ or quasi-criminal price-fixing cases being subject to Community competition procedures. These cases have also resulted in very high fines in the order of hundreds of millions of euros, together with a very strong rhetoric from the Commission and other institutional actors denouncing such behaviour. It is argued that in such circumstances that the Community’s competition procedures have to be revisited and reviewed to bring them closer into line with modern European human rights standards.

II. The Commission’s Investigatory and Contentious Procedures. i. Investigatory Procedures. i. Article 18: The Power to Obtain Information. ii. Articles 20 and 21: The Power of Inspection of Business and Private Premises. iii. Leniency ii. Contentious Procedures i. From Statement of Objections via Access to File to Oral Hearing ii. Power of Decision and Fining Powers iii. Right of Challenge Article 230 EC Treaty.

III. The Human Rights: The Approach of the European Court of Justice. i. The Human Rights Protection Provided by the ECJ. ii. The Application of ECJ Human Rights case law to Competition Law: Cases 46/87 and 227/88 Hoechst AG v. Commission [1989] ECR 2859 and Case 374/87 Orkem SA v. Commission [1989] ECR 3283.

IV. Applying the Case Law of the European Court of Human Rights (EctHR) i. Are the Community’s Competition Procedures Criminal for the Purposes of the European Convention of Human Rights? Stenuit v. France [1992] EHRR 509. ii. The Power to Obtain Information and the privilege against Self-Incrimination, Saunders v. United Kingdom [1996] EHRR 313. iii. The Power of Inspection and the right to protection of home and business premises in Article 8 of the ECHR, Colas Est v. France [2002] Application No. 37971/97, 16th April 2002. iv. Limited Legal Professional Privilege Contained in Case 155/79 AM&S Europe v. Commission [1982] ECR 1575 compared with the Campbell v. United Kingdom [1993] EHRR 137 line of ECtHR case law. v. Is Access the File adequate under Community Competition Procedures under Article 6? vi. Can the Commission investigate, prosecute and make final decisions without a hearing before an independent jurisdiction without infringing Article 6 ECHR? vii. Is a Commission Decision adopted by the Commission definitively holding that an undertaking has infringed the competition rules an infringement of the presumption of innocence contained in Article 6(2)? viii. Dangers for National Competition Authorities who adopt Commission competition procedures. ix. Can the European Competition Network function given these potential legal challenges to Community Procedures?

V. Reaction of the European Court of Justice and the Court of First Instance to ECHR Case Law Developments.

After an initial refusal to consider the ECHR argument, see for example T-112/98 Mannesmannrohren-Werke v. Commission [2001] ECR II-729, Both Courts have been struggling to avoid the prospect of a conflict between the Luxembourg and Strasbourg Courts. See for example Case C-238/99 PVC II [2002] ECR I-8375 Case

C-94/00 Roquette Freres [2002] ECR I-9011 and Case T-236/01 et seq Tokai Carbon v. Commission [2004] ECR, judgment of 29th April 2004 not yet reported.

VI. The Cartel Enforcement Revolution Strengthens the ECHR Arguments. It could have been argued that the ECHR arguments were marginal to the development of Community competition procedures as the Commission rarely dealt with ‘sanction cases’, which in competition law are largely price-fixing cartel cases, that are likely to attract ECHR protection. Traditionally, the Commission focussed on administration of agreements through a notification process, which rarely revealed any serious competition law infringements. However, Regulation 1/2003 abolishes the administrative notification process. The Commission has indicated its intention to focus on the more serious competition infringements such as price-fixing cases. Furthermore, in February 2002 the Commission adopted a US style leniency notice. This notice grants immunity from fines in a price-fixing case to the first member of a cartel to provide evidence of the cartel’s existence to the Commission. Between February 2002 and November 2004 the Commission received 92 leniency applications and has already granted 38 conditional immunity applications. It is currently dealing with more cartel cases than in the period between the founding of the Community in 1958 and 2002. The principal focus of the application of Article 81 cases in future is likely to be price-fixing cases. In such circumstances, the human rights arguments become far more central to the application of competition law by the Commission, and they carry more weight as the Commission increases both the fines and the rhetoric against cartels.

VII. Conclusion: Redefining Community Competition Procedures.