1 T he obje c tive : to pr e ve nt double pe nalisation | i - PDF document

Should jur isdic tions se e k to alloc ate c ase s to pr ll t t e ve nt t double pe nalisation? AN E U PE RSPE CT IVE Kr is Van Hove ICN Car te l Wor kshop, T aipe i 3 October 2014 1 Ove r vie w The obje c tive : “to prevent double penalisation”    The me ans : “jurisdictions seek to allocate cases” The me ans : jurisdictions seek to allocate cases  The practitioner’s vie w : concerns and suggestions Conclusion  2 1

T he obje c tive : “to pr e ve nt double pe nalisation” | i  What is the “no double pe nalisation ( ne bis in ide m )” pr inc iple ? Conviction or acquittal under a final criminal judgment in one State bars prosecution q j g p of the same person for the same facts in another State  How is the pr inc iple applie d at the national and E U le ve l? UN: 1966 International Covenant on Civil and Political Rights (Art. 14(7))  Council of Europe: Convention for the Protection of Human Rights and  Fundamental Freedoms (Protocol No 7, Art. 4)  EU case law: a long-established “fundamental principle of EU law” g p p  EU: codified in the Charter of Fundamental Rights of the European Union (Art. 50) National legal systems: recognised as a fundamental legal principle  3 T he obje c tive : “to pr e ve nt double pe nalisation” | ii  How is the pr inc iple applie d in the fie ld of c ompe tition law?  The application has been confirmed in the case law of the EU Courts (e.g. Limburgse Vinyl Maatschappij, C-238/99P) The rationale: the principle is to be observed with respect to EU competition law  proceedings “because of their similarity to proceedings at criminal law.” (Toshiba, Case C-17/10, Opinion of AG Kokott) gse Vinyl Maatsc happij, C-238/ 99P at § 59: “the E CJ in L imbur princ iple o f no n bis in ide m,[…] pre c lude s, in c o mpe titio n matte rs, an unde rtaking be ing fo und guilty o r pro c e e dings fro m be ing bro ught against it a se c o nd time o n the gro unds o f anti-c o mpe titive c o nduc t in re spe c t o f whic h it has be e n pe nalise d o r de c lare d no t liable by a pre vio us unappe alable de c isio n.”  H How is the pr i th inc iple applie d at the inte r i i l li d t th i t national le ve l (othe r ti l l l ( th th than within the E ithi th E U)? U)?  Prosecution and sanctioning are generally considered to be an important expression of sovereignty ECJ: the principle is rejected at the international level because of no “unity of  the legal interest being protected” and no general principle of EU or public international law holding otherwise Traditionally remedied through bilateral or multilateral agreements between  States and is gradually being recognised by international criminal tribunals 4 2

T he obje c tive : “to pr e ve nt double pe nalisation” | iii  Conc lusion The national legal order of the EU Member States and the EU legal order v. the g g  international legal order  Applicable in the competition law field  Double penalisation is an issue where multiple agencies have parallel competences to enforce laws with overlapping legal interests Example in point:   The EU: where the Commission and the Member State agencies are all competent to enforce EU competition law  Solution: case allocation under the European Competition Network (in accordance with indicative, non-binding principles set out in the 2004 ECN Notice) Notice) 5 T he me ans: “jur isdic tions se e k to alloc ate c ase s” | i  Case alloc ation unde r the E ur ope an Compe tition Ne twor k (E CN): Alloc ation Pr inc iple s (i) Case allocation is NOT a “transfer” of a case from one agency to another but merely one agency abstaining from acting or closing the file. (Commission Staff Working Paper accompanying the Commission Report on the Functioning of Reg. 1/2003, 2009, § 221)  Each agency retains full discretion as to whether or not to investigate  Reallocation should happen only at the outset of the procedure and when the agency initially in charge is not “well placed” to act Reallocation should be “quick and efficient” and should “not hold up ongoing  investigations” i ti ti ”  Reallocation should preferably go to a single agency but parallel action by two or three agencies is not excluded  In cases involving parallel action, coordination should take place as much as possible (e.g. appointment of a lead agency) 6 3

T he me ans: “jur isdic tions se e k to alloc ate c ase s” | ii  Case alloc ation unde r the E ur ope an Compe tition Ne twor k (E CN): Alloc ation Pr inc iple s (ii) When is an agency well placed?  An agency is well placed if three cumulative conditions are met: i. the conduct investigated “has substantial direct[,] actual or foreseeable e ffe c ts on competition within [the agency’s] territory, is imple me nte d within or or iginate s from [the agency’s] territory”; ii. the agency “is able to effectively br ing to an e nd the entire infringement, […] and […] can, where appropriate, sanc tion the infringement adequately”; and iii. the agency “can gathe r , possibly with the assistance of other [agencies], the e vide nc e required to prove the infringement.” (ECN Notice, § 8) When is parallel action appropriate? When is parallel action appropriate? Parallel action may be appropriate if there are effects in multiple Member States  and action by a single agency is insufficient to end and/or sanction the infringement adequately When is the Commission well placed? The Commission is particularly well placed if the conduct affects competition in  more than three Member States 7 T he me ans: “jur isdic tions se e k to alloc ate c ase s” | iii  Case alloc ation unde r the E ur ope an Compe tition Ne twor k (E CN): Ope r ational me c hanism How is the process facilitated?   An early warning system is in place An early warning system is in place ning syste m ( §§ 16-19, E E ar ly war CN Notic e ): “[..] T he Co unc il Re gulatio n c re ate s a me c hanism fo r the c o mpe titio n autho ritie s to info rm e ac h o the r in o rde r to e nsure an e ffic ie nt and quic k re - allo c atio n o f c ase s. Artic le 11(3) o f the Co unc il Re gulatio n lays do wn an o bligatio n fo r NCAs to info rm the Co mmissio n whe n ac ting unde r Artic le 81 o r 82 o f the T re aty be fo re o r witho ut de lay afte r c o mme nc ing the first fo rmal inve stigative me asure [i.e . usually a re que st fo r info rmatio n o r an inspe c tio n] […].” [I n a Jo int S tate me nt, the natio nal age nc ie s have e xpre sse d the ir jo int inte ntio n to make the same info rmatio n available amo ng e ac h o the r.] T he Co mmissio n has ac c e pte d an e quivale nt o bligatio n to info rm NCAs unde r Artic le has ac c e pte d an e quivale nt o bligatio n to info rm NCAs unde r Artic le CN No tic e , § 17). 11(2) o f the Co unc il Re gulatio n. […] (E Agencies have the option to suspend or terminate proceedings because  another agency is dealing with the case Agencies provide mutual assistance in the form of:  i. an exchange of information ii. assistance with respect to collecting information Companies have no right to allocation but certain safeguards are foreseen  8 4

T he me ans: “jur isdic tions se e k to alloc ate c ase s” | iv  Conc lusion Case allocation under the European Competition Network (ECN) is intended for p p ( )  the special situation in which 29 agencies are all competent to apply the same competition rules within the EU It is based on non-binding principles centered around the foundation of the well  placed agency and an operational mechanism centered around information- sharing and mutual assistance Reallocation remains the exception  The situation at the international level is not the same as within the EU and case The situation at the international level is not the same as within the EU and case   allocation would thus appear at first sight of very limited relevance at that level. Yet, the private practitioner has concerns with some recent developments and sees some form of case allocation as a possible remedy to meet these concerns 9 T he pr ac titione r ’s vie w: c onc e r ns and sugge stions| i  F ir st ar e a of c onc e r n: A gr owing tr e nd of applying c ompe tition r ule s e xtr a-te r r itor ially base d on the notion of indir e c t e ffe c ts (i) Issue: → If an agency claims jurisdiction on the basis of indirect effects that a cartel produces, it risks imposing a second sanction with respect to a given transaction (e.g. a price- fixed sale) since that very same transaction may already have been the subject of a fine in the country where the transaction took place → In my view, this is a violation of the principle of ne bis in ide m and there is a serious risk of over-deterrence 10 5