The echr implications of the investigation provisions of the draft competition regulation

International and Comparative Law Quarterly

Volumn 51, Issue 1, 2002, Pages 55-89

  Riley, Alan ^a  

^a NOTTINGHAM TRENT UNIVERSITY   (United Kingdom)

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EID: 84937380866     PISSN: 00205893     EISSN: 14716895     Source Type: Journal    
DOI: 10.1093/iclq/51.1.55     Document Type: Article

References (162)

1. COM (2000) 582 Final, 27 Sept 2000.
2. Art 18(4). In fact an application for annulment of an Art 18 decision will be heard by the CFI. See Art 3(c) of Council Decision 88/591 ECSC, EEC, Euratom, OJ 1989 L317/48.
3. The European Commission, Brussels, April 1999, Commission Programme no 99/027.
4. It could be argued that the reason why Art 19 does not grant the Commission a power of compulsion, as envisaged in the Modernisation White Paper, is that in putting together the draft regulation the Commission has taken account of the judgment of the ECtHR in Saunders v United Kingdom [1996] 16 EHRR 297. Saunders suggests that the imposition of penalties as a result of a refusal to answer questions can constitute a violation of Art 6 of the ECHR. The case is discussed in detail in part 4. However, it is difficult to see how the Commission's draftspersons could have taken account of Saunders in relation to Art 19, when Art 18 raises includes a power of compulsion, which, as it is argued below, itself infringes Art 6 of the ECHR and the rule in Saunders.
5. Kerse, EC Antitrust Procedure, 4th edn (Sweet & Maxwell, 1998) para 3.34.
6. No judicial authorisation is required in the Netherlands, Sweden, Finland, Italy, and Austria, prior to national enforcement of an Art 20(4) decision. 1999 Modernisation White Paper, EC Antitrust Procedure, para 110, n 64.
7. Case 46/87 and 227/88 [1989] ECR 2859. The draft regulation, however, does not provide uniform Community standards when National Competition Authorities acting on their own initiative seek to obtain information by inspection of premises for themselves, or in respect of other NCAs. Art 21(1) expressly leaves the power of inspection as a matter of national law when one NCA is acting for another NCA. No direct reference is made to own initiative inspections by NCAs. However, the lack of any reference in the draft regulation infers that such inspections are also to be left to be governed by national law.
8. In the Explanatory Memorandum to the draft regulation the Commission explains that in recent cases it has come across evidence that incriminating documents have been held on the private premises of company officials, Draft Regulation, ECR, 25.
9. Cases 6 and 7/73 [1974] ECR 1281.
10. For a further discussion see Kerse, ECR, para 7.46. As he notes, Commercial Solvents is ‘an old but instructive case’.
11. Alston and Weiler, ‘An Ever Closer Union in Need of a Human Rights Policy: The European Union and Human Rights’, 9 in Alston (ed), The EU and Human Rights (Oxford: OUP, 1999).
12. [1996] ECR I-1759.
13. C-299/95 [1997] ECR I-2629.
14. Opinion 2/94 ECR, para 33
15. Kremzow, ECR, para 14. Art 6(2) of the Treaty on European Union also provides that ‘the Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 Nov 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law.’ However, as the last clause of the sentence that makes up the art indicates, Art 6(2) re-states the position in respect of fundamental rights as developed by the Court of Justice. Clearly this re-statement will have implications for the operation of the other pillars of the Union, but it is difficult to see how it adds to the protection already provided by the ECJ's case law.
16. Case 136/79 [1980] ECR 2033.
17. National Panasonic, ECR, paras 19 and 20.
18. The question of self-incrimination was raised even earlier. When the initial draft of what was to become Regulation 17 was considered by the European Parliament it voted to recommend the inclusion of a provision against self-incrimination. However, the Council did not incorporate the Parliament's amendment into the Regulation. See Edward, ‘Constitutional Rules of Community Law in EEC Competition Cases’ (1989–1990) Fordham ILJ, 112, 123
19. see also Kerse, Fordham ILJ, para 3.44
20. and Advocate-General Warner in Case 155/79 AM&S Europe v Commission [1982] ECR 1575, 1621.
21. Case 374/87 [1989] ECR 3283.
22. Hoechst, ECR
23. In respect of Orkem, see Case T-34/93 Société Générale v Commission [1995] ECR II-545
24. Case T-112/98 Mannesmann Werke AK v Commission, 20 Feb 2001, not yet reported
25. and Case C-294/98P Metsa Serla Og Y 6 Nov 2000 not yet reported. In respect of Hoechst, see Joined Cases T-305/94, T-306/94, T-307/94, T-313/94, T-314/94, T-315/94, T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94
26. LVM and Others v Commission (PVC), [1999] ECR II 931, paras 405 to 407.
27. Opinion of Advocate-General Lever, C-353/99P Council v Hautala, 10 July 2001, not yet reported. Opinion of Advocate-General Mischo Case C-94/00 Roquette Freres v Directeur Generale de la Concurrence 20 Sept 2001 not yet reported.
28. Orkem, para 29.
29. Orkem, para 30.
30. Orkem, para 34.
31. Orkem, para 35.
32. Orkem, para 37.
33. Dealing with the Commission, Notification, Complaints, Inspections and Fact-Finding Powers under Arts 85 and 86 of the EEC Treaty (European Commission, 1997) para 4.1. (hereafter Dealing).
34. Kerse, EEC Treaty, para 3.44.
35. Hoechst, EEC Treaty, para 30.
36. Orkem, EEC Treaty, para 27.
37. There is also the safeguard in relation to an Art 14(3) decision that, as required by Art 253 of the EC Treaty, a decision must be reasoned. However, in relation to an Art 14(3) decision, this requirement has been interpreted as only requiring the Commission to comply with the terms of Art 14 (3) itself, i.e. that the decision states the subject-matter and purpose of the investigation, the appointed date on which it is to begin, the penalties that may be imposed, and the right of review by the CFI. National Panasonic, EEC Treaty, para 25.
38. Dealing, EEC Treaty, para 5.5, sub-para 1.
39. EEC Treaty, sub-para 2.
40. EEC Treaty. However, if lawyers are available on site, the Commission may proceed with the investigation without waiting for the arrival of external lawyers.
41. Explanatory Note to Authorisation to Investigate in Execution of a Commission Decision under Art 14(3) of Regulation no.17/62, para 6. see Kerse, EEC Treaty, App G.
42. Case 155/79 [1982] ECR 1575.
43. In Case T-30/89 Hilti AG v Commission [1990] ECR II 163, the CFI held that legal professional privilege extended to documents drawn up by in-house lawyers summarising the advice of outside counsel.
44. For a discussion of the extent of confidentiality and use restrictions, see Kerse, ECR, paras 3.45 and 3.46.
45. Hoechst, ECR, para 33.
46. Hoechst, ECR, para 32.
47. ECR, para 27.
48. [1979–1980] 1 EHRR 647, para 81.
49. Engel, EHRR, para 82.
50. [1994] 18 EHRR 54.
51. Bendenoun, EHRR, para 47.
52. [1979–1980] 2 EHRR 439.
53. In Deweer, the Court emphasised the punitive character of the impugned regulations as a factor weighing heavily in its decision as to their criminal law character, EHRR, para 46.
54. Stenuit v France [1992] 14 EHRR 509.
55. Stenuit, EHRR, paras 60 to 67.
56. Engel, EHRR, para 81.
57. Commission imposes fines on the vitamin cartel. Commission press release 21 Nov 2001. As Kerse observes, fines in millions of ?=s are no longer rare. Kerse, EHRR, para 7.27.There he lists the most recent, and heaviest, individual and collective fines. It should be noted that if Hoffman la Roche had not obtained leniency for its co-operation the fine would have been 50% higher i.e. ?=924 rather than ?=462 million.
58. OJ 1993 C 39/6, para 13.
59. For example, the UK Institute of Directors has recently established a Chartered Director qualification. In order to become and remain a Chartered Director it is necessary to agree to, and comply with, a code of conduct. Art 5 of which requires that CDs comply with ‘relevant laws, regulations and codes of practice, refrain from anti-competitive practices.’ A parallel disciplinary code provides a mechanism for sanctions against CDs who infringe the code of conduct. See IOD Code of Conduct and IOD Disciplinary Code (IOD, 1998).
60. Saunders, IOD Code of Conduct and IOD Disciplinary Code.
61. The ECtHR, in the earlier case of Funke v France [1993] 16 EHRR 297, took a much broader approach to the rule against self-incrimination. In particular, the Court indicated that even an order requiring the production of documents and not just testimony infringed Art 6. However, there was little reasoning in the judgment and the CHR opposed the conclusions of the Court. The ruling in Saunders appears to implicitly overrule Funke.
62. For a further discussion of Saunders see Riley ‘Saunders and the Power to Obtain Information in European Community and United Kingdom Competition Law’ (2000) 25 ELRev 264.
63. Saunders, para 68.
64. ELRev, para 69. In the recent case of PK & JH v United Kingdom the Court accepted that ‘voice samples’, recordings taken when the plaintiffs were unaware of such recordings taking place did not constitute an infringement of Article 6, and were akin to the taking of blood on DNA samples, 25 Sept 2001, not yet reported.
65. ELRev, para 70. Saunders was obliged under ss 434 and 436 of the Companies Act 1985 to answer the questions put to him by the DTI Inspectors. A refusal by the applicant to answer the questions put to him could have led to a finding of contempt of court and the imposition of a fine or committal to prison for up to two years. It was no defence to such a refusal that the questions were of an incriminating nature.
66. ELRev, para 71.
67. ELRev, para 73.
68. ELRev, para 74.
69. It should be noted that in John Murray v United Kingdom [1996] 22 EHRR 29, the ECtHR took the view that the right to silence was not absolute and that inferences could be drawn in certain circumstances, para 47.
70. Saunders, para 75.
71. Davies, ‘Self Incrimination, Fair Trials and the Pursuit of Corporate and Financial Wrongdoing’, in The Impact of the Human Rights Bill on English Law (Oxford: Clarendon Press, 1998), ed Markesinis, 31, 35.
72. Fayed v United Kingdom [1994] 18 EHRR 221.
73. In I.J.K., G.M.R. and A.K.P v United Kingdom, [2001] EHRR 11, not yet reported, in a further set of Guinness defendants sought to challenge their convictions before the Strasbourg authorities. The ECtHR in that case did take the view that a legal requirement for an individual to give information demanded by an administrative body did not necessarily infringe Art 6 of the ECHR, para 100. However, as explained above this gloss on the rule in Saunders is of little assistance to the Commission where the purpose of the investigatory procedure is to provide evidence for a prosecution and subsequent conviction.
74. Saunders, EHRR, para 71. The ECtHR emphasised that even exculpatory or factual answers given under compulsion could amount to an infringement of the privilege.
75. However, the power of the Commission to ask oral questions during inspections, under Art 14(1)(c), may well fall foul of Saunders in cases where fines can be imposed under Art 15(1)(c). For a discussion of when fines can be imposed see Kerse, EHRR, para 7.08.
76. Should the White Paper proposals be adopted in full the Commission will then have wide powers to ask questions during inspections, and wide powers to impose fines for refusals or inadequate answers. White Paper, EHRR, para 113.
77. Van Overbeek, ‘The Right to Remain Silent in Competition Investigations: The Funke decision of the Court of Human Rights Makes Reform of the ECJ's Case Law Necessary’ (1994) ECLR 127, 132.
78. [1993] 16 EHRR 97, para 29.
79. Niemietz, EHRR, para 29.
80. EHRR, para 30.
81. EHRR, para 31.
82. EHRR, para 32.
83. EHRR, para 32
84. and Huvig v France [1990] 12 EHRR 528, paras 8 and 25.
85. See also Halford v United Kingdom [1997] 25 EHRR 523.
86. Niemietz, para 31.
87. Funke, EHRR, para 55.
88. EHRR, Klass v Germany [1979–1980] 2 EHRR 214, para 42.
89. Huvig, EHRR, para 28.
90. Chappell v United Kingdom [1990] 12 EHRR 1, para 56
91. and Huvig, EHRR, para 29.
92. EHRR, EHRR, para 26.
93. Huvig, EHRR, para 29.
94. Huvig, EHRR, para 33.
95. Funke, EHRR
96. John Murray v United Kingdom [1996] 22 EHRR 29.
97. Chappell, EHRR
98. EHRR, EHRR, paras 59 and 60.
99. EHRR, EHRR, para 63.
100. Respectively, [1993] 16 EHRR 332, para 38
101. and [1993] 16 EHRR 357, para 40.
102. [1997] 28 EHRR 458, para 46.
103. T-30/89 [1991] ECR II 1439.
104. Kerse, ECR, para 3.21.
105. Under Art 14(5) NCA officials may attend the investigation. They are not umpires or independent observers. Art 14(5) makes it clear that the NCA officials are there to assist the Commission. They may in fact take a direct part in the investigation. See Kerse, ECR, para 3.38.
106. Kerse, ECR, para 3.29.
107. Art 6, Explanatory Note to Authorisation to Investigate, ECR
108. The Commission has, however, recognised this method as a means of protecting the interests of both undertakings and itself in its own commentary on Regulation 17. See Dealing, ECR, para 5.3.2.
109. In Niemietz the Court indicated that although business premises were caught by Art 8(1), a greater degree of interference may be able to be justified under Art 8(2). Conversely, less interference will be permitted and the safeguards will have to be stronger where the premises in question are private homes. Niemietz, ECR, para 31.
110. PVC, ECR, respectively, paras 405–7 and 419–20.
111. Joined Cases T-25/95, T-26/95, T-30/95, T-31/95, T-32/95, T-34/95, T-35/95, T-36/95, T-37/95, T-38/95, T-39/95, T-42/95, T-43/95, T-44/95, T-45/95, T-46/95, T-48/95, T-50/95, T-51/95, T-52/95, T-53/95, T-54/95, T-55/95, T-56/95, T-57/95, T-58/95, T-59/95, T-60/95, T-61/95, T-62/95, T-63/95, T-64/95, T-65/95, T-68/95, T-69/95, T-70/95, T-71/95, T-87/95, T-88/95, T-103/95 and T-104/95 Cimenteries CBR SA and Others v Commission (Cement), 15 Mar 2000, not yet reported, para 732.
112. See also the robust rejection of the application of the case law of the ECtHR in Mannesmann, Cimenteries CBR SA and Others v Commission (Cement), para 84 et seq.
113. For a discussion of Mannesmann see Willis ‘You have the right to remain silent … or do you? The privilege against self-incrimination following Mannesmann-Werke and other recent decisions’ [2001] ECLR 313.
114. Mendelson, ‘The Impact of European Community Law on the Implementation of the European Convention of Human Rights’ (1985) LIEI 99, 103
115. and Besselink, ‘Entrapped by the Maximum Standard: On Fundamental Rights, Pluralism and Subsidarity in the European Union’ (1998) CML Rev 629, 659.
116. Case C-812/79 Attorney-General v Burgoa [1980] ECR 2787, para 6
117. Levy, ECR, para 11 and C-62/98 and 84/98 Commission Portugal, 4 July 2000, not yet reported, paras 43 and 52.
118. Art 30, Vienna Convention on the Interpretation of Treaties, (1969) ILM 679.
119. Case 10/61 Commission v Italy [1962] ECR 1.
120. Case C-158/91 [1993] ECR I 4287.
121. Case C-324/93 [1995] ECR I-563.
122. Evans Medical, ECR, AG Lenz, para 33.
123. Levy, ECR, para 21. In the context of a preliminary ruling the ECJ cannot ordinarily interpret an international agreement.
124. Levy, ECR, para 22.
125. Evans Medical, ECR, para 32.
126. Case C-13/93 Office National de l'Emploi v Madeleine Minne [1994] ECR I 371, para 15
127. Belgium denounced ILO Convention No 89 to ensure compliance with Art 5 of the Equal Treatment Directive, 76/207/EEC, OJ 1976 L39/40.
128. In Levy, the Advocate-General reported that the French government had also denounced the ILO Convention. Levy, OJ, para 7.
129. See also Portugal, OJ, paras 49 and 58. In both the Portuguese cases the ECJ took the view that with regard to Art 307 that if a Member State encounters difficulties which make adjustment of an agreement impossible denunciation cannot be excluded.
130. In the Portuguese cases the ECJ emphasised the importance of the existence of a denunciation clause in the agreements in question. The Court argued that the exercise of the denunciation clause provided Portugal with a means to escape its obligations to the other Contracting Parties. Portugal, OJ, paras 46 and 55. The ECHR also contains a denunciation clause in Art 58. However, exercise of that Art by the Member States is likely to be considered politically impos-sible,especially in the light of Art 6(2) TEU and the recently adopted EU Charter of Fundamental Rights, see part 5.4.
131. Schemers, ‘The European Communities Bound by Fundamental Human Rights’ (1990) CMLRev 249
132. and Advocate General Jacobs in C-168/91 Konstantinidis v Stadt Altensteig-Standesamt [1993] ECR I-1191, paras 50–51.
133. See for example, Paftis v Greece [1999] 27 EHRR 566, para 95. This case concerned the issue of whether the case before the national courts had infringed Art 6 of the ECHR by being unduly delayed. The national court had made a reference under Art 234 of the EC Treaty to the ECJ. Despite the considerable time it took the ECJ to deliver its ruling (over 20 months) the ECtHR refused to take account of that time period in calculating the time taken by the national court for the purposes of the reasonable time doctrine contained in Art 6.
134. However, in Cantoni v France (1996) ECHR Reports, 1997-V-,1614, paras 29–30, not reported in the EHRR, the ECtHR took the view that the fact that a domestic provision is based almost word for word on a Community directive does not remove it from the ambit of the Convention. There appears to be no obvious principle to discern in the approach of the ECtHR to the Community legal order, save a notion of judicial respect toward the ECJ.
135. Respectively, Case Application No 8030/77 and Case Application No 13539/80. See also the recent admissibility Case Application No 51717/99 Société Guerin Automobiles v The Fifteen Member States of the European Union, 4 July 2000, not yet reported. Currently there is a major challenge to the investigative powers of the Commission laid before the ECtHR. See Case Application No 56672/60 DSR Senator Lines v Fellow Member States of the EU.
136. Case Application No: 13258/87 M & Co. v Germany.
137. M & Co, Case Application No: 13258/87, 8, para 1.
138. M & Co, OJ, 8, para 5.
139. OJ, 9, para 6.
140. Matthews, OJ. Mrs Matthews is a British national born and resident in Gibraltar.
141. OJ, para 32.
142. OJ, para 33.
143. OJ, para 34.
144. Cantor, ‘Primus Inter Pares, Who is the Ultimate Guardian of Fundamental Rights in Europe?’ (2000) ELRev 1, 5. Although Cantor does argue that in fact the ECJ could have provided a remedy, pp 5–7.
145. See also Schermers, ‘Matthews v. the United Kingdom’ Case Law note (1999) CMLRev 673.
146. King, ‘Ensuring Human Rights Review of Inter-Governmental Acts in Europe’ (2000) ELRev 79, 84–87.
147. Besselink, ELRev, 656.
148. Matthews, ELRev, para 34.
149. Besselink, ELRev, 657.
150. ELRev, 656, also raises the issue of the application of Art 55. There the Convention limits application of disputes regarding interpretation or application of its provisions to the Strasbourg dispute settlement procedures. It is unclear how Art 55 would apply to the Community legal order.
151. There has so far been only one case in which Art 55 has been raised, Cyprus v Turkey [1997] 23 EHRR 244.
152. See also Mendelson, EHRR, 108.
153. There appears to be considerable ministerial disquiet at the prospect of the effective abolition of national competition law. See ‘Ministers to Underline Concerns Over Flaws in Monti's Blueprint’, European Voice, 30 Nov 2000.
154. It could be argued that the interpretive obligation in Section 60 of the UK Competition Act which requires that, insofar as possible, questions arising under the Act are to be dealt with in a manner which is consistent with the treatment of corresponding questions arising in Community law in relation to competition within the Community, having regard to any relevant differences. However, the broad scope of section 3 of the Human Rights Act which applies the Act to primary legislation and subordinate legislation whenever enacted; together with the fact that both Acts were enacted on the same day; suggests that if Parliament had intended for Section 60 to act as a lex specialis to the HRA it would have said so. Furthermore, if Section 60 did oust the operation of the HRA, the UK by not complying with Saunders would be infringing its Convention obligations, which again suggests that Section 60 does not override the operation of the HRA and the Convention case law. For a further discussion of the issues see Riley, ‘The Human Rights Act 1998: Triple Trouble for the OFT?’ Nott LJ, Winter 1999 1, 23–5.
155. So far the Charter of Fundamental Rights has been referred to in 13 cases, only one of which was a judgment, Mannesmann, in which the CFI took the view that it was adopted too late to apply in that case. Booker Aquaculture v Scottish Ministers Paris 126. However the Advocate-General's opinions do illustrate the potential of the Charter to inform and expand existing rights, and the emphasis given to the ECHR case law. See in particular the opinion of Advocate-General Mischo, C-64/60, Mannesmann Nott LJ, para 76.
156. It would appear that this fear may explain the curt rejection of arguments based on Saunders in PVC, where the CFI refused to recognise what it termed an, ‘absolute right to silence.’ PVC, Nott LJ, para 448
157. Mannesmann, Nott LJ, para 66.
158. Saunders indicates that documentary evidence can be seized or copied so long as warrant is obtained first, Nott LJ, para 69.
159. Severes v France [1999] 28 EHRR 265, para 47. The ECtHR held that the purpose of the oath is to ensure that a person tells the truth, not to levy compulsion upon him. The right to silence remains.
160. John Murray, EHRR, para 54. The ECtHR held that inferences can be drawn from silence, so long as there is already evidence that calls for explanation from the accused.
161. Malone, EHRR. The issue for the ECtHR is whether the legal instrument providing for such powers is accessible to the public, is clear in its terms as to the categories of persons to whom it applies, and provides for independent supervision. Clearly the Member States are unlikely to grant the Commission direct electronic surveillance powers. However, the draft regulation could provide an obligation for the Member State authorities to provide such assistance to the Commission, perhaps after having obtained an order from the CFI permitting the Commission to make such a request.
162. The US Cartel Leniency Program, since its inception in 1993, has had a high degree of success. In 1999 alone over $1 billion fines were imposed, thirty-five Grand Jury investigations were launched into international cartels and undertakings are entering the programme at the rate of one a fortnight. Recently the European Commission proposed the adoption of a new leniency notice which would be much more closely aligned with the US model. See OY 2001 C205/18 Draft Commission Notice on immunity from fines and reductions in cartel cases.