In the second of two blog posts, Aidan O’Neill QC considers the growing body of case law regarding the CJEU’s use of the Charter of Fundamental Rights.
No standing for Consumer Associations to challenge merger clearance decisions by the Commission
In Case T‑224/10 Association belge des consommateurs test-achats ASBLv Commission supported by Électricité de France (EDF) 12 October  ECR II-nyr the General Court yet again rejected a challenge to its restrictive standing rules, this time brought by a consumer association who sought to challenge on behalf of consumers a clearance decision of the Commission allowing a merger between two undertakings to take place. The Court rejected the consumer association’s argument that the Treaty and Charter provisions (Article 38 CFR), which require consumer-protection considerations to be taken into account in defining and implementing other EU policies and activities and for those EU policies to ensure a high level of consumer protection, meant that it should be recognised to have sufficient interest in a merger on behalf of consumers affected by it. Instead the Court stuck to its narrow definition of standing in the usual terms:
“65. Since the applicant does not meet either the conditions governing admissibility laid down in the Plaumann judgment or those applicable to actions that seek to safeguard procedural rights, it must be concluded that the applicant lacks standing to bring an action against the clearance decision.
66 That conclusion cannot be called into question by the arguments of the applicant relating to its right to effective judicial protection, the importance of which is emphasised by the Lisbon Treaty, in particular by the binding force acquired by the Charter of Fundamental Rights of the European Union, and by certain developments in the legal systems of several Member States.
67 Indeed, suffice it to point out that, in accordance with settled case-law, the conditions for admissibility of an action for annulment cannot be set aside on the basis of the applicant’s interpretation of the right to effective judicial protection (Case C‑260/05 P Sniace v Commission  ECR I‑10005, paragraph 64, and order of 26 November 2009 in Case C‑444/08 P Região autónoma dos Açores v Council, not published in the ECR, paragraph 70). Accordingly, an individual to whom a Commission decision is not of direct and individual concern, and whose interests are therefore unaffected by that measure, cannot invoke the right to judicial protection in relation to that decision (see order in Case C‑483/07 P Galileo Lebensmittel v Commission  ECR I‑959, paragraph 60 and the case-law there cited).”
EU Competition law and EU Charter rights
In Menarini Diagnostic Srl v. Italy  ECHR 43509/08 (Second Chamber, 27 September 2011) the European Court of Human Rights was faced with a complaint by the applicant company which had been fined some EUR 6 million by the Italian competition authority and had appealed unsuccessfully. The complaint was that the national courts, acting within the ambit of EU competition law, did not have a wide enough appellate jurisdiction against decisions of the relevant competition authority to satisfy the requirements of Article 6 ECHR. Although the Strasbourg Court ruled that on the facts there had been no violation of the requirements of Article 6 ECHR it did make it plain that fines in competition law cases constituted the imposition of substantial financial penalties such as to bring their imposition within the criminal limb of Article 6 ECHR, notwithstanding that they are not classified as penal under and in terms of national law. The national authorities were therefore required to ensure that their administrative procedures in competition matters that could result in the imposition of penalties and fines offered equivalent guarantees to the defendant that an accused was offered in criminal proceedings.
Case law of the CJEU in more recent years has certainly begun to emphasize that in competition law-related matters undertakings are entitled to EU fundamental rights to due process (known in Euro-speak as ‘the rights of the defence’). As the CJEU noted in Case C-328/05 P SGL Carbon AG v Commission  ECR I-3921 at paras 70–71:
“[I]n all proceedings in which sanctions, especially fines or penalty payments, may be imposed, observance of the rights of the defence is a fundamental principle of Community law which must be complied with even if the proceedings in question are administrative proceedings (see, in particular, Case C‑194/99 P Thyssen Stahl v Commission  ECR I‑10821, paragraph 30). … Observance of the rights of the defence requires, in particular, that the undertaking under investigation is put in a position during the administrative procedure to put forward its point of view on the reality and the relevance of the alleged facts and also on the documents used by the Commission (see Case C‑310/93 P BPB Industries and British Gypsum v Commission  ECR I‑865, paragraph 21).’).
These procedural rights (and the implicit promise of an ‘open, efficient and independent European administration’) are now set out in Article 41 of the EU Charter of Fundamental Rights (CFR), which guarantees a ‘right to good administration’ in the following terms (so far as relevant):
“1. Every person has the right to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions, bodies, offices and agencies of the Union.
2. This right includes:
(a) the right of every person to be heard, before any individual measure which would affect him or her adversely is taken;
(b) the right of every person to have access to his or her file, while respecting the legitimate interests of confidentiality and of professional and business secrecy;
(c) the obligation of the administration to give reasons for its decisions.”
In Joined Cases T‑458/09 and T‑171/10 Slovak Telekom a.s. v. Commission 22 March  ECR I-nyr at paras 67-8
“67 Article 41 of the Charter, entitled ‘Right to good administration’, states, in paragraph 1, that ‘[e]very person has the right to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions and bodies of the Union’.
68 According to settled case-law of the European Union judicature relating to the principle of good administration, where the institutions of the European Union have a power of appraisal, respect for the rights guaranteed by the legal order of the European Union in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (Technische Universität München, paragraph 45 above, paragraph 14; La Cinq v Commission, paragraph 45 above, paragraph 86; and Atlantic Container Line and Others v Commission, paragraph 45 above, paragraph 404).”
An increasing number of challenges have been made to the Convention compatibility of the EU’s procedures in EU competition law cases because of the institutional roles of the Commission as promoter and prosecutor, investigator and enforcer of EU competition law. None of these challenges has, to date, been successful before the CJEU, albeit that lip-service is always paid by the EU courts to the principle of due process and respect for the rights of the defence and the right to good administration.
For example, in Case T‑348/08 Aragonesas Industrias y Energía, SAU v. Commission 25 October  ECR II-nyr, the General Court confirmed that the presumption of innocence proclaimed in Article 47 CFR applied to procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties. This meant that the Commission is obliged to produce sufficiently precise and consistent evidence to support the firm conviction that the alleged infringement took place.
In Case C‑386/10 P Chalkor AE Epexergasias Metallon v. Commission 8 December  ECR I-nyr the appellant expressly relied upon the jurisprudence of the Strasbourg court to underline that competition proceedings before the Commission are criminal proceedings within the meaning of the ECHR. Consequently, it was submitted that since the Commission is an administrative body and not an ‘independent and impartial tribunal’, the General Court was required, when an action is brought before it, to carry out a full review of Commission decisions as regards both matters of fact and law. In sum it was said that the General Court must review all the relevant circumstances of the case and decide on all matters of fact on the basis of its own independent assessment rather than exercise a more limited supervisory or judicial review type jurisdiction of the Commission’s decision in competition disputes. The Court of Justice surveyed the law, confirmed that the CJEU was a court of full jurisdiction even in competition matters but dismissed the appeal, noting as follows:
“54 As regards the review of legality, the Court of Justice has held that whilst, in areas giving rise to complex economic assessments, the Commission has a margin of discretion with regard to economic matters, that does not mean that the Courts of the European Union must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must those Courts establish, among other things, whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it (see Case C‑12/03 P Commission v Tetra Laval  ECR I‑987, paragraph 39, and Case C‑525/04 P Spain v Lenzing  ECR I‑9947, paragraphs 56 and 57).
62 Furthermore, the Courts must carry out the review of legality incumbent upon them on the basis of the evidence adduced by the applicant in support of the pleas in law put forward. In carrying out such a review, the Courts cannot use the Commission’s margin of discretion – either as regards the choice of factors taken into account in the application of the criteria mentioned in the Guidelines or as regards the assessment of those factors – as a basis for dispensing with the conduct of an in-depth review of the law and of the facts.
67 The review provided for by the Treaties thus involves review by the Courts of the European Union of both the law and the facts, and means that they have the power to assess the evidence, to annul the contested decision and to alter the amount of a fine. The review of legality provided for under Article 263 TFEU, supplemented by the unlimited jurisdiction in respect of the amount of the fine, provided for under Article 31 of Regulation No 1/2003, is not therefore contrary to the requirements of the principle of effective judicial protection in Article 47 of the Charter. “
These are fine words, but the question remains whether they will result in any actual change in practice on the part of the General Court in competition cases. In Case C‑389/10 P KME Germany AG v. Commission 8 December  ECR I-nyr at para 136 in rejecting a similar challenge to the apparently light touch limited review carried out by the General Court in relation to competition decisions of the Commission, the Court of Justice said, apparently without any irony:
“[A]lthough the General Court repeatedly referred to the ‘discretion’, the ‘substantial margin of discretion’ or the ‘wide discretion’ of the Commission, including in paragraphs 52 to 54, 99, 114, 136 and 150 of the judgment under appeal, such references did not prevent the General Court from carrying out the full and unrestricted review, in law and in fact, required of it.
There remains an impression after this survey, that notwithstanding the increasing dominance of fundamental rights talk on the part of the CJEU in the interpretation and application of EU law, it is not always clear that the CJEU is willing to apply the requirements of fundamental rights with any particular rigour against the EU institutions themselves, most clearly as regards the EU Courts themselves and their procedures and hallowed practices. See for example C-514/07 P, C-528/07 P and C-532/07 P, Sweden v API and Commission 21 September  ECR I-nyr;  2 AC 359, ECJ at paras 92-93:
“the exclusion of judicial activities from the scope of the right of access to documents, without any distinction being drawn between the various procedural stages, is justified in the light of the need to ensure that, throughout the court proceedings, the exchange of argument by the parties and the deliberations of the court in the case before it take place in an atmosphere of total serenity. Disclosure of the pleadings in question would have the effect of exposing judicial activities to external pressure, albeit only in the perception of the public, and would disturb the serenity of the proceedings.”
These observations were then applied to merger control administrative procedures before the Commission in Case C-506/08 P Sweden v European Commission 22 July  ECR I-nyr,  5 CMLR 18 at paras 66-7:
“[A]dministrative procedures, especially in the area of the control of concentrations, are subject to strict time-limits, compliance with which would be jeopardised if the Commission was required to deal with reactions to its internal communications in the course of the procedure. Consequently, it must be ensured, as in court proceedings, that administrative procedures also take place in an atmosphere of total serenity. It is necessary to avoid exposing administrative activities to external pressure, albeit only in the perception of the public, which would disturb the serenity of the proceedings”.
This kind of attitude may be thought to be one of the reasons, of course, behind the pressure for the EU itself to become a signatory to the ECHR with the consequence that the CJEU would in effect fall under the jurisdiction of the ECtHR. But none of this may happen. As the European Court of Human Rights has more recently complained in Preliminary opinion of the European Court of Human Rights in preparation for the Brighton Conference (Adopted by the Plenary Court on 20 February 2012) at paragraph 40:
“Following the submission of a draft accession treaty to the Committee of Ministers in October 2011, the process now seems to be stalled. After some thirty years of discussion all that appears to be lacking is the political will to overcome the last obstacles. The Court would therefore urge the Member States to seize the opportunity provided by the Brighton Conference to take forward the process to completion in compliance with the Lisbon treaty.”
Watch this space ….