Pfleiderer revisited: the AG Opinion in Donau Chemie

Christopher Brown

img-documentsOn 7 February, AG Jääskinen issued his Opinion in Case C-536/11 Donau Chemie, a much anticipated case (at least among competition lawyers) concerning the compatibility with EU law of an Austrian law which prohibits third party access to the court files in “public law competition proceedings” absent the parties’ consent.  The questions referred by the Austrian Cartel Court thus required the CJEU to venture into similar terrain to that covered by its Pfleiderer judgment (see this previous post for an application of Pfleiderer in a domestic case).

The background, in brief, is that a trade association active in the printing sector sought to obtain access to documents on the file of the Cartel Court which related to proceedings which had been brought by the Austrian competition authority (the BWB) against a number of distributors of printing chemicals (in Austria, as in Ireland, the competition authority ‘prosecutes’ alleged infringements before a designated court; it does not adopt administrative infringement decisions).  The BWB’s investigation had been triggered by a leniency application.  In the proceedings, the BWB had successfully demonstrated the existence of a cartel in breach of Article 101 TFEU, and the Cartel Court had imposed fines on the cartelists.  Unsurprisingly, the trade association was interested in exploring the potential for follow-on damages actions to be brought by its members, and so wanted to get hold of documents which would help identify what the value of any claims would be.

The sticking point, of course, was the provision of national law which imposed a blanket ban on access to court documents in such cases (including – bizarrely for us English lawyers at least – a copy of the order made by the Court).  Understandably, the Cartel Court was concerned that this provision might itself breach the principle of effectiveness of EU law and so sought a preliminary ruling from the CJEU.  It also wondered whether the provision might breach the principle of equivalence, on the basis that access to documents is allowed in relation to other types of civil and criminal proceedings.

In short, the AG took the view that the domestic provision does offend against the principle of effectiveness unless national law provides other avenues for securing proof of breach and extent of loss which effectively protect the right to claim damages for breach of EU competition law and, more generally, the right of access to court as guaranteed by Article 47 of the Charter of Fundamental Rights.  The provision does not, however, offend against the equivalence principle: the same prohibition applies to actions based on an infringement of EU competition law as to actions based on infringement of domestic competition law.  As the AG said, “the principle of equivalence cannot be interpreted as requiring a Member State to extend its most favourable rules in any area to all actions brought in a certain area of law” (para 32).

Returning to the principle of effectiveness, the AG first referred to the balancing exercise mandated by the Court in Pfleiderer (namely balancing the interest of protecting information given voluntarily to a competition authority in the context of a leniency programme with the interest in ensuring that the disclosure rules do not operate such as to make it practically impossible or excessively difficult for victims of breaches of the EU competition rules to obtain compensation).  He considered that the Court’s approach in Pfleiderer is “equally valid” here, despite the fact that that case involved access to administrative rather than judicial documents (paras 40-41).  That said, there were some differences between the two cases: Pfleiderer only concerned access to information communicated by a leniency applicant and its impact on the system of cooperation between competition authorities under Regulation 1/2003, whereas the present case was a more general ban on disclosure of documents on the file. 

For that reason, the AG considered the case to be more akin to Crehan, which concerned the compatibility of the English common law rule that parties could never sue upon an unlawful agreement (thus precluding parties to an anti-competitive agreement from ever suing each other in respect of it, regardless of the circumstances).  There, the Court held that the full effectiveness of the EU competition rules would be imperilled if it were not open to any individual to claim damages for loss caused as a result of anti-competitive conduct (para 26).  The “crucial question”, therefore, was whether the Austrian provision meant it was not open to the trade association or its members to claim damages for the loss caused to them by the cartel (para 46).  This, it would appear, leads to his conclusion that the provision is contrary to EU law unless (adequate) proof of infringement and loss can be obtained other than by accessing the court file.

It is a little difficult to square this reasoning with the CJEU’s judgment in Pfleiderer.  There, the Court did not build into the test a consideration of whether there were alternative ways for the prospective claimant to obtain adequate proof of infringement (e.g. through inter partes disclosure rules).  It may be, therefore, that the AG is seeking to persuade the CJEU to nuance its earlier ruling, which has been subject to the criticism that it creates uncertainty for potential leniency applicants and thus makes applying for leniency less attractive, which in turn risks making competition enforcement less effective (see e.g. Di Stefano “Access of damage claimants to evidence arising out of EU cartel investigations: a fast evolving scenario” (2012) GCLR 95; although see also the dicta of Roth J casting some doubt on this concern in National Grid Electricity Transmission v ABB and Others [2012] EWHC 869 (Ch) at [37]).  This interpretation would be consistent with another passage of his opinion (para 64), where the AG seems to suggest that a rule which provided “absolute protection for the participants in a leniency programme”, but otherwise provided for a balancing of interests, should be acceptable under EU law: here, too, the Opinion is hard to reconcile with Pfleiderer, which makes no such distinction.

That said, the Opinion seems to contain mixed messages.  At one point, the AG makes specific reference to the need to take account, post-Lisbon, of Article 19 TEU, under which Member States are obliged to provide remedies “sufficient to ensure effective legal protection in the fields covered by Union law”.  In the AG’s view, “in the light of that Treaty provision, the standard of effective judicial protection for EU based rights seems to be more demanding than the classical formula [of the ‘effectiveness’ principle] referring to practical impossibility or excessive difficulty.  In my opinion, this means that national remedies must be accessible, prompt, and reasonably cost effective” (para 47, emphasis added). 

Having gone that far (indeed further, expressing the view at para 51 that subjecting access to such judicial files to the consent of the infringer amounts to a “significant deterrent” to the exercise of the right to claim damages), the AG rather frustratingly does not explain how Article 19 TEU impacts on the case at hand.  One might have expected his observations on Article 19 to lead him to the conclusion that the Austrian law was incompatible with EU law regardless of whether other avenues existed for obtaining proof of infringement and loss, or at least to the extent that such other avenues were particularly burdensome (in terms of cost and/or time) compared with accessing the court file.  It will be interesting to see whether this sort of argument is deployed in future cases and, indeed, how Article 19 will be interpreted more generally by the CJEU.

The CJEU’s judgment is now awaited.  It will be keenly scrutinised for any suggestion that the Court is prepared to reconsider its Pfleiderer ruling.  Given that Pfleiderer was a Grand Chamber ruling, and a recent one at that, the prospects must be fairly slim.  Meanwhile, practitioners – and others such as the UK Government (see section 7 of its concrete proposals for reform of private enforcement of competition law in the UK) – also await a proposal from the Commission, which has indicated that it intends to put forward draft legislation that “strike[s] the right balance between the protection of leniency programmes and the victims’ rights to obtain compensation”.  This particular conundrum evidently has a lot of life left in it yet.

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