The GULS Law Review

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European Law

Are we naively restrained? : A critique on former US Solicitor General, Robert Bork’s view that vertical restraints are always in the best interest of consumers

February 21, 2017

In this article, Mashal Aamir (4th year LL.B), critically discusses the pro and anti-competitive effects of vertical restraints and the extent to which EU Competition law is in line with, or diverges from, Bork’s statement that vertical restraints should be lawful in the consumer interest
 

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In Memory of the UK’s Membership of the European Union: 1973 - ?

February 17, 2017

In light of the UK’s vote to leave the European Union, this article by Saif Gilani (2nd year LLB) analyses the timeframe needed for the UK to withdraw from the EU, considering the key legal and political obstacles which must first be overcome.

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A critical discussion of the pro and anti-competitive effects of vertical restraints and the extent to which EU Competition Law is in line with, or diverges from, Bork’s statement.

February 16, 2017

This article, written by Laura Rankin (4th Year LLB ), criticises Robert Bork’s view of vertical agreements and why, in light of the modernisation process of the Euorpean Commission, undertakings are still reluctant to incorporate such agreements. It is clear that the current law diverges significantly from the view of Bork owed particularly to the ambiguity of what is to be considered the primary aim of EU Competition Law.

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‘Modern Competition Policy: A Re-evaluation of economic efficiencies’

January 31, 2017

In this article, Robin Van Mulders (LLM in International Competition Law and Policy) discusses the applicability of Robert Bork’s welfare standard ‘economic efficiency’ in modern states. It evaluates the effectiveness of the standard in the context of US antitrust law as well as in the context of EU’s market integration goal and developing countries. The article suggests that the previous belief that economic efficiency as a competition objective is not a one-size-fits-all objective that can be applied and implemented in competition regimes, but that rather, due consideration ought to be given to the jurisdictions stage of economic development and current market structures...

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*BREXIT WRITING COMPETITION WINNER* - "Brexit & the Refugees in Calais: Navigating the Legal Jungle"

November 14, 2016

In the WINNING ARTICLE, Anna Nelson explores the effect that Brexit will have on the refugees in Calais and discusses whether or not the June 2016 result will be more onerous on Britain than had been anticipated by the Leave campaign...

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*BREXIT WRITING COMPETITION RUNNER UP* - Brexit: The End of the Road for Conflicts Harmonisation in the UK?

November 14, 2016

In his entry, Jordan Rhodes of fourth year considers the uncertain future for Private International Law following the Brexit vote...

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*BREXIT WRITING COMPETITION RUNNER UP* - “In Memory of the UK’s Membership of the European Union: 1973 - ?”

November 14, 2016

Second year student, Saif Gilani was one of our runners up for the Brexit Writing Competition. This article analyses the topical issue of triggering Article 50 TEU and the timeframe needed for the UK to leave the EU.

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“Remind me, what’s your name again?”

October 19, 2014

 This article looks at the new EU "Right to be forgotten", its conflict with the Freedom of Expression and the misleading nature of its name 

 Written by Christopher Lewis-Laverty, fourth year LLB and European Union law sub-editor.

 

 

The internet (nearly) never forgets. Following the ruling earlier this year EU citizens now have a “Right to be Forgotten” on the internet. Since the European Court of Justice’s ruling back in May, nearly half a million links from Google’s search engine have been removed.

This new found right has progressed rapidly since the original case (C-131/12)[1] was ruled in 2010 concerning a Spanish citizen lodging a complaint against a newspaper with the national Data Protection Agency and against Google Spain and Google Inc.

He complained that information concerning an auction notice of his house which was repossessed was entirely irrelevant, breaching his privacy rights as this out-of-date information had been fully resolved several years ago. Yet whenever anyone typed his name into Google this embarrassing information would come up, causing the applicant distress.

The Court therefore ruled in this case that, under certain conditions, individuals have the right to request for search engines to remove links with personal information about them, or more commonly called: the right to be forgotten. But how truly is this new practice working out?

 

How it works:

Any EU citizen can request for data held on the internet about themselves to be removed permanently, of which the online service provider must adhere to, unless “legitimate reasons” exist to do otherwise[2]. The Court in its judgement made clear the request for erasure has to be assessed on a case-by-case basis, showing an element of proportionality is required.

The main providers affected by this have been YouTube, Facebook, and of course, Google[3]. The majority of requests have been directed towards links to content on Facebook in response to people wanting material removed to protect their privacy[4].

The extent of this new Right to be Forgotten is effective only to a certain extent however: the recent European Court of Justice’s decision only allows search requests based on someone’s name to be the subject of an erasure request – meaning all the other content of the source will remain untouched. Therefore this judgement shows that unwanted articles certainly would not be deleted from the Internet – they simply would not appear in search results.

Another criticism is that if a request is successful then the links will not appear in search results on the company’s European domains – yet they will still remain public on global sites such as Google.com. Therefore there really is no hiding once information is made public on the internet.

Currently the UK is the third highest amongst its European counterparts for making full use of this Right to be Forgotten (behind France and Germany)[5]. So far over 63,000 pages (I.e. 1 in 10 of all requests)[6] have originated from the UK, but not all requests are always granted approval.

In a recent transparency report published by Google, all sorts of weird and unusual requests were shown to be turned down. For example a former British clergyman’s request to have links describing an investigation into sexual abuse claims made against him was rejected.

 

Freedom of expression complications:

The Right to be Forgotten has encountered many difficulties since its debut. Recently Justice ministers met in Luxembourg to argue whether this new right was truly reasonable as critics said it breached Article 10 of the European Convention on Human Rights, that of Freedom of Expression.

The Court eventually concluded the Right to be Forgotten was in fact acceptable in allowing search engines to remove people’s names provided that either the data is an invasion of privacy, irrelevant, out of date, or simply inaccurate[7].

Fighting for greater rights of expression founder of Wikipedia, Jimmy Wales, calls this right to be forgotten “one of the most wide-sweeping internet censorship rulings… ever seen”[8]. Campaign group Index on censorship concurs with Mr Wales, stating the decision “violates the fundamental principles of freedom of expression”[9].

On the contrary EU justice commissioner, Martine Reicherts argues it “will strengthen legal certainty, both for search engines and individuals, and will guarantee coherence”[10].

It should be noted that in Europe neither the right to be forgotten nor the right to freedom of expression are absolute rights, meaning an equitable middle-ground should be sought when trying to balance the two in opposition. In fact both of these rights are placed almost on equal footing. Interestingly in the United States however, the First Amendment protects freedom of speech above privacy rights, showing Europe has a much different approach when it comes to Data Protection.

 

Updates brought by the case-law:

Before this ruling was passed the 1995 Data Protection Directive was the main source of law in this domain[11]. It already included ways to allow people to request for personal data to be deleted provided it was no longer necessary (Article 12 of the Directive). This demonstrates that the newer more stringent rules are by no means ground-breaking.

Google was founded 3 years after the 1995 Data Protection Directive was passed, and since then a “digital revolution” has occurred, with the amount of online data increasing exponentially. Therefore new regulation in this area was more than welcomed in order to update this 19 year old legislation.  

Further, this “Right to be Forgotten” judgement emphasises that the rights of the individual are paramount in the EU when it comes to their control over their personal data, although there is a public interest defence when it comes to people in public life.

Even for such a large global corporation such as Google it is a massive burden to be processing on average 1,000 erasure requests per day across Europe. The problem however comes when smaller corporations start to handle increased amount of erasure requests and they don’t have the facilities to do so. Some believe in this instance smaller search engines will simply have to withdraw links to any material complained of, thereby damaging the fundamental right of freedom of expression.

The threat comes to corporate entities when they don’t follow new Data Protection Regulation. Data protection authorities are hereafter allowed to impose fines of up to 2% of annual worldwide turnover where entities do not abide by the rights of others, such as the right to be forgotten.

Lastly this Spanish case (C-131/12) successfully proved that EU data protection legislation goes beyond its borders, to that not only of organisations within Europe but also to those outside the EU which have operations within it, such as Google Inc in this specific case.    

 

Conclusion:

The phrase “Right to be Forgotten” is largely misleading and inaccurate. Information cannot be “forgotten” and it will certainly still be available on the Internet following this new legal update. This right at best will make information less easily accessible; it still however, will be available.

In any event this is not ground breaking regulation for the likes of Google or other large search providers. Google already has a system in usage to handle deletion requests such as for national identification numbers, bank account numbers, images of signatures and credit card numbers.

The Right to be Forgotten will be largely controlled by Google or search engines themselves which is controversial to say the least. This new found responsibility seems unwanted however from the likes of Google who will now need to spend a lot of time handling the waves of erasure requests that can be expected.

In the future search engine providers will no doubt develop this procedure further to make requests for erasure more accessible and available to all interested. Currently you’d need a legal expert to help process an erasure request with a search provider. If the EU has its way the whole process will become far easier and an automated process will be set up, costing Google both time and money to handle.

With further EU regulation coming into force soon concerning Data Protection provisions, this domain is likely to get much more rigid and controlled with particular data protection authorities in place. For the time being however, if you’re unhappy about your name published on the internet, you can make your (online) self disappear by almost just a click of a button.



[1] Judgment (OJ), 20/06/2014, Google Span and Google.

[2]Europea Factsheet on the “right to be forgotten”; date: 13th October 2014; http://ec.europa.eu/justice/data-protection/files/factsheets/factsheet_data_protection_en.pdf

[3] 12th October 2014; http://www.bbc.co.uk/news/uk-29586700

[4] Ibid

[5] 13th October 2014; http://www.wired.co.uk/news/archive/2014-10/10/google-right-to-be-forgotten-transparency

[6] Ibid

[7] C-131/12; Judgment (OJ), 20/06/2014, Google Span and Google.

[8] 14th October 2014; “Google ruling ‘astonishing’, says Wikipedia founder wales”; http://www.bbc.co.uk/news/technology-27407017

[9] 14th October 2014; http://www.bbc.co.uk/news/world-europe-27388289

[10] 14th October 2014; http://euobserver.com/justice/126011

[11] Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data 

The EU’s Accession to the ECHR: The Courts’ Relationship Prior to Accession

January 6, 2014

 

Written by Viktoria Tsvetanova
(LL.B graduate and DPLP student)

With the coming into force of the Lisbon Treaty in 2009, several amendments were introduced to the structure of the European Union (EU). Other than disposing of the ‘pillar structure’ previously in place, the Lisbon Treaty also makes provisions for the EU’s accession to the European Convention on Human Rights[1] (ECHR), an international Treaty established by the Council of Europe (CoE) through which Signatory States can be held accountable for human rights violations. Accession will place the EU on equal footing with its Member States in relation to the ECHR with the aim of increasing the EU’s credibility by allowing acts of EU institutions to be subjected to the scrutiny of the European Court of Human Rights[2] (ECtHR). Therefore, in cases concerning an alleged fundamental rights violation, the Court of Justice of the European Union (CJEU) will no longer be the final adjudicator of the legality of EU action. Since both the CJEU and the ECtHR claim to be human rights protectors by judging cases concerning fundamental rights, accession appears to be necessary in order to ensure the uniformity of judgements. However, if having two systems for the protection of fundamental rights is so dangerous to the principle of legal certainty, one wonders how Member States have coped with their dual obligations so far. In fact, the legal order pre-Lisbon was very functional. It placed the Courts in a cooperative relationship, ensuring the uniform protection of human rights after all. In this paper, I seek to explore this cooperative relationship and deduce why, despite it, accession is an essential step.

 

The Court of Justice of the European Union

When the EU[3] was formed in 1957, its goals were purely economic. Accordingly, having provisions for the protection of human rights in the original EEC Treaty was unnecessary[4]. However, with the widening of the EU’s aims, protection of human rights was a necessary step if it genuinely wanted to be a democratic system. Moreover, it was the CJEU that discovered this principle of human rights protection in the EU. In 1969, when provisions of community legislation were to be interpreted, the CJEU observed that “conceptions of value in the national constitutional law, in particular, national basic rights, must be observed as unwritten components of Community law” [5]. Thus, the Court deduced that fundamental rights were part of the general principles of EU law.

Having established the need to develop a system for the protection of fundamental rights in Europe, the EU chose not to develop its own rules yet[6] but to turn to the ECHR instead. This marked the beginning of a relationship of comity between the two Courts. In the 1990s, the CJEU went further than merely taking the ECHR’s principles into consideration and used the instrument as decisive guidance when ruling upon fundamental rights issues in EU law[7]. The CJEU’s commitment to the ECHR, despite not being based on a legal obligation, was once again made evident when the Luxembourg Court started paying increasingly close attention to the ECtHR’s jurisprudence; referring to it for the first time in P v S & CCC[8]. Thus, it is unsurprising that the CJEU’s interpretation of human rights will usually be analogous to the Strasbourg Court’s construal of the ECHR.

In 2000, the Charter of Fundamental Rights of the EU was enacted as a non-binding instrument[9] which served as a guide to the minimum human rights protection an EU Member State should afford its citizens. Since many of its Articles correspond to Articles of the ECHR, the CJEU continued to follow the ECtHR’s interpretation of those rights in its judgements. This continued respect for ECtHR interpretation is most noticeable[10] in its pursuit to guarantee a fair trial[11], respect for private and family life[12] and freedom of expression[13]. As such, the CJEU has demonstrated an understanding that the ECtHR is a specialised court.

 

The Courteous European Court of Human Rights

Despite the lack of a legal link between the CJEU and the ECtHR, the two Courts have come to a silent compromise in order to ensure a harmonious development of their case law. As explained above, the Luxembourg Court has been willing to employ the ECHR as a key source of law when ruling upon fundamental rights. On its part, the Strasbourg Court had made clear its willingness to establish a harmonious jurisprudence by referring to the CJEU’s case law[14].

Since all EU Member States are also parties to the Convention, they must always comply with the ECHR, even when implementing EU law. Thus, the ECtHR has been willing to review acts of EU Member States, despite the latter being directed by EU law[15]. This is logical since absolving Contracting Parties of their ECHR responsibilities by virtue of their transfer of competences to the EU would have been improper. However, on further examination, the ECtHR seems to nevertheless dismiss those cases on other grounds such as lack of victim status or non-applicability of the substantive rights claimed[16]. More importantly, the ECtHR’s inclination to maintain inter-court comity is seen through its abstinence from rendering judgements which may impede on the CJEU’s exclusive jurisdiction over EU law, in an attempt to avoid jurisdictional conflict. This approach was first seen in the landmark case of Bosphorus v Ireland[17]. In Bosphorus, the ECtHR held that when a Contracting State was acting in pursuit of an obligation deriving from its membership to an international organisation, its action was justified provided that the organisation protected human rights in a way “at least equivalent to” the protection afforded by the Convention[18]. If such an equivalent protection was afforded, then the state would be presumed to have complied with the ECHR as long as it had had no discretion in implementing the law. This became known as the ‘Bosphorus presumption’; rebuttable on a case-by-case basis only if the Court deems the protection to be “manifestly deficient”[19]. The Strasbourg Court held that the EU did provide the ‘equivalent’ protection necessary[20] and that there was no ‘manifest deficiency’[21].

The ‘Bosphorus presumption’[22] represents the most important contribution of the ECtHR towards the maintenance of legal certainty and harmony with Luxembourg jurisprudence by taking a default position that the EU’s protection of human rights is ‘equivalent’ to that of the ECHR. Accordingly, the ECtHR would abstain from ruling in cases where Member States did no more than apply their legal obligations. The ‘equivalent protection’ test suggests that attention is paid to the effectiveness of the judicial procedures within the EU, rather than the substance of the potential violation. Bearing in mind the CJEU’s commitment to the ECtHR’s jurisprudence, it is unsurprising that no ‘manifest deficiency’ has yet been found.

                                                          

Evaluation of the Arrangement

It is evident that a complex but cooperative relationship has formed between the CJEU and the ECtHR. Both Courts have comprehended the importance of avoiding conflict between their bodies of case law and have developed an informal system based on cooperation to ensure legal certainty. On the one hand, the CJEU has been willing to employ the ECHR and ECtHR jurisprudence for decisive guidance when ruling upon fundamental rights issues in EU law. On the other, the ECtHR has been seeking to avoid judicial conflict by refraining from making judgements that may obstruct the exclusive jurisdiction of the CJEU over EU law. However, since this cooperative relationship has no legal basis, either Court can end it at any time[23].

The lack of legal duty to cooperate is precisely why I believe that the EU’s accession to the ECHR is necessary.  In the absence of a guaranteed relationship between the two Courts, they will remain fundamentally separate and will potentially issue conflicting judgements: a scenario which has previously occurred. In Hoechst, the CJEU decided that the right to private and domestic life does not apply to companies[24]. When ruling upon the same issue in Niemetz, the ECtHR decided that such a right does apply to companies[25].

Pavone[26] has argued that accession is unnecessary since the two Courts maintain a “highly functional system”[27]. Further, he contends that their institutional differences allow plaintiffs to ‘forum shop’ when choosing between them[28]. As concerns his latter argument, I am inclined to disagree. I do not see a possibility for a litigant to ‘forum shop’ since, assuming the case concerns an EU act implemented by a Member State, the ‘Bosphorum presumption’ would be applied in the ECtHR and the case would be dismissed. Thus, the litigant’s only possibility is to apply to the CJEU. Apropos Pavone’s former contention, I do agree that the Courts have developed a coherent human rights system. However, I do not believe that this system can last indefinitely. With an increasingly political Union, it needs official supervision in such a sensitive area as human rights. At the very least, accession will give legal basis for the Courts’ relationship, currently purely founded on collaboration, and will guarantee the future harmonious protection of human rights.

In summation, the CJEU’s parallel interpretation of fundamental rights with the ECtHR developed into a relationship of comity between the two European Courts. This has in turn ensured the uniformity of judgements by filling the gap existing due to a lack of legal association. However, this is no longer satisfactory. A merely cooperative relationship built on the use of one another’s legal instruments and jurisprudence does not absolve the EU from its lack of accountability when it comes to human rights protection. Furthermore, it does not guarantee the uniform protection of human rights in Europe. As such, I conclude that accession is a necessary future step.



[1] Article 6(2) Treaty on European Union.

[2] European Parliament Resolution, ‘Institutional Aspects of Accession by the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms (2009/2241(INI))’ Official Journal of the EU (2011/C 161 E/12) of 31 May 2011, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2011:161E:0072:0078:EN:PDF, last accessed on 12/12/2013 at 13:00, 23.

[3] Then called the European Economic Community.

[4] Dogan,Y, ‘The Fundamental Right Jurisprudence of the European Court of Justice: Protection for Human Rights within the European Union Legal Order’(2009) 6 Ankara Law Review 53, 53.

[5] C-29/69 Stauder v City of Ulm [1969] ECR 419, at p.1.

[6] Charter of Fundamental Rights of the EU was drafted in 2000, when the EU had gained experience with fundamental rights case law.

[7] Case 260/89 Elliniki Radiophonia Tileorassi (ERT) v Dimotiki Etairia Pliroforissis [1991] ECR I-2925.

[8] C-13/94 [1996] ECR I-2143, at p.12.

[9] Until 2009 when the Lisbon Treaty gave it a binding status.

[10] Callewaert, J, ‘The European Convention on Human Rights and European Union Law: a long way to harmony’ (2009) 6 European Human Rights Law Review 768, 769.

[11] Case 7/98 Bamberski v Krombach [2000] ECR I-1935 (trial in absentia).

[12] Case 540/03 European Parliament v Council of the European Union [2006] ECR I-5769 (family reunification).

[13] Case 274/99P Connolly v European Commission [2001] ECR I-1611 (freedom of expression of European civil servants).

[14] Pellegrin v France, 8 Dec. 1999 (App. No. 28541/95) (2001) 31 EHRR 26.

[15] Melcher v Germany, 9 Feb. 1990 (App. No. 13258/87) 64 D&R 138.

[16] Craig, P. De Burca, G. EU Law: Text, Cases and Materials (Oxford University Press, 2011), 401.

[17] Bosphorus Hava Yollari Turizm ve Ticaret Anonim Sirketi v Ireland, 30 Jun. 2005 (App. No. 45036/98) (2006) 42 EHRR 1.

[18] Ibid., para 155.

[19] Ibid., para 156.

[20] Ibid., para 165.

[21] Ibid., para 166.

[22] Subsequently applied in Coopérative des Agriculteurs de Mayenne v France, 10 Oct. 2006 (dec.), (App. No. 16931/04) and Connolly v 15 Member States of the European Union, 9 Dec. 2008 (App. No. 73274/01).

[23] Krisch, N. ‘The open architecture of European human rights law’(2008) 71 Modern Law Review 183, 201.

[24] C-46/87 and 227/88 Hoechst AG v Commission [1989] ECR 2859 at p.17.

[25] Niemitz v Germany, 16 Dec. 1992 (App. No. 13710/88) (1993) 16 EHRR 97 at p.31.

[26] Pavone, T, ‘The Past and Future Relationship of the European Court of Justice and the European Court of Human Rights: A Functional Analysis’, http://ssrn.com/abstract=2042867, Accessed 12/12/2013 at 13:00.

[27] Ibid., 19.

[28] Ibid., 16-17.

Recent developments on the position of leniency applicants in follow-on private actions for damages under European and national competition law

July 2, 2013

 

 

 

Written by Fraser Grier (4th year LLB)

 

I.                   Background

 

 The previous decade has witnessed an effort by the  European Commission to afford greater potency to private antitrust litigation; concurrently aiming to navigate between the gravity of private individuals’ interests and broader community-wide objectives of the internal market. A duet of landmark judgments[1] of the Court of Justice guarantees that any natural or legal person who suffers harm as a result of a breach of European antitrust rules under Articles 101 and 102 of the Treaty of the Functioning of the European Union must be able to claim reparation from the individuals (or “undertakings”) that cause harm to customers through collusive practices such as price fixing. The direct effect of the Articles gives rise to rights and obligations enforceable by individuals before national courts of Member States.[2] Awarding compensation is beyond the field of competence of the Commission and National Competition Authorities and within the remit of national courts applying civil law and procedure, thus laying the basis for private enforcement of EU competition law.[3]

 The Commission’s Impact Study pertinent to the recent Commission proposal on private action[4] estimates the total amount of potential compensation to victims lost due to ineffective private enforcement lies, in the most extreme assumption, at €23 billion each year across Member States.[5] The Commission’s previous White[6] and Green[7] papers mark an ambition to foster a claimant-friendly forum within the Union, culminating in the current proposal subject to assessment below. 

 Private action often arises from a “follow-on” procedure; where public enforcement proceedings have resulted in a finding of an infringement by cartel participants and subsequent fines imposed, opening up the cartelists as targets for private damages claims by individuals.[8] Of greatest relevance to this article is the preservation of effective leniency incentives; where cooperation and information sharing with Competition Authorities by suspected cartelists takes place in return for conditional immunity from fines or reduction.[9] The contention that shall be focused upon arises where ex post damage claimants are faced with an often insurmountable obstacle of proof of harm caused under national laws, yet the threat of potential disclosure of leniency documents by Competition Authorities to private parties poses a substantial disincentive for potential leniency applicants, compromising ex-ante public detection and prevention of cartels.[10]

 This article aims to outline current grounds of conflict, the position on disclosure of leniency evidence both under legislation and following the Court of Justice judgement of Pfleiderer,[11] and evaluate the provisions of the recent Commission proposal.

 

II.                Public and private enforcement

 

 The crevasse between public and private enforcement has been characterised by conflicting ethos. Public enforcement in the EU serves as an instrument of deterrence and punishment, whilst private enforcement is focused upon corrective justice in compensation for victims.[12]

 The promotion of the role of private action in antitrust enforcement potentially circumvents the influence of National Competition Authorities upon national competition policy,[13] leading to concern from leadership of the latter Authorities who wish to see priority afforded to leniency programmes over compensatory mechanisms for victims.[14] At the constitutional level, NCAs have traditionally been the primary navigators of competition policy within Member States. The role of courts thus far has been to ensure that administrative bodies act within the law, as opposed to public policy direction.[15]  The rise of a culture of private damages claims will cause a transition of power in the policy field to the courts, further testing the incumbent constitutional relationship.[16]

 Moeschel accords several advantages to public enforcement, notably the state sanctioned power to impose substantial fines upon infringing undertakings.[17] A strong example is offered in that the levying of up to ten per cent of world turnover of an undertaking, based on average operating margins in Europe, may eliminate profits for up to five years.[18] Accumulation of practice and efficiencies in specialisation may request lesser costs than private enforcement.[19] In the current armoury of investigation methods at the disposal of Member States, private enforcement meanwhile remains largely supplementary in nature.[20]  Advantages of the latter in this regard are posing as an additional deterrence to potential cartelists.[21] Leniency programmes in particular hold significant benefits for public enforcement, the most considerable being swift collection of intelligence and evidence through goal oriented inspections in premises.[22] Recognition of a violation by a number of cartelists aiming to secure immunity serves to mitigate costs of adjudication.[23] Furthermore, the incentive of a single undertaking to surrender information regarding cartel activity in return for a sole immunity guarantee weakens the confidence of undertakings to take part in collusive practices from the beginning.[24]

 

 III.              Current legal bases for leniency applications

 

 Since 2002 the Leniency programme of the Commission has proven itself as the most effective tool at its disposal for the detection of secret cartels.[25] The current EU leniency regime is governed by the Commission and NCAs forming the European Competition Network (ECN), acting under the procedural framework for antitrust of the 2006 Leniency Notice, Council Regulation 1/2003 and Commission Regulation 773/2004. The regime draws inspiration from models employed by the United States Department of Justice, focusing upon the cooperation of undertakings in submission of self-incriminating corporate statements and documentary evidence.[26] The 2012 Model Leniency Programme, without EU legislation in the area, reflects an attempt to align Member State leniency policy programmes.[27] This is of particular importance as leniency programmes remain a matter of idiosyncratic national policy than binding EU law. Where interstate effect of cartels is an issue, an applicant may have to apply to a number of NCAs, including the Commission itself, to escape liability, often creating “leniency dilemmas”.[28] In addition, forum shopping by parties for more favourable leniency conditions may lead to a decline in authority and consistency of competition law within the Union.[29]

Conflicts arise, for example, where national courts in private antitrust action request documents from the Commission in order to apply Articles 101 and 102 TFEU, by virtue of the duty of cooperation with Member State courts enshrined in Art 4(3) TFEU and Article 15 of Regulation 1/2003.  Alternatively, in inter partes actions, Member State courts may issue a request to defendants in national proceedings which are currently, or have been, under investigation by the Commission to disclose evidence before national courts.[30] 

 At present, protection is afforded to corporate statements under EU law through mechanisms such as oral submission of evidence, in order to ensure that only the Commission retains a transcript.[31] Corporate statements are issued to addresses within the Commission’s Statement of Objections only under secure circumstances, following assurance by recipients that the statements are used solely for the purposes of judicial or administrative proceedings for the application of EU competition rules.[32] Furthermore, the Commission “will not transmit to national courts information voluntarily submitted by a leniency applicant without the consent of that applicant”.[33]

The 2008 Commission White Paper called for enhanced protection for corporate statements submitted under the Leniency Notice, whilst other documents should be precluded under “investigative privilege” from disclosure to courts if the Commission or an NCA demonstrated to the court that an order obliging the disclosure of certain pieces or categories of evidence during a specified period of time would jeopardise an on-going investigation.[34]

 The Commission conceded that the mere fact of disclosure of evidence entailing unfavourable consequences for the addressee of the disclosure in parallel civil proceedings cannot constitute a reason to object to the disclosure order, so as to overcome the “information asymmetry” weighted against claimants in private damages cases.[35] While the Commission discourages the use of the Transparency Regulation[36] on the part of damage claimants seeking access to the file, as we shall see below, it cannot be excluded that damage claimants will pursue the transparency route to seek access to cartel evidence.[37] A European Ombudsman decision[38] highlights the difficult balancing exercise inherent in Regulation 1049/2001 (“the Transparency Regulation”) between the public interest of increasing the deterrent effect of EU competition law through effective private enforcement and the commercial sensitivity of evidence.

 Nevertheless, the Court of Justice has cast doubt over the uniformity of protection of leniency materials across all Member States in maintaining that national courts are to decide case-by-case on disclosure of information voluntarily submitted by leniency applicants.

 

 IV.              The Pfleiderer case

 

 The position at present was established in the seminal judgement of Pfleiderer. Here a claimant in national follow-on proceedings adversely affected by the conduct of several companies submitted an application to a National Competition Authority for access to leniency material. 

The Court of Justice firstly defends public enforcement; at paragraph 25 of the judgement it provides that “leniency programmes are useful tools if efforts to uncover and bring to an end infringements of competition rules are to be effective and serve, therefore, the objective of effective application of Article 101 TFEU”. Secondly, the Court counters with a riposte for private enforcement at paragraph 29; “actions for damages before national courts can make a significant contribution to the maintenance of effective competition in the European Union” with reference to Courage v Crehan. Nevertheless, the Court of Justice ruled that Article 101 TFEU and Regulation 1/2003 do not preclude access to documents relating to a leniency procedure involving the perpetrator of that infringement. It is for the national courts and tribunals on the basis of their national law to determine the conditions under which such access must be permitted or refused by weighing the interests protected by European Union law.[39]

 It should be noted here that the judgement ran contrary to the wishes of the Commission, who saw the threat of disclosure of leniency documents in follow on procedure as a substantial deterrent to potential applicants, despite any proof of their actual value in private enforcement.[40] National Competition Authority heads have also expressed a desire to protect material submitted under a leniency programme from disclosure.[41] In his Opinion prior to the judgement, AG Mazak proposed distinction between corporate statements and other pre-existing leniency documents which may be disclosed on a case by case basis.[42]

 Following the judgement of the Court of Justice in Pfleiderer, a number of European national courts have been given the opportunity to apply the principles set out therein, with a variety of outcomes. The lack of a unified system across Member States means that, in cases of parallel leniency applications, a damage claimant may elect to apply to claimant-friendly jurisdictions for disclosure of the leniency documents, before relying on them for damage claims in other jurisdictions, perpetuating the activity of “forum” or “document” shopping mentioned above.[43]

Despite the Court of Justice giving priority to the principle of national autonomy,[44] in the absence of any common principles or categories such as those proposed by the Commission and the Advocate General, leniency applicants will lack certainty on how national courts will treat requests for access and protect their leniency confessions from disclosure.[45] Indeed, lack of clarity has been further propagated by the General Court in the CDC [46] and EnBW [47] rulings. The former ruling concerned the full annulment of a Commission refusal to grant access to evidence containing leniency submissions under the Transparency Regulation (Regulation 1049/2001). The Court rejected the Commission’s justification regarding the protection of commercial interests as well as the protection of the purpose of investigations. In the latter case the Court rejected the same justifications on the basis that the Transparency Directive cannot be overlooked by reference to a potential negative impact on the Commission’s leniency programme.[48] In EnBW in particular, the Court adopted a sceptical viewpoint over whether the evidence at stake protected genuine commercial interest, or simply served to aid undertakings escape actions for damages in national courts.[49] Advocate Jääskinen’s Opinion in the recent case of Donau Chemie and Others[50] wrestles inconclusively with, on the one hand, the principles of the effect utile of providing remedies for victims of infringement under Article 19(1) TEU and Pfleiderer,[51] and the other the rights against self-incrimination of leniency applicants inherent in Article 47 of the Charter of Fundamental Rights and public policy.[52] Post-Pfleiderer, demands have multiplied for legislative intervention to stem uneven enforcement of EU antitrust law, in particular disclosure of evidence under leniency programmes, at national level.[53]

 

V.                Assessment of the  proposed Directive

 

The recently published Commission proposal for a Directive on damages actions[54] aims to accommodate the interests of both claimants and defendants in private damages actions. The proposal immediately moves to counter the ‘Pfleiderer stance held by the Court of Justice, in providing that national courts are prohibited from disclosure or permission of use of leniency corporate statements and settlements submissions to the Commission in any circumstances, echoing the Opinion of AG Mazák. National courts may order the disclosure, or permit the use, of “other information” prepared for use for or by a Competition Authority, for example the Statement of Objections, only after the authority has closed its proceedings or taken a decision.[55] Furthermore, before this point the evidence is rendered inadmissible.[56] These provisions answer to the principle that in civil damages context leniency cannot put cooperating applicants at a disadvantage compared to non-applicants, having voluntarily conceded liability before completion of the investigation.[57] Documents falling outside the above categories may be disclosed at any moment in time, albeit on the basis that doing so does not compromise Competition Authority proceedings; on the further condition of specificity of evidence requested as opposed to mere reference to type or category.[58]

A further issue addressed is the “information asymmetry” between defendants and claimants, with the latter burdened with the task of establishing a causal relationship between harm and the infringement of EU competition rules[59] as well as quantification of damages sought.[60] The impetus for greater invasiveness in obtaining evidence submitted to national authorities stems from the high cost of factual and economic analysis that victims are often compelled to carry out in order to obtain restorative justice,[61] yet more than 9 out of 10 cartels are indeed found to have caused illegal overcharges.[62] The proposal thus calls for a reversal of the burden of proof due to a rebuttable presumption emplaced upon the defendant, thus the evidential burden shifts to defendants, remedying the shortcomings in available evidence to the detriment of claimants establishing harm caused by the cartelists.

A key goal of the proposal is harmonisation of national laws, evident in the legal bases of the Directive being stated as Article 114 TFEU, in conjunction with Article 103.[63] Additionally, a primary focus stated by the Commission is the ascertainment of a minimum level of effective access to evidence to equip both claimants and defendants.[64]

 

VI.              Conclusion

 

It would appear that the stalling of the Commission’s progress towards a stronger private enforcement culture within the Union may be rectified through binding legislative measures to achieve uniformity in application of national and EU antitrust law.

 The Commission identified that limited access to evidence by cartel victims in the Member States is one of the main procedural hurdles to obtaining full compensation.[65] Despite its claimant friendly agenda, the provisions of the proposal show a regard for safeguards against weakening leniency mechanisms under public enforcement. Further aspects that space has precluded discussion are fundamental rights considerations under the European Convention on Human Rights and Charter of Fundamental Rights regarding the right to a fair trial raised in the Donau Chemie case. Nevertheless, the proposal presents a bold attempt to resolve the dichotomy in ethos of public and private enforcement, yet it remains to be seen whether the provisions hold fast in enabling the principles championed by the Court of Justice in Courage v Crehan; that of effective provision of redress under Articles 101 and 102.

 



[1] Courage v Crehan [2001] ECR 1-6297 and Manfredi [2006] ECR 1-6619

[2] Article 6 of Council Regulation No 1/2003 of 16 December 2002

[3] Explanatory Memorandum of the Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 2013/0185 (COD), 2

[4] Ibid.

[5] Executive Summary of Impact Assessment: Damages actions for breach of the EU antitrust rules, SWD(2013) 204 final, 4

[6] White Paper on damages actions for breach of the EC antirust rules, COM/2008/0165

[7] Green paper on damages actions for breach of the EC antitrust rules, COM(2005) 672

[8] Wils, W.P.J. 'The Relationship between Public Antitrust Enforcement and Private Actions for Damages' (2009) 32 World Competition, Issue 1, 3–26,  5

[9] Commission Notice on Immunity from fines and reduction of fines in cartel cases, 2006/C 298/11

[10] Stakheyeva, H ‘Removing Obstacles to a More Effective Private Enforcement of Competition Law’[2012] G.C.L.R , Issue 2, 68 – 75, 74

[11] Pfleiderer AG v Bundeskartellamt (Case C-360/09) ;  [2011] WLR (D) 196

[12] Wils, W.P.J ‘The Relationship between public antitrust enforcement and private actions for damages’ (2009) World Competition 3, 15

[13] Wilsher, D ‘Reconciling the Public and Private Dimensions of Competition Litigation in the European Union’ [2011] 4 G.C.L.R, Issue 2, 89 – 98, 90

[14] Resolution of the Meeting of Heads of the European Competition Authorities 23 May 2012 “Protection of leniency material in the context of civil damages actions”

[15] Wilsher ‘Reconciling the Public and Private Dimensions, 90

[16] Ibid.

[17] Moeschel, W ‘Should Private Enforcement of Competition Law Be Strenghtened?’ [2013] G.C.L.R. Issue 1, 1 – 6,  3

[18] Ibid.

[19] Ibid.

[20] Wils, W.P.J ‘Leniency in Antitrust Enforcement: Theory and Practice, (2007) 30 World Competition 25- 64

[21] Moeschel, W ‘Should Private Enforcement of Competition Law Be Strenghtened?’, 4

[22] ICN Anti-Cartel Enforcement Manual, 2009. Chapter 2, para 2.2

[23] Ibid.

[24] Caruso, A ‘Leniency Programmes and Protection of Confidentiality: The Experience of the European Commission’ Journal of European Competition Law & Practice  (2010) 454

[25] Stefano, S ‘Access of Damage Claimants to Evidence Arising out of EU Cartel Investigations: A Fast-evolving Scenario’ [2012] G.C.L.R Issue 3, 95 -110, 101

[26] Caruso, A ‘Leniency Programmes and Protection of Confidentiality’, 454

[27] ECN Model Leniency Programmes as revised November 2012, Explanatory Notes, para 6 – 9

[28] See Thyssenkrupp Nirosta v Commission (C-352/09 P)

[29] Wilsher, D ‘Reconciling the Public and Private Dimensions of Competition Litigation in the European Union’ , 90

[30] Caruso, A ‘Leniency Programmes and Protection of Confidentiality’

[31] Van Bael and Bellis, Competition Law of the European Community (Alphen aan den Rijn: Kluwer Law International, 2010), p.1137

[32] Stefano, S ‘Access of Damage Claimants to Evidence Arising out of EU Cartel Investigations: A Fast-evolving Scenario’

[33] Commission Notice on cooperation within the Network of Competition Authorities (2004/C 101/03) paragraph 26.

[34] White Paper on damages actions for breach of the EC antirust rules, COM/2008/0165, paragraph 2.9

[35] F. Rizzuto, “Leniency and Damages Actions: The Impact of Recent European Union Court Jurisprudence” [2012] G.C.L.R. 1

[36] Ibid.

[37] Ibid.

[38] 3699/2006/ELB

[39] Pfleiderer, paragraph 33

[40] Judgment of the General Court of 22nd May 2012, Case T-344/08 ENBW paras 72 – 73, Nielen M.G. ‘Leniency material unveiled? Access by cartel victims to Commission and NMa files from a perspective of EU fundamental rights and cartel enforcement’ Science Shop, Faculty of Law, Economics and Governance (University of Utrecht, 2013)

[41] Resolution of the Meeting of Heads of the European Competition Authorities of 23 May 2012 “protection of leniency material in the context of civil damages actions”

[42] Opinion of A.G. Mazák in Pfleiderer (C-360/09) at paragraphs 16–17, 44, 46, 47 and 48

[43] Stefano, S ‘Access of Damage Claimants to Evidence Arising out of EU Cartel Investigations: A Fast-evolving Scenario’, 103

[44] See Pfleiderer (C-360/09) at paragraphs 20 and 23

[45] F. Rizzuto, “Leniency and follow-on private actions for damages: Comment on the Opinion of the Advocate General in the Pfleiderer Case” [2011] G.C.L.R. 99

[46] [2006] OJ L353/54

[47] EnBW (T-344/08) May 22, 2012, not yet reported.

[48] Ibid. at paragraph 125

[49] EnBW (T-344/08) May 22, 2012, not yet reported, at paragraph 147

[50] AG C-536/11, not yet reported

[51] Ibid. paragraph 51

[52] Ibid. paragraphs 55 and 56

[53] “EU needs legislative solution to whistle-blower files access, AG Mazák says” (MLex, February 24, 2012)

[54] 2013/0185 (COD)

[55] Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 2013/0185 (COD), Chapter II, Disclosure of Evidence

[56] Ibid.

[57] Commission Notice on Immunity from fines and reduction of fines in cartel cases (2006/C 298/11), paragraph 6

[58] Explanatory Memorandum of the Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 2013/0185 (COD), 15

[59] [2001] ECR 1-6297

[60] Explanatory Memorandum of the Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 2013/0185 (COD), 18

[61] Ibid.

[62] Ibid

[63] Ibid. 9

[64] Ibid. 14

[65] White Paper on damages actions for breach of the EC antirust rules, COM/2008/0165, 4 - 5

 

 

 

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