Between Menarini and Delta Pekarny – Strasbourg view on intensity of judicial review in competition law

Between Menarini and Delta Pekarny – Strasbourg view on intensity of judicial review in competition law by Maciej Bernatt

The final version of this article will be published in: The procedural aspects of the application of competition law: European frameworks – Central European perspectives, Csongor István Nagy (ed.), Europa Law Publishing, Gröningen

1. Introduction The judgement in Menarini v Italy of 20111 is undoubtedly the most famous European Court of Human Rights (the ECtHR) judgment in competition law circles. Its impact reaches beyond the enforcement system of competition law in Italy. It has been broadly discussed by EU competition law scholars. Most notably the European Commission’s representatives used it as an argument against criticism concerning the incompatibility of the EU competition law enforcement system with the fundamental rights requirements stemming from Article 6 of the European Convention on Human Rights (ECHR).2

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Assistant Professor, University of Warsaw, Faculty of Management, Department of European Economic Law (Jean Monnet Chair) and Scientific Secretary of the Centre for Antitrust and Regulatory Studies at the University of Warsaw; e-mail: [email protected]. This article reflects author’s broader research on judicial deference in administrative and competition law, see M. Bernatt, Transatlantic Perspective on Judicial Deference in Administrative Law, 22(2) Columbia Journal of European Law 275, 275-325 (2016), available at: http://ssrn.com/abstract=2648232. Point 3 of the article draws on author’s post-conference article, see M. Bernatt, Deferential Standard of Judicial Review in the light of Article 6 of the ECHR, in: Procedural Fairness in Competition Proceedings, P. Nihoul, T. Skoczny (eds.), Edgar Elgar, 309-327. The article does not discuss in detail the ECHR standards and the practice of judicial review of fines imposed by competition authorities. In this respect see in Polish M. Bernatt, Czy Polska oferuje więcej niż wymaga Konwencja? O konwencyjnym wymogu pełnej jurysdykcji i polskim modelu sądowej kontroli kar nakładanych przez Prezesa UOKiK, w: Między prawem administracyjnym a prawem karnym. Standardy rzetelności postępowania w sprawach ochrony konkurencji i konsumentów, W. Jasiński (red.), Wolters Kluwer, Warszawa 2016, available at: https://uw.academia.edu/MaciejBernatt. 1 The ECtHR judgment of 27 September 2011, no. 43509/08. 2 For instance A. Italianer, the Director General of DG Competition noted in October 2011 that the ECtHR judgment in Menarini confirms “the legitimacy of administrative systems, a model followed by many competition agencies. It also corroborates the case law of the European Court of Justice which has repeatedly found the EU system of competition enforcement to fulfil the requirements of Article 6 ECHR on the right to a fair trial”, see Italianer, Best Practices for antitrust proceedings and the submission of economic evidence

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Against this background, this article aims at placing Menarini in the broader context of the ECtHR jurisprudence. Such an approach is necessary, since it is the established ECHR standards rather than single judgments that are binding on all ECHR contracting parties.3 Thus the study of cases other than Menarini is indispensable for discussing the compatibility of any European competition law enforcement system with Article 6 ECHR. In addition, this article discusses the ECHR standards that dictate the required intensity of judicial control over the inspections run by competition authorities. The ECtHR judgement in Delta Pekarny of 2014 serves as a primary point of reference. Finally, the article discusses the challenges arising from ECHR framework judgments for the enforcement system of EU and Polish competition law. 2. What Menarini was and what was not about To start with, it is important to understand which issues were addressed by the ECtHR in Menarini and – equally important – which were not. First of all Menarini is important as it clearly confirms that competition law cases involving fines qualify as criminal ones in the sense of Article 6(1) ECHR. This is because Engel criteria are met.4 However, this judgement confirms that—in the formulation of the ECtHR in Jussila v Finland5— Article 6(1) ECHR under its criminal head does not apply to competition proceedings with its full stringency. Competition law (unless clearly criminal in nature) falls short of the “hard core of criminal law”. The Menarini judgment lacks a full explanation as to what it really means that Article 6 ECHR does not apply in competition proceedings with full stringency. Does it mean that some guarantees concerning criminal cases (guarantees prescribed in Article 6(1) but also in 6(2)-6(3) ECHR) do not apply at all? Or is it only that it is applied differently? If so, differently in what way? What we know from Menarini (and other previous and subsequent ECtHR judgments) is that the ECtHR is satisfied with the and the enhanced role of Hearing Officer, http://ec.europa.eu/competition/speeches/text/sp2011_12_en.pdf, p. 3. 3 Under Article 46(1) ECHR, the ECtHR is directly binding only on the country that was the addressee of the judgment. 4 Although practices restricting competition are classified as administrative and not criminal, the general and abstract character of the prohibition as well the deterrent, repressive, severe and stigmatizing character of fines (not compensatory ones) determines the criminal character (in the meaning of the ECHR) of the proceedings concerning these practices. See Menarini, paras 38-44 when it comes to Italian law. For an understanding of the Engel criteria see the ECtHR judgment of 8 June 1976 in case Engel and others v the Netherlands, no. 5100/71, para 82 and the ECtHR judgment of 21 February 1984 in case Öztürk v Germany, no. 8544/79, para 50. 5 The ECtHR judgment of 23 November 2006 in Jussila v. Finland [GC], app. 73053/01, para 43.

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enforcement system in which the administrative authority and not a court, in the meaning of Article 6 ECHR, decides the case of a not strictly criminal nature in the first instance.6 It seems also that the ECtHR rejects a complete non-application of certain Article 6 ECHR guarantees required in criminal cases even if the way of their application may be different. Such an observation seems justifiable in light of the conclusion of the ECtHR that the differences between an administrative procedure and a typical criminal procedure do not discharge ECHR contracting parties from providing all the guarantees provided under the criminal head of Article 6 ECHR.7 Thus it seems that in principle all procedural requirements of Article 6 ECHR must be met in competition proceedings even if the proceedings are conducted in the first phase before the administrative body and not a court. In other words, although application of these guarantees is different than in the context of traditional criminal cases8 (for example it is an administrative authority and not a court that issues a first instance decision), the guarantees such as the right to be heard and the rights of defence (as defined in the broad jurisprudence of the ECtHR) should be provided for. To be sure, the ECtHR in Menarini was not focused on the administrative phase of the proceedings and the level of procedural guarantees required in this phase. Most importantly the ECtHR did not refer to the issue heavily debated in competition law: what is the required level of institutional impartiality of those administrative authorities (division of investigatory/prosecutorial and decision-making functions) that deliver the first instance decision concerning the violation of competition law?9 Menarini was about the required intensity of judicial review regarding competition authority decisions and this issue is the most important when discussing the consequences of Menarini for the enforcement of competition law. 3. Standard of judicial review in cases classified as criminal In Menarini, the ECtHR reiterated that in criminal cases falling beyond the scope of the hard core of criminal law10, it is permissible that administrative See however the ECtHR judgment of 11 June 2009 in case Dubus S.A. v France, no. 5242/04, para 58-60. 7 The ECtHR stated that “a nature d’une procédure administrative peut différer, sous plusieurs aspects, de la nature d’une procédure pénale au sens strict du terme. Si ces différences ne sauraient exonérer les Etats contractants de leur obligation de respecter toutes les garanties offertes par le volet pénal de l’article 6, elles peuvent néanmoins influencer les modalités de leur application” (para 62). 8 Menarini v Italy, para 62 in fine. 9 The ECtHR, without any detailed analysis, pointed that “Le respect de l’article 6 de la Convention n’exclut donc pas que dans une procédure de nature administrative, une «peine» soit imposée d’abord par une autorité administrative” (para 59). 10 Menarini, para 62. 6

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authorities deliver decisions and impose fines as long as such decisions are reviewed by a judicial body that possesses full jurisdiction.11 The Court then proceeded to provide an analysis of the sufficiency of judicial review. Indeed it found that the Italian courts’ review of the Italian competition authority’s decision imposing a fine on the company for its participation in a cartel was in accordance with Article 6 ECHR.12 The ECtHR observed that the judicial review exercised by the Italian administrative court was in practice not limited to the question of legality only. The Italian courts could determine whether, in relation to the particular circumstances of the case, the competition authority had made proper use of its powers. They were able to examine the validity and proportionality of the administrative decision and even scrutinize technical assessments. They also analysed allegations of fact and law and assessed the evidence collected. Thus, the ECtHR found the judicial review in this particular case to be sufficient. The question regarding the required level of intensity of judicial review in not strictly criminal Article 6 cases (such as competition law infringements) is not an easy one. Departing from the opinion voiced by some EU competition law scholars, a close study of the ECtHR jurisprudence suggests that in the cases decided under the criminal head of Article 6(1) ECHR, the ECtHR does not apply its test established in the civil line of Article 6 cases13, most notably in Bryan v. UK14, later confirmed in Tsfayo v. UK15 and Sigma v. Cyprus.16 Under this test the ECtHR is ready to accept a weaker judicial review of administrative action in case certain conditions are met. The ECtHR has considers “the powers of the judicial body in question and to such factors as (a) the subject-matter of the decision appealed against, in particular, whether or not it concerned a specialized issue requiring professional knowledge or experience and whether it involved the exercise of administrative discretion and if, so, to what extent; (b) the manner in which that decision was arrived at, in particular, the procedural guarantees available in the proceedings before the adjudicatory body; and (c) the content of the dispute, including the desired and actual Id., at para 59. Id., at paras 63-67. See however strong dissent by Judge Pinto de Albuquerque. The applicant questioned the legality of the review exercised by the Italian courts (under which the courts were checking the qualification of facts to law) which failed to cover factual determinations that were central to the case (Menarini, paras 13-17). For a commentary see M. Bronckers, A. Vallery, Fair and Effective Competition Policy in the EU: which Role for Authorities and which Role for the Courts After Menarini, (2012) 8 European Competition Journal, 283, 285-289. 13 See M. Bernatt, Deferential Standard of Judicial Review in the light of Article 6 of the ECHR, in: Procedural Fairness in Competition Proceedings, P. Nihoul, T. Skoczny (eds.), Edgar Elgar, 309, 319-322 (2015). 14 The ECtHR judgment of 22 November 1995 in Bryan v United Kingdom, app. 19178/91 15 The ECtHR judgment of 14 November 2006 in Tsfayo v UK, app. 60860/00. 16 The ECtHR judgment of 21 July 2011 in Sigma Radio Television v Cyprus, apps. 32181/04 and 35122/05, paras 159-166. 11

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grounds of appeal”.17 In addition, the court must always be entitled to determine the central issue of the dispute18 and to remand the case to the administrative authority.19 Contrary to this approach in judgments concerning criminal cases preceding Menarini – Umlauft v. Austria20 and Schmautzer v. Austria21, the ECtHR described what ‘full jurisdiction’ means in cases involving a criminal charge in a meaning of Article 6 ECHR where the first instance adjudicative body does not meet the requirements of Article 6 ECHR. Both cases involved fines imposed for violation of road traffic law. The ECtHR laconically defined the characteristics of a ‘judicial body that has full jurisdiction’. Such a body should have the power to quash in all respects, on questions of fact and law, the decision of the subordinated body22, as well as examine all relevant facts.23 This standard was invoked and further developed in 2002 in Janosevic v. Sweden, a case concerning the imposition of tax surcharges qualified as criminal sanctions within the autonomous meaning of Article 6(1) ECHR.24 The ECtHR found that the system where tax authorities are entitled to impose sanctions such as tax surcharges is compatible with Article 6(1) ECHR as long as the taxpayer can bring any such decision affecting him before a judicial body that has full jurisdiction, including (in the phrasing employed in Umlauft) the power to quash in all respects, on questions of fact and law, the challenged decision. 25 The ECtHR found that the Swedish administrative court had jurisdiction to examine all aspects of the matters before it and was not restricted to points of law but could also extend its review to factual issues, including the assessment of evidence.26 If the court disagreed with the findings of the Tax Authority, it had the power to quash the decisions appealed.27 By contrast, the review was found to be insufficient in the 2012 Steininger v. Austria case.28 The ECtHR, after rejecting the possibility of relying on the Bryan standard29 on the basis of Umlauft/Schmautzer and Janosevic, found that the Austrian administrative court’s decision merely related to the questions of law by simply referring to a previous decision on a similar matter and contained no Id, at para 154. Id. See also the judgment of 27 October 2009 in Crompton v UK, app. 42509/05, paras 78-80. 19 The ECtHR judgment of 7 November 2000 in Kingsley v UK, app. 35605/97, paras 5859. 20 The ECtHR judgment of 23 October 1995 in Umlauft v Austria, app. 15527/89. 21 The ECtHR judgment of 23 October 1995 in Schmautzer v Austria, app. 15523/89. 22 Schmautzer, para 36; Umlauft, para 39. 23 Schmautzer, para 35; Umlauft, para 38. 24 The ECtHR judgment of 23 July 2002 in Janosevic v Sweden, app. 34619/97, para 81. 25 Janosevic, para 81. 26 Id., para 82. 27 Id. 28 The ECtHR judgment of 17 April 2012 in Steininger v Austria, app. 21539/07. 29 Steininger, para 52. 17

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answer to the applicant company’s complaint relating to the facts.30 For this reason such review could not be qualified “as adequate ‘full review’ of the applicant company’s criminal conviction passed by an administrative authority”.31 The Umlauft/Schmautzer standard was also invoked by the ECtHR in 2004 in Silvester's Horeca Service v Belgium32, in 2011 in Menarini33, in 2012 in Segame v. France34 and in 2014 in Grande Stevens v. Italy.35 On the basis of the analysis of these cases one could believe that due to the non-application of the Bryan conditions in cases decided under the criminal head of Article 6(1) ECHR, there is very little space for light judicial review in competition law. However, it is observed that in practice the ECtHR accepts a quite limited standard of review of administrative decisions also in criminal cases.36 The ECtHR does not expect a full rehearing of the evidence and does not require the courts to have the power to substitute their own decision for that of the administrative authority.37 Instead, the ECtHR takes a case-by-case approach and sees its task mainly in controlling the sufficiency of judicial review in the case under complaint.38 Thus, in some instances (for example in Menarini), it accepts a review that is formally limited to legal questions if in fact it goes further so that evidentiary issues are also reviewed.39 In light of the judgement following Menarini in Grande Stevens, it may be also argued that the presence of several Article 6 ECHR safeguards during the proceedings before the European Commission may serve as an argument for defending a weaker judicial review in competition law.40 It is argued that different results would have been reached by the ECtHR in Grande Stevens if the prosecutorial and adjudicative functions had been separated during the administrative phase of proceedings or if the applicant had had access to an oral hearing during the administrative phase of proceedings.41 4. Delta Pekarny and judicial review in case of inspections

Id., at para 57. Id., at para 57. 32 The ECtHR judgment of 4 March 2004 in Silvester's Horeca Service v Belgium, app. 47650/99, para 26. 33 Menarini, para 59. 34 The ECtHR judgment of 7 June 2012 in Segame v France, app. 4837/06, para 55. 35 The ECtHR judgment of 4 March 2014 in Grande Stevens and Others v Italy, app. 18640/10, para 139. 36 M. Bernatt, supra note 13, at 324-326. 37 Id. 38 Id. 39 Id. 40 Id. 41 Id. 30 31

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The ECtHR jurisprudence may be instructive not only for the judicial review of competition law decisions on the merits but also for the judicial review and judicial oversight over the inspections run by competition authorities. In this respect Article 8 ECHR protecting firms’ offices against disproportionate state intrusion serves as a point of reference.42 The European Court of Human Rights (ECtHR) confirmed directly in the field of competition law procedure that Article 8 ECHR protects undertakings against arbitrary inspections by competition authorities. The ECtHR requires in this respect existence of adequate procedural guarantees. In Société Colas Est and Others v France43 the ECtHR accepted the use of inspections as a tool for discovering anticompetitive practices. Under Article 8(2) the ECtHR found that steps taken by the French competition authority in order to prevent the disappearance or concealment of evidence of anticompetitive practices justified the interference with the applicant’s right to respect its premises. Such interference was justified in the light of the economic wellbeing of the country Article 8(2) ECHR directly mentions. However, the ECtHR found that French law had not afforded the inspected company adequate and effective safeguards against abuse of power by the competition authority.44 The ECtHR pointed out that the French competition authority had extensive powers of inspection which gave it an exclusive competence to determine the expediency, number, length and scale of inspections.45 Moreover, inspections were carried out without a prior warrant from a judge and without a senior police officer being present.46 It concluded, having regard for the manner of the proceedings in the case in question, that impugned inspections cannot be regarded as strictly proportionate to the legitimate aims pursued47. In light of Colas Est, judicial oversight over the inspections run by the competition authorities seems to be the most important procedural safeguard. The ECtHR judgment in the case Delta Pekarny v. Czech

Article 8 ECHR guarantees the right to respect for private and family life, home and correspondence. The term ‘home’ is referred in the ECtHR jurisprudence not only to private homes but also to firms’ offices. See Niemietz v. Germany, application no. 13710/88, judgment of 16 December 1992, para 30. The ECtHR accepts at the same time that the entitlement of State authorities to interfere with the rights protected by Article 8 ECHR may be more far-reaching where the business premises of a legal person are concerned (para 31). 43 Application no. 37971/97, judgment of 16 April 2002, see paras 48-49. 44 Id. 45 Id., at 49. 46 Id. 47 Id. See also other ECtHR judgments in which the proportionality of inspections was assessed – Funke v. France, application no.10828/84, judgment of 25 February 1993, par. 55-57; Crémieux v. France, application no. 11471/85, judgment of 25 February 1993, par. 38-40; Miailhe przeciwko Francji, application no. 12661/87, judgment of 25 February 1993, par. 36-38. 42

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Republic of 2 October 201448 confirms that. In this case the ECtHR found a violation of Article 8 ECHR by Czech Republic because of insufficient judicial control of the inspection run by the Czech competition authority at the applicant’s premises.49 The ECtHR came to such a conclusion because of lack of prior judicial authorization of the inspection – a shortcoming that was not remedied by the post-inspection judicial review. The ECtHR held that the absence of a court inspection warrant50 has to be offset by an effective judicial review carried out ex post.51 In this context, the ECtHR discussed the required intensity of such ex post judicial review. First, such control should not be limited only to the question of legality of the inspection.52 Existence of necessity of inspection (in the light of particular circumstances of the case in question) and in the broader sense its proportionality to the legitimate aim pursued53 need to be reviewed as well.54 The Czech courts in Delta Pekarny checked only whether the initiation of the proceedings had legal basis.55 The ECtHR found that this was insufficient. It observed that the Czech courts did not review the grounds for the initiation of the inspection, the duration of the inspection as well as its aim and scope.56 The necessity of the inspection was not checked either.57 Second, in the light of the above requirements, facts that underlie the necessity of the inspection need to be reviewed by national courts as well.58 Otherwise the assessment of the necessity of the inspection is impossible. The Czech competition authority before initiation of the inspection should have collected sufficient evidence pointing at the necessity of the inspection.59 In the light of the judgement it seems that the necessity of inspection cannot be proven by the evidence collected during the inspection. Application no. 97/11. For the description of the facts of the case by Czech antitrust lawyers see Robert Neruda, Roman Barinka, Delta Pekarny v Czech Republic: European Court of Human Rights on Dawn Raids and Prior Judicial National Authorization, 6(6) Journal of European Competition Law & Practice, 411, 411 (2015). 50 In this respect see the judgment of 16 October 2007 in Wieser and Bicos Beteiligungen GmbH c. Austria, No. 74336/01, para 57. 51 Delta Pekarny, at para 83. 52 In this respect see also the judgment of 21 December 2010 r. in case Primagaz v. France, no. 29613/08 and the judgment of 21 December 2010 r. in case Société Canal Plus and others v. France, no. 29408/08. 53 Economic wellbeing in the words of Article 8(2). See the judgment of 21 December 2010 in Canal Plus Corporation and Others v France, No. 29408/08, para 54. 54 Delta Pekarny, at para 86. See also the judgment of 7 June 2007 in Smirnov. Russia, no 71362/01, para 45. 55 Id, at 86. The mere fact of the institution of an administrative proceeding against the applicant company gave the Czech competition authority the right to inspect. 56 Id, para 87 and 91. 57 Id. 58 Id., at 91. 59 Id. 48 49

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Some prior evidence needed to exist and the Czech courts should have checked whether this was the case.60 4. Judicial review in EU competition law and ECHR standards An analysis of the ECHR standards governing judicial review leads to the general conclusion that judicial review in EU competition proceedings is sufficient.61 An exact answer to this question may be case-specific, yet the ECtHR in a hypothetical scenario of assessing the EU courts review in competition law cases62 would most probably be satisfied with the intensity of the EU courts’ review. Even in cases where the EU courts declare that the Commission has a margin of appreciation in complex economic assessments, their review seems to be sufficient from the point of view of Article 6 ECHR, on the condition that EU courts follow their self-imposed obligation to check in each case whether the evidence relied on by the Commission is factually accurate, reliable and consistent and 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.63 Such judicial review is fully acceptable in competition law cases concerning civil rights and obligations in the meaning of Article 6 ECHR (namely, the cases dealt with in merger and commitment proceedings). The Bryan test may serve as a basis here. Id. This issue is heavily discussed in the literature. See among others: D. Gerard, “Breaking the EU Antitrust Enforcement Deadlock: Re-empowering the Courts?”, 36 European Law Review 457 (2011); I. Forrester, “A Challenge for Europe’s Judges: The Review of Fines in Competition Cases”, 36 European Law Review 185 (2011); H. Schweitzer, “The European Competition Law Enforcement System and the Evolution of Judicial Review”, Eur. Competition L. Annual 79 (2009); D. Bailey, “The Scope of Judicial Review under Art. 81 EC”, 41 CML Rev. 1327 (2004); B. Vesterdorf, “Judicial review in EC competition law: Reflections on the role of the Community courts in the EC system of competition law enforcement”, Competition Policy International 3 (2005) 1; F. Castillo de la Torre, “Evidence, Proof and Judicial Review in Cartel Cases”, 32 World Competition 505 (2009); Editorial Comments, “Towards a More Judicial Approach? EU Antitrust Fines under the Scrutiny of Fundamental Rights”, 48 CMLR 1405 (2011); P. Van Cleynenbreugel, “Constitutionalizing Comprehensive Tailored Judicial Review in EU Competition Law”, 18 Columbia Journal of European Law 519 (2011-2012); R. Nazzini, “Administrative Enforcement, Judicial Review and Fundamental Rights in EU Competition Law: A Comparative Contextual-Functionalist Perspective”, 49 CMLR 971 (2012); W. Wils, “The Compatibility with Fundamental Rights of the EU Antitrust Enforcement System in Which the European Commission Acts Both as Investigator and as First-Instance Decision Maker”, 37 World Competition 1 (2014). 62 The European Union is not a party to the ECHR. Still, the ECHR influences the EU fundamental rights framework via the EU Charter of Fundamental Rights. According to Article 52(3) ChFR the fundamental rights provided there must have the same meaning and scope as the same rights laid down in the ECHR. The CJEU held that Article 47 ChFR secures in EU law the protection afforded by Article 6(1) ECHR, see C-386/10 P Chalkor v Commission, para 51. 63 See C-12/03 P Commission v Tetra Laval, para 39. Such formula was confirmed by CJEU Grand Chamber in C-199/11 Europese Gemeenschap v Otis and Others, para 59. 60 61

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On the other hand, the application of a margin of appreciation formula in cases involving a criminal charge in the meaning of Article 6 ECHR (cases dealt with in the proceedings concerning infringement of Article 101-102 TFEU) would also most probably be accepted by the ECtHR if the actual review required under the Tetra Laval standard was exercised by the EU courts. The EU courts’ review of Article 101-102 TFEU infringement decisions rendered by the Commission is surely deeper than the judicial review offered by Austrian administrative courts in cases such as Steininger (that had been found insufficient from an Article 6 ECHR point of view) and not less intense than exercised by Swedish courts (in Janosevic). For these reasons, the EU courts are quite right in believing that the judicial review they offer is in accordance with fundamental rights requirements. 64 As long as the formula of margin appreciation does not serve as an excuse not to review economic findings of the Commission at all the EU courts review should be seen sufficient in the light of the ECHR standards. At the same time, the ECHR standards should not be seen to preclude the EU courts from deferring to the Commission’s economic findings on condition that the EU courts establish that such conclusion could have been reached on the basis of reliable and consistent evidence gathered by the Commission. What seems to be open for further discussion is the need for procedural and institutional improvements in the proceedings before the Commission. Menarini does not offer many hints in this respect. However, a broader survey of ECtHR jurisprudence suggests that there is a link between the intensity of judicial review and the presence of procedural guarantees as well as the institutional impartiality of the first-instance decision-maker. The greater the level of procedural guarantees and the more quasi-judicial the administrative proceedings are, the more limited the scope of judicial review may be.65 For these reasons, improvements regarding the scope of procedural guarantees provided in the proceedings before the Commission may be considered.66 In particular, a more marked separation of prosecutorial and adjudicative functions may be contemplated so that the objective impartiality is guaranteed.67 In this respect it can be observed that in Grande Stevens the ECtHR found that the guarantees of impartiality in The EU Courts – when addressed with the issue by the appellate parties – strongly defend the compatibility of the current model of judicial review in the EU with the requirements of Article 6 ECHR, compare C-272/09 P KME Germany and Others v Commission, para 106. EU Courts do not refrain from invoking directly the ECtHR jurisprudence to substantiate a defense as to the compatibility of EU judicial review with Article 6 ECHR, see judgment of 18 July 2013 in C-501/11 P Schindler v Commission, paras 33-36 relying on Menarini. 65 M. Bernatt, supra note 13. 66 Id. 67 See R. Nazzini, supra note 42, at 1002-1003. For a different opinion see W. Wils, The Combination of the Investigative and Prosecutorial Function and the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis, 27 World Competition 201 (2004). 64

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the proceedings before Italian Companies and Stock Exchange Commission were insufficient what combined with lack of access to public, oral hearing both before the administrative authority and the reviewing court brought the ECtHR to the conclusion that Article 6 of the ECHR was violated.68 Taking into account this judgment one could recommend further improvements of decision-making process in the proceedings before the Commission.69 The reading of Grande Stevens may suggest that the lack of objective impartiality combined with lack of direct access to the decisionmaker at oral hearing70 and other, further limitation of right to fair trial in the case under complaint (for instance lack of possibility to cross-examine witnesses71) could – in hypothetical scenario – raise doubts of the ECtHR even if the judicial review exercised by the EU courts was believed by the ECtHR to be sufficient.72 When it comes to judicial review of the inspections run by the European Commission, the compatibility with Article 8 ECHR standards is case specific – it depends on the intensity of actual review provided by the EU Courts. The system as it stands on paper does not directly violate the ECHR standards. It is true that the Commission’s inspection concerning business premises does not require prior judicial authorization. However, the Commission’s decision authorizing the inspection issued under Article 20(4) Regulation 1/2003 may be appealed by the inspected undertaking – immediately after notification of the inspection – to the General Court under the general rules provided in Article 263 TFEU. The GC is quite vigilant in checking whether the Commission limits the scope of inspection to the one established in the Commission’s decision.73 It expects the Grande Stevens, at paras 122-123 and 136-137. For a proposal of distinguishing two units: one responsible for investigation and the other for preparing the draft of the decision see Arianna Andreangeli, A. Andreangeli, EU Competition Enforcement and Human Rights, 240–243 (2008). Compare also the proposal of establishing an adjudication unit outside the Directorate-General for Competition that would report directly to the Commissioner for competition, Renato Nazzini, supra note 42, at 1002. 70 Neither the Commissioner responsible for the competition nor other commissioners are present at the oral hearing, see the Commission notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU, OJ C 308/06, 20.10.2011, paragraph 108. The oral hearing is also not public. For comment see Ian S. Forrester, Due Process in EC Competition Cases: A Distinguished Institution with Flawed Procedures, 34 European Law Review, 817, 823, 833-834 (2009). 71 Under the EU principle of right of defence there is no requirement that undertakings concerned should be afforded, in the administrative procedure, the opportunity to crossexamine the witnesses heard by the Commission (see C-219/00 P Aalborg Portland A/S and Others v Commission, [2004] ECR I-123, para 200). For this reason the undertakings complaints in this respect based on Article 6(3)(d) of the ECHR are rejected by the EU Courts, see T-122-124/07, Siemens Österreich and Others v. Commission, [2011] ECR II00793, para 229-235. 72 See M. Bernatt, supra note 13, at 326. 73 This follows from the principle that undertakings’ rights of defense would be seriously endangered if the Commission could rely on evidence against undertakings which was 68 69

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Commission to be precise in describing the scope of the inspection – the Commission’s inspection decision needs to contain the description of the subject matter and purpose of the inspection74. Importantly, the GC is ready to annul the Commission’s decision in cases where it covers the undertaking activity that is unrelated to the presumed anticompetitive conduct.75 On the other hand the intensity of actual review exercised by the General Court may be seen as more challenging from the Delta Pekarny point of view when it comes to the Court’s check of the necessity of the Commission’s inspections. For example, in the recent Deutsche Bahn case, the CJEU did not agree with the complaining company that the General Court did not exercise sufficient review as to the proportionality and the necessity of the Commission’s decisions76 and focused on more formal issues concerning the grounds for the Commission’s inspection and collection of material for which the inspection decision did not provide authorization.77 In light of Delta Pekarny it may be quite disputable whether the EU Courts’ review focused on the scope of inspections and whether an adequate statement of reasons of the Commission’s decisions guarantees full review of both law and facts and review of the existence of necessity of inspection (for discovering the evidence of anticompetitive conduct). Potential shortcomings in this respect are not remedied by the supervision of the Commission’s inspections by national courts (if applicable78). Article 20(8) of Regulation 1/2003 directly specifies that the national courts may not call into question the necessity for the inspection nor demand that it be provided with the information in the Commission's file. The lawfulness of the Commission’s decision is subject to review only by the EU Courts. In cases when this ‘lawfulness’ is to be interpreted narrowly as the review concerns only the legal basis for the Commission’s action and the check of the scope of the Commission’s inspection, the judicial review of the inspections in the EU may fall short of ECHR requirements.79

obtained during an investigation but was not related to the subject-matter or purpose thereof, see 85/87 Dow Benelux v Commission, para 18. 74 Inspection decision needs to state specific reasons for the inspection in respect to subject matter and purpose of the inspection, see Article 20(4) Regulation 1/2003 75 See T-135/09 Nexans France v Commission, para 91. 76 The applicants claimed that neither the procedure provided for in Article 20(8) of Regulation No 1/2003, which empowers national judicial authorities to assess whether the coercive measures required to implement the Commission’s inspection decisions are nonarbitrary and proportionate in the event of opposition, nor the review by the European Union Courts satisfies the conditions developed by the ECtHR in its case-law, see T-289/11 Deutsche Bahn and Others, para 104. The CJEU found that the GC rejection of the applicants’ arguments was correct, see C-583/13 Deutsche Bahn, paras 25-37. 77 See C-583/13 Deutsche Bahn, paras 56-69. 78 See Article 20(6)-20(7) Regulation 1/2003. 79 The CJEU does not address this issue in Deutsche Bahn in detail. It simply referred to its general case law and repeated that EU courts carry out an in-depth review of the law and of the facts on the basis of the evidence adduced by the applicant in support of the pleas in law

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5. Judicial review in Polish competition law and the ECHR standards From the law in books point of view, the importance of the ECHR standards that govern judicial review is easier to be established than in case of EU law. First, Poland as the ECHR contracting party is directly bound by the ECHR standards. Second, the Polish model of judicial review in competition matters goes beyond what is expected under Article 6 ECHR. Appeals against decisions of the Polish competition authority (Prezes Urzędu Ochrony Konkurencji i Konsumentów, the UOKiK) are reviewed by the Court of Competition and Consumer Protection in Warsaw (the Competition Court) and then subsequently by the Court of Appeal in Warsaw and on an extraordinary cassation complaint basis by the Supreme Courts. The Competition Court is a first-instance civil court (not an administrative court). It is entitled to change the decision of the UOKiK in its judgement (not only to annul it) and reviews the case on a de novo basis (including facts). By contrast, when law in action is taken into consideration, the Polish system of judicial review is more challenging. Before 2004, the Competition Court was criticised for focussing only on the formal aspects of the competition proceedings. The Supreme Court judgement of 13 May 2004 in case III SK 44/04 brought about changes in this respect. The Competition Court became obliged to focus on the merits of the case. In further jurisprudence this judgement was interpreted in a way so that the Competition Court was not obliged to refer in detail to the procedural objections raised in the appeal, especially if the submitted irregularities were not likely to be of a kind that influenced the UOKiK decision on its merits.80 Procedural irregularities concerning evidence could not lead to the annulment of the UOKiK decision if it was in line with the provisions of substantial law.81 This form of review resulted in a complete lack of review of procedural objections against UOKiK decisions, which was not compatible with Article 6 ECHR standards.82

put forward (see, to that effect, judgment in C-386/10 P Chalkor v Commission, para 62), see C-583/13 Deutsche Bahn, para 34. 80 The Supreme Court's judgment of 19 August 2009, III SK 5/09. 81 Id. 82 For an analysis in this respect see M. Bernatt, The control of Polish courts over the infringements of procedural rules by the national competition authority. Case comment to the judgment of the Supreme Court of 19 August 2009 - Marquard Media Polska (No. III SK 5/09), 3(3) Yearbook of Antitrust and Regulatory Studies 300-305 (2010), available at http://ssrn.com/abstract=1874797. EU courts concentrated on possible procedural infringements during the proceedings before the Commission, see T-44/90 La Cinq SA, [1992] ECR II-1, para 86. The Polish system was also under criticism because of a very short time limit (14 days) for appealing the UOKiK decisions, see for example B. Turno, Termin

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More recently, following the Supreme Court judgement of 3 October 2013 in case III SK 67/1283 the Competition Court started reviewing potential procedural irregularities of proceedings before the UOKiK. Further improvements in this respect should be expected. A thorough review of the procedural aspects of competition law enforcement seems to be a natural consequence of firmly established Supreme Court’s case-law (based directly on ECtHR Article 6 judgments) under which the standards of review of administrative decisions imposing fines in competition and market regulation cases should reflect those applicable in a criminal procedure.84 The recent broadening of liability for antitrust violations to include natural persons (vaguely defined as ‘managing persons’)85 also requires a closer judicial check on whether natural persons are offered sufficient guarantees of the right of defence during proceedings before the UOKiK. What remains problematic in the opinion of many Polish practitioners is the Competition Court’s willingness and actual ability to review the complex merits of UOKiK decisions. The problems in this regard require further academic studies. However, it is clear that the Competition Court – despite acting on a de novo basis in first instance judicial proceedings – sometimes repeated without significant own reflection the findings of the UOKiK of both factual and legal character.86 The changes may well be underway.87 In any case, one can expect further discussion on the adequacy of the Polish model of judicial review in competition law. Transferring

na wniesienie odwołania od decyzji Prezesa UOKiK, 6 Przegląd Prawa Handlowego 24-25 (2008). Since January 2015, a new 30-day time limit is the law. 83 For a commentary see D. Aziewicz, Due Process Rights in Polish Antitrust Proceedings. Case comment to the Judgment of the Polish Supreme Court of 3 October 2013 – PKP Cargo S.A. v. President of the Office of Competition and Consumers Protection (Ref. No. III SK 67/12), 8(11) Yearbook of Antitrust and Regulatory Studies 261 (2015). 84See the Polish Supreme Court judgments of: 14 April 2010, III SK 1/10; 1 June 2010, III SK 5/10; 21 September 2010, III SK 8/10; 21 October 2010, III SK 7/10; 10 November 2010, III SK 27/08; 21 April 2011, III SK 45/10. According to this line of cases judicial control of an administrative decision in which financial sanctions are imposed should meet the standards analogous to those applicable in criminal proceedings. 85 For a commentary, see M. Martyniszyn, M. Bernatt, On Convergence with Hiccups. Recent Amendments to Poland’s Competition Law”, 36, 1, European Competition Law Review (2015), 8, available at http://ssrn.com/abstract=2556231. 86 See the judgment of the Competition Court of 26 February 2007, XVII Ama 41/06 upheld by Warsaw Court of Appeal of 27 July 2008, VI ACa 12/08. 87 In the judgment of 19 June 2015 in case XVII Ama 112/12 the Competition Court annulled the important and controversial UOKiK decision of 23 November 2011 in case DOK-8/2011. In this decision, the UOKiK found the violation of competition law by Polish mobile network operators who jointly settled the way of dealing with the undertaking that in answer to a tender offer by the President of the Office of Electronic Communications was willing to provide services of reception for TV broadcasting on mobile phones in the digital technology (DVB-H). According to the UOKiK the agreement impeded the development of the wholesale DVB-H television market in Poland.

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competition law cases to administrative courts (argued by some in Poland88) would not be contrary to Article 6 ECHR standards if the judicial review provided by the administrative courts were to go in practice beyond pure legality review. However, as the law stands, the current model is also compatible with Article 6 ECHR (as well as the Polish Constitution).89 Studies regarding the intensity of judicial review in Polish competition law cases are much needed.90 If they confirm that judicial review in Polish competition law is deferential, calls for improvements of procedural fairness in the proceedings before the UOKiK will find another valid basis.91 6. Conclusion The ECtHR judgement in Menarini is important for the enforcement of competition law in Europe when considered in the broader context of ECtHR jurisprudence. The study of ECtHR judgments shows that under the Article 6(1) ECHR full judicial review standard there is some space for a deferential standard of review. Also, in cases classified as criminal in the meaning of Article 6(1) ECHR, the ECtHR does not expect a de novo judicial B. Turno, Model sądowej kontroli decyzji Prezesa Urzędu Ochrony Konkurencji i Konsumentów, 10 Państwo i Prawo (2012); M. Błachucki, Właściwość sądów administracyjnych i sądów powszechnych w sprawach antymonopolowych in Aktualne problemy rozgraniczenia właściwości sądów administracyjnych i powszechnych, M. Błachucki, T. Górzyńska (eds.), Naczelny Sąd Administracyjny, 2011; R. Stankiewicz, Likwidacja procedur hybrydowych – krok w dobrym kierunku czy szkodliwy dogmatyzm? In Aktualne problemy rozgraniczenia właściwości sądów administracyjnych i powszechnych, M. Błachucki, T. Górzyńska (eds.), Naczelny Sąd Administracyjny, 2011. 89 M. Bernatt, W sprawie kontroli sądowej postępowania przed Prezesem UOKiK, 3 Państwo i Prawo 89 (2013). 90 Preliminary findings suggest that Polish courts may often exercise weak review when it comes to the substance of the case. On the other hand, they tend to be very aggressive when changing the amount of fines imposed by the Polish competition authority what may bring risks for the general deterrence of Polish sanctions for anticompetitive conduct. As to the latter problem see M. Bernatt, Między pełną kontrolą sądową a odstraszającą polityką karania – o sądowej kontroli kar nakładanych w sprawach konkurencji przez Komisję Europejską i Prezesa UOKiK, Europejski Przegląd Sądowy 2016, available at: https://uw.academia.edu/MaciejBernatt 91 Polish antitrust procedure has long been criticized for not guaranteeing procedural fairness to a sufficient degree. The level of procedural guarantees offered to the parties is lower than in competition proceedings before the EU Commission. The Polish competition procedure is characterized by a number of procedural limitations, such as the absence of a limited scope of the right to be heard, a near-complete exclusion of third parties’ access to competition proceedings, a lack of clear standards of privilege against self-incrimination and of legal professional privilege. See M. Bernatt, Convergence of Procedural Standards in the European Competition Proceedings, 8, 3, Competition Law Review 260-267 (2012), available at: http://ssrn.com/abstract=2240899; M. Bernatt, Can the right to be heard be respected without access to information about the proceedings? Deficiencies of national competition procedure, 5, 6 Yearbook of Antitrust and Regulatory Studies, 91-110 (2012); M. Bernatt, Right to be heard or protection of confidential information? Competing guarantees of procedural fairness in proceedings before the Polish competition authority, 3, 3, Yearbook of Antitrust and Regulatory Studies 53-70 (2010), available at: http://ssrn.com/abstract=1874796 88

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review. Thus, even in such cases the determinations of an administrative authority may have certain instructive value for the reviewing courts. Judicial review the way it is exercised by EU courts in competition law is generally compatible with Article 6 ECHR. Still, one can consider further improvements of administrative process in the competition proceedings before the Commission. In addition, in light of ECtHR Article 8 Delta Pekarny judgment, one could expect from the EU courts a control whether the Commission showed that the inspection was necessary to discover the anticompetitive conduct. However, for the Commission’s ability to pursue effective competition policy the EU Courts should not replace the Commission’s in this assessment of necessity. Their role is to check whether the Commission’s decision had sufficient basis from a proportionality (as well as legality) point of view. In Poland potential problems of judicial review in competition law cases do not result from the legal framework. It is the practice of the Competition Court that requires close attention. Changes in the approach to the judicial review of procedural objections raised by the appellant parties show that with the instructive involvement of the Poland’s Supreme Court, greater compatibility with ECHR standards may be achieved without any amendments to the law governing competition proceedings.

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