Antitrust Alert: EC Announces Reforms to EU Antitrust Procedures – Welcome Changes, But "Too Little"

In a 30 May 2011 speech, the EU Commissioner for competition policy, Joaquín Almunia, announced a series of changes to EU antitrust procedures, with a view to providing parties under investigation with more transparency into European Commission (EC) investigations. These changes follow announcements that the Commissioner has made, relating in particular to fines, private enforcement and oral hearings. The new changes are welcome, but there remain significant challenges for businesses that are the subject of EU antitrust proceedings.

Announcements from the Commissioner

Following criticism and increasing calls from legal and business communities for the EC to respect fundamental rights of defence and to guarantee "due process" to parties under investigation, the Commissioner had announced, in a series of speeches in 2010, that a number of procedural changes were going to take place.  (For a discussion of prior EC announcements, see our antitrust alert of November 2010.)   

The first measure was announced in April 2011. The Commissioner announced that the EC would begin to include in its statement of objections (SO), the document that describes an antitrust challenge, "the elements for the calculation of the fine, such as the value of the cartelised sales…but also, for example, an indication of the gravity and issues of recidivism. This innovation will open a channel for dialogue with the parties and will give them a better idea, at an early stage, of the size of the fines that may be imposed on them."

In his recent speech of 30 May 2011, the Commissioner went further, announcing the following measures to be adopted by the EC, relating to the crucial issues of due process and the rights of defence:

1. Key documents. Parties under investigation will have earlier and wider access to "key documents" (such as economic studies) before they potentially receive a SO from the EC and have access to the EC’s file.

2. State of play meetings. These meetings provide a forum for the mutual exchange of information between the EC and the parties under investigation, at key points in the procedure. These may be meetings at the EC’s offices or if appropriate by telephone or videoconference. Usually held for abuse of dominance investigations, now they will be extended to cartel cases. Such meetings also will be introduced for complainants, so that the Commission can discuss with them whether it will continue to investigate a matter that they have raised with the EC.

3. Hearing Officers. The Commissioner announced various measures as regards the Hearing Officers.

3.1. Hearing Officers will be involved from the start of an investigation, whereas until now they were only involved after the issuance of a SO.

3.2. Hearing Officers will have the powers to review disputes over legal privilege. This is potentially an important practical change as, under the current rules, privilege disputes between the EC and the parties must be brought to the EU Courts, where proceedings may take several years. The Commissioner indicated that, "Under our new rules, companies claiming privilege over documents could address themselves to the Hearing Officer, let him check the content of the documents and ask him to make a recommendation."  (For more information on the scope of legal privilege in the EU, see this antitrust alert.)

3.3. Hearing Officers may also be appointed from outside of the Commission, a possibility that the Commissioner will "seriously consider in the future."


Helpful changes – but not enough

We certainly welcome the changes announced by the Commissioner, as they will enhance transparency in EU antitrust proceedings.

The fundamental flaw remains.  Nevertheless, the Commissioner made clear that "the fundamentals will not change. The hearing officers will not become judges and will not rule on the substance of cases; they will remain the guarantors of procedural rights." These changes will not remedy the perceived fundamental flaw in the process: the fact that the EC acts as investigator, prosecutor and judge – with the inherent issues that this raises in terms of independence, impartiality and the rights of defence. These unfortunate "fundamentals" will remain unchanged despite the measures announced by the Commissioner.

The definition of "key documents."  It is the EC that will determine which are the "key documents" in its file and therefore to which documents the investigated parties will have access before receiving a SO or access to complete file. However, the EC has a history, in some cases, of only selectively including documents from its file and selectively not relying on potentially exculpatory documents. It therefore remains to be seen how, in practice, the EC will discharge this new requirement to give access to "key documents".

Are Hearing Officers well-suited to deal with legal privilege issues?  It is potentially an improvement that legal privilege issues may be submitted to Hearing Officers, rather the Case Team or ultimately the EU Court. However, we can see at least two reasons why investigated parties may be reluctant to allow the Hearing Officers to review, in detail, the content of potentially privileged documents.

First, although Hearing Officers do not report to the investigating case team, they report to the Commissioner, who is a member of the Commission that ultimately will decide the outcome of the investigation.

Second, disclosing documents to a Hearing Officer raises potential waiver issues.  For example, there is a line of precedent in the U.S. that, if a privileged document is shown to a third party or a privilege is waived in one proceeding, the party is deemed to have waived legal privilege on the entire subject-matter and for other proceedings. Accordingly, although it is a question of U.S. law, showing a legally privileged document to the Hearing Officer could be claimed in the U.S. to be waiver of the privilege for the entire subject-matter. This may have ramifications not only for U.S. government antitrust investigations, but also U.S. private actions for damages.

For these reasons, investigated parties in practice may be reluctant to allow Hearing Officers to review these documents and rule on issues of legal privilege.

No changes to oral hearings.  Early in his mandate, the current Commissioner had announced forthcoming changes to the way in which oral hearings would be run. However, no such measure was announced as part of this recent package of reforms. This is disappointing.  As discussed in our November 2010 Alert, in a system with limited due process safeguards (investigation, prosecution and decisionmaking powers belonging to one institution), the fact that oral hearings are not chaired by an independent decisionmaker and are not public exacerbates the limits of the protections afforded to investigated companies.


Overall, the announced measures may contribute to improving the transparency of EC antitrust proceedings and somewhat improving "due process." The announced measures therefore are potentially important for investigated companies. Only time will tell whether, in practice, these measures will have a real effect on investigated parties. In any event, they are not sufficient to remedy the "fundamentals" of this fundamentally-flawed enforcement system.

Lawyer Contacts
For more information, please contact your principal Jones Day representative or either of the lawyers listed below.

Vincent Brophy
Brussels / London
+ 32.2.645.15.35 / +44.20.7039.5192

Scott McInnes
+ 32.2.645.14.10

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