Antitrust Alert: Reforms Bring Greater Transparency to European Commission Antitrust Proceedings
The European Commission ("Commission") has adopted a package of antitrust procedural reforms designed to increase transparency and fairness in antitrust competition proceedings and advise parties on what they can expect at different stages of an antitrust investigation. These reforms may lead to less litigation, with more disputes being resolved before a Hearing Officer.
The reforms comprise (i) a Notice on Best Practices for the conduct of proceedings concerning Articles 101 and 102, (ii) Revision of the Hearing Officer's mandate, and (iii) Best Practices on the submission of economic evidence and data collection in cases concerning the application of Articles 101 and 102 and in merger cases. Article 101 prohibits anti-competitive arrangements. Article 102 prohibits abuse of a dominant position.
The Commission adopted the package in response to calls for greater transparency, fairness, and predictability in the Commission's antitrust proceedings. Several undertakings have taken court action against the Commission for procedural breaches: an action by Deutsche Bahn for procedural breaches during a dawn raid; by Elf Acquitaine, for which the European Court of Justice annulled a Commission decision holding Elf liable for the conduct of a subsidiary in a chemicals cartel, the Court finding that the Commission’s responses were procedurally inadequate; and by ArcelorMittal (pre-stressing steel cartel) for which fines levied by the Commission twice have been reduced to correct calculation of the fine and address problems with the way the Commission had transferred liability for the cartel onto the group’s parent company (the fine dropping from €276 million to €45 million).
Notice on Best Practices in antitrust proceedings
The Notice covers the main proceedings followed by the Commission relative to suspected infringements of Articles 101 and 102 TFEU. The Notice provides for:
- Public announcement of key stages in antitrust proceedings, namely the opening of cases, the sending of a Statement of Objections ("SO"), closure of proceedings, and adoption of a decision.
- An opening of formal proceedings as soon as the initial assessment phase has been concluded, to identify the scope of the investigation and the identity of the parties at an early stage.
- Guidance on how the commitment procedure is used in practice.
- State of play meetings at key points of the proceedings: shortly after opening of formal proceedings, at an intermediary stage between the opening of proceedings and the issuing of the SO, and after the SO and the extension of such meetings to cartel cases and complainants in specific circumstances.
- Informing parties in the SO of the main parameters for the possible imposition of fines, parties can better prepare their arguments and present them in the oral hearing. This will also help the Commission to verify its own calculations at an early stage.
- Disclosure of key submissions of complainants or third parties, prior to issuing a SO.
- Publishing rejections of complaints.
- When claims for inability to pay a fine may be made and how and when the Commission will assess such claims.
A flowchart of the Commission's investigations reflecting the new procedure can be found here.
Revision of the Hearing Officer's mandate
The main tasks of the Hearing Officer in competition proceedings is to safeguard the procedural rights of the parties concerned. Although Hearing Officers are directly attached to the office of the Commissioner in charge of competition policy, they are not members of DG Competition. The Hearing Officers act as an interface between the Commission services responsible for the individual investigations and the companies concerned and act as an independent arbiter in disputes between the competition case teams and the parties.
The current reforms of the Hearing Officers' mandate explicitly confirms that the Hearing Officers shall act independently in performing their duties and extends the Hearing Officers mandate to cover the entire procedure, not just the stages of the procedure that follow the sending of the SO. Specifically:
- A party that claims confidentiality of communications between itself and its external lawyers (legal professional privilege) can now ask the Hearing Officer to review the privilege status of a document and express a view on whether the document is privileged or not. Where a solution cannot be reached, the Hearing Officer can address a reasoned recommendation to the Competition Commissioner. If the matter is not resolved on this basis, the Commission will examine the matter further and, where appropriate, adopt a decision. At the moment, if the privilege status of a document is in dispute, documents are sealed in an envelope, to be dealt with at a later stage.
- The Hearing Officer can intervene when a company believes it has not been informed of its procedural status.
- If the Commission sends a request for information or carries out an inspection, and does not inform the companies being investigated whether they are potentially suspected of an infringement, the Hearing Officer now may intervene.
- Parties will be able to refer the matter to the Hearing Officer if they feel that they should not be compelled to reply to questions that might force them to admit to an infringement.
- The Hearing Officer can intervene in disputes about the extension of deadlines to reply to information requests under Article 18(3) of Regulation 1/2003.
Best Practices on the submission of economic evidence
The Commission may impose fines where, intentionally or negligently, undertakings supply incorrect, incomplete, or misleading information. The Best Practices on the submission of economic evidence therefore contain recommendations regarding the presentation and content of economic and econometric analysis and guidance on how to respond to Commission requests for large sets of quantitative data in order to provide timely and relevant information to the Commission.
It is hoped that the package of reforms will increase the transparency and fairness in antitrust competition proceedings and provide clarity as to what parties can expect at different stages of an antitrust investigation. It is also hoped that the package will lead to less litigation with more disputes being resolved before the Hearing Officer.
Considering the amount of fines that can be levied for an infringement of Article 101 and Article 102 (up to 10% of turnover in preceding business year) as well as for breach of procedural rules (up to 1% of turnover in preceding business year), it remains essential for every undertaking to be aware of the relevant procedural rules in antitrust investigations.
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