European Commission fines and their compliance with Article 6

12 August 2013 by David Hart KC

C-501/11P Schindler v. European Commission, CJEU, 18 July 2013 – read judgment

Two things of general interest to the human rights lawyer in this unsuccessful attempt by Schindler to challenge a fine of a mere €143 million for anti-competitive behaviour before the EU’s top court.

The first is that the Commission’s role as investigator, prosecutor and enforcer was not found to be in breach of Article 6(1) – because its decisions were subject to “full review” by the EU judges. The second is the remark in the CJEU’s judgment that the EU status of Article 6 ECHR will change when the EU accedes to the ECHR – I shall look at whether this change will be formal or substantive, given the presence of an equivalent right in the EU Charter, within Article 47.

Like a lot of decisions involving issues of high principle, the underlying facts do not reflect well on the offending company, in this case Schindler. It, with three other companies (Kone, Otis and ThyssenKrupp), stitched up the lift and escalator markets in Belgium, Germany, Luxembourg and the Netherlands. Somebody tipped off the Commission, who conducted a massive investigation, and fined all these companies. As is standard, the process of investigation did not involve any oral hearing, with some limitations on the access by the accused companies to all the material which the Commission received.

As my image shows, cartel fines by the Commission involve big big money, and I dare say they dwarf any fines levied by member states on “true” criminals.

In many administrative fields (e.g. planning) an administrator may be decision-maker, and not “an independent..tribunal” within the meaning of Article 6(1), but the process will be Article 6(1) compliant, if an aggrieved party has a right of appeal or review from that decision before such a tribunal. But this process is not generally to be applied to the “hard core” of the criminal law, to which the strict rules set out in the rest of Article 6 (presumption of innocence, attendance of witnesses etc) apply. This was the general position since Engel (1976), but the ECtHR has rather relaxed its severe stance even in some cases found to be “criminal”, more recently in Jussila (2006), and closer to home, Menarini (2011, French only, but see the Court’s English summary). Menarini decided that a fine issued by an Italian competition authority amounted to “criminal” proceedings, but this did not amount to a breach of Article 6 because the authority’s decision could be properly reviewed by the Italian courts.

Hence, the Court is now concentrating on the extent of the powers of the courts which consider an appeal from the original administrative decision – and if the courts have “full jurisdiction” on appeal or review, then it does not require the gamut of criminal guarantees, in particular the need for an oral process.

Schindler’s strongest point on appeal to the CJEU in favour of the full criminal guarantees being required was the sheer size of the penalties which were and are typically exacted by the Commission for such breaches. It combined this with the point that the EU General Court did not take evidence from live witnesses before reaching its conclusion.

The Court was unimpressed. The law, as Menarini shows, has moved on. The General Court did have full jurisdiction on facts and law, and the CJEU on appeal would then further consider the law applicable to the pleas put before the General Court.  Schindler’s complaints about lack of live evidence were purely theoretical. Before the General Court, Schindler had not contested the facts set out in the Statement of Objections nor had it applied to that Court for the examination of witnesses. To that extent, the case was not a good vehicle for exploring the points of principle which could give rise to unfairness within Article 6.

The second point of general interest arises from [32] of the judgment. The CJEU had just pointed out that the Commission decision in question preceded the Treaty of Lisbon, its incorporation of the Charter, and the EU’s commitment  in Article 6(2) of TEU  to accede to the ECHR, and therefore these changes could not be relied upon as undermining the impugned decision. It continues

32. Furthermore, whilst, as Article 6(3) TEU confirms, fundamental rights recognised by the ECHR constitute general principles of the European Union’s law and whilst Article 52(3) of the Charter requires rights contained in the Charter which correspond to rights guaranteed by the ECHR to be given the same meaning and scope as those laid down by the ECHR, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into European Union law (see Case C‑571/10 Kamberaj [2012] ECR I‑0000, paragraph 62, and Case C‑617/10 Åkerberg Fransson[2013] ECR I‑0000, paragraph 44).

Some (e.g. this post on Eutopia) think that these two caveats (pre-Lisbon and pre-accession to ECHR) raises the possibility of a more stringent review by the  by the EU judges of the Commission’s procedure on decisions adopted once the EU formally accedes to the ECHR. You may recall that (as explored in a recent post on the Draft Agreement on Accession) individuals will then get the right of petition to complain about EU decisions to the Strasbourg Court.

But I am not so sure that this will arise as a matter of law. I think it is no more than the fairly common problem of the Court expressing itself in too abbreviated fashion in rebutting Schindler’s argument that the landscape has changed because of Lisbon. I would add that cannot see that formal incorporation of Article 6 will transform or indeed modify the substance of the law which is already embedded in the EU treaties through Article 47 of the Charter. The clue, in my view, lies in what Advocate-General Kokott said in the companion passage of her opinion

From a formal perspective, however, it is not Article 6 ECHR, as such, that forms the starting point for the examination of the breaches of the principles of separation of powers and the rule of law alleged by Schindler, but Article 47 of the Charter of Fundamental Rights, in particular the second paragraph, and the general principles of Union law within the meaning of Article 6(3) TEU.

So I think the AG is saying no more that that arguments about fair trial must at the moment be couched in Article 47 terms, prior to formal accession by the EU to the ECHR, at which point Article 6 ECHR becomes “formally incorporated” into EU law. But I cannot see why the change between Article 47 Charter and Article 6 ECHR ought to make any difference to the substantive fair trial protections.

That said, the Eutopia post rightly raises the prospect that accession to the ECHR might in fact lead the CJEU to examine rather more closely some Commission practices which arguably do not meet the requirements of the Strasbourg case law. As a matter of pragmatics, one can see this – the CJEU will have the Strasbourg Court looking over its shoulder in the same cases, where post-accession litigants feel aggrieved in Luxembourg and decide to move off to Strasbourg – even though Article 6 ECHR and Article 47 contain effectively the same fair trial rights.

How the Sun will cope with this greater intertwining of European Courts (see Adam’s recent post), only time will tell.

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