Ways in which the System of Sanctions in EU Competition Enforcement can be changed

Transcription

1 Ways in which the System of Sanctions in EU Competition Enforcement can be changed Deterring EU Competition Law Infringements: Are we using the right sanctions? Brussels, 3 December 2012 Luis Ortiz Blanco Garrigues

2 The problem The Massacre of the innocents Rubens 2

3 There must be a limit to the progressive increase of the amount of fines. Otherwise, fines will seriously undermine the financial situation of companies, the net effect of which will be to hurt the innocent (workers and shareholders) while leaving those responsible for the infringement (the managers) unscathed. Fine arts in Brussels: punishment and settlement of cartel cases under EC competition law (2008) Luis ORTIZ BLANCO Ángel GIVAJA SANZ Alfonso LAMADRID DE PABLO 3

4 The origin of the problem It would be better to explore other means of achieving the deterrent effect sought by the Commission, such as disqualifying the guilty parties from the possibility of acting as directors or even imposing criminal sanctions on them. The Commission s reluctance to move in this direction may be because both of these alternatives would involve a transfer of competences from the Commission to national courts. However, this is no excuse for not doing the right thing. In short, the Commission needs to bite the bullet, however reluctant it might be to do so. Fine arts in Brussels: punishment and settlement of cartel cases under EC competition law (2008) Luis ORTIZ BLANCO Ángel GIVAJA SANZ Alfonso LAMADRID DE PABLO 4

5 Innovative alternative solutions 5

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8 Now, seriously What kind of punishment? Which method of calculating fines? What type of procedure? 8

9 What kind of punishment? 9

10 De lege ferenda Criminal punishment Director disqualification Exclusion from public procurement Publizicing names of the infractors 10

11 Getting the most out of what we have Civil sanctions Damages Other possible (and effective) civil remedies - Fruit agreements: nullity and restitution Pecuniary fines ECJ Judgment of september 2001 on Courage v Crehan, para. 22 the nullity referred to in Article [101](2) ( ) is capable of having a bearing on all the effects, either past or future, of the agreement E.g. TAA Decision (1994) Art. 5: The undertakings to which this Decision is addressed are hereby required, within a period of two months of the date of notification of this Decision, to inform customers with whom they have concluded service contracts and other contractual relations in the context of the TAA that such customers are entitled, if they so wish, to renegotiate the terms of those contracts or to terminate them forthwith. 11

12 Which method of calculating fines? 12

13 Which method of calculating fines? The usual problems: principles of legality, retroactivity, proportionality, accounting for the economic context, etc. Towards effects-based calculations? Ok, but Quantitative v. Qualitative approach ECONOMISTS AHEAD 13

14 What type of procedure? 14

15 Well known issues 15

16 It should not be forgotten that Article 6 review is itself a review of legality. Put bluntly, if a system passes muster in Strasbourg, we know that it is not so bad that it is illegal, judged by the combined standards of the ECHR s 47 signatory states. This raises the question of whether a bare pass à la Menarini is good enough for the EU. Should not the Nobel Prize winner, which has always been at the vanguard of respect for fundamental rights, aim higher? Luis Ortiz Blanco & Mark English, Procedural Rights in EU Antitrust Enforcement, Forthcoming

17 Ways in which the sanctioning procedure could be changed (i) The real problem: Proportionality in procedural guarantees ( parking ticket procedure; gap bigger and bigger over time) The solution: Matching types of cases with types of procedure (the higher the likely punishment, the higher the procedural guarantees) 17 17

18 Ways in which the sanctioning procedure could be changed (ii) Three basic types of cases Four basic types of procedures Three-step approach 18 18

19 Ways in which the sanctioning procedure could be changed (iii) Type 1 Cases: Article 7 Reg. 1/2003 purely declaratory decisions with cease and desist orders (including interim measures under Article 8 Reg. 1/2003) No (positive) injunction; Commitment decisions (Article 9 Reg. 1/2003); and Finding of inapplicability (Article 10 Reg. 1/2003) 19 19

20 Ways in which the sanctioning procedure could be changed (iv) Type 2 Cases: Article 7 Reg. 1/2003 decisions with injunctions in the form of behavioural remedies (including interim measures under Article 8 Reg. 1/2003); Fines up to a certain amount (e.g. 10M ) per company 20 20

21 Ways in which the sanctioning procedure could be changed (v) Type 3 Cases: Article 7 decisions with injunctions in the form of structural remedies (including interim measures under Article 8 Reg. 1/2003); Fines higher than a certain amount (e.g. 10M ) per company 21 21

22 Ways in which the sanctioning procedure could be changed (vi) Type 1 Procedures: Standard Administrative Procedures Type 2 Procedures: Enhanced Administrative Procedures (i) Split investigation and adjudication by transforming the Hearing Officers into Administrative Judges (FTC-style) (final decisions adopted by the College of Commissioners). Holding public hearings 22 22

23 Ways in which the sanctioning procedure could be changed (vii) Type 3 Procedures: Enhanced Administrative Procedures (ii) Type 2 procedural guarantees, with adjudication entrusted to selected Commissioners (competition Commissioner plus, e.g. two other Commissioners, in turns). Type 4 Procedures: Judicial Procedures DG Comp transformed into pure prosecutor; Adjudication entrusted to judges (Treaty adaptations arguably needed) 23 23

24 Ways in which the sanctioning procedure could be changed (viii) Matching Type of Case with Type of Procedure (I) Present situation Case Type 1 Case Type 2 Procedure Type 1 Case Type

25 Ways in which the sanctioning procedure could be changed (ix) Matching Type of Case with Type of Procedure (II) First Phase Case Type 1 Case Type 2 Procedure Type 1 Case Type 3 Procedure Type

26 Ways in which the sanctioning procedure could be changed (x) Matching Type of Case with Type of Procedure (III) Second Phase Case Type 1 Procedure Type 1 Case Type 2 Procedure Type 2 Case Type 3 Procedure Type

27 Ways in which the sanctioning procedure could be changed (xi) Matching Type of Case with Type of Procedure (IV) Third Phase Case Type 1 Procedure Type 2 Case Type 2 Procedure Type 3 Case Type 3 Procedure Type

28 Conclusions Smart sanctions Proportionate pecuniary fines Introduction of individual penalties (director disqualification) Look back to the Treaty: making the most out of the sanction of nullity Need to evolve towards better adapted procedural solutions 28 28

29 Thank you for your attention 29