The Interface between Human Rights and Lex Mundi European Regional Conference Antitrust & Competition Practice Group 10 May 2002 Christian Wik
Contents Introduction The European Commission s investigative powers 1. Sources of investigative powers 2. Content of the investigative powers Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR): Relevant provisions Main issues in the interface between Human Rights and 1. The nature of competition law procedures and penalties 2. The privilege against self-incrimination (Article 6 of the ECHR) 3. Interface between the Commission s power of inspection and Article 8 of the ECHR Human Rights and the proposed criminalisation of cartels: problematic issues List of cases referred to in the presentation 2
Introduction The European Commission has been granted by Member States large investigative and procedural powers (Regulation 17) for the implementation of Articles 81 and 82 of the EC Treaty. Human rights arguments have been raised by applicants before the European Court of Justice (ECJ) since the late seventies (Pioneer case in 1979) and in almost all cases have been rejected. Human rights arguments are likely in the future to gain more weight in competition law proceedings as competition law offenses are increasingly criminalised. 3
The European Commission s investigative powers Sources of investigative powers Regulation 17 Power to make requests for information (Article 11) Power to make inquiries into sectors of the economy (Article 12) Power to carry out on-site investigations (Article 14) Case-law of the ECJ and the CFI Proposal for a Council Regulation to replace Regulation 17 Extension of the Commission s on-site powers (right to enter private premises and to ask questions) 4
The European Commission s investigative power Content of the investigative powers Article 11: Request for information Letter: Not mandatory (Article 11(1)) Decision: If Article 11 letter fails (Article 11(5)) Article 14: On-site investigation Authorisation (Article 14(2)) Decision (Article 14(3)) Powers to enter any premises and means of transport of undertakings examine and copy the books and other business records ask for oral explanations on the spot 5
Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR): Relevant provisions Article 6 Right to a fair trial 1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. 2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. 6
Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR): Relevant provisions Article 6 Right to a fair trial (continued) 3. Everyone charged with a criminal offence has the following minimum rights (a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him; (b) to have adequate time and facilities for the preparation of his defence; (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require; (d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; (e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court. 7
Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR): Relevant provisions Article 8 Right to respect for private and family life Everyone has the right to respect for his private and family life, his home and his correspondence. There shall be no interference by a public authority with the exercise of his right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. 8
Main issues in the interface between Human Rights and 1. The nature of competition law procedures and penalties European Court of Human Rights decisions on the criminal nature of certain procedures and penalties ECtHR decision: Engel v. The Netherlands The definition of a criminal charge, for the purposes of the ECHR, is autonomous (cannot be decided unilaterally e.g. by the Commission). Core criteria for the definition: Classification of the offence under national law Nature of the offence Severity of the penalty 9
Main issues in the interface between Human Rights and 1. The nature of competition law procedures and penaltie ECtHR decision: Société Stenuit v. France The fine imposed under national competition law was considered in the case of a criminal nature because of the nature of competition law itself and the severity of the fine. The aim of the French competition law is the protection of the free competition within the French market, i.e. general interests of society that are normally protected by criminal law. The maximum fine to which those responsible for the infringements make themselves liable amounts to substantial sums (in the present case 5 per cent of the annual turnover). 10
Main issues in the interface between Human Rights and 1. The nature of competition procedures and penalties Analysis of the nature of EC competition procedures and penalties for the purposes of the ECHR Regulation 17: EC fines are not of a criminal law nature. Aim of the EC competition rules and severity of the penalties The aim of EC competition rules is to preserve and develop a state of effective competition in the common market by impacting on the structure of markets and the conduct of market players. = protection of general interests of society, as with criminal law Substantial penalties can be imposed of up to 10 per cent of the worldwide turnover (for example: EUR 462 million imposed on Hoffman La Roche as a result of its participation in the Vitamins cartel). Conclusion For the purposes of the ECHR, the EC competition procedures and penalties should be regarded as criminal in nature. 11
Main issues in the interface between Human Rights and 2. The privilege against self-incrimination (Article 6 of the ECHR) Privilege against self-incrimination Definition: the right not to be required to incriminate oneself by one s testimony ECJ: Orkem v. Commission Argument presented by Orkem: the Commission has in its decision under Article 11(5) of Regulation 17, when requesting information, infringed the general principle that no one may be compelled to provide evidence which is incriminating against oneself. Response of the ECJ: 1) Regulation 17 contains no express right to silence. 2) Article 6 of the ECHR may be relied upon by an undertaking subject to an investigation relating to competition law. 12
Main issues in the interface between Human Rights and 2. The privilege against self-incrimination (Article 6 of the ECHR) 3) The wording of Article 6 of the ECHR or the case law of the ECtHR does not indicate the existence of a right not to give evidence against oneself. 4) The Community law imposes certain limitations on the Commission s powers of investigation: Certain questions are permitted ( factual questions ), as for instance questions relating to the subject matter and implementation of measures taken in order to determine and maintain a satisfactory price level. Certain questions are not permitted ( incriminating questions ), as for instance questions relating to the purpose of the actions taken and the objectives pursued. 13
Main issues in the interface between Human Rights and 2. The privilege against self-incrimination (Article 6 of the ECHR) ECtHR: Funke v. France Article 6(1) of the Convention contains a right to remain silent and not to contribute to incriminating oneself. This principle applies not only in criminal procedures in the strict sense, but also in administrative procedures of a criminal nature. ECtHR: Saunders v. the United Kingdom The right not to incriminate oneself is not confined to statements of admission of wrongdoing or to remarks which are directly incriminating but also to exculpatory remarks or mere information or questions of fact. Documents seized under a warrant or required to be produced are not covered by the right not to incriminate oneself. Documents obtained through methods of coercion or oppression in defiance of the will of the accused are covered by the privilege of self-incrimination include requirements both to provide explanations of documents produced, and to provide information. US Supreme Court: United States v. Doe Similar or even broader approach than in Saunders. 14
Main issues in the interface between Human Rights and 2. The privilege against self-incrimination (Article 6 of the ECHR) CFI: Mannesmannröhren-Werke v. Commission Direct challenge of an Article 11(5) decision. Arguments of the parties: Questions asked by the Commission in its investigation went beyond what was permitted under Orkem The decision infringed Article 6 of the ECHR (Commission proceedings to be considered as criminal within the meaning of Article 6 of the ECHR) Response of the CFI: Regulation 17 contains no express right to silence. It is necessary to consider whether certain limitations on the Commission s powers are necessary in order to preserve the rights of the defence. A right to silence would constitute an unjustified hindrance to the Commission s performance of its tasks. 15
Main issues in the interface between Human Rights and 2. The privilege against self-incrimination (Article 6 of the ECHR) Some of the questions asked by the Commission went further than permitted under Orkem. Arguments based on Article 6 of the ECHR were dismissed applicants may not rely directly on the Convention before the Community Courts. ECHR is part of Community Law but legal persons may not rely on the ECtHR s interpretation of the ECHR before Community courts. Conclusion: Current status of the privilege of self-incrimination Before Funke and Saunders cases, the ECJ in Orkem was prepared to concede that Article 6 applies to competition proceedings. Now that the ECtHR s case law has established that Article 6 includes a right to silence (possibly also in competition proceedings), the CFI holds that the ECtHR s interpretation of Article 6 of the ECHR does not apply in competition cases before Community courts. 16
Main issues in the interface between Human Rights and 3. Interface between the Commission s power of inspection and Article 8 of the ECHR Does the power of inspection granted to the Commission in Article 14(3) of the Regulation 17 comply with the safeguards required for the application of the exception in Article 8(2) of the ECHR? ECtHR s decisions Chappel v. United Kingdom and Crémieux v. France illustrate the nature of the safeguards required Requirement of a judicial warrant. The authorities concerned may not only act at their own discretion. Proportionality between the interference of the applicant s right and the legitimate aim pursued. 17
Main issues in the interface between Human Rights and 3. Interface between the Commission s power of inspection and Article 8 of the ECHR What are the safeguards provided at Community level to protect the rights of undertakings? Are these safeguards sufficient to reach the standards required for the application of the exception of Article 8(2) of the ECHR National systems do not always require a judicial warrant prior to national enforcement of an Article 14(3) decision. Judicial review by national courts is strictly limited to establishing that the Commission s decision is authentic and that the enforcement measures envisaged are neither arbitrary nor excessive (Hoechts v. Commission). 18
Human rights and the proposed criminalisation of cartels: problematic issues Report for the OFT on the proposed criminalisation of cartels in the UK (November 2001) Interplay between civil and criminal proceedings Civil investigation subsequently transferred to a criminal investigation or vice versa use of documentary evidence obtained under civil powers in subsequent criminal proceedings and vice versa use of explanations and answers to questions obtained under civil proceedings in subsequent criminal proceedings risk that publicity given to the civil proceedings prejudice a fair trial for individuals subject to the related criminal proceedings civil law v. criminal law standards of evidence Which body would be responsible for bringing prosecution? relevant expertise in conducting criminal proceedings relevant powers to bring prosecutions Conflict between loyalty as employee and criminalisation of competition law risk of criminal charges for behaviourin the perceived interest of the employer 19
Human rights and the proposed criminalisation of cartels: problematic issues Powers required for criminal investigation more intrusive methods of investigation use of criminal search warrants use of physical and technical surveillance use of property interference Ensure that relevant investigatory powers are applied in accordance with human rights considerations Leniency and immunity from prosecution: How to provide sufficient comfort against criminal prosecution and the imposition of custodial sentences for potential whistleblowers. 20
List of cases referred to in the presentation ECtHR: Engel v. The Netherlands, 8 June 1976 and 23 November 1976 ECtHR: Société Stenuit v. France, 24 February 1992, case no. 67/1991/319/391 ECJ: Orkem v. Commission, 18 October 1989, case no. 374/87 ECtHR: Funke v. France, 25 February 1993, case no 82/1991/334/407 ECtHR: Saunders v. United Kingdom, 17 December 1996, case no. 43/1994/490/572 US Supreme Court: United States v. Doe CFI: Mannesmannröhren-Werke v. Commission, 20 February 2001, case no. T- 112/98 ECtHR: Chappel v. United Kingdom, 30 March 1989, case no. 17/1987/140/194 ECtHR: Crémieux v. France, 27 January 1993, case no. 83/1991/335/408 ECJ: Hoechts v. Commission, 21 September 1989, joined cases 46/87 and 227/88 21