Tuesday, March 20, 2012
Posted by D. Daniel Sokol
Kristina Nordlander & Patrick Harrison (Sidley Austin) ask Are Rights Finally Becoming Fundamental?
ABSTRACT: In the landmark 2005 Article 102 TFEU case regarding Losec, AstraZeneca was fined EUR 60 million for conduct that would not have been an infringement of EU competition law had AstraZeneca not been found to be dominant in the relevant market. The European Commission ("Commission") found that the relevant market on which Losec competed should be defined narrowly to include only the newer class of medicines ("PPIs") to the exclusion of their older equivalents (H2 Blockers). The Commission's decision to define the market narrowly dictated that AstraZeneca's shares were in excess of 50 percent. At such share levels, there exists a presumption of dominance that is extremely difficult to rebut. On appeal, AstraZeneca challenged the findings on market definition and dominance. However, the EU's General Court limited its review to whether the Commission had committed a "manifest error" of assessment in arriving at its findings. Having found no "manifest error," the General Court upheld the Commission's findings on market definition and dominance and largely upheld the Commission's multi-million Euro fine.
Is this fair? If a prosecutor comes to a view on market definition, which is a sine qua non for a finding of infringement and the imposition of a high punitive fine, but which is not then subject to full review by an independent court, does that really constitute a fair trial for purposes of the European Convention for the Protection of Human Rights and Fundamental Freedoms (the "ECHR") and the Charter of Fundamental Rights of the European Union ("Charter")?
The EU courts have often drawn indirectly on fundamental rights of the kinds set out in the ECHR and the Charter and incorporated them into EU law as "general principles." However, the 2009 entry into force of the Lisbon Treaty, and the EU's forthcoming direct accession to the ECHR seem set to give fundamental rights center stage in the application of EU law in general and EU competition law in particular. This article does not undertake a full review of this fascinating area of law, but rather focuses briefly on four issues, which are critical to EU competition law enforcement and in which fundamental rights challenges may play a key role going forward:
1. The question of whether the EU courts exercise a sufficiently "full review" in order to render the Commission's triple role as investigator, prosecutor, and judge compliant with the right to a fair trial as set out in Article 47 Charter and Article 6 ECHR.
2. The consistency of increasingly effects-based standards with the basic maxim of nulla poena sine lege, as enshrined in Article 49 Charter and Article 7 ECHR.
3. The appropriateness of legal presumptions in a system with questionable compliance with the right to a fair trial.
4. The issue of whether key procedural rights are sufficiently guaranteed in the course of the Commission's investigations.
We conclude that several aspects of EU competition law and the Commission's enforcement procedures are questionable at present, in particular in light of the often-limited review exercised by the EU courts. We may well see EU competition law fining decisions struck down in future if the European Court of Human Rights ("ECtHR") or the EU courts conclude that EU competition law imposes sanctions that are of a criminal nature and subjects EU competition law proceedings to the full force of Articles 6 and 7 ECHR and Articles 47 and 49 Charter.