1 / 22

Burden & Standard of Proof in Competition Law

Assimakis Komninos. Burden & Standard of Proof in Competition Law. Definitions. Burden of proof Who must prove and what – Who fails to prove, if 50%-50% (legal burden of proof) (GR “objective burden of proof”)

mimir
Download Presentation

Burden & Standard of Proof in Competition Law

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Assimakis Komninos Burden & Standard of Proof in Competition Law

  2. Definitions • Burden of proof • Who must prove and what – Who fails to prove, if 50%-50% (legal burden of proof) (GR “objective burden of proof”) • ei incumbit probatio qui dicit, non qui negat: General principle of (Community) law (Laboratoires Boiron, AG Tizzano’s Opinion, ¶ 68) • Standard of proof • Degree of proof necessary for judicial/administrative conviction • Conflicting interests/principles: • Effectiveness of competition law enforcement v. rights of defence & presumption of innocence (in dubio pro reo)

  3. The European Systems of Competition Law Enforcement • Centralised Administrative Enforcement (inquisitorial system with adversarial elements) • Antitrust: ex post enforcement through deterrence in the absence of pre-screening • a. Article 81 EC – agreements: Principle of prohibition • b. Article 82 EC – monopolies: Principle of abuse • Merger Control: ex ante enforcement through pre-screening as a substitute to ex post enforcement through deterrence • Decentralised Administrative, Civil and Criminal Enforcement (inquisitorial or adversarial system)

  4. Burden of Proof – Article 2 • Article 2 Regulation 1/2003: • “In any national or Community proceedings for the application of Articles 81 and 82 of the Treaty, the burden of proving an infringement of Article 81(1) or of Article 82 of the Treaty shall rest on the party or the authority alleging the infringement. The undertaking or association of undertakings claiming the benefit of Article 81(3) of the Treaty shall bear the burden of proving that the conditions of that paragraph are fulfilled.” • No change of legal reality for enforcement by the Commission • Consten and Grundig, p. 347 • Fiatagri, ¶ 99 • Métropole, ¶¶ 130-131

  5. Burden of Proof – Article 2 • Change of legal reality for enforcement by Member State courts and (possibly) authorities: • Previously: GT-Link, ¶¶ 22-27 • “It is for the domestic legal order of each Member State to lay down the detailed procedural rules, including those relating to the burden of proof, governing actions for safeguarding rights which individuals derive from the direct effect of [Articles 81 and 82] of the Treaty, provided that such rules are not less favourable than those governing similar domestic actions and do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law.”

  6. Legal Burden of Proof v. Evidential Burden to Adduce Evidence • “It should be for the party or the authority alleging an infringement of the competition rules to prove the existence thereof and it should be for the undertaking or association of undertakings invoking the benefit of a defence against a finding of an infringement to demonstrate that the conditions for applying such defence are satisfied, so that the authority will then have to resort to other evidence. • Although … the legal burden of proof is borne either by the Commission or by the undertaking or association concerned, the factual evidence on which a party relies may be of such a kind as to require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been discharged.” (not an one-way route) • Aalborg Portland, ¶¶ 78-79

  7. Legal Burden of Proof v. Evidential Burden to Adduce Evidence • “The Commission naturally bears the burden of proving all the findings which it makes in its decision. However, before there is any need to allocate the burden of proof at all, each party bears the burden of adducing evidence in support of its respective assertions. A substantiated submission by the Commission can be overturned only by an at least equally substantiated submission by the parties. The rules governing the burden of proof are only applicable at all where both parties provide sound, conclusive arguments and reach different conclusions. • Therefore, if in its decision the Commission draws conclusions as to the conditions prevailing in a particular market on the basis of objectively verifiable evidence from stated sources, the undertakings concerned cannot refute the Commission’s findings simply by unsubstantiatedly disputing them. Rather, it falls to them to show in detail why the information used by the Commission is inaccurate, why it has no probative value, if that is the case, or why the conclusions drawn by the Commission are unsound. This requirement does not represent the reversal of the burden of proof … but the normal operation of the respective burdens of adducing evidence.” Nederlandse Federatieve Vereniging voor de Groothandel op Elektrotechnisch Gebied (electrotechnical fittings)AG Kokott’s Opinion, ¶¶ 73-74

  8. Burden of Proof – Article 81(1) EC • Commission “must prove the infringements which it has found and adduce evidence capable of demonstrating to the requisite legal standard the existence of the facts constituting an infringement” e.g. German Banks Judgment of 27 September 2006, ¶ 59 • Commission must prove in particular: • identity of parties • nature of parties’ involvement in the infringement • products/services involved • duration of the infringement • “Rule of Reason” - Ancillary restraints - Article 81(1) EC? (legal v. evidential burden) Métropole,¶ 131

  9. Burden of Proof – Article 81(3) EC • “A person who relies on Article 81(3) EC must demonstrate that those conditions are satisfied, by means of convincing arguments and evidence. The Commission, for its part, must adequately examine those arguments and that evidence, that is to say, it must determine whether they demonstrate that the conditions for the application of Article 81(3) EC are satisfied. In certain cases, those arguments and that evidence may be of such a kind as to require the Commission to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof borne by the person who relies on Article 81(3) EC has been discharged. In such a case the Commission must refute those arguments and that evidence.” Glaxo Spain, ¶¶ 235-236 • BUT Commission must examine ex officio obvious Art. 81(3) points (good administration - Consten & Grundig, p. 347) • Non liquet? (50%-50%)? → problematic (legal v. evidential burden - in dubio pro reo) • BERs → parties have the burden to prove that they fall within → non-rebuttable presumption of legality pursuant to Article 81(3) EC vis-à-vis third parties

  10. Burden of Proof – Article 82 EC • Commission must prove the infringement (e.g. United Brands, ¶¶ 264-265) • Defences? Objective justification? → Article 2 Reg. 1/2003 → no differentiation • 2005 DP, ¶ 77: “The burden of proof for such an objective justification or efficiency defence will be on the dominant company” (also Michelin II, ¶ 107; Tournierand Lucazeau AG Jacobs’s Opinion, ¶ 43) • Article 82 EC has no hidden “paragraph 3” – no bifurcation (system of abuse) – “paragraph 3” inherent within the concept of abuse – problem also between the prima facie exclusionary conduct & o.j. & division of burden of proof (DP) • In reality, not a question of burden of proof, but of burden to bring forward relevant argumentation and evidence to support a defence (if 50%-50%, Commission fails to establish an abuse – legal burden)

  11. Burden of Proof – Merger Control • Prohibition Decisions: Commission bears the burden of proof e.g. Airtours, ¶ 63; Schneider, ¶ 179 • “Under the structure of the Merger Regulation, it is the responsibility of the Commission to show that a concentration would significantly impede competition. The Commission communicates its competition concerns to the parties to allow them to formulate appropriate and corresponding remedies proposals. It is then for the parties of a concentration to put forward commitments … The Commission has to assess whether the proposed remedies, once implemented, eliminate the competition concerns identified. It is only the parties that have all the relevant information necessary for such an assessment, in particular as to the feasibility of the commitments proposed and the viability and competitiveness of the assets proposed to divest. It is therefore the responsibility of the parties to provide all such information available that is necessary for the Commission's assessment of the remedies proposal.” New Draft Remedies Notice, ¶¶ 6-7

  12. Burden of Proof – Merger Control • “Whereas the parties have to propose commitments sufficient to remove the competition concerns and submit the necessary information to assess them, it is for the Commission to establish whether or not a concentration, as modified by commitments validly submitted, must be declared incompatible with the common market because it leads, despite the commitments, to a significant impediment of effective competition. The burden of proof for a prohibition or authorisation of a concentration modified by commitments is therefore subject to the same criteria as an unmodified concentration.” New Draft Remedies Notice, ¶ 8; EDP, ¶ 62 et seq. • THUS • Commission → legal burden of proof always • Undertakings → (a) opportunity to propose commitments & (b) evidential burden to provide necessary information

  13. Standard of Proof • Recital 5 Reg. 1/2003: • “This Regulation affects neither national rules on the standard of proof nor obligations of competition authorities and courts of the Member States to ascertain the relevant facts of a case, provided that such rules and obligations are compatible with general principles of Community law.” (effectiveness) • Beyond reasonable doubt > High degree of probability > Balance of probabilities (51% rule) > Mere possibility • Too high a standard of proof → per se legality • Too low a standard of proof → per se illegality

  14. Standard of Proof between Common and Civil Law • Standard of Proof → common law concept • Civil law → free-unfettered evaluation of evidence • “The activity of the Court of Justice and thus also that of the Court of First Instance is governed by the principle of the unfettered evaluation of evidence, unconstrained by the various rules laid down in the national legal systems.” Polypropelene AG Vesterdorf’s Opinion • “The principle that prevails in Community law is that of the unfettered evaluation of evidence and that it is only the reliability of the evidence that is decisive when it comes to its evaluation” Mannesmannröhren-Werke, ¶ 84

  15. Standard of Proof – Article 81 EC • Article 81(1) EC • Commission must produce “sufficiently precise and coherent proof” or “demonstrate convincingly” certain facts; Commission “must produce precise and consistent evidence to support the firm conviction that the infringement took place” e.g. CRAM / Rheinzink, ¶ 20; Wood Pulp II, ¶ 127; Volkswagen (ECJ), ¶ 20; JFE Engineering, ¶ 341; Mannesmannröhren-Werke, ¶ 260; Glaxo Spain, ¶ 82 • Article 81(3) EC • Undertaking must employ “convincing arguments and evidence” → Commission must “adequately examine those arguments and that evidence”, conduct a “proper examination”, “validly take into account all the factual arguments and the evidence pertinently submitted by an undertaking, and refute certain of those arguments, especially if they are “sufficiently relevant and substantiated to require a response” or if they are “relevant, reliable and credible, having regard to their content”. Glaxo Spain, ¶¶ 235, 236, 263, 303

  16. Standard of Proof – Article 81 EC - Cartels • High Standard? • “High standard of proof required” “Conclusions drawn from the evidence must never develop into ill-founded speculation. There must be a sufficient basis for the decision and any reasonable doubt must be for the benefit of the applicants according to the principle in dubio pro reo”. Rhône-Poulenc(Polypropelene), AG Vesterdorf’s Opinion, p. 885 • “Since recourse to indirect forms of evidence is involved, caution must be exercised in establishing the existence of a concerted practice … It is necessary to establish a degree of certainty that goes beyond any reasonable doubt … Unless the court can be satisfied by a set of presumptions having a solid basis, concertation is not established. In any event, if there is a plausible explanation for the conduct found to exist which is consistent with an independent choice by the undertakings concerned, concertation remains unproven”. Wood Pulp II AG Darmon’s Opinion, ¶ 195

  17. Standard of Proof – Article 81 EC - Cartels • In dubio pro reo - “Any doubt in the mind of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed” “Given the nature of the infringements in question and the nature and degree of severity of the ensuing penalties, the principle of the presumption of innocence applies” “The Commission must show precise and consistent evidence in order to establish the existence of the infringement” “The direct evidence relating to the meeting … is not sufficient for it to be considered, without any reasonable doubt remaining on that point, that the banks present concluded an agreement … Those indicia do not suffice to support to the requisite standard of proof the theory that there was a concurrence of wills on the common fixing of prices” • German Banks (Dresdner), ¶¶ 60-62, 144

  18. Standard of Proof – Article 81 EC - Cartels • Or Low Standard? • Presumption that the undertakings participating in collusive action and remaining active on the market take account of the information exchanged with their competitors when determining their conduct on that market. “Commission must “establish to the requisite legal standard that an undertaking has participated in collusion for the purpose of restricting competition; it does not have to adduce evidence that the collusion manifested itself in conduct on the market” Anic Partecipazioni, ¶¶ 121,126 • Prima facie evidence: “It is sufficient for the Commission to show that the undertaking concerned participated in meetings at which anti-competitive agreements were concluded, without manifestly opposing them, to prove to the requisite standard that the undertaking participated in the cartel … It is for that undertaking to put forward evidence to establish that its participation in those meetings was without any anti-competitive intention by demonstrating that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs.” Aalborg Portland, ¶ 81; Sumitomo, ¶ 47

  19. Standard of Proof – Article 81 – Cartels – Empirical Conclusions • Distinction between direct and circumstantial evidence: • Direct evidence: documentary evidence, “smoking guns”, witness testimony, statements made by other incriminated undertakings • Circumstantial evidence: hearsay, common sense, information on participation in meetings or travels, economic evidence referring to movements in the market • If documentary evidence is sufficient to prove the cartel infringement → no need to check actual conduct in the market • If insufficient → coincidences and indicia connected with conduct on the market may have to be taken into account • Distinction between agreement and concerted practice • see Electrotechnical Fittings AG Kokott’s Opinion, ¶ 56 • “In the absence of a firm, precise and consistent body of evidence, it must be held that concertation regarding announced prices has not been established by the Commission.” Wood Pulp II, ¶ 71

  20. Standard of Proof – Article 82 EC • In dubio pro reo United Brands, ¶ 265 • When the Commission applies a prospective analysis, the quality of the evidence it produces is “particularly important” Tetra Laval, ¶¶ 39-45 • Dominant company must provide “specific information” about possible defences; it must not “merely state generally” that there are efficiency reasons; its line of argument must not be “too general and insufficient to provide economic reasons to explain specifically” the claimed efficiencies. Michelin II, ¶¶ 108-109

  21. Standard of Proof – Merger Control • Ex ante enforcement BUT no sanctions (no criminal law parallels) → “sufficiently cogent and consistent body of evidence” (e.g. Kali & Salz, ¶ 228) • “The Merger Regulation does not establish a presumption as to the compatibility or incompatibility with the common market of a transaction which has been notified. It is not the case that the Commission must find in favour of a concentration falling within its jurisdiction in a case in which it might entertain doubts but rather that it must always make an actual decision one way or the other.” General Electric, ¶ 61 • “The Commission is required to undertake a complex assessment predicting the effects of the concentration on the structure and competitive dynamics of the markets concerned…”. No need of establishing the above “with absolute certainty”. It is sufficient “if, on the basis of solid elements gathered in the course of a thorough and painstaking investigation, and having recourse to its technical knowledge, the Commission is persuaded that the notified transaction would very probably lead to the creation or strengthening of such a dominant position. If the Commission is not so convinced, it must on the contrary authorise the merger. Tetra Laval AG’s Tizzano’s Opinion, ¶¶ 73-74

  22. Standard of Proof – Merger Control • Prospective analysis - collective dominance - conglomerate mergers • “Where the Commission takes the view that a merger should be prohibited because it will create a situation of collective dominance, it is incumbent upon it to produce convincing evidence thereof. The evidence must concern, in particular, factors playing a significant role in the assessment of whether a situation of collective dominance exists, such as, for example, the lack of effective competition between the operators alleged to be members of the dominant oligopoly and the weakness of any competitive pressure that might be exerted by other operators.” Airtours, ¶ 63 • “The Commission’s analysis of a merger producing a conglomerate effect calls for a close examination of the circumstances which are relevant for an assessment of that effect on the conditions of competition on the reference market.” Tetra Laval (ECJ), ¶ 40

More Related