22 October 2015

Advocate General’s Opinions on cement appeals suggest General Court's judgment is set aside

On 15 October 2015, Advocate General Wahl provided his Opinion on the appeals brought by four cement companies against the General Court (GC) judgment, dismissing their arguments that the European Commission had exceeded its powers during the investigation of presumed infringement of Article 101.

AG Wahl has proposed that the European Court of Justice (ECJ) set aside the GC’s judgment.  If the Opinion is followed, this would confirm a more limited scope to the Commission’s powers to investigate antitrust behaviour.

In 2008 and 2009, the Commission conducted dawn raids of companies operating in the cement sector and opened formal proceedings in 2010.  The contested decision came in March 2011, when the Commission formally ordered the companies to provide specified information (pursuant to Article 18(3) of Regulation 1/2003).  Seven of the companies being investigated argued before the GC that the Commission had exceeded its powers in its request for information by, amongst other things, imposing a disproportionate workload and failing to explain the presumed infringements.  The companies therefore asked that the GC suspend their duties to comply with the requests.

The GC judgment, dated 14 March 2014, confirmed the powers exercised by the Commission.  Though it was acknowledged that the presumed infringements were set out very generally and that a large volume of work had been imposed by the Commission, this was overridden when balanced against the alleged infringements and the need for the Commission to investigate.  Buzzi, Heidelberg, Schwenk and Italmobilaire are now appealing to the ECJ.

In his Opinion, AG Wahl noted that Commission requests under Article 18(3) Regulation 1/2003 must be ‘necessary’.  AG Wahl suggests neither a literal, nor lax interpretation should be taken; “a correlation must exist between the information requested and the presumed infringement that is sufficiently close” for the Commission to conclude the information is indeed necessary.  He determined that the GC had erred in law when assessing the necessity requirement, and for instance, pointed to the fact that some of the information requested was publicly available, thus unnecessarily included as part of the request.

AG Wahl stated that the Commission’s wide ranging powers are, at the very least, restrained by the rights of defence of the undertakings under investigation observing that “EU acts imposing obligations which interfere with the private sphere of … undertakings and which, if not complied with, carry hefty financial penalties, should, as a matter of principle, have a self-standing statement of reasons.”  In this case, the Commission had not provided a clear statement of reasons making it “excessively difficult” for the companies to properly exercise their rights of defence and assess their duties to cooperate.  For instance, the contested decision referred to 'cement' and 'cement-related products' over a period of a decade, making it hard for the companies to appreciate the scope of the investigation.

The Opinion also determined that the GC wrongly interpreted the right not to incriminate oneself.  In relation to Heidelberg, the GC had said that the company could challenge the self-incriminatory nature of any questions, if the Commission later imposed a fine.  AG Wahl noted that not dealing with the potential breach of rights of defence in the present proceedings, would deprive Heidelberg of its right to have the act reviewed by the EC Courts (provided by Article 18(3) of Regulation No 1/2003).

AG Wahl concluded that the GC’s judgment should be set aside and the contested decision be annulled in its entirety, as a result of the legal errors.

The ECJ is expected to hand down its judgment in the coming months, and will review the Opinions, though they are not binding.  Following AG Wahl’s clear assessment and frank conclusions, if the ECJ was to uphold the contested decision, this might be interpreted by some as conferring a carte blanche on Commission information requests.  This development is also particularly interesting, as recent Commission Guidelines have sought to extend the Commission’s right to access information on individuals’ personal devices, which commentators have suggested is not only excessive but falls foul of data protection legislation.

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