September saw a number of rulings from the European Courts in a variety of cartel cases. In addition to dealing with familiar complaints as to the quality of evidence relied on by the Commission and the substantive fairness of its fining decisions, the Courts also issued useful rulings on some key fundamental rights matters.
In Dutch Trade Association (Case C-105/04 P) (DTA) the European Court of Justice clarified the application of the principle of 'reasonable time' in respect of delays in competition cases. In Archer Daniels Midland (Case T-59/02) (ADM), the Court of First Instance ruled on the application of the rule against 'self-incrimination' in relation to statements collected by bodies other than the Commission.
DTA – excessive delay
The DTA case arose from a 1991 complaint concerning alleged price fixing in the Dutch electrical fittings market. In 1999, some eight years after the complaint was lodged with the Commission, it imposed fines on various parties. They appealed against the fines on various grounds including that the Commission had breached the principle of reasonable time in waiting so long to proceed against them. According to that principle, where there is excessive delay (attributable to the Commission) in issuing an infringement decision to an undertaking and this delay has compromised the effective conduct of the undertaking's defence, then the decision is liable to be set aside.
The CFI analysed this ground of appeal by dividing the process leading up to the 1999 decision into two stages. The first (investigative) stage, covering the period up to notification of the statement of objections, began on the date on which the Commission opened its investigation against the parties. The second (administrative) stage covered the period from notification of the statement of objections to adoption of the final decision. The CFI found that, in this case, the Commission had taken excessive time to progress matters in each of these two stages. However, in examining whether delay had compromised the rights of the defence, the CFI excluded that element of delay which had occurred during the first (investigative) stage. It took this approach on the basis that it was only during the second stage that undertakings were able to rely in full on the rights of the defence, which they were unable to do during the first stage because the Commission has not yet formulated its accusations.
The ECJ overturned this ruling on appeal. The CFI's approach had, it found, ignored the possibility that the excessive duration of the investigation stage might have an effect on an undertaking's exercise of its rights of defence after notification of the statement of objections. According to the Court, the more time that elapses between the opening of an investigation and the notification of the statement of objections, the more unlikely it becomes that exculpatory evidence relating to the infringements set out in the statement of objections can be obtained, owing, e.g., to management and other staff departures.
ADM – self-incrimination
In this case, the Commission had imposed fines on a number of parties including ADM who had participated in the citric acid cartel. The cartel had been investigated by both the US and EU competition authorities.
In the US proceedings, a former representative of ADM made a statement at his interview by the grand jury, giving a detailed description of the manner in which the cartel functioned and of the parties involved. That interview, during which the individual was accompanied by his lawyers, was conducted following the adoption of a ‘compulsion order’. The interview gave rise to an FBI report.
That interview was conducted at the request of ADM and the relevant individual (who had been given immunity from criminal prosecution) agreed to submit to the interview on condition that it was allowed to exercise his US constitutional right not to reply to questions which could result in him incriminating himself. The competent US authorities also indicated that his statement could not be used directly or indirectly against ADM or any of its employees, subsidiaries or affiliates in any criminal prosecution.
In the EU proceedings, the Commission relied upon the FBI report in its statement of objections (and infringement decision) as pointing towards ADM's leading role in the cartel. ADM claimed before the CFI that, by relying on the FBI report, the Commission infringed its procedural safeguards provided under Community law, in particular its right against self-incrimination.
The CFI accepted that where the Commission, in assessing the evidence in its possession, relies on a statement made in another context which potentially contains information that the undertaking concerned would have been entitled to refuse to provide to the Commission, the Commission is required to guarantee to the undertaking concerned procedural rights equivalent to those conferred by Community law.
As such, the Commission had to examine if, prima facie, there was serious doubt as to whether the procedural rights of the parties concerned were complied with in the procedure during which they provided such statements. If there were no such serious doubt, the procedural rights of the parties concerned would be adequately safeguarded if, in its statement of objections, the Commission clearly indicated that it intended to rely on the statements in question. In that way, the Commission would make it possible for the parties concerned to comment not only on the content of those statements, but also on any irregularities or special circumstances as regards their creation or submission to the Commission.
On the particular facts of the case, the CFI found that ADM had no grounds to object to the reliance placed by the Commission on the FBI report.