The ECJ on the prohibition of double jeopardy according to the “ne bis in idem“ principle in competition law
In two recent judgments, the Court of Justice of the European Union (“ECJ”) addressed the question of whether there is unlimited protection against double prosecution and punishment for one and the same competition law offense. In doing so, the ECJ clarified the principle of “ne bis in idem”. However, there could also be cases in which double jeopardy would be permissible, according to the ECJ, which for the first time ever established a uniform test for this purpose. In addition, the Court updated the criteria for assessing proportionality and supplemented them with a multi-stage test that goes beyond the general criteria. If only one of the now established requirements is not met, double jeopardy is prohibited.
1. Facts of the cases
The ECJ clarified the rules for double jeopardy in competition law in two preliminary rulings. This was prompted by two proceedings relating to restrictions of competition. One of them concerned a Belgian postal operator, the other the so-called Austrian sugar cartel.
In the Belgian postal case, two different national authorities successively fined the company. In the sugar cartel, on the other hand, the Austrian Federal Competition Authority (“FCA”) applied for a fine against sugar producers who had already been fined by a final decision of the German Federal Cartel Office (“FCO”).
Both cases concerned the interpretation of Article 50 of the Charter of Fundamental Rights of the European Union (“CFR”). This article enshrines the principle that a person must not be prosecuted or punished again in criminal proceedings for an offense for which he or she has already been finally convicted or acquitted. Any restriction of this principle requires justification, which is only possible within the narrow limits of Article 52 (1) CFR.
a) Case bpost SA (C-117/20)
The Belgian company bpost SA was successively fined by the Belgian Postal Regulatory Authority and the National Competition Authority, each of which targeted different offenses.
The postal regulator found that the discount schemes operated by bpost SA since 2010 were discriminatory against some customers. Subsequently, it imposed a fine in July 2011. Bpost SA appealed and the competent Belgian court overturned the decision in March 2016.
Notwithstanding this, the Belgian competition authority opened new, second proceedings and – unlike the postal regulator – regarded these discount schemes as an abuse of a dominant position. Consequently, it also imposed a fine in December 2012.
Since the first decision was not overturned until several years later, the two proceedings were conducted in parallel for a considerable amount of time. Bpost SA appealed with reference to the “ne bis in idem” principle, claiming that the second proceedings violated the prohibition of double jeopardy.
b) Case Nordzucker AG and others (C-151/20)
Based on information provided by a key witness, the FCA initiated investigations on a sugar cartel that existed or was suspected in Austria. Finally, in 2010, the authority applied for both a finding of an antitrust violation and the imposition of fines on several German sugar manufacturers which had entered into territorial agreements for the distribution of industrial sugar in Austria. The declared goal was not to operate beyond their traditional sales territory (“home market principle”). One of the key points of the proceedings was a telephone conversation between two company representatives about the Austrian market.
The FCO also investigated the sugar cartel and imposed fines on three German sugar producers in February 2014. This decision became final.
Due to the FCO’s parallel proceedings in Germany, the Austrian Cartel Court had to abide by the prohibition of double jeopardy. Consequently, it refrained from imposing a fine and rejected the FCA's application in the first instance. The FCA appealed against this decision to the Austrian Supreme Court (“ASC”) as the Higher Cartel Court. The ASC, in turn, recognized a strong connection to European law and submitted the provisions in question to the ECJ for interpretation by way of a preliminary ruling. Essentially, four questions were asked which, in the opinion of the FCA, are of great importance for the understanding of European antitrust law.
The outcome of the two preliminary rulings in the cases of bpost SA and Nordzucker AG and others as well as the interpretation given by them are the topic of this blog post. On the one hand, the ECJ’s rulings create a better understanding of the cooperation between national competition authorities. On the other hand, they concern the effectiveness of the enforcement of EU law. The key points of the ECJ's comments are presented in detail below.
2. Criteria for the applicability of the double jeopardy prohibition
The principle of “ne bis in idem” is not only a fundamental principle of EU law. It is also enshrined, for example, in Article 4 of the 7th Additional Protocol to the European Convention on Human Rights (“ECHR”). It is also worth mentioning that the principle is by no means exclusively applicable in purely “criminal” proceedings. This is established case law.
a) Previous developments in case law
The ban on double jeopardy was previously subject to two cumulative conditions. First, there had to be a prior final decision (“bis” criterion). Second, both the previous final decision and the subsequent proceedings had to relate to the same conduct (“idem” criterion).
However, the idem criterion has been the subject of controversy because of its unclear meaning, partly due to the ECJ’s case law. The latter developed two different approaches to assessing the idem criterion: an “idem factum” approach and an “idemcrimen” approach. Depending on the respective area of EU law, the ECJ applied different idem criteria.
(1) For double proceedings that were outside the scope of EU competition law, the assessment was made according to the “idem factum” approach. According to this approach, it only mattered whether the two proceedings concerned the same persons and the same facts (“double identity of facts”). If so, there technically was a violation of the “ne bis in idem” principle. As an exception to this, the ECJ in the “Menci” case nevertheless considered double proceedings and thus exceptions to the prohibition of double jeopardy – under narrow boundaries - to be legal. In particular, justification has to flow directly from Article 52 (1) CFR. Accordingly, double jeopardy could only occur if a restriction of the “ne bis in idem” principle was provided for by law and was proportionate. For a restriction to be proportionate, again, sanctions had to be necessary. These sanctions, in turn, had to follow an objective that was recognized by the Union and benefit the common good.
(2) In the case of double proceedings within the scope of EU competition law, onthe other hand, the ECJ applied the “idem crimen” approach. Accordingly, the prohibition of double jeopardy was only affected if there was a “triple identity of facts”. Unlike “idem-factum”, it must also refer to the same protected legal interest in addition to the same persons and the same facts. In practice, however, this led to a narrowed scope of application of the “ne bis in idem” principle. The ECJ’s case law continuously developed “idem-crimen”. In this context, the executive judgment in the “Toshiba” case must be emphasized. It established the above-mentioned threefold criteria and was recently confirmed in the Slovak Telekom judgment.
The ECJ in its two current judgments has now departed from this separation in the assessment of the “idem” criterion. The Court considered the criticism of the responsible Advocate General (“AG”) Bobek to be justified generally, however aligned the two approaches differently than proposed by him.
b) Menci v Toshiba – clarification and specification by the ECJ
In his opinion, AG Bobek called for a standardization of the two assessment methods mentioned above for all areas of EU law. The ECJ should henceforth be guided exclusively by its judgment in the “Toshiba” case and the three criteria established therein.
While recognizing the need for uniformity, the Court, however, opted for the approach it had established in the “Menci” case. Hence, a double identity of facts would be sufficient to satisfy the “idem” criterion. The “Toshiba” case law – following the need for uniformity – was thus implicitly overruled.
In its reasoning, the ECJ stated that the identity of the facts was the relevant criterion for assessing whether the same offense is at hand. By this, the Court means “the existence of a set of concrete circumstances inseparably linked to one another.” The legal classification of the facts under national law and the protected legal interest do not play a separate role at this point, in contrast to the assessment according to “idem-crimen”. If the facts of the case are identical, it must then be examined whether double jeopardy can be justified under Article 52 (1) CFR.
Following Article 52 (1) CFR, the possibility of double prosecution and sanctioning must be provided for by law and preserve the essence of “ne bis in idem”. National laws that provide for double punishment exclusively under different legal provisions generally meet these requirements.
As already mentioned, the criterion of the protected legal interest thus no longer plays an independent role in the “idem factum” approach. However, a closer look shows that it certainly remains part of the assessment, because the essence of “ne bis in idem” must still be taken into account. Therefore, if the objective pursued or the offense is the same, a conflict with the prohibition of double jeopardy arises.
Moreover, any possible case of double jeopardy must be proportionate. The ECJ in its two current judgments has also established new criteria related thereto. When assessing whether the means used by any authority or court are appropriate and necessary, a multi-stage examination must be carried out.
First, clear and precise rules are needed. These should make it possible to foresee which actions may be the subject of double proceedings or sanctions. Second, it must be evident that there will or can be coordination between the various authorities. The ECJ, nonetheless, leaves open what its understanding of coordination is. One could think of an exchange of information, joint investigations, assistance with dawn raids and coordination of strategy. Third, the two proceedings must actually be sufficiently coordinated and conducted at a similar time. And finally, if a sanction has already been imposed in the first proceedings, it must be taken into account when assessing the second sanction.
The following findings can be derived from the two ECJ judgments. All of them are essential for the understanding of the principle “ne bis in idem” not just in competition law, but in all areas of law.
a) Double jeopardy is not necessarily impermissible
The ECJ has emphasized that there is no absolute ban on double jeopardy. In individual cases, it may well be permissible under certain conditions. Sanctions imposed must respect the essence of fundamental rights, be necessary for that purpose and correspond to the objectives recognized by the European Union. Regarding the ECJ’s case law, in the case of bpost SA – in principle – a second sanction under competition law is not impermissible per se. The decisive factor is whether the first sanction, that ultimately became final, was not issued on the basis of the same facts and the same offenses.
b) Sanctions and prosecution measures can be cumulated
However, such an approach requires that clear and precise rules are in place that make cumulation foreseeable and allow for coordination between the respective authorities. The ECJ, nonetheless, left open what its understanding of coordination is. At most, one could think of an exchange of information, joint investigations, assistance in dawn raids and coordination of procedures in general. In addition, both proceedings must actually be sufficiently coordinated and closely linked in time. Finally, the overall sanctions must be reasonable with regard to the seriousness of the misconduct at hand. If these requirements are not met, the competition authority acting later is in violation of the “ne bis in idem” principle.
- Sanctions can also be imposed by different national competition authorities
In the Nordzucker AG and others case, the ECJ determined that the final decision of the German FCO does not in principle stand in the way of prosecution and sanctioning by the Austrian FCA if the conditions outlined above are met. However, a subsequent decision may under no circumstances relate to infringements of competition law in the territory of the competition authority that first took action. Otherwise, the second authority would violate the prohibition of double jeopardy and the corresponding prosecution measures would be inadmissible. The latter is the core issue in the above-mentioned proceedings, which the Austrian Supreme Court must now clarify.
c) “ne bis in idem” must also be applied in leniency proceedings
The ECJ stated that the mere initiation of prosecution measures by another authority can fall within the scope of the “ne bis in idem” principle. It is not necessary that these proceedings actually lead to the imposition of fines. Consequently, the “ne bis in idem” principle must also be abided by in leniency proceedings, regardless of whether or not a fine is ultimately imposed.
According to the ECJ, there is no guarantee for leniency applicants that they will indeed benefit from possible advantages of the national leniency programs. Rather, the granting of those advantages depends on numerous factors, some of which cannot be influenced, as well as on the authorities themselves, which is why also these proceedings satisfy the “bis” criterion. Furthermore, an anew, successful settlement with the investigating authority would undoubtedly qualify as a “decision”, which is exactly what the prohibition of double jeopardy seeks to prevent.
This also applies in the Nordzucker AG and others case as proceedings for the enforcement of competition law. It is irrelevant that a breach of competition law is merely to be established. This, too, would constitute a sanction, which would thus be prohibited.
With these two rulings, the ECJ now appears to have unified its previous case law on the prohibition of double jeopardy, thus creating the coherence necessary. However, caution is advised when assessing individual cases. Although criteria for the application of the “ne bis in idem” principle have been established, the ECJ's standard of judgment is extremely fact-specific and can therefore diverge widely. A fertile ground for further litigation.
Please note: This blog merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the blog.