Follow up: The prohibition of double jeopardy according to the “ne bis in idem“ principle in competition law – Sugar Cartel Part II
In March 2022, the European Court of Justice (“ECJ”) delivered its judgement in the sugar cartel case in response to the preliminary ruling procedure initiated by the Austrian Supreme Court as the Cartel Supreme Court. In its judgement, the ECJ addressed issues relating to the applicability of the prohibition of double jeopardy.1 These findings have now been applied by the Cartel Supreme Court. As advocated by the Austrian Federal Competition Authority (“FCA”), the Cartel Supreme Court held, inter alia, that the prohibition of double jeopardy did not apply in the present case due to the lack of identity of the offenses.
1. Background – Case Nordzucker AG and others (C-151/20) before the ECJ
In the main proceedings, the ECJ essentially dealt with four questions referred for a preliminary ruling. The resulting judgment can in turn be divided into four crucial findings, which clarify issues relating to the “ne bis in idem” principle in the field of antitrust law, but also more generally:
- Double jeopardy is not necessarily impermissible.
- Sanctions and criminal proceedings may be cumulative.
- Sanctions may also be imposed by different national competition authorities (“NCA”s).
- “Ne bis in idem” must also be applied in leniency proceedings.
However, not all the above points apply unconditionally. The conditions for each have been discussed in detail in Part I.
The Cartel Supreme Court was instructed to include the German Federal Cartel Office’s (“FCO”) final decision on the sugar cartel in its own assessment. In particular, it had to examine whether the German decision covered not only the German but also the Austrian market when assessing the anti-competitive purpose and effect. The ECJ also considered this to be relevant regarding the question of the basis on which the fine was calculated. Consequently, the Cartel Supreme Court had to determine whether only the turnover achieved in Germany was considered by the FCO.
2. The end? – Findings of the Supreme Court as Cartel Supreme Court (16 Ok 2/22p)
Regarding the FCO’s respective decisions, the Cartel Supreme Court has now found that these decisions did not assess individual facts with regard to their anti-competitive nature and their influence on the imposition of a fine. Particularly, it cannot be deduced from these documents what significance was attached to the essential element of the facts for the Austrian connection, namely a telephone conversation between representatives of a German and an Austrian company. The amount of the fine was only justified by a general reference to the discretionary power of the FCO. No reference was made to a specific turnover on a specific (in this case German or Austrian) market. The same applies to the FCO’s respective hearing letters2, which together with the fine notices formed the subject matter of the fine proceedings.
Against this background, it was clear to the Cartel Supreme Court that the FCO's fine proceedings were exclusively aimed at the punishment of anti-competitive behavior which had an impact on the German market. The FCO only made a passing reference to the telephone conversation concerning the Austrian market to substantiate the collusion on the German market, especially as it called into question the peace of competition on the German market. Specifically, the threat was made to disregard the home market principle previously upheld by both sides and to advance into the other company's traditional core markets.
According to the Cartel Supreme Court, neither the two penalty notices nor the hearing letter indicated that the anti-competitive purpose or the anti-competitive effect of this telephone call regarding the Austrian territory would have been decisive for the imposition of the fine or the determination of its amount. The resulting restriction of competition (also) on the Austrian market was not considered in the German proceedings.
This view was supported by a statement by the FCO’s President, according to which the two German notices of fines “exclusively concerned Germany” and – in accordance with the FCO’s guidelines on fines – were based only on domestic sales. Thus, just the effects of the cartel on the German market were sanctioned. This opinion is a (non-binding) subsequent interpretation of the fine decisions. Nevertheless, the Cartel Supreme Court could rely on it in its “assessment of all relevant circumstances”.
In the end, the Supreme Court as the Cartel Supreme Court concluded that the prohibition of double jeopardy did not apply in the present case.
3. What does this mean for the original proceedings before the Court of First Instance?
In the opinion of the Cartel Supreme Court, the decision of the Cartel Court to dismiss the application for a finding of an antitrust violation and the imposition of a fine was unlawful and should be amended accordingly.
However, since the Cartel Court did not address the question of whether and to what extent a fine should be imposed, no sufficient findings were made on the criteria relevant for the assessment of the fine. For the purpose of supplementing the proceedings before the Cartel Court, the first instance decision was thus (partially) overturned by the Cartel Supreme Court. It stressed, inter alia, that a deterrent effect can only be attained with an appropriately high fine. Moreover, in order to effectively combat cartel infringements, fines of the magnitude that have long been customary at EU-level and in many Member States should also be imposed in Austria.
In this case, the Cartel Court will have to assess in particular whether and over what period the anticompetitive agreement was effective, which market it affected and to what extent, if any, specific deliveries to Austria were omitted.
So even after its fourth court appearance, the sugar cartel has not yet reached its finale. The outcome of the proceedings before the Cartel Court is now eagerly awaited.
1 Part I is available at https://www.bindergroesswang.at/en/law-blog/2022/the-ecj-on-the-prohibition-of-double-jeopardy-according-to-the-ne-bis-in-idem-principle-in-competition-law.
2 The hearing letter is an interim step in the proceedings, giving the undertaking an opportunity to respond to the allegations and provide further justification or remedies.
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.