On March 10 2016 the European Court of Justice (ECJ) handed down judgments(1) that clarify the limits on information requests issued by the European Commission in antitrust investigations – as regards the statement of reasons that is to be provided.

Facts

Following dawn raids and the opening of an investigation into suspected infringement in the cement sector, the commission asked a number of companies to answer a questionnaire concerning the suspected infringements. This request took the form of a commission decision under Article 18 of EU Regulation 1/2003.(2) Four companies unsuccessfully challenged the commission's decision in front of the General Court and subsequently appealed to the ECJ. The ECJ overturned the General Court's judgments and annulled the commission's original decision. The commission has an obligation to state reasons justifying its request for information. In this case, the ECJ considered that the statement of reasons was "excessively succinct, vague and generic – and in some respects, ambiguous".

Requirements to be satisfied in information request

Under Article 18(3) of the regulation, where the commission requires the supply of information by decision it must specify:

  • the legal basis and purpose of the request;
  • the information that is required;
  • the time limit within which this is to be provided; and
  • the penalties for failure to provide the information and the right to judicial review.

In its judgment, the ECJ highlighted the following points:

  • The "obligation to state specific reasons is a fundamental requirement, designed not merely to show that the request for information is justified but also to enable the undertakings concerned to assess the scope of their duty to cooperate whilst at the same time safeguarding their rights of defence".
  • Although the commission is not required to communicate all the information at its disposal concerning the alleged infringements, or to make a precise legal analysis, it must clearly indicate the suspicions that it intends to investigate.

Did commission meet its obligations?

The parties argued that the commission's statement of reasons was inadequate and the ECJ agreed. The questions asked were "extremely numerous" and broad ranging. In particular, the parties were asked to disclose detailed information relating to transactions – both domestic and international – in relation to 12 member states over a period of 10 years. The ECJ considered that the statement of reasons lacked detail regarding the nature of the suspected infringements, as well as the products and geographic markets concerned. Further, it did not disclose "clearly and unequivocally, the suspicions of infringement which justify the adoption of that decision and [did] not make it possible to determine whether the requested information is necessary for the purposes of the investigation".

The timing of the commission's information requests was relevant in relation to whether the statement of reasons was adequate, as the requests came two years after the commission's first inspections. The ECJ therefore considered that the commission "already had information that would have allowed it to present more precisely the suspicions of infringement by the companies involved". In contrast, an inspection may take place at a time when less precise information is available to the competition authority. Consequently, it is "not essential" to provide an exact market definition, duration period or legal nature of the presumed infringements in a decision authorising an inspection.

Comment

These cases provide a reminder to companies and their legal advisers to review carefully any information request received to ensure that the document meets the required standard. They also clarify what constitutes an acceptable statement of reasons in the European Union. Where there is no leniency applicant, as in this case, the investigating authority may be more inclined to make a broader, less substantiated, request, as it will be reliant on inspections and responses to information requests in order to obtain its information. Interestingly, in this case the commission closed its investigation without reaching a decision, as the evidence obtained was "not sufficiently conclusive".

The opinion of Advocate General Wahl in these cases (which the ECJ followed) provides a great deal more detail regarding the conditions for, and the limits to, the commission's powers in requesting information. The ECJ's judgments related to only one point of appeal (regarding the statement of reasons). By contrast, the advocate general's opinion considered:

  • the choice of the legal instrument and the time limits imposed;
  • the necessity of the information requested;
  • the format of the information requested;
  • the vagueness of the questions;
  • self-incrimination; and
  • the time limits (where the advocate general thought that the actual human, technical and financial capacity of a company to provide the information requested should be one of the factors taken into account).

Further, the advocate general held that:

"the fact that a statement of reasons may be too general or somewhat vague on certain aspects does not result in invalidity if the rest of the decision allows the recipient and the EU Courts to understand with sufficient precision what information the Commission seeks and the reasons for that."

He considered that the subject matter of the questions posed might "shed additional light on a statement of reasons". However, in the cases in question he did not think this was the case and pointed to the range of questions asked in which it was "extremely difficult to identify a connecting thread".(3)

For further information on this topic please contact Bill Batchelor or Rachel Cuff at Baker & McKenzie by telephone (+32 2 639 36 11) or email (bill.batchelor@bakermckenzie.com or rachel.cuff@bakermckenzie.com). The Baker & McKenzie website can be accessed at www.bakermckenzie.com.

Endnotes

(1) Case C-247/14 P – HeidelbergCement AG v European Commission; Case C-248/14 P - Schwenk Zement KG v European Commission; Case C-267/14 P – Buzzi Unicem SpA v European Commission; Case C-268/14 P – Italmobiliare SpA v European Commission; and ECJ Press Release 27/16.

(2) Council Regulation (EC) No 1/2003 of December 16 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.

(3) See paragraphs 46 to 48 of the advocate general's opinion in Case C-247/14 P.

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