The General Court of the European Union validates the admission of illegally obtained telephone recordings to prove an anticompetitive agreement

In the Goldfish BV e.a. versus Commission case, the General Court of the European Union ruled on September 8, 2016 that recordings of telephone conversations collected illegally by a company and seized by the European Commission are admissible as evidence in the context of legal proceedings.

In 2013, the Commission imposed a €28,716,000 fine on four shrimp traders in the North Sea region for having taken part in an anticompetitive agreement on price fixing and shrimp sales volume allocation.

During the investigation which followed the leniency application by one of the parties, the Commission carried out surprise inspections at the premises of the relevant companies during which it found illegally recorded telephone conversations and written notes referring thereto.

These documents were used by the Commission as evidence to find the concerned companies guilty. The applicants therefore lodged an appeal before the Court to contest the legality of these exhibits.

On this occasion, the Court recalled that the prevailing principle under Union law is that of free consideration of evidence, which implies on the one hand that the admissibility of a piece of evidence regularly obtained cannot be contested before the Court, and on the other hand, that the probative force of evidence regularly produced is appreciated on the basis of its credibility.

In light of this principle, the Court controlled, in accordance with the case law of the European Court of Human Rights, that the admission of a piece of evidence obtained in breach of Article 8 of the European Convention for the Protection of Human Rights (ECHR) recognizing the right to privacy, did not constitute a breach of the principles of fairness set forth in Article 6§1 of the ECHR, and therefore, that the rights of defense of the companies sued had been respected.

Thus, the Court ruled that the applicants had not been deprived of their right to a fair trial as they had had access to all the audio recordings and accompanying written notes. Furthermore, the Commission did not solely rely on these recordings, but also on other elements of proof, to find the relevant companies guilty, and it had verified that the recordings in issue matched the other exhibits produced in the proceedings.

Accordingly, the Court concluded that the Commission had rightly used the recordings as evidence of the alleged anticompetitive practices, since it had obtained them regularly during its investigation, even if they had been collected illegally by one of the parties to the unlawful agreement.

This approach is contrary to the analysis adopted by the French Supreme Court, which asserted in a decision dated January 7, 2011 that recordings of telephone conversations captured without their author’s knowledge and used to prove anticompetitive practices before the French Competition Authority are to be declared inadmissible because obtained in an unfair manner.

This position had been invoked by one of the applicants in support of its arguments. On this point, the Court answered that although the European Union judge can be guided by the laws of the Member States, he has no obligation to apply a stricter regulation of a Member State concerning the production of evidence.

It remains to be seen whether this decision, which will probably be appealed before the Court of Justice of the European Union, will lead the French Supreme Court to change its position in this respect. In any event, the principle of prudence requires avoiding making any anticompetitive statements which an ill-intentioned contact may use in the context of a leniency application.

Reinforced duty of loyalty for online platforms in France

The supervision of the activity of online platforms, notably with respect to loyalty and transparency vis-à-vis consumers, is nothing new. The French law for growth, business and economic equality of August 6, 2015 had already established certain obligations in this respect for platforms which bring into contact sellers (professionals and non-professionals) and consumers for the sale, exchange or sharing of goods or services (in other words, marketplaces and collaborative economy sites).

In 2016, the legislator decided to go further by establishing a general loyalty principle for all platforms operating in consumer affairs and whose activity consists either in bringing into contact sellers and buyers, like those referred to in the 2015 law, or in the ranking or referencing of contents, goods or services offered by third parties.

Thus, the law of October 7, 2016 for a digital Republic stipulates, for these platforms, the obligation to provide the consumer with loyal, clear and transparent information on:

  • the terms and conditions of use of its service and the procedures for referencing, ranking and dereferencing contents, goods or services offered on its site;
  • the existence of a contractual relation or capital link with the persons referenced or its remuneration, when this has an impact on the ranking or referencing;
  • the capacity of marketer (i.e. seller) and the rights and obligations of the parties in civil and tax matters, when consumers are brought into contact with professionals or non-professionals.

Furthermore, any platform which, as a principal or subsidiary business, collects, moderates or publishes online reviews from consumers, which today concerns the majority of online platforms, is required to deliver a set of information on these reviews, such as the methods of publication and treatment, the existence or not of a verification, the main characteristics of this verification, if any, their dates and the reasons for non-publication of certain reviews.

Concerning the terms and conditions of sale relating to the product or service put on line on the platform and of which the buyer must imperatively be made aware, it is stipulated that the platform will make available to the professional sellers space so that they can communicate the mandatory pre-contractual information. Pending the publication of the various implementing decrees, the platforms concerned can already think about how to make the necessary adaptations to their terms and conditions of use.

The French Competition Authority has new power to increase fines by up to 10% to fund victim assistance

Since June 4, 2016, fines imposed by the French Competition Authority against perpetrators of anticompetitive practices (unlawful agreements or abuses of a dominant position) can be increased by up to 10% of their amount in order to fund victim assistance.

The French Competition Authority’s new power, which has gone practically unnoticed since the promulgation of the law establishing it (law of June 3, 2016 strengthening the fight against terrorism), is surprising to say the least. This mechanism, also provided for other types of offenses, was initially designed to find new resources for victim support associations which experience serious financial difficulties. However, the text does not specify the terms of such funding or the type of victims which can benefit therefrom. If this concerns victims of anticompetitive practices, there is a risk of discriminatory application of the increase in question. Not all competition breaches can in actual fact give rise to actions for damages, which would lead to increasing the fine for some companies and not for others, without knowing exactly the legal bases on which this difference is founded. Furthermore, the victims of anticompetitive practices can be both companies and consumers. However, this text seems to concern more victims who are individuals alone, to the exclusion of legal entities, since the victim support associations which could benefit therefrom are essentially consumer associations.