The Commission’s best practices in antitrust procedures and the revised role of hearing officer

Following a public consultation launched in January 2010¹, the Commission adopted on 17 October 2011 the final version of its package of measures which “aimed at increasing interaction with parties in antitrust proceedings and strengthening the mechanisms for safeguarding parties’ procedural rights”. The package encompasses the Best Practices for the conduct of antitrust proceedings, a revised Hearing Office’s mandate and a revised version of the Best practices on the submission of economic evidence².

The aim of the Antitrust Best Practices is to increase understanding of the Commission’s investigation process and to ensure a high degree of transparency and predictability in the process. This notice should be read in conjunction with other instruments that give an “exhaustive account of all measures governing proceedings before the commission” and any relevant jurisprudence.

Under the revised decision on the function and terms of reference of hearing officers in certain competition proceedings, the role of the hearing officer is strengthened in the investigation phase, including resolving disputes about legal privilege, incriminating evidence and deadlines for replies and submissions.

Due to the increasing importance of economic evidence in cases, the Commission issued the Best Practices on the submission of economic evidence that promote a degree of standardization for the parties who must provide economic evidence.

The Antitrust Best Practices: A reminder of Commission’s power of investigation

While the Best Practices aim at informing the parties and complainants of their rights during antitrust proceedings, it also secures the Commission’s prerogatives during an antitrust investigation.

Even if the Commission commits to inform the parties under investigation of the initiation of proceedings sufficiently in advance to enable them to prepare and coordinate their communication strategy, the Best Practices recall that the opening of proceeding does not prevent the Commission from extending the scope and/or the addressees of the investigation at a later point in time.

Furthermore, the Best Practices emphasises the Commission’s margin of discretion in respect of the scope of the request for information. The Commission has a power of appreciation in shaping the enquiry while respecting the principle of proportionality.

Legal Professional Privilege

The Commission will examine closely whether claims for legal professional privilege “LPP” are justified. The undertaking must provide the Commission with appropriate justification and relevant material to substantiate its claim for protection of legal professional privilege, while not being bound to disclose the content of such document. The Commission may request the submission of redacted versions removing the parts covered by LPP.

If the Commission considers that the undertaking has not provided pertinent material to substantiate its claim, it may order production of the document in question and if necessary, impose on the undertaking fines or periodic penalty payments for its refusal. The Commission has the power to impose a fine when a company makes clearly unfounded claims for LPP or opposes any cursory look without objective justification

An undertaking is entitled to refuse to allow the Commission officials to take even a cursory look at the general layout, heading, title or other superficial features of a document, provided that it gives appropriate reasons why a cursory look would be impossible without revealing the content of the document. However, in the course of an inspection, the Commission officials may immediately read the contents of the documents and take a copy of it (without using the sealed envelope procedure) if the undertaking fails (i) to substantiate its claims for LPP (ii) to invoke reasons based on settled case-law; or (ii)  to give accurate factual assertions.

Where it cannot be excluded that the document may be protected, the officials may place a copy of the contested document in a sealed envelope and bring it to the Commission premises. Pursuant to the revised Hearing Officer revised mandate, the Hearing Officer may examine the claim for LPP. Where the matter is not resolved on the basis of the hearing officer’s reasoned recommendation, the Commission may either decide to examine the matter further or adopt a decision rejecting the claim.

Even if the Hearing Officer’s mandate has been extended to guarantee the rights for the parties to be heard, the Hearing Officer largely has a conciliatory role. In cases where no compromise is achieved, the Commission will have “the final word”. The undertaking has the possibility to bring an action for annulment against the Commission decision and to apply for interim measures within the specified time limit. In this case, the Commission will not open the sealed envelope and will not read the documents until the Court of Justice of the EU has decided on the application for interim relief.

State of play meeting

The Commission will offer the parties being investigated in cartel cases a State of Play meeting at key stages of the procedures, such as shortly after the opening of proceedings and at a sufficiently advanced stage in the investigation to discuss competition concerns and parties’ arguments. Additionally, a State of Play meeting may take place after the parties have replied to the Statement of Objections or after the Oral Hearing.

The review of key submissions in cartel cases

The Commission has committed to give the parties subject to the proceedings shortly after the opening of proceedings (so prior to the Statement of Objections) the opportunity to review non-confidential versions of "key submissions" (non-confidential version of complaints or economic studies) already submitted to the Commission. It is important to note that since the investigation of cartels is subject to specific procedures, “the review of key submissions will not be offered in the context of cartel proceedings”.

Statement of Objections and information on the imposition of fines

In order to increase transparency, the Commission endeavours to provide relevant information for the calculation of fines in the Statement of Objections. It will refer to the Guidelines on setting fines and will indicate the essential facts and matters of law which may result in the imposition of a fine, such as the duration, the gravity of the infringement and whether the infringement was committed intentionally or negligently.

The Statement of Objections will also mention in a sufficiently precise manner that certain facts may give rise to aggravating circumstances or to attenuating circumstances. However, the Best Practices reveal that the Commission is under no obligation to share such information and may provide this information after the Statement of Objections.

In the Statement of Objections the Commission will inform parties that in exceptional cases, it may, upon request, take account of the undertaking's inability to pay and reduce or cancel the fine. However, “the assessment of the financial situation is carried out for all undertakings that have made an inability to pay request close to the adoption of the decision and on the basis of up-to-date information, irrespective of when the request was submitted”.

Extension of time limit

The addressee who meets some difficulties to answer a request for information or after the Statement of Objections may within the given time limit submit a reasoned request to the DG Competition to be granted an extension of the time limit. In case, the addressee disagrees with the extra length granted by the Commission, it may refer the matter to the Hearing Office for review. The hearing officer will assess the situation according to criteria such as the size and complexity of the file, whether there was prior access to information; or whether there are any other objective obstacles.

Management and exchange of data

The paper on the submission of economic evidence encourages the parties to submit economic evidence according to certain standards in order to facilitate its assessment.

The Commission has set up procedures for simplifying the exchange of confidential information between parties to the proceedings. In particular, the Commission may use the data room procedure to allow parties’ economic advisors and external counsel to review quantitative data. The advisers may make use of the information contained in the data room for the purpose of defending their client but may not disclose any confidential information to their client. Also, “the advisers are strictly prohibited from taking copies, notes or summaries of the documents and may only remove from the "data room" a final report, which is to be verified by the case-team in order to ensure that it does not contain any confidential information”. This clarifies the consultation paper, where previously “the external counsel may record information contained in the data room but may not disclose any confidential information to their client.”

Publication of decision rejecting complaints

The Commission intends to make public on its website its decisions rejecting complaints or just a summary thereof. If required for the protection of legitimate interests of the complainant, the published version of the decision will not identify the complainant.

Application

The Best Practices apply from the date of their publication for pending and future cases.