The ACM's first personal cartel fines ever (see for more our Competition Newsletter of November 2010) were overturned by a recent ruling which concludes that the ACM was not allowed to use transcripts of telephone taps installed by the Public Prosecutor as evidence in its investigation of a possible cover pricing cartel. But do not sigh in relief yet: the court's ruling does not exclude the possibility of the Public Prosecutor lawfully providing transcripts of telephone taps to the ACM in future competition law investigations.

Even though the ACM, like the European Commission, is not authorised to tap telephones when investigating possible anti-competitive practices, the ACM did build its entire decision in this particular case around the evidence obtained through telephone taps. The Public Prosecutor had installed taps on the lines of several employees of a construction company to investigate possible corruption and bribery of public servants during tender procedures. In 2008, the Public Prosecutor contacted the ACM with suspicions of a price-fixing cartel among several construction companies and provided it with approximately 30 telephone transcripts on the basis of Article 39f(1) of the Judicial Data and Criminal Records Act (“JDCR Act”).

In interim relief proceedings before the District Court of The Hague, the construction company argued that only information relevant to the criminal investigation is part of the criminal file. The JDCR Act is thus not applicable to (criminally irrelevant) information on a possible infringement of the Dutch Competition Act. Even if this information should be considered part of the criminal file, Article 39f(1) of the JDCR Act prevents it from being disclosed to third parties without a compelling public interest. Competition law enforcement does not constitute such interest, according to the construction company. The District Court of The Hague disagreed. It considered the price-fixing information as part of the criminal file, since the telephone transcripts should be regarded as one integral piece. In addition, the Court found that the enforcement of the Dutch Competition Act constitutes a compelling public interest, now that it is concerned with protecting the economic well-being of the Netherlands and concluded that the Public Prosecutor could lawfully provide the telephone transcripts to the ACM.

In appeal against the ACM's fining decision, the District Court of Rotterdam agreed with the District Court of The Hague that a violation of the cartel prohibition can constitute a compelling public interest which justifies the supply of the telephone taps to the ACM. But contrary to the provisional relief court, the Rotterdam Court found that even in the event of a compelling public interest, the Public Prosecutor has to first make an apparent and, for a court, verifiable assessment of the necessity to provide the relevant information before actually supplying it. Since the Public Prosecutor neglected to perform such assessment in this particular case, the ACM could not use the telephone taps as evidence. The District Court of Rotterdam recently applied a similar reasoning to overturn the cartel fines imposed in a shipping waste cartel.

Even though the ruling by the District Court of Rotterdam may not prevent the ACM from obtaining telephone transcripts through the Public Prosecutor in future competition cases, it does impose an additional hurdle which needs to be taken prior to the supply of such information. The ACM can appeal the ruling.